Recently, Weilong spicy strips have been on the hot search because of the advertising slogan on its packaging.
The cause of the incident was a Weibo blogger named "Beanie Sauce Is a Little Idle", who noticed that the three outer packaging of Weilong Spicy Strips were printed with the words "about it", "thief big" and "tough", and reflected it to the Tmall flagship store of Weilong Food.
For the suspected "vulgar marketing", the Economic Development Zone Bureau of the Luohe Market Supervision and Administration Bureau in Henan Province, where Wei Long is located, has now intervened in the investigation.
In response to the dispute over the slogan of the outer packaging of spicy strips, at 0:42 a.m. on March 30, Weilong posted a Weibo post of "Response to Weilong Packaging Copywriting" through its official Weibo, which was the first in the hot search. Wei Long apologized and responded, "The company attaches great importance to the opinions of the majority of netizens and consumers, and decided to stop the production of controversial copywriting packaging, while optimizing the layout copywriting and design." ”
For Wei Long's advertising slogan, some netizens believe that it is "the slogan is very normal and over-understood", but more people think that there is indeed a situation of rubbing the edge ball, and the controversy continues.
In fact, Weilong's product packaging not only has these 3 kinds of copywriting, but also other words such as "pressure shock", "willfulness", "thief spicy", "calm" and so on. If you look at one or more kinds of packaging together, it seems that there is no problem, but the three words "about it", "thief big" and "tough" are put together, and there is indeed a suspicion of vulgarity and edge ball.
According to the Advertising Law, advertisements must not obstruct social public order or violate good social customs, and must not contain obscene, pornographic, gambling, superstitious, terrorist, or violent content.
In this regard, lawyer Lan Tianbin, a partner at Jiangsu Fade Dongheng Law Firm, said that Weilong's advertising slogan looks relatively vulgar and bad taste, and it is not highly evaluated aesthetically and morally, but at the same time, it should be noted that vulgar advertising slogans are not necessarily equivalent to illegality.
Associate Professor Du Peng, director of the Department of Marketing Management of Zhongnan University of Economics and Law and researcher of the New Media Marketing Research Center, believes that as a national snack, rubbing the edge ball on the packaging, using some promotional slogans that are easy to cause ambiguity, although some netizens said that the whistleblowers were "too strict", it is undeniable that some words are indeed inappropriate in a specific environment, so the subtle impact on minors cannot be ignored. As a well-known enterprise, product design should be considered in many ways, reduce this ambiguous and even ambiguous publicity, establish correct values and publicity awareness, and do not lose more than the loss in order to attract people's attention and damage the corporate image.
Du Peng also suggested that relevant enterprises need to seriously reflect on the reasons for problems in packaging, and improve their work from all aspects of creation scale, creation management, product management and so on.
According to public information, Weilong Food belongs to the own brand of Luohe Pingping Food Co., Ltd., founded in 2004 with a registered capital of 120 million yuan, the legal representative Liu Zhongsi, and the company's representative product is Weilong Spicy Strips.
In fact, Weilong has been relying on fancy marketing since its inception, and has quickly become popular by improving packaging, rubbing the popularity of Apple's mobile phones, and cooperating with Riot Comics to launch violent hot strips. In addition, he has also hired stars such as Yang Mi to endorse him. According to data from a report by Frost & Sullivan last year, China's spicy snack food market concentration is not high, and Weilong currently ranks first with a market share of 5.7%.
In May 2021, Weilong submitted a listing application with the name of the company to be listed as "Weilong Delicious Global Holdings Limited". On November 15, Weilong Delicious Global Holdings Limited passed the listing hearing of the Hong Kong Stock Exchange, but has not yet been listed.
In the impression of many people, spicy noodles are the low-end food of the memory of the middle school days, but this is actually a very profitable track. According to the prospectus, from 2018 to 2020, Weilong's revenue was 2.752 billion yuan, 3.385 billion yuan and 4.12 billion yuan, and net profit was 476 million yuan, 658 million yuan and 819 million yuan, respectively.
In 2020, Weilong's net profit was 820 million yuan, with a gross profit margin of 38% and a net profit margin of 20%. In contrast, the gross profit margin of the good shops in the high-end market is 30.47%, and the net profit margin is only 4.36%, which is far lower than that of Weilong.
However, due to the low threshold of the spicy noodle industry, many food companies have begun to produce related products, and in recent years, the competition in the spicy noodle market has become increasingly fierce. According to statistics, as of October 2021, there are 2386 spicy noodle related enterprises in the mainland. Among them, 680 new ones were added in 2020, an increase of 30.02% year-on-year, which is the largest number of new spicy noodle-related enterprises in the past decade.
Among them, three squirrels launched the spicy strip project in 2015, and officially launched the spicy series in 2017, selling 4.8 million copies in 7 months, the first sales volume in the same period of the Tmall platform spicy strip category. In 2019, Yanjin Shop invited Lin Ton to endorse its spicy noodle products, which made the revenue of the product soar to 49.4136 million yuan, an increase of 13817.12% year-on-year. In July 2021, Qiaqia Food applied for the registration of the trademark of "Inner Roll Spicy Strips" and also began to lay out the spicy strip category.
The intensification of competition has also had a certain impact on Weilong's performance. In the first half of 2021, Weilong's revenue in the first half of 2021 was 2.303 billion yuan, an increase of 22.06% year-on-year, and net profit was 358 million yuan, down 2.53% year-on-year. This is related to its increased marketing efforts, in the first half of 2021, Weilong's sales expenses reached 263 million yuan, an increase of 54.47% year-on-year.
At the same time, in order to avoid the product line is too single, Weilong has also begun to expand other product categories. The prospectus shows that at present, the konjac shuang produced by Weilong has surpassed the spicy strips and become the company's highest-selling product, and the annual sales of vegetable products represented by konjac shuang exceed 1 billion, which is regarded as the second growth curve of Weilong.
It is worth mentioning that due to the outstanding performance, Weilong spicy noodles were previously favored by the capital market. Before submitting its IPO application to the Hong Kong Stock Exchange, Weilong introduced external capital for the first time and completed the Pre-IPO round of financing. This round of financing was led by CPE Yuanfeng and Hillhouse, and followed by sequoia China, Tencent, Yunfeng Fund and other well-known institutions, with a financing amount of 549 million US dollars, a total shareholding of 5.85%, and a post-investment valuation of more than 60 billion yuan.
(Titanium media APP editor Zhai Biyue synthesized from 21 economic reports, city boundaries, Beijing Business Daily, etc.)