Author| Zhang Chao Editor| Luo Lijuan
When it comes to influencer catering, what comes to mind?
Cha Yan Yue, Master Bao, Uncle Zhi Si, or Wen Heyou, a cage of small luck...
Take stock of popular restaurant brands, all of which have been closely linked to words such as "queuing", "punching in", "hot" and so on, so they are called "internet celebrities".
However, the emergence of new formats will always encounter various problems in the development process. In addition to adapting to the rules of Internet survival, net red catering needs to complete the improvement and upgrading of public catering.
As the first generation of net red catering brands, green tea restaurants once swept the country with signature dishes such as "bread temptation" and cost-effective labels.
More than a decade ago, reports about green tea restaurants "waiting for 1-2 hours" and "more than 4 times per store, up to 7 times" and other reports were common, and its popularity was self-evident. Official data show that in 2014, the company's single store traffic averaged 1,500 people per day, and the average queue was two hours per person.
It is such a restaurant that was once loved by consumers, but it has repeatedly folded the secondary market, and the road to listing is full of bumps.
On April 8, Green Tea Restaurant updated the listing application materials and successfully passed the hearing of the Hong Kong Stock Exchange on the 11th; prior to this, Green Tea Restaurant had applied for listing twice, respectively, due to financial data errors and overtime application materials "invalid", and finally failed.
From the opening of the first restaurant in 2008 to the current chain of more than 200 stores, Green Tea Restaurant has enjoyed the traffic dividend owned by the "first generation of Internet celebrities", and has also fallen into the business dilemma of the decline rate, and is now bent on going public in Hong Kong. The company also plans to open 75 to 100 new restaurants per year in 2022-2024, and expects restaurants that have opened or will open in 2022 to break even for the first time in 1-5 months.
Can this Chinese restaurant, which lost the crown of "net red", finally go public? And how will it regain consumers?
The bumps in the way of the first generation of influencers
The establishment of Green Tea Restaurant originated from the keen business sense of co-founders Wang Qinsong and Lu Changmei.
In 2004, the two ran a youth hostel on the shores of beautiful West Lake. Because there is a tea garden next to it, the couple named the hostel "Green Tea". Surrounded by mountains and rivers, the beautiful environment attracts backpackers from all over the country and even around the world.
With the communication with travelers with different backgrounds, Wang Qinsong found that everyone's eating habits are very different, and only "fusion dishes" can be suitable for all kinds of travelers.
The couple decided to try to delve into fusion dishes and developed several dishes that are popular with travelers, such as roast chicken and flame shrimp, which made the prototype of the green tea restaurant. Also because the restaurant mainly welcomes young "backpackers" from all over the world, the price of green tea dishes is generally relatively close to the people.
With the two characteristics of fusion cuisine and cost-effectiveness, coupled with the pleasant natural environment of the hostel, Green Tea Hostel is sought after by many travelers. This also laid the foundation for the establishment of the green tea restaurant.
Wang Qinsong and his wife, who have insight into the business opportunities of catering, resolutely gave up the hotel business in 2008, turned to the catering industry, and opened the first "green tea restaurant" by the West Lake.
The store decoration design of the ink natural scenery screen, green brick Daiwa, xiaoqiao flowing water, etc., which integrates the classic elements of traditional Chinese art and natural landscapes, makes the green tea restaurant unique in decoration and has a Jiangnan flavor.
Green tea restaurant Longjing boat banquet theme decoration design
In designing its dishes, Green Tea Restaurant draws inspiration from dishes from all over China and around the world to develop dishes that cover all ages, such as breads that are loved by children and boiled rice in the signature stone pot that is loved by older customers. Each green tea restaurant usually offers 80-100 kinds of dishes, including signature dishes, appetizers, soups, main courses, vegetarian dishes, desserts and drinks; the per capita consumption is about 50-80 yuan.
Green Tea Restaurant signature dish representative
The ultimate cost performance made Green Tea Restaurant quickly popular in Hangzhou, and in the second year of opening, it was awarded the "Top 50 Most Popular Restaurants in 2009".
After Hangzhou's fame, green tea restaurants released greater ambitions, in 2010 began to expand the territory of the country, the first expansion to first-tier cities, has opened stores in Beijing, Shanghai, Shenzhen and other places; in 2015 won the "2015 China Service Top Ten Creative Culture Restaurants" award issued by the China Cuisine Association; in 2018, the number of Chinese stores reached 100.
According to the prospectus, the number of green tea restaurant stores reached 180 by the end of 2020; by the end of 2021, this number will increase to 236. In less than three years, the company has been catching up with the pace of store openings over the past decade, and this plan to try to seize the market through store expansion is clear at a glance.
After intensively expanding its business footprint, Green Tea Restaurant embarked on a new journey – submitting a prospectus to the Hong Kong Stock Exchange in March 2021 to seek a public offering to raise funds.
Previously, Green Tea Restaurant had only received strategic investment from United Group in 2017; before the IPO, United Group held 28.2% of Green Tea Restaurant through a company composed of its funds. The controlling shareholders of Green Tea Restaurant are still Wang Qinsong and Lu Changmei, who hold a total of 65.8% of the shares through the establishment of family trusts.
Shareholding structure of Green Tea Restaurant
However, the listing road of green tea restaurants is not as smooth as imagined, and it is not an exaggeration to describe it with twists and turns.
For the first time, the green tea restaurant made a lot of oolong, which was accused of "errors in letter approval" and loopholes in the prospectus, such as writing the column of "total current liabilities" as "total current assets"; publishing the details of current assets and liabilities in the "working capital" column of financial information; and adding brackets when expressing negative values in the financial reports of Hong Kong listed companies, but the Chinese version of the prospectus of Green Tea Group did not mark the corresponding value with "brackets", so that the net current assets that should have been negative appeared "negative to positive".
Although the company said that the prospectus was a typographical error and that there were no errors in the English version, hkex made it clear that there is a clear provision in Chapter II of the Listing Rules that any announcement or corporate communication must be "accurate and complete". Eventually, Green Tea Restaurant's first IPO was planned to fail.
In October 2021, the undead Green Tea Restaurant submitted a prospectus to the Hong Kong Stock Exchange for the second sprint IPO. Although the listing hearing was passed and the post-hearing prospectus was disclosed, by April 6 this year, its listing application materials were finally "invalid" due to the overdue time.
Just when the outside world was talking about it, Green Tea Restaurant once again submitted an updated prospectus and sprinted to the Hong Kong Stock Exchange for the third time. The green tea restaurant that was prepared, this time it was like sitting on a rocket, and it took only 3 days to successfully pass the hearing of the Hong Kong Stock Exchange to be listed.
The capital market is also waiting for a new story of the green tea restaurant, a story of whether a "past Internet celebrity" can turn red again.
What is green tea missing?
According to the prospectus, the revenue of green tea restaurants mainly comes from offline restaurants, which contribute more than 80% of the company's revenue; takeaway services and other revenue account for less than 15% of the company's total revenue.
From 2019 to 2021, the revenue of green tea restaurants was 1.736 billion yuan, 1.569 billion yuan and 2.293 billion yuan, respectively, with an increase of 32.42%, -9.62% and 46.14% year-on-year, and the net profit was 106 million yuan, -55.262 million yuan and 114 million yuan, respectively. In addition to the company's revenue and profit fluctuations caused by the impact of the epidemic in 2020, overall, green tea restaurants have maintained a stable level of profitability.
Green Tea Restaurant Revenue 2019-2021
When offline catering competition is becoming more and more fierce, what exactly does green tea restaurant rely on to achieve profitability? From Wang Qinsong's interview, you may be able to get a glimpse of one or two.
"We want to be a national chain brand that attracts the public to eat our cuisine to the greatest extent, so it is not limited to local cuisine." According to Wang Qinsong's concept, the positioning of green tea restaurants is not limited to the fusion of Zhejiang cuisine, nor is it a traditional Hangzhou cuisine, but more like a creative dish that integrates sichuan cuisine, Cantonese cuisine, Lu cuisine, Beijing cuisine and other local cuisines.
From the consumer side, creative dishes belong to the fusion cuisine, which can meet the needs of more users with different preferences, which is naturally wider than the development path of a single cuisine; at the same time, this also puts forward no small requirements for the research and development capabilities of green tea restaurants.
In order to meet the market demand, green tea restaurants usually carry out four rounds of menu design every year, guaranteeing that about 20% of the dishes are updated every year; once the trial is launched, the recipe may be adjusted or the corresponding dishes may be removed from the menu if the desired sales results are not achieved.
According to the prospectus, in 2019, 2020 and 2021, Green Tea Restaurant launched 120, 147 and 178 new dishes respectively. If calculated according to the 365 days of the year, the green tea restaurant has reached the level of a new dish every 2 days.
In addition, the cost performance is also one of the competitiveness that green tea restaurants are proud of, which is also the route set by Wang Qinsong when he opened the green tea hostel.
As early as the early days of the establishment of the green tea restaurant, its customer unit price was around 50 yuan; and from the data released from the prospectus, from 2019 to 2021, the unit price of the green tea restaurant was 54.8 yuan / person, 58.4 yuan / person, 61.3 yuan / person, and 60.5 yuan / person, respectively. Compared with the hot pot enterprises with one or two hundred per capita, the price advantage is obvious.
Green Tea Restaurant Operating Data
Despite the good financial data, Green Tea Restaurant has a downward trend since 2016. A clear sign is that when consumers mention "net red catering", it is difficult to remember the name of the green tea restaurant, and the long queue at the door of the store has gradually disappeared.
This trend can also be seen in the turnover rate of restaurants. The highest daily turnover rate of this "first generation of Internet celebrities" was 6-8 times a day, and Wang Qinsong, the founder of Green Tea Restaurant, also said that in the normal working state of ensuring chefs and employees, the turnover rate of 4 times a day is the lower limit, and 7 times is the upper limit. He even said: "(Turnover rate) 4 times is a threshold for mass catering, if it is not reached, it may be necessary to consider whether there is any problem (business strategy)." ”
The prospectus shows that from 2018 to 2021, the turnover rate of green tea restaurants was 3.48 times/day, 3.34 times/day, 2.62 times/day, and 3.23 times/day, respectively. In addition to the impact of the epidemic in 2020, offline store operations have been frustrated, and the turnover rate has generally been in a state of decline in recent years.
The reason may be related to the disappearance of the "two core competitions" of green tea restaurants.
In terms of dishes, in order to optimize the operational efficiency and ensure the consistency of dishes, the green tea restaurant has streamlined the kitchen operation and adopted standardized operations. As of now, Green Tea Restaurant has worked with 176 third-party food processing companies to distribute most of the preparation process of the dishes to the highly automated facilities of third-party processing food companies.
As a result, most of the current signature dishes at Green Tea Restaurants involve semi-processed foods prepared by third-party food processing companies. Even if it is the signature green tea roast chicken, the store only needs to complete the process of putting the pre-pickled chicken into the oven to bake.
In the face of changing consumer demand, although green tea restaurants have maintained an average research and development speed of 2 days/course of dishes, from the perspective of quality, they may be less than expected. On the public reviews, the current top recommended dishes such as bread temptation and green tea roast chicken are no different from ten years ago.
In terms of cost performance, the all-weather technology search found that in the actual consumption process, the per capita consumption of many green tea restaurant stores was higher than the figures announced in the prospectus. Taking Shanghai as an example, there are currently 6 green tea restaurants, with a minimum per capita consumption of 78 yuan / person, a maximum of 91 yuan / person, and a per capita consumption level is basically between 80-90 yuan.
Dianping commented on the per capita consumption of some green tea restaurants in Shanghai
In this price range, there are also a number of new Internet celebrities such as Taier Sauerkraut Fish, Xianqi Half-Step Epilepsy, Miss Fu in Chengdu, etc., and the living space given to green tea restaurants is naturally compressed.
Fall of the "net red" to save themselves
If a cost-effective restaurant wants to be profitable, it can only speed up the flow of resources and improve the efficiency of operations.
In order to regain the market and capture the stomachs of young consumers, Green Tea Restaurant offers a new capital story – one of the most noteworthy is to promote sustainable growth through strategic expansion.
From the current point of view, the strategy of green tea restaurants may expand the existing regional market share while sinking and harvesting the traffic outside the fifth ring road.
Green tea restaurants, which basically solve the problems of standardization and supply chain, have consciously established a market position in East China, Guangdong and North China in recent years. According to the plan of Green Tea Restaurant, it will concentrate resources in several major business districts to form an "operating network" to accelerate market penetration.
Up to now, Green Tea Restaurant consists of 240 Green Tea Restaurants (including one restaurant that has been suspended and is now applying for a fire safety inspection certificate), covering all first-tier cities, 12 new first-tier cities, 26 second-tier cities and 29 third-tier cities and below in China.
According to the statistics of China Insight Consulting, in the past three years (2019-2021), the market share of green tea restaurants in Guangdong and North China has increased by 0.41% and 0.22% respectively; in terms of revenue and number of restaurants in 2021, green tea restaurants have become the fourth largest leisure Chinese restaurant operator in China, with a total market share of 0.5%.
Green tea restaurants share the market share in each region
This also means that the status of green tea restaurants may be shaken at any time, and the "first generation of Internet celebrities" must try more self-help paths.
For green tea restaurants, in the past, in order to pursue efficiency, they have been trapped in the digital cage, ignoring the value brought by Internet marketing. Even Wang Qinsong himself has said, "Brand marketing is something we have to learn." ”
Therefore, since 2019, green tea restaurants have begun to embrace the Internet, successively opened social accounts such as Weibo and Douyin, learned the traffic play of "contemporary Internet celebrities", and used video, live broadcast and other updates and more interesting ways to attract the attention of young people.
It's clear that green tea restaurants have missed the best period for free traffic and can only rely on preferential activities to impress consumers.
Perhaps, the key to the future world of the green tea restaurant will be affected by the Internet, but in the final analysis, the catering still has to return to the dish itself.
How to break the deadlock in the expansion of signature dishes and optimize the taste of dishes on the basis of ensuring the efficiency of store operations, green tea restaurants also need to give a more essential solution.