Image source @ Visual China
Text | A little financial editorial board, the author | Cai Yutong, Editor | Thin winter plum
Green tea restaurant, was also an Internet celebrity.
In 2008, Wang Qinsong, who opened a youth hostel, opened his first store in Hangzhou, integrating cuisines from all over the country and making the green tea restaurant a great success, the following year was rated as "2009 Most Popular Restaurant TOP50" by Dianping.com, in 2010 and 2011, Beijing, Shanghai, Suzhou, Ningbo and other places opened branches, and entered the southwest market in 2015...
After 14 years of admission, how is this "first-generation Internet celebrity" mixed? On 11 April, Green Tea Group passed the hearing of the Hong Kong Stock Exchange, with Citi and CMB International as joint sponsors, or will be officially listed in late April or early May – this is its third submission.
In the face of the unremitting efforts of the Green Tea Group, some people say that it is "listed with diseases", and some people think that it is undervalued. Undoubtedly, compared with the restaurant brands that are either blessed by capital or are internet celebrities, green tea has been "gone" and has not returned to its former glory.
"Water can carry boats, but also can cover boats", green tea once helped, now has become a pain point.
01 Failed "Low Price Magic"
The green tea restaurant originated from a "halfway out of the house" business.
At first, Wang Qinsong and his wife were doing a hostel business by the West Lake, and in the face of the different eating habits of guests from the south to the north, the couple smelled the business opportunities of fusion dishes. Perhaps because it is aimed at "budget- and "budget-conscious" young people, Green Tea has labeled cost-effectiveness at the beginning. According to statistics from Zheshang Securities, as of Q1 2022, the per capita consumption of green tea is 60.5 yuan, which is low in the head Chinese restaurant.
Everything has two sides, low prices make green tea "net red", but also make it difficult to make a profit. Wang Qinsong also realized this, "We are exchanging a low price of almost cost for passenger flow, so we must pay attention to the turnover rate." In his view, high cost performance means that green tea is different from other restaurants, and there must be a high turnover rate to make money, "the turnover rate 4 times a day is to protect the capital."
The so-called turnover rate, which refers to the reuse rate of the table, is an important indicator to measure the profitability of the restaurant. It is reported that the average turnover rate of green tea in 2013 was 6-8 times.
In fact, the "low-price magic" wang Qinsong planned for green tea is the number of low-cost flipping rate stores, but the arrival of the epidemic has made this magic no longer effective. The lower limit of the former overturning has now become a ceiling that is difficult for green tea to reach, and the prospectus shows that the turnover rate of green tea from 2019 to 2021 is 3.34 times, 2.62 times and 3.23 times, respectively, and has been under the 4 times of capital preservation.
The low unit price and low turnover rate have brought about a decline in revenue and store performance. The data shows that between 2019 and 2021, the average same-store sales of green tea per restaurant fell from 14.811 million to 11.686 million.
The catering industry has been hit hard by the epidemic, from Haidilao to streetside mom-and-pop shops, all of which have been affected, and green tea is certainly no exception. Compared with Haidilao and sipping, the turnover rate of green tea is less affected by the epidemic, and the recovery in 2021 is also very fast, but the different model requires green tea to recover faster.
Jiumaojiu Group (taier belongs), Haidilao, Sipping and feeding these catering brands, or high-end pricing, or direct operation, franchised mixed operation. The difference is that the green tea model is one low price and two operations, making its anti-risk ability lower.
Since the beginning, perhaps it is the experience of operating hostels that makes Wang Qinsong attach great importance to stores. First, it is very thoughtful in store decoration, Chinese style, Jiangnan style, which is almost the essence of every store of green tea, but each store is different, Wang Qinsong once said that green tea is a per capita consumption of 50 yuan, 5 million yuan of decoration costs.
Second, the green tea restaurant has not yet opened to join, all directly operated, taking the heavy asset model. This makes its store opening cost quite high, with a single store investment cost of 3.2 million to 3.7 million yuan higher than that of the same industry (Laowang 3 million to 3.5 million), and the return on investment period of a single store (17.5 months) is also higher than that of the same industry (7.4 months for Grandma's house, 7 months for Tai'er).
From 2019 to 2021, while the sales and turnover rate of stores affected by the epidemic have declined, green tea is still expanding rapidly, and the "home bottom" that is not rich is even worse. As of the end of 2021, the number of green tea restaurants has increased from 163 in 2019 to 236, of which 44 (18%) are operating losses.
In the first half of 2019, some companies confidently shouted out "store expansion", the survival of the fittest accelerated under the influence of the epidemic, and some brand stores contracted and the increase in ground rent slowed down, making them think that they could take advantage of this opportunity to occupy more offline entrances. But the sporadic explosions that followed the first wave frustrated many people's desire to expand.
Haidilao, which accelerated its expansion in 2019, contracted in the cliff in 2021. Green Tea still intends to go all the way to the end, and the prospectus shows that after opening 73 stores in two years, Green Tea plans to open 75-100 new stores per year from 2022 to 2024.
Low prices, reduced turnover rate, the direction is low income; store expansion, the direction is high cost: for green tea, it is inevitable that it is difficult to make a profit.
According to the prospectus, from 2019 to 2021, green tea revenue was 1.736 billion yuan, 1.569 billion yuan and 2.293 billion yuan, net profit was 106 million yuan, losses were 55.262 million yuan and 114 million yuan, net profit margins were 6.11%, -3.52% and 4.97%, and adjusted net profit margins were 6.1%, -0.7% and 6.0%, respectively, lower than the industry average (8%-10%).
In the face of the failed "low-price magic", what else can green tea do?
02 Hindered self-help
Following the "playing" of Western food brand and the stew brand "Kanto-made", green tea restaurant has become the only hope of green tea group. Through new product development, market sinking, and listing, Green Tea Restaurant and Green Tea Group are trying to save themselves, but there is a lot of resistance.
First, "explosive models" become "old models", and new products are not "explosive models".
In addition to the low price, Wang Qinsong is proud of making green tea, which is delicious. The hostel once opened by the couple, because of the delicious dishes such as grilled chicken and flame shrimp, attracted some people who came to visit and did not stay only for dinner, which was also the main opportunity for him to start making green tea.
The rise of green tea stems from the dividends of the Internet era, its rapid expansion began in 2010, 2011, in 2015, 2016 burst into popularity, and the rapid expansion of the Internet in sync.
Perhaps it is this experience that makes Wang Qinsong attach great importance to network and word-of-mouth communication: "I think that in the Internet era, good products, good models, and good experiences will spread themselves, especially in catering, good taste, good experience, customers will take the initiative to help you do word-of-mouth communication, which is more effective than any external marketing." ”
Once a green tea dish that was novel and delicious, it has been selected for many restaurant menus by its bread temptation with fire. But what people want to try is always something newer and tastier, not something that used to be new and tasty.
From Russian-style kitchens, Western restaurants such as Banqiu Mountain, to Chinese restaurants such as Grandma's House and Green Tea, in the public comments, "bread temptation"
It has become the "old face" sold in dozens of restaurants, while searching for "bread temptation" on the Internet, you can also find detailed home practices, it can be said that the green tea used to dominate the sign has become invisible to everyone.
With the emergence of a new batch of internet celebrity catering brands such as Wen Heyou, Xicha, and Master Bao, the wind direction of the market is changing, and the eye-catching degree of product creativity has become the key to whether it can break the wall. Ai Media Consulting data shows that the proportion of "Generation Z" among catering consumers has increased to 39.3%, and they are more willing to pay for interest, which will bring new changes to the demand side of catering.
Today, when "Tu Fresh" is becoming more and more common, the life cycle of an Internet celebrity brand is 3-5 years, and the 14-year-old green tea is entering the fourth cycle together with signature dishes such as "bread temptation" and "green tea roast chicken", and after more than ten years of hot sales, the attractiveness of these explosive models is weakening.
Wang Qinsong and Green Tea Restaurant are not unaware of this problem, and they have never given up on new product development. The data shows that in the three years from 2019 to 2021, the number of new dishes launched by green tea restaurants was 120, 147 and 178 respectively, which was about 20% updated every year, and an average of 2-3 days launched a new product.
Unfortunately, the pulse of consumers is not easy to touch, there may be many accurate once, touch two, three times very few, although the update is frequent, the category is complex, but green tea has not appeared new explosive models. In the case that the attractiveness of the old explosive model is weakened and the new explosive model does not appear, Wang Qinsong wants to use good products to naturally attract consumers.
Second, the sinking market opens new stores, but the low price of the first line is not the low price of the third and fourth lines.
The store is a great tool for green tea restaurants, as of 2021, it covers all first-tier cities, 12 new first-tier cities, 26 second-tier cities and 26 third-tier cities and below.
According to the green tea restaurant's plan, the plan is to raise 150 million US dollars for store expansion, and 75-100 new stores will be opened every year from 2022 to 2024. Nearly 80% of these new stores will be opened in second- and third-tier cities and below, and unlike small restaurant stores in first-tier and new first-tier cities, the layout of green tea restaurants in lower-tier cities is dominated by large-scale restaurants.
In the past ten years, Green Tea has explored a set of replicable business models "low price + high turnover rate + fine decoration store + prefabricated products + some specialties / high-frequency updated dishes", which is based on first-tier and new first-tier cities. For the first line / new first line, the "low price" of green tea is very attractive, for the sinking market, is this "low price" still attractive?
And although the sinking market is a blue ocean, the competition is also quite fierce; the consumer demand in the sinking market is scattered, and the preferences of the first line and the new line are not the same, and whether green tea can accurately pulse is also a problem.
Third, improve standardization, but the charm of prefabrication is weakening.
In Wang Qinsong's concept, occupying the market is inseparable from "standardization". This is a business theory summarized by Wang Qinsong after years of exploration: standardized operation through the central kitchen, and quickly seize the market while reducing costs.
In this fast-paced era, in order to improve operational efficiency, more and more Chinese food chain brands have raised the banner of standardization. According to the "2021 China Catering Industry Annual Report", among the chain catering brands with more than 10 stores, about 70% of them use centralized distribution in central kitchens.
With the semi-finished products uniformly made by the central kitchen, the store only needs simple processing to produce fast meals, which greatly reduces the dependence on the chef staff, and the scale of green tea has also grown rapidly due to the existence of the central kitchen.
Looking around the industry, Haidilao, Sipping and other Chinese food brands build their own food supply systems to control costs more easily, and their anti-risk ability will be stronger. In 2020, Green Tea established a supply chain management company, Zhejiang Luqin, and revealed its plans to operate its own central food factory in the prospectus.
It is undeniable that the high efficiency of the central kitchen has accelerated the development of green tea, but the emergence of more and more cooking bags and prepared dishes has made consumers more and more nostalgic for the pot gas of Chinese food.
03 Conclusion
The green tea restaurant that has also been popular with internet celebrities has been exposed one after another, and the lack of new explosive products and insufficient anti-risk ability have been exposed, and listing to find money is an opportunity for it to turn over. For the capital market, the old routine of low prices and rapid expansion has been listened to more, and it is not impossible for green tea to play this set, but the epidemic superimposed on the downgrading of low-line consumption, and the timing is not the best now.