Image source @ Visual China
The article | CBNData consumer station, author, cartographer | North River, edited | Backlight, Bai Ziren
Compared with the bustle of the beauty industry, offline retail and daily chemical home cleaning industry seem relatively low-key, but there is also a dark tide under the calm lake. In 2021, the once brilliant Wangfujing fell into the tide of store closures, Gome Retail launched the "True Happiness" APP to test the waters of new retail, and the discussion around physical retail is also endless: offline vs entity Who can win in the end? How can hypermarkets help themselves? For brick-and-mortar retail, is a new era of digital transformation coming?
In the daily chemical jiaqing industry, in 2021, we see that the competition for categories is becoming increasingly fierce, and brands compete from multiple directions, and the "ceiling" of the industry is constantly being refreshed. When refinement becomes the "just need" of life, the epidemic has changed people's consumption psychology and habits, and the daily chemical Jiaqing track will usher in a greater market increase in the future. So in this industry, what are the keywords in 2021?
With such a question, this article focuses on the offline retail and daily chemical home cleaning industry, takes stock of the annual reports of 47 related enterprises, and disassembles the two representative enterprises of Zhang Xiaoquan and Babi Food in detail, taking you back to "offline retail and daily chemical home cleaning industry 2021" from the data perspective.
【Nichihua Family Qing Chapter】
As can be seen from the financial report, the revenue of Vinda International in 2021 exceeded 15 billion yuan, an increase of 13.11% year-on-year, and it is still the "leader" of Rihua Jiaqing. From the perspective of net profit, 6 companies have achieved profitability in 2021, with Vinda International and Blue Moon Group occupying the top two positions respectively, and the two-sided needle has a micro-profit of 0.087 billion yuan in 2021.
In terms of business categories, Two-Sided Needle, Zhang Xiaoquan and Tan Carpenter are all steadily established in their own professional fields. In particular, Zhang Xiaoquan, who was just listed in 2021, handed over an eye-catching report card in his first financial report, and his revenue increased by 32.81% year-on-year, ranking first among 6 companies. So in the "small profit, high sales" knife and scissors industry, how did Zhang Xiaoquan achieve revenue growth of more than 30%? Let's analyze this company from the financial report.
Can the long-established Zhang Xiaoquan win new consumers?
In September 2021, Zhang Xiaoquan was successfully listed, becoming the first listed enterprise in the domestic knife and scissors industry. Half a year after the listing, the company disclosed its first annual report, in 2021, the company's operating income was 760 million yuan, an increase of 32.81% year-on-year; net profit was 78.7328 million yuan, an increase of 1.96% year-on-year.
Zhang Xiaoquan wants to create a "new national tide"
According to the financial report, Zhang Xiaoquan's revenue and net profit are growing in 2021, but compared with previous years, the growth rate of net profit has slowed down. From 2019 to 2021, Zhang Xiaoquan's net profit margin on sales was 14.94%, 13.49% and 10.36% respectively, and in the long run, the net profit margin continued to decline, and the company's profitability showed signs of weakening.
In contrast, the sales of Zhang Xiaoquan's online channels in 2021 are more eye-catching. As early as 2011, Zhang Xiaoquan opened a Tmall flagship store, even earlier than some FMCG brands. According to public information, there were 60 people in the e-commerce department established that year, but the online sales volume that year was only 200,000 yuan, which was not enough for personnel expenses. By 2016, with the rise of domestic e-commerce platforms, Zhang Xiaoquan's online sales scale exceeded 120 million yuan. Since 2018, the Zhang Xiaoquan brand has been ranked first in the ranking of scissors stores on Taobao Tmall and Jingdong platforms. As of 2021, Zhang Xiaoquan's online sales accounted for 50.2% from 35.54% in 2018, and the proportion of online sales gradually increased, and e-commerce became an important channel for Zhang Xiaoquan.
Data source @ Zhang Xiaoquan 2021 financial report
In addition to traditional e-commerce, Zhang Xiaoquan is also actively laying out emerging e-commerce. Because although the "knife and scissor" products are just needed, the replacement frequency is very low, only by turning to a younger consumer group can the brand be prevented from aging. In 2021, Zhang Xiaoquan established a new media matrix on social platforms such as WeChat, Weibo, Douyin, and Xiaohongshu, and continuously narrowed the distance with young people by updating interesting videos on social platforms. In recent years, Zhang Xiaoquan has successively launched a series of products such as Transformers, Onizuka, and Misaki, which have won praise from many fans. In addition, Zhang Xiaoquan also kept up with the trend of live streaming with goods early, and in 2020, in the Weiya live broadcast room, Zhang Xiaoquan launched a knife set priced at more than 400 yuan in sales exceeded one million yuan in a few minutes. Recently, General Manager Xia Qianliang even appeared in the Pinduoduo live broadcast room in person, and more than 1.46 million netizens watched the live broadcast on the same day. However, these attempts at brand promotion have also led to a rise in marketing expenses, with Zhang Xiaoquan's sales expenses increasing by 41.8% year-on-year to 117 million yuan in 2021. The financial report explained that the increase in sales expenses was related to the company's increase in brand promotion and product promotion, and the corresponding increase in advertising expenses.
Fakes are rampant, and the old brand should protect the "golden signboard"
For long-established brands, due to weak brand awareness, copycat goods plagiarism, historical legacy and other issues, enterprises are easy to fall into the dilemma of brand disputes. For example, Wang Mazi, who is equally famous as Zhang Xiaoquan, has declined because of the lack of brand protection. At the beginning, Wang Mazi was famous and various imitations appeared in an endless stream, but Wang Mazi scissors were neglected to maintain. In 1995, Wang Mazi scissors re-registered the "Wang Mazi" trademark, the new and old trademarks began to be confused, and consumers' loyalty to the brand slowly weakened. According to the data, Wang Mazi's turnover in 2019 was only more than 4 million yuan, but the sales of the major online and offline platforms "Wang Mazi" products were as high as 100 million yuan.
Similar to Wang Mazi, Zhang Xiaoquan has also been involved in brand disputes due to restructuring. Due to historical reasons, Zhang Xiaoquan has changed hands several times, and for a time there was a situation in which Two Zhang Xiaoquans coexisted in Hangzhou and Shanghai. Until 2014, under the operation of Fuchun Holdings, Hangzhou and Shanghai two Zhang Xiaoquan merged into one, officially completed the brand unification, and since then Zhang Xiaoquan has also gone further and further on the road of building brand IP.
In 2015, Zhang Xiaoquan coincidentally appeared in the popular American drama "Hannibal", the "Hannibal same" kitchen knife was immediately snapped up, and the name of "Zhang Xiaoquan" was remembered by young people; in 2017, Zhang Xiaoquan launched the image of "Uncle Quan" in the "China Has Hip Hop" program, and the brand image was further enriched and younger; then with the brand going to sea, Zhang Xiaoquan became a Chinese business card in the hearts of overseas people. By shaping the IP image of the national tide, jointly branding film and television variety shows, and launching brand peripherals, Zhang Xiaoquan has continuously refreshed the golden signboard of the old brand, and has also gained a large number of "young fans". Zhang Xiaoquan's attitude towards fake goods is also much tougher, and the prospectus discloses that from 2018 to 2020, Zhang Xiaoquan's expenses for brand maintenance and prevention of counterfeiting and shoddy mainly include service fees, lawyer fees and salaries of anti-counterfeiting rights protection commissioners, with a total expenditure of 470,200 yuan.
Zhang Xiaoquan = knife scissors + N?
"Starting in 2022, Zhang Xiaoquan further proposed to complete the strategic development goal of upgrading from a kitchen brand to a quality home brand in 3-5 years." This is the strategic principle put forward by Xia Qianliang, general manager of Zhang Xiaoquan. Scissors and knives as durable goods, the replacement cycle is long, so Zhang Xiaoquan urgently needs to break free of the frame by building a new "scene" of use. At present, in addition to the main business of knife and scissors, Zhang Xiaoquan's "N" is moving towards a variety of consumption scenarios such as kitchens, living rooms, and homes.
Source @ Zhang Xiaoquan 2021 financial report
According to the 2021 financial report, Zhang Xiaoquan's traditional advantageous products knife and scissors category achieved revenue of 530 million yuan in the whole year, an increase of 20.00% year-on-year, and the growth rate has slowed down. The revenue of the two new product categories (kitchen appliances and household hardware) accounted for 29.91%. It can be seen that in addition to the traditional business, the company's new product layout has grown rapidly. But it should also be noted that the products covered by the kitchenware appliance business cluster are not only small household appliances, but also cover hotel supplies, cooking utensils, miscellaneous bamboo and wood, etc., so from this point of view, a considerable part of Zhang Xiaoquan's kitchen appliance income is still contributed by knife scissors.
In September 2019, Zhang Xiaoquan established the small household appliances division, focusing on the concept of "healthy small electricity", but with the fading of the wave of small household appliances, the industry has appeared "cooling" phenomenon. In the first half of 2021, the retail sales of domestic small household appliances were 25.08 billion yuan and the retail volume was 119.11 million units, down 8.6% and 8.2% respectively year-on-year. From the Tmall flagship store, we can see that the sales performance of Zhang Xiaoquan's small household appliances category is not outstanding, and the small household appliance market also has powerful giants such as Suber, Jiuyang, and Midea, and there are also small bear electrical appliances, which are aimed at young people's creative small household appliance brands, and the industry as a whole belongs to the head competition. Under this fierce competition pattern, whether Zhang Xiaoquan's small household appliance road is stable is still unknown.
Whether it is in the main knife and scissors track, or in the new category of kitchen appliances track, the root of the victory is hard-core technology and continuous innovation products. The data shows that from 2018 to 2021, Zhang Xiaoquan is gradually increasing R& D investment, but the R & D expense rate is lower than the industry average, and Zhang Xiaoquan's R & D expense rate will further drop to 3.01% in 2021. As a long-established brand with nearly 400 years, by the end of 2021, Zhang Xiaoquan has 135 patents (2 invention patents, 39 utility model patents, and 94 design patents).
In the field of kitchenware and home furnishing, Zhang Xiaoquan, as a latecomer, is not realistic to rely solely on long-established brands and brand feelings to attract consumers to pay. In the market of advantageous products hardware and tools, due to the simple process technology, the entry threshold is not high, and the market is becoming more and more saturated. Therefore, for Zhang Xiaoquan, whether he can come up with innovative and competitive products in the future to catch up later, and it is particularly important to tap new market increments.
【Offline Retail】
Among the 37 listed companies in the offline retail industry, 26 companies have announced their financial reports as of April 29. Since there are more businesses involved in the offline retail industry and the gap between the revenue status of various enterprises is large, we will divide the 2021 revenue of the disclosed financial report enterprises into more than 10 billion, 5 billion to 10 billion, 1 billion to 5 billion and less than 1 billion yuan, and the number of companies of each magnitude is distributed as follows:
Specifically, the old retail enterprises that can achieve revenue of more than 10 billion yuan are old retail enterprises such as Gome Retail, Lianhua Supermarket and Wangfujing. Among the enterprises with revenue of 5-10 billion yuan, only Hualian Zongchao and Renrenle lost money in 2021, and the revenue of these two companies fell by more than 10% year-on-year. Companies under 5 billion yuan accounted for 46%, and only 3 lost money, of which Babi Food had the highest revenue growth rate, reaching 41%. As the only company that specializes in early breakfast, how does Barbie Foods do a good job in this grounded business? Next, we want to explore a thing or two from the data.
"The first share of buns", can it harvest more market share in the future?
Revenue increased and gross margin declined
In 2021, The operating income of Babi Food was 1.375 billion yuan, an increase of 41.06% year-on-year, and the net profit was 314 million yuan, an increase of 78.92% year-on-year.
Of the 314 million yuan of profit, about 147 million yuan is the non-operating income brought by Babi Food's indirect holding of Dongpeng Beverage shares through Tianjin Junzheng Investment Management Partnership in 2021. Net profit after deducting non-recurring gains and losses was RMB152 million, an increase of 18.06% year-on-year.
According to the 2021 annual report, due to the increase in raw material costs, labor costs and depreciation and amortization, the operating cost increased by 45.4% year-on-year, which was higher than the growth rate of operating income of 41.1%, which also caused the gross profit margin of Babi Food's various businesses to decline, and the overall gross profit margin fell by 2.2%.
Babi Foods' national expansion path
From the perspective of revenue, in 2021, East China achieved revenue of 1.257 billion yuan, accounting for 91.42%; South China and North China achieved revenue of only 0.84 billion yuan and 0.31 billion yuan. From 2019 to 2021, East China has been accounting for a relatively heavy proportion.
Babi Food was first developed in Shanghai, so East China was the most mature and had the largest number of stores, after which it began to expand to the Pearl River Delta region centered on Guangzhou and the Beijing-Tianjin-Hebei region centered on Beijing.
In February 2014, Babi Foods began to enter the South China market, but the market in South China is extremely competitive. The variety of local breakfasts is already abundant, and the quality location has long been occupied by local breakfast restaurants. As a cross-regional latecomer, the Barbie brand needs to invest more costs if it wants to enter a high-quality location; if it chooses a non-high-quality zone, it will have an impact on profitability for categories that rely on geographical advantages such as breakfast.
Babi food entered North China later. Since there was no self-built factory at the beginning, it has always relied on commissioned processing and production, with limited production capacity and difficulty in controlling quality. In 2020, due to the impact of the epidemic, the expansion rate of stores was slower. In addition, the tastes of North China and East China are different, for example, the special milk yellow bun of Babi food is not as popular as traditional filling in the north. In addition, the degree of localization of Babi food is not high, and the cost of research and development has always been very low. According to the 2021 annual report, Barbie Food's research and development expenses reached 5.9601 million yuan, accounting for only 0.43% of the total revenue, which also led to Barbie Food's inability to make changes to local taste preferences.
From the perspective of franchise distribution, the main sales model of Babi Food is mainly franchised, supplemented by direct stores and group meal sales, and online sales models such as third-party e-commerce platforms are carried out. As of 2021, Barbie Foods has a total of 3461 franchised stores and 19 directly operated stores across the country.
Source @ Babi Foods 2021 Earnings
From the financial report, it can be seen that Babi food franchise stores are generally located in Shanghai, Zhejiang, Jiangsu, Guangdong, Beijing and other provinces. As of 2021, the number of franchised stores in East China is close to 3,000, only 370 stores in South China, and even fewer stores in North China. At present, the sales model of Babi Food is mainly franchised, and the sales of franchise stores in 2021 will achieve revenue of 1.121 billion yuan, accounting for 81.55% of the main revenue, an increase of 37.93% year-on-year.
From the perspective of capacity utilization rate, compared with the overload production of factories in East China, the capacity utilization rate in South China and North China is relatively low. In 2021, the capacity utilization rate of South China and North China will be less than 48%.
Source @ Babi Foods 2021 Earnings
Before the Shanghai Phase II plant was officially put into operation, the east China plant was overloaded, and the capacity utilization rate often exceeded 100%. Although South China and North China have capacity to supply capacity, they do not produce products that match production capacity, and the capacity utilization rate is low. In this way, in the case of the East China market is close to saturation, the supply output of South China and North China will not only fail to promote the expansion of scale, but also drag down the overall performance. Therefore, Barbie Foods said that in 2022, the company will improve the capacity utilization rate of the South China factory and the North China plant. By the end of 2021, Barbie Foods' monetary funds will be 1.262 billion yuan, where will this cash be used? From the perspective of business plan, on the one hand, the company should promote the construction of the Wuhan intelligent manufacturing center with a total investment of 750 million yuan; on the other hand, the company hopes that the number of newly expanded stores will rise to a higher level than in 2021.
Breakfast + group meal, Barbie food card slot right?
First of all, the breakfast consumer market is upgrading and moving towards multi-scenario.
From the perspective of business structure, "pastry" is the main source of Barbie Food's operating income. In 2021, the operating income of the "pastry category" was 470 million, accounting for 34.1% of revenue and 22.5% of gross profit margin. Pastry products include homegrown buns, steamed buns, coarse grain snacks and other traditional Chinese breakfasts.
Source @ Babi Foods 2021 Earnings
The breakfast market is actually not easy to do. According to the Mintel report, Chinese consumers' total consumption of breakfast food will increase from 1.334 trillion yuan in 2015 to 1.948 trillion yuan in 2021. Although the market size is large, the industry threshold is not high, there are many players entering the game, and the number of domestic chain breakfast companies has reached about 2,000. Breakfast is a low-margin industry in catering, and the unit price per capita is lower than the average consumption level. According to the 2021 financial report, the average income of Barbie Food franchise stores is 324,000 yuan / year, and the average income of a single day is less than 900 yuan.
In addition, in the context of increasing consumption upgrading, people have put forward higher requirements for breakfast, and the breakfast market has begun to move towards diversification and quality. First of all, there are already more than traditional buns, eggs, milk, KFC McDonald's and other foreign fast food have entered the breakfast, and continue to expand the product library; convenience stores and supermarkets provide sandwiches, rice balls and other rich breakfast options. Secondly, the breakfast shop environment is also being upgraded and optimized, although the habit of breakfast take-out still occupies the main proportion, but there are more and more consumers who choose to spend breakfast time in a well-decorated breakfast restaurant. These all put forward more requirements for traditional breakfast shops: on the one hand, to improve the supply chain, improve the standardized process and other methods to increase revenue, on the other hand, to retain consumers through continuous innovation categories.
The group meal market, which Is dominated by Barbie Foods, is ushering in new demand in the future.
In a recent public interview, when asked what the factory would produce in the future, Barbie Foods Chairman Liu Huiping answered that semi-finished dishes were processed. With the increasing demand for breakfast food in various restaurant chains, convenience stores, and canteens of various units, the demand for Chinese noodle quick-frozen food in the group meal consumer market has just begun to be released. In the household consumer market, pastry frozen food not only meets the requirements of easy cooking and nutritious ingredients, but also conforms to the consumption concept of young people pursuing convenience, speed, health and hygiene, so the group meal business has huge room for development.
In 2021, the sales of Babi Food's institutional meals achieved revenue of 215 million yuan, accounting for 15.62% of the main revenue, an increase of 61.21% year-on-year, and the high proportion of growth in the institutional catering business was regarded as one of the reasons for the revenue growth of Babi Foods.
Source @ Babi Foods 2021 Earnings
As can be seen from the financial report, in 2021, chain franchise stores and large customers of group meals have become the company's two core businesses. The production and sales volume of pastry products (including buns, steamed buns, coarse grain snacks and other items) and filling products increased over the same period of the previous year, mainly due to the growth of store sales and the expansion of the group meal business. On the one hand, Babi Food develops currency products to enhance the company's market competitiveness in the field of large customers of group meals, and can also launch customized products for customers with special needs; on the other hand, Babi Food also has a new retail channel layout on the fresh online such as Hema Fresh Food, Meituan Buy Vegetables, Dingdong Food, etc., to supplement the consumption scene outside the store.
Analysts at Guolian Securities said in a recent research report that since 2021, with the growing scale of the institutional catering division, the Barbie food institutional catering business has grown significantly, promoting the capacity utilization rate of the Shanghai factory to be almost saturated, and the Nanjing smart factory is expected to gradually release new production capacity in the second half of 2022. However, although the revenue of institutional meals has achieved a substantial increase in 2021, the problem in front of Babi Food is that the gross profit margin is low, and the gross profit margin of institutional meals in 2021 is only 19.49%, which is far lower than that of franchise and direct business, and if you want to expand the scale for strategic upgrading in the future, Babi Food still needs to break through this bottleneck.