Burning Dimension (ID: chaintruth) original
Text | Feng Xiaoting
ed. | Rao Xiafei
The same is a business for young people, and the two new consumer goods categories of new tea drinks and new Chinese baking have different situations at present.
For the new tea drinking track, the starting gun of a new round of the arms race has been fired.
In the past, former "high-end tea drink" brands such as Heytea, Lele Tea, and Naixue have successively explored the franchise model; Later, new tea brands such as Michelle Ice City, Hushang Auntie, and Gu Ming wanted to "catch up" with Naixue and launch an impact towards the IPO goal.
On July 24, Cai Lian News Agency reported that "Shanghai Auntie" plans to IPO in Hong Kong and is expected to submit a prospectus at the end of this year, after it was reported that Gu Ming and Michelle Ice City intend to go public in Hong Kong, and Cha Baidao, which recently announced the completion of nearly 18 billion yuan in angel round financing, is also heading for an IPO.
In the foreseeable future, several new tea brands will flock to the secondary market.
But the new Chinese baking track, which was once also sought after by young people, was not so lucky.
On the one hand, in terms of the popularity of capital and the duration of brand horse racing, "new Chinese baking" is much shorter than the new tea drinking track. In sharp contrast to the IPO of new tea brands, the wind of "new Chinese baking", which has been blowing with the concept of consumption upgrading, has stopped in less than 3 years.
On the other hand, the popularity of new Chinese baking is also greatly reduced. Since 2023, Ran Dimension has been to the Momo Dim Sum Bureau located in Beijing Dongzhimen Raffles City and Xidan stores at many time points such as weekends and holidays, weekday evenings, etc., and it is rare to see the "queuing grand situation" at the beginning of Momo Dim Sum Bureau entering Beijing, whether it is offline orders or online order pickup, most of the time you don't need to wait to pick up orders.
Many post-90s young people living in Beijing, Shanghai, Changsha and Guangzhou also expressed their attitude towards new Chinese baking to Ran Dimension, "I haven't queued up to buy new Chinese baking for a long time", "I won't buy if I pass by without queuing", "I don't buy without queuing", "I don't have to queue and don't buy"... At the same time, no consumer said to Ranji that they would "buy it every week".
And this group of young consumers who are bored with new Chinese baking have queued up in the past to buy a new Chinese baking brand, "For Internet celebrity products, there will definitely be the idea of trying early." ”
It is worth noting that the target customer group of new Chinese baking is actually highly overlapping with the target customer group of new tea drinking. The above-mentioned young people who bluntly said to Ran Dimension that "they will not queue up to buy new Chinese baking" are many fans of new tea drinks. One day or several days a week, ordering a cup of milk tea for takeaway as afternoon tea is the habit of most of them.
This group of young consumers still puts their enthusiasm on new tea drinks, but has long forgotten about new Chinese baking.
The representative brands of the new Chinese baking upstart, Momo Dim Sum Bureau and Hutou Bureau, have all undergone strategic contraction in the past year. Momo Dim Sum Bureau stores only exist in Hunan and Beijing, while Hutou Bureau only maintains 7 stores in Wuhan.
I have to admit that the rapid rise of Internet celebrity brands has made new Chinese baking another phenomenal industry dynamic in the new consumer field after the new tea drinking circle in 2016, but it is easy to become an Internet celebrity, but it is difficult to become popular.
In the young track of new Chinese baking, when the boom of capital recedes and the freshness of consumers is too strong, can "new Chinese baking" become the next "new tea drink" in the new consumption field, or later, the primary goal at present is to retain young people.
01
Vanishing stores and long lines
New Chinese bakery stores, it is difficult to see the scene of "queuing everywhere" in 2021.
In 2021, Yangyang, a post-95 girl who basically spends more than 4 times a month in Luxi River, can't remember the last time she bought new Chinese dim sum, but she is a veritable "fan" of new Chinese baking.
"Luxi River, Momo Dim Sum Bureau, Tiger Head Bureau, Dian Golden Lion, Zhan Ji Peach Crisp... In recent years, I have bought all the new Chinese bakery brands that are a little famous, and I have tasted the signature products of various families, especially the newly opened Luxi River near my home in early 2021. Yangyang recalled that the biggest "price" she had paid for this was that in the first week of Momo Dim Sum Bureau in Beijing, she queued for two and a half hours in the store, although the total cost was only more than 50 yuan in the end.
Photo: Momo Dim Sum Bureau on the weekend
Source: Saturday, January 7, 2023 at noon
Ran Dimension was photographed on the B1 floor of Raffles City Beijing
In the past, in order to taste the "Internet celebrity dim sum" recommended by bloggers on social platforms such as Xiaohongshu and Douyin, Yangyang would often take time off on weekends to go to a new Chinese bakery a few kilometers away from his home, and he would spend time queuing in long lines to satisfy his curiosity.
"I have basically visited many shops that are far away from my circle of life. Like I recently learned, the two stores in Beijing that I frequented in early 2022 have closed. The Momo Dim Sum Bureau Chongwen store that I visited before is also closed. Yangyang said.
The store closure of Yangyang, as a consumer, is just one of the cases of the frequent retreat of New Chinese Bakery in the past year.
Tianyan inspection data shows that Dian Jinlion was established in 2021, and completed two rounds of financing in the year of its establishment and the angel round and pre-A round, although the investment amount was not disclosed, and most of the participating institutions were VC institutions focusing on the early investment stage, but the two rounds of financing were received in the year of establishment, which can still see the hope of capital.
The first store of Dian Jinlion opened in Beijing on New Year's Day 2022. Since then, Dian Jinli has also opened stores in Zhengzhou out of Beijing, but so far, the number of Dian Jinli stores has not been left, two stores in Beijing have closed, and only one of the three stores in Zhengzhou is still open to the public.
Due to the small number of stores and the small number of areas covered, the Golden Lion is not well-known in the industry, and the attention caused by the closure is naturally not as good as the star brands in the industry Hutou Bureau and Momo Dim Sum Bureau.
Compared with the Golden Lion, the Tiger Head Bureau and the Momo Dim Sum Bureau are only favored by capital, and with the help of capital, the steps are also big, but they have also "fallen" in the past year.
In November 2022, when Hutou Bureau closed a number of stores in Beijing and other places, it issued an article saying, "After careful consideration, it believes that efficiency is far more important than scale, and will temporarily withdraw from some regional markets, and in the future, it will take East China and South China as the base point and radiate to surrounding cities." In December of the same year, Hutou Bureau issued a national recruitment announcement of "business partners" and opened for joining.
At the end of 2022, Hutou Bureau officially disclosed data showing that although stores in Beijing and other places have been closed, there are still 44 stores operating across the country, and said that "the closure is the company's strategic adjustment and layout optimization of the market, and more stores will open in the future".
In January 2023, Hutou Bureau, which was mired in turmoil, announced that it had obtained tens of millions of yuan in financing, with the participation of old shareholders Sequoia Capital and GGV Jiyuan Capital, but this financing did not reverse the situation of Hutou Bureau. There is frequent negative news related to it in the market. Rumors of arrears to suppliers, layoffs, and even closures are rife.
Since entering the second half of 2023, there has been less and less news related to the tiger head bureau. Last year's vision of "more stores will open in the future" has not been realized.
Ran Dimension originally planned to inquire about the operation of Hutou Bureau through the store information of Hutou Bureau's official mini program. However, in the Mini Program, no matter which city it is located, it shows "there are no stores nearby".
In the Meituan APP, a search was made of the regions of Hutou's past layout, and found that except for Wuhan, other stores in Changsha, Shanghai, Guangzhou and other places showed "closed and closed".
Momo Dim Sum Bureau is also a member of this new Chinese baking retreat. Following the closure of Chongwen stores and R&F Plaza stores in Beijing in February this year, Momo Dim Sum Bureau closed 15 stores in Wuhan in June this year, completely withdrawing from the Wuhan market. In response, Momo Dim Sum Bureau responded that this year's strategy is to focus on Hunan, focusing on strengthening the training system of store staff, store managers and backstage management.
By inquiring about the store operation of Momo Dim Sum Bureau, it can be seen that Hunan is the big camp of Momo Dim Sum Bureau. Among the 7 cities that Momo Dim Sum Bureau has entered in the past, there are 4 in Hunan City, of which Changsha has a total of 33 stores, and the rest of Changde, Hengyang and Zhuzhou have one or two stores.
In addition, the Momo Dim Sum Bureau has fully withdrawn in Hangzhou and Wuhan. In other words, the Beijing area, which currently has 6 stores, is the only area where Momo Dim Sum Bureau has a layout other than the Hunan base camp.
02
How long the queue is and how quickly it cools
The wind of new Chinese baking actually only blew in 2021.
Fueling this wind to a high point is the blessing of "venture capital queen" Xu Xin, and the ultra-high valuation of a single store reaching 100 million yuan.
In 2021, Momo Dim Sum Bureau, which has only been established for one year, has previously completed multiple rounds of financing from Clear Stream Capital, Yuanjing Capital and Tomato Capital. In June 2021, Momo Dim Sum Bureau won the investment of Today's Capital at the helm of Xu Xin, at that time, the valuation of Momo Dim Sum Bureau jumped to 1 billion yuan, while at the same time, Momo Dim Sum Bureau opened only more than ten stores in Changsha, in other words, the valuation of one store reached 100 million yuan.
Also in June 2021, there was another exciting investment event in the new consumer sector. At this time, Manner's valuation reached US$2.8 billion after its latest round of financing, which also converted to a store valuation of RMB 100 million, based on the number of Manner's stores in the country at that time.
The two brands that were popular at that time, although at that time, the valuation of a single store was 100 million, but the development in the past two years was very different.
In terms of brand coverage area, the Manner brand has a layout in first- and second-tier cities across the country, while Momo Dim Sum Bureau has retreated to only Hunan Province and Beijing; In terms of the number of stores, the big data of red food shows that the number of Manner stores is 666, while the number of Momo Dim Sum Bureau is only 44.
Although the development of Momo Dim Sum Bureau is now blocked, at that time, a new Chinese bakery with only 10 stores was worth more than 1 billion yuan, which was enough to shock people.
With the blessing of many parties, the track of new Chinese baking has become hot again. Among them, according to incomplete statistics of red meal big data, in 2021, a total of 9 brands of new Chinese baking have received financing, and many brands such as Momo Dim Sum Bureau, Hutou Bureau, and Dian Jinlion have received more than two rounds of multiple investments.
In 2021, when the new Chinese baking is in full swing, the Momo Dim Sum Bureau and the Hutou Bureau with the help of capital have mentioned the "100-store goal".
In September 2021, after Momo Dim Sum Bureau completed its Series B financing, founder Wang Yuxiao said that it expected to open 50 stores in Changsha by the end of 2021 and 100 in the future.
Source/Visual China
The tiger head bureau is not far behind. Founder Hu Ting said in an interview in 2021 that 100 directly-operated stores will be opened in the first-line core area in the next year, and at the same time, it will not consider joining until 600 directly-operated stores are opened.
However, this momentum of expansion has now worn off. Along with this, there is the fading enthusiasm of capital. Red meal big data shows that since entering 2022, due to the large number of entrants, weak product innovation and serious homogenization, the number of financing events for new Chinese baking has decreased significantly.
Although there are still investment events in the new Chinese baking track, such as Longmen Bureau, Standard Chartered Dim Sum and Pastry Bureau, all completed angel round financing in the year. However, the financing amounts of 5 million yuan and 50 million yuan respectively are very different from Hutou Bureau and Momo Dim Sum Bureau, which can accumulate more than 100 million yuan in financing in 2021.
In addition, new Chinese bakery brands that have received financing for many times in 2021 have rarely disclosed new financing news this year. At the beginning of this year, Hutou Bureau did receive a new injection of tens of millions of financing from old shareholders, but before this investment was hot, Hutou Bureau was mired in bankruptcy booing, and now the number of stores is only single-digit, and Hutou Bureau has not played a good role in this financing fund.
Since 2021, it has stood on the cusp and attracted all its attention, and now it is cold in the capital market. Many new Chinese bakery brands have witnessed this journey in less than 3 years.
03
Why is that?
The most important point for the popularity of new Chinese baking in 2021 to be favored by investors is that investors want to find the "Naixue" of the baking industry.
No matter how deep the new tea drink is now involuted and how difficult it is to make money. But Nai Xue successfully landed on the Hong Kong Stock Exchange, and early investors gained dozens of times from it, and now there are a number of new tea brands, which are IPOs.
"Imitating" the new style of tea is also the starting means for the new Chinese baking nouveau riche. In addition to the similarities such as fast product launch and rapid store opening, the popularity of new Chinese baking in 2021 is no less than that of new tea drinks in 2016.
"For every three tea houses, there is a Momo Dim Sum Bureau", which is the "flag" widely spread by Wang Yuxiao, the founder of Momo Dim Sum Bureau. At the beginning of the establishment of Momo Dim Sum Bureau, it did have such magic. Countless fans of "Momo", just as they flocked to Heytea, flocked to Momo Dim Sum Bureau.
But it is a pity that the new Chinese baking brand has not been able to continue to become popular with the new tea drink, and ushered in its own period of rapid development, but it only took 3 years to harvest an abandoned ending.
Why can't the new Chinese roasting catch the popularity of the new tea drink, nor can it become the new tea drink?
The "2022 Bakery Category Development Report" released by Meituan shows that although new Chinese roasting, like new tea drinks, has Internet celebrity attributes, the consumption stickiness of baking is obviously insufficient. Meituan data shows that in 2021, the per capita transaction frequency is only 1, and the roasting is much higher than that of tea; And more than 5 times, the bakery category is all lagging behind tea.
In addition, contemporary young people have no "taste bud loyalty" to speak of, and they "forget" after tasting it. Most Internet celebrity brands have the problem of homogenization, cheesecake, dirty bags, etc. are gradually forgotten after being popular all over the Internet, even if Chef Bao's meat pine scallops have not yet walked out of the consumer's "forgetting curve", the volume has not been as loud as before, replaced by new Chinese dim sum such as freshly baked mochi, cheese crisp, peach crisp...
Source/Visual China
Behind the explosive products "You Sing and I Appear", the old and new brands are staging the reshuffle of "sea water and flame". Learning from the early stage of the new tea drinking track, the model of seizing the market has reached the top, and the new Chinese baking needs to think more about brand increments in addition to the usual traffic methodology. Otherwise, if you always borrow the traffic model, you are doomed, and once the traffic fades, it will no longer exist.
Although the "XX Bureau" new Chinese baking brand that has sprung up in recent years has cooled the development of the capital market and the enthusiasm of the consumer market, the retreat tide of the new Chinese baking industry is underway, but this cannot represent the decline of the entire new Chinese baking industry.
In February this year, the representative brand of new Chinese bakery "Luxihe" announced that it had obtained its first strategic financing amounting to hundreds of millions of yuan, jointly led by Bailian Zhigao Capital and Longbai Capital. It is reported that the financing funds will be mainly used for supply chain construction and digital upgrading.
Bao Caisheng, the founder of Master Bao, once said in the past, "There is a strange theory in the baking industry, once in 5 years, if the cards are shuffled, if they are unchanged, they will be washed out." ”
Luxi River, founded in 2013, and Chef Bao, founded in 2004, although not the most capital-watched upstart in the new Chinese baking industry in 2021, still survive on this track in the big waves of 3 years.
As the founder of Momo Dim Sum Bureau said, "cultivate internal strength". The track of new Chinese baking is still very promising, but it needs brands to explore a healthy business model.
In the past, the model of chasing traffic and burning money for growth is obviously not a correct way to operate, and in the final analysis, new Chinese baking still has to return to the essence of retail from traffic.
*The title image and some of the accompanying pictures are from Visual China.
*Yangyang is a pseudonym in the text.
*Disclaimer: Under no circumstances does the information in this article or the opinions expressed constitute investment advice to anyone.