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- Source/Brand Officer
- Author/Brand Officer
Introduction: Xi'an, the once-quiet "noodle province", ushered in a heavyweight player! When "Mandu" meets Western-style pie, it seems natural to break the record.
On December 24, the pizza brand Domino's opened its first store in Northwest China in Xi'an, Shaanxi.
Xi'an people, who have carved the gene of eating steamed buns in their bones, really live up to their reputation, with a turnover of 320,000 yuan, breaking the first-day sales record of their global stores!
It is said that for this day, Domino's also transferred dozens of store assistants from Beijing to help.
Previously, this record was held on December 24, the opening day of the first Domino's store in Hunan, as high as 300,000 yuan, and after a while, this record was broken by the people of Xi'an!
Before the first store in Hunan, the highest daily turnover record for a single store in the world was held by the first store in Chengdu, 160,000 yuan.
Domino's has the highest daily turnover of a single store in the world, which has been broken by the first store in China one after another, and as long as Domino's comes to a city to open its first store, it will set off a wave of queue craze.
According to Domino's Global System internal rankings, Domino's Chinese stores occupy nine of the top 10 best opening sales in the first month of Domino's in the world!
I have to sigh, the combat effectiveness of foodies is really strong!
What's the origin of this Domino's that makes everyone so crazy?
01, why is "Damen" so crazy?
Just as McDonald's has a "McGate", Domino's also has a "Damen".
This pizza brand from the United States has made young people in China crazy.
Following Sam and Master Bao, the daigou in the circle of friends even developed a new purchasing category for "Damen" - Domino's Pizza.
No matter where you are, the daigou can undertake the "Domino's pizza demand" all over the country, and many young people who can't eat Domino's do not hesitate to increase the price by 10-30 yuan, just to eat that bite of "scarce".
The crazy "Damen" even cut the corners of the pizza delivered from across the province, packed each corner of the pizza in a food packaging bag, and put it in the frozen refrigerator, as long as it was heated, it was a fresh and hot pizza.
Some people even travel to cities with Domino's, and Domino's pizza has become a must-eat "specialty".
Domino's has only opened stores in 29 cities across the country, and eight of the new cities opened between December 23 and 24.
So for the "foodies" everywhere, it is indeed "in short supply".
Some time ago, Domino's also rushed to the hot search on social platforms because of the loss of 900 million # in #3 years, which attracted waves of love from netizens.
In the three years from 2019 to 2021, Domino's three-year revenue was 837 million, 1.104 billion, and 1.611 billion respectively.
Watching the revenue rise, but in fact it is not making money.
Domino's has had a net loss of 182 million, 274 million, and 471 million for three consecutive years, with a cumulative loss of 970 million in three years.
As a result, netizens are begging Damei not to go out of business, asking every day: "When will it be opened to me?"
As a result, under the affectionate confession of netizens, Domino's announced its performance report for the first half of 2023, and in the six months ended June 30, 2023, Domino's total revenue in China was about 1.376 billion yuan, a year-on-year increase of 51.5%.
The operating profit of the store rose by 123.6% to 186 million yuan. Up to now, Domino's has more than 750 stores in China.
Thanks to the speed of development in China, Domino's announced that the number of stores is expected to exceed 1,000 by the end of 2024.
However, Domino's actually entered the Chinese market as early as 1997, but the expansion rate was very slow at that time, so not many people knew about it.
It was in the past few years that Domino's opened stores in China, coupled with marketing offensives, and it became well-known to everyone.
However, Domino's, who is firmly in the position of the world's leader in the pizza industry, cannot beat Pizza Hut in China.
02. The big brother of the global pizza industry, but he can't do Pizza Hut in China
As of January 1, 2023, Domino's has more than 20,000 stores in more than 90 countries and regions around the world, making it the world's largest pizza company and a veritable pizza brother.
Despite being the world's leader, Domino's ranks third in China with a market share of only 5.3% in 2022.
(Source: Dash Prospectus, Essence International)
Pizza Hut has 3,072 stores in China, covering more than 600 cities across the country. Domino's has only 750 stores in 29 cities in China, less than a quarter of Pizza Hut.
One reason for this is that Pizza Hut entered the Chinese market seven years earlier than Domino's, and in those seven years, Pizza Hut cultivated its first pizza audience in Chinese cities.
Its positioning as a "happy restaurant" has captured the hearts of many young people and children.
Seven years later, Domino's, which entered the Chinese market, not only did not take Pizza Hut as a "strong enemy" in its eyes, but also did not put the Chinese market in an important strategic position.
As a result, Domino's development in China has been very slow, and at the same time, the management rights are relatively scattered, and the branches are not united with each other, where can it compare with the "well-trained" Pizza Hut.
Although in China, there are many people who complain about Pizza Hut, but it is undeniable that when it comes to pizza, everyone will still think of the name Pizza Hut first.
And in terms of regional coverage, Domino's is not as good as Pizza Hut. Domino's is generally settled in the core business district area of first- and second-tier cities, and there is no strategy to sink the market.
Therefore, in many third- and fourth-tier cities, some people have not even heard of Domino's as a city, but it does not prevent it from becoming an "Internet celebrity pizza" on various social platforms, and everyone has shouted for Domino's to open their own city.
In addition to the suppression of Pizza Hut, Domino's proud food delivery business has come to China, but it has become a painful promise.
03, 30 minutes to arrive, in China "not adaptable"?
Back in 1960, a pair of brothers in Michigan, USA, took over a small pizzeria that was on the verge of bankruptcy.
Their names are Tom and Jim, just like ordinary young people with entrepreneurial dreams, they have no background in the restaurant industry, and their family background is very ordinary, and they borrowed $900 to open a store with full enthusiasm.
The brothers were very motivated in the early days of their business, working nearly 100 hours a week, and thanks to their efforts, they gradually revitalized the small pizzeria.
The two brothers were distressed because the business had improved, but the store was too small to accommodate too many customers, but Tom found one thing, in fact, many customers were in a hurry to buy pizza, and basically did not sit in the store to eat, hoping to take it home quickly.
So, Tom made a bold decision to make the food delivery business the focus of his development.
In order to make pizza available to customers quickly, Tom began to modify the menu to eliminate items other than pizza, while also finding ways to simplify the production process.
As a result, business in the store began to get better and better, from making $99 a week to $750. As the business grew, Tom officially changed the name of the small pizzeria to Domino's in 1965.
Tom decided to take delivery to the extreme, he kept speeding up the pizza making time, and carefully considered the problem of pizza insulation, and designed the classic thick cardboard box, so that Domino's pizza production time became faster and faster.
By 1969, Domino's had 14 stores.
In order to expand quickly, Tom decided to launch the world's first delivery guarantee, which is "30 minutes before delivery, discount".
This slogan is not unusual in China's food delivery market today, but it can be said to have shocked the industry in the United States at that time.
As a result, Domino's has become synonymous with fast delivery in the eyes of consumers.
At this point, Domino's has grown from a small local store to a national chain.
Tom, who was very ambitious, continued to push for the franchise, and he began to raise his tentacles to the international market, and the slogan became more and more wild.
In 1979, Domino's officially launched the slogan "30 minutes or free".
In the 80s, it was a critical hit to reach within 30 minutes, no matter what kind of food and beverage it was.
Therefore, this move directly put Domino's on the road of rapid global expansion.
By 1984, Domino's had skyrocketed to 1,900 stores worldwide. In 2004, Domino's was listed on the New York Stock Exchange.
As a result, I didn't expect Domino's to become the world's "pizza brother" by relying on the takeaway system, but when it came to China, it was "unadaptable".
Domino's "30-minute delivery" in the Chinese market relies on semi-finished products, a distribution range within 4 kilometers and scientific route planning to achieve the fastest delivery purpose.
However, the delivery time is not 30 minutes at all, because excluding the 12 minutes for pizza making, there is only 18 minutes left for the delivery rider.
This means that riders race against the clock to get pizza to customers in the fastest possible time.
At the same time, Domino's also needs to hire a large number of full-time and part-time food delivery workers. This part of the labor needs to pay a higher cost than Meituan.
According to Domino's prospectus, employee compensation is the highest cost expense. In the three years from 2019 to 2021, the ratio of employee compensation expenses to total revenue was 40.15%, 42.5% and 43.66% respectively.
Labor costs account for almost half of the revenue, and it is not an exaggeration to call it a gold-swallowing beast. This is also why Domino's has suffered consecutive losses during the three years from 2019 to 2021.
In addition, the domestic takeaway business pattern has basically stabilized, and consumers have little impact on whether they arrive in 30 minutes or 40 minutes.
There is a saying, or a good description of Domino's, that is, "orange born in Huainan is orange, and born in Huaibei is orange".
04. Is it really important to arrive in 30 minutes?
Founder Tom seems to have a morbid obsession with the "30-minute delivery", leading to a period of time when he demanded delivery times that even exceeded the taste of pizza.
The pursuit of fast perfection makes the quality control worse and worse, and Domino's receives more and more bad reviews.
In 2007, Domino's sales continued to decline, and everyone thought that Domino's pizza was unpalatable like a piece of "cardboard".
On November 20, 2008, Domino's stock price fell to a record low of $2.83.
Domino's executives found the problem and began to reform the product, replacing the ingredients of the pre-made ingredients and bringing together the chefs to reinvent the product and create a new recipe with more than a dozen combinations of dough, sauces and cheeses.
Domino's sales gradually recovered, and it successfully recovered from this brand crisis.
Domino's is willing to listen to the opinions of consumers and make corrections, which is worthy of all companies to understand and resolutely implement.
However, for domestic consumers, we are more concerned about "whether it is delicious or not", and perhaps it is really not so important to arrive in 30 minutes.
Have you ever eaten Domino's? What do you think of its "30-minute delivery"? Welcome to leave a message in the comment area to discuss, express your opinions or opinions, thank you.
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