36,000, this is the number of stores disclosed by Mixue Bingcheng in the latest prospectus.
With this achievement, Michelle Bingcheng has become the fifth largest fast-food chain in the world, behind McDonald's, Subway, Starbucks and KFC.
You must know that the four companies in front of Mixue Bingcheng have a brand history of tens or hundreds of years, and their stores are located in hundreds of countries around the world.
In contrast, at present, the stores of Mixue Bingcheng are mainly concentrated in China (32,000), and overseas stores are mainly in Southeast Asia.
Therefore, whether Mixue Bingcheng can continue to move forward and become a truly world-renowned long-term catering brand is also quite controversial in the market.
01 Open a store, open a store like crazy
The business model of Mixue Bingcheng is very simple, and its customers are the majority of franchisees.
In other words, Mixue Bingcheng mainly obtains income by providing ingredients, packaging materials, equipment, and collecting franchise fees and service fees to franchisees.
Theoretically speaking, the more franchised stores, the more revenue Mixue Bingcheng gets from franchisees, and at the same time, the scale effect will continue to be formed, and the stronger the profitability of the enterprise will be.
As a result, opening stores and crazy stores have become the focus of the development of Mixue Bingcheng.
According to the official website of Mixue Bingcheng, in 2020, the number of franchised stores of Mixue Bingcheng exceeded 10,000, becoming the only brand in China's new tea drink that reached the level of 10,000 stores at that time.
Since then, the pace of store opening has been accelerating.
According to the prospectus, the number of stores has reached 20,000 in 2021, increased to 29,000 in 2022, and reached 36,000 by September 30, 2023.
Source: Prospectus
Through the continuous influx of franchisees, Mixue Bingcheng has also made a lot of money.
According to the prospectus, from 2021 to the first three quarters of 2023, the revenue of Mixue Bingcheng will be 10.351 billion yuan, 13.576 billion yuan and 15.393 billion yuan respectively.
Among them, the sale of sugar, milk, tea and other ingredients to franchisees and packaging materials such as cups and straws are the main revenue. From 2021 to the first three quarters of 2023, the sales revenue of this part of the company accounted for more than 90% of the total revenue.
In addition to selling goods, equipment sales ranked second, including ice cream machines, coffee machines, ice machines, etc., contributing about 5% of sales revenue.
Source: Prospectus
From the perspective of "making money", the prospectus shows that from 2021 to the first three quarters of 2023, the net profit of Mixue Bingcheng will be 1.912 billion yuan, 2.013 billion yuan and 2.453 billion yuan respectively.
At present, whether it is revenue or net profit scale, Mixue Bingcheng is the leader of new tea drinks, far surpassing Naixue's tea, ancient tea, tea Baidao and other players.
To sum up, although Mixue Bingcheng sells cheaply, it is indeed very profitable, mainly because of its scale.
The core of its business model is to master the self-production of core raw materials through self-built supply chains, reduce costs to the minimum, so as to attract more franchisees, continue to reduce costs after the formation of scale effects, and then attract consumers through low-cost advantages to form a commercial closed loop.
Therefore, Mixue Bingcheng can actually be understood as a supply chain company dressed in milk tea
02 Franchisees, life is not easy
People often ask questions on the Internet, does it make money to open a Honey Snow Ice City?
The answer is that it wasn't before, it's harder now.
In the end, whether it makes money or not, how much money it makes from Mixue Bingcheng in the hands of the franchise store, maybe it can be reversed.
According to the prospectus data, in the first three quarters of 2023, Mixue Bingcheng's revenue will be 15.393 billion yuan, of which the revenue from commodity sales will account for 94.3%, and the revenue from selling products will be about 14.5 billion yuan.
The number of stores in the first three quarters was 36,000, so in the first three quarters, each store sold about 400,000 products on average, and about 44,000 yuan per month.
The gross profit margin of franchisees is basically about 50%, so the total monthly income of franchised stores is about 8.8 yuan.
Suppose you open a Mixue Bingcheng, the monthly rent budget is 10,000 yuan, the monthly salary of 4 clerks is 4,000 yuan, the monthly labor cost is 16,000 yuan, the water and electricity bill is about 5,000 yuan, the food is about 44,000 yuan, and the monthly expenditure is about 7.5 yuan, and the net profit is only 13,000 yuan.
If you can earn 13,000 yuan a month, you need to invest at least 370,000 yuan in franchise fees, equipment fees, decoration fees, transfer fees, admission fees, etc. in the early stage of opening a store.
However, this is not counting the fact that the headquarters may require store decoration upgrades, price reductions and promotions, fines for non-standard inspections, consulting fees, management fees, etc., in short, stores will actually face more expenses.
Of course, the biggest crisis may be the opening of a new Honey Snow Ice City next to you.
Source: AutoNavi Map
At present, the number of stores in China has been too dense, and it has almost become a "street fighter" in large and small cities, but the stores are too dense, which will directly lead to the dilution of customer flow, and franchisees are also miserable about it.
It can be seen in the prospectus that the number of franchisee store closures has increased significantly.
From 2021 to September 30, 2023, the number of closed stores of Mixue Bingcheng franchisees was 577, 696 and 856 respectively. Among them, the number of stores closed by franchisees was 206, 264 and 403, accounting for 35.7%, 37.9% and 47.1% respectively.
The number of franchisees closing stores has increased significantly, and it is obvious that more and more franchisees can no longer hold on. Of course, the franchisee is having a hard time, which also directly affects the development space of Mixue Bingcheng.
03 Overseas markets, more uncertainties
If the domestic market tends to be saturated, then the development of overseas seems to be inevitable.
At present, there are about 4,000 stores overseas, mainly in Southeast Asia. According to statistics from Vietnam Finance, as of April 2023, Mixue Bingcheng has 1,500 stores in Indonesia and more than 1,000 stores in Vietnam.
But at present, many problems have been exposed in the overseas market.
For example, in September last year, the Vietnamese franchisees of Mixue Bingcheng collectively pulled banners and protested. The reason is that Mixue Bingcheng announced a 25% price reduction for its products in Vietnam, but the raw materials supplied to franchisees were only reduced by 8%-10%, which means that franchisees need to bear a large price adjustment loss.
Already with small profits but quick turnover, continuing to reduce prices makes the situation of franchisees more difficult.
At the same time, according to media reports, a Vietnamese franchisee said, "Michelle promised in the initial contract that the distance between the stores was more than 500 meters. In the new contract signed in 2022, Michelle promised to keep the distance between stores at more than 200 meters, which led to a significant reduction in the number of customers per store. ”
In fact, these problems exposed overseas are basically the same as those in China.
The core lies in the fact that the price reduction of Mixue Bingcheng is to continue to replicate this domestic game overseas through a low-price strategy.
But the problem is that at present, the biggest advantage of Mixue Bingcheng in China is that it has the advantage of supply chain and can control costs well, but this business model obviously does not work overseas.
If Mixue Bingcheng chooses to build its own supply chain overseas, the initial investment will be huge, but the overseas market is fiercely competitive, the regional culture is different, and the international politics are also changeable, and the uncertainty is greater.
If you choose to ship goods overseas, then the logistics cost is also huge, and the low-cost advantage is not there.
Therefore, no matter how Mixue Bingcheng chooses, it is not an overnight thing to replicate the success of China overseas;
04 A real challenge
Finally, there is a more core question worth thinking about, that is, how long is the life cycle of the brand Mixue Bingcheng.
It really depends on multiple dimensions such as product and marketing.
On the one hand, whether there can be sustained marketing heat.
Mixue Bingcheng has become the "top stream", which is the brainwashing divine comedy "You love me, I love you" created by Hua and Huawei in 2021.
Since then, Snow King has begun to have more actions, such as always going to other brands to "make appointments" offline, and various yin and yang weirdness in the online comment area.
However, this kind of marketing method, will netizens watch for a long time, and consumers will pay for it for a long time?
Image source network
On the other hand, whether there can be a continuous explosion of products.
The new tea beverage industry is very involuted, and almost everyone is competing to be the first to come up with various new products, but this is actually difficult for Mixue Bingcheng. Because enterprises need to focus on cost control and the number of stores is very large, in a sense, price has limited product innovation.
At the same time, now the whole new tea drink is developing in the direction of health, and everyone emphasizes that they are real tea and real milk.
In addition, there is a major pain point in the product, that is, food safety issues.
In fact, in recent years, whether it is the official statistics released or the comments of users on the black cat complaint platform, in terms of food safety-related issues, Mixue Bingcheng is basically "far ahead".
Therefore, whether it is at the marketing level or the product level, there are still too many uncertainties about whether Mixue Bingcheng can become a long-term brand.
I remember that Zhengxin Chicken Chop, which was once popular all over the country, reached 25,000 stores at its peak in 2021, and now the number of stores has dropped to 12,000. Behind it is that brand marketing and product innovation cannot keep up, and are finally gradually forgotten by consumers.
brief summary
The relationship with franchisees, the dilemma of overseas development, and the ability of the brand to continue to operate are actually overwhelming.