In the endless scuffle of snack rivers and lakes, the days of several giants are not nourishing, and even the "first brother" good store has no choice but to reduce the price to survive! The new head Yang Yinfen's "At present, what is in front of us is not only the problem of living hard, but the problem of whether we can live" is still in our ears, and there is a lot of controversy about the 300 products of BESTORE ushering in the largest price reduction in history......
Do your best, but also look at the destiny! Founded in 2006 and has been fighting for 17 years, BESTORE has accumulated rich experience in resisting business risks, but it is still inevitable to reach the "painful period" of performance, in 2024, under the leadership of Yang Yinfen, BESTORE will be able to turn the tide and welcome the 18-year-old "coming-of-age ceremony" with a high-profile attitude?
01, the first net profit was overtaken by Shiojin Puzi!
Not long ago, the quarterly report disclosed by BESTORE sparked heated discussions, and the net profit of BESTORE, which is the first brother in terms of revenue, was actually surpassed by the "fourth" Yanjin Shop, which surprised many netizens:
According to the public financial report, in the first quarter of 2024, BESTORE achieved revenue of 2.451 billion yuan, and the net profit attributable to shareholders of the parent company was 62 million yuan, a year-on-year decrease of 57.98%, and in the same period, three squirrels achieved revenue of 3.646 billion yuan, and the net profit attributable to shareholders of the parent company was 308 million yuan, an increase of 60.80% year-on-year, and Qiaqia Food achieved revenue of 1.822 billion yuan and net profit attributable to shareholders of the parent company of 240 million yuan, an increase of 35.15% year-on-year.
It is not surprising that BESTORE and Three Squirrels and Qiaqia have won and lost each other in terms of revenue and net profit, but unexpectedly, during the reporting period, Yanjin Shop achieved revenue of 1.223 billion yuan, and the net profit attributable to shareholders of the company was as high as 160 million yuan, a year-on-year increase of 43.10%.
Quarterly net profit, not only overtaken by the "old four", but also opened a gap of nearly 100 million, plus in 2021, the revenue scale of Yanjin Shop is less than 25% of BESTORE, and now it is close to 50% of BESTORE.
In the industry, many people believe that the direct cause of the sharp drop in BESTORE's net profit is the big price cut!
At the end of November 2023, Yang Yinfen, the new chairman and general manager of BESTORE, who was "appointed in danger", directly pointed out the severe challenges faced by the company through an internal open letter, and then Yang Yinfen announced a major adjustment to the company's "high-end snacks" strategy, that is, a large-scale price reduction of 300 of its products, with an average price reduction of 22%, and a maximum reduction of up to 45%.
The largest price reduction in the history of BESTORE also ushered in some doubts:
Although the big drop covers categories with relatively high repurchase rates such as macadamia nuts, pine nuts, pistachios, cashew nuts, pork jerky, duck neck, grilled sausages, spicy strips, dried tofu, bread cakes and melon seeds, compared with BESTORE's omni-channel 1600+ SKUs, the scope of price reduction seems to still have a lot of room for improvement;
In addition, the products of this big price reduction are mainly limited to offline stores, and they need to be members to enjoy, such a pre-threshold also makes many consumers "not perceive strong", after all, users who are used to online shopping rarely go offline to buy snacks, and although BESTORE said that the price reduction will not reduce quality, it is undeniable that this is also an impact on the tonality of its high-end positioning.
Of course, this big price cut, but also brought some results, mainly so that the company's revenue finally returned to the positive growth of the benign track, although the net profit fell sharply, but the total revenue still increased by 2.9% year-on-year, which also gave investors a positive outlook for its Q2 and even the whole year's revenue growth.
You must know that in the past 2023, BESTORE will achieve revenue of about 8.046 billion yuan, a year-on-year decrease of 14.76%, and the net profit attributable to shareholders of listed companies will be about 180 million yuan, a year-on-year decrease of 46.26%.
Also in 2023, Yanjin Shop will achieve revenue of 4.115 billion yuan and operating profit of 582 million yuan, a year-on-year increase of 42.22% and 70.77%, setting the best results since its listing in 2017;
Understanding this background, it is not difficult to understand why Yang Yinfen said frankly, "What is in front of us is the question of whether we can live or not." ”
However, many people only see the appearance of the decline in BESTORE's net profit associated with the big price cut, but ignore the essential problem behind it:
Apple's official promotion for the iPhone 15 series can indeed optimize inventory and increase sales to a certain extent, but it is not a cure for the symptoms, why is the original price of the fruit 15 not as good as in the past? The core reason is naturally the lack of product innovation, which leads to a decline in competitiveness and a decrease in everyone's subjective desire to buy, which is the most critical point.
In the same way, as a brand focusing on high-end snacks, the deep-seated reason for the decline in BESTORE's performance is also due to the decline in the attractiveness of its products.
Figure: ifind
The acceleration of the industry's involution, the emergence of "new forces", and the low entry threshold all belong to the objective external environment, which is difficult for any brand to avoid, and the same is true for the three squirrels, Qiaqia, Yanjin Shop, etc.
Relying on price reduction can only attract for a while, how to improve the comprehensive competitiveness of products is the ultimate self-help methodology of BESTORE!
02, the "weakness" of BESTORE
In 2023, BESTORE's R&D expenses will be 44 million yuan, down 13.5% from the same period last year, and in the first quarter of 2024, BESTORE's R&D expenses will be less than 5 million yuan, down 62% year-on-year; Yanjin Shop's R&D expenses in 2023 will be nearly 80 million, and nearly 16 million in the first quarter of 2024, because the revenue scale of Yanjin Store is only about 50% of BESTORE, so the R&D intensity is higher or lower? Logic at a glance.
Of course, emphasizing marketing over R&D is not the patent of BESTORE, and the head snack brands more or less have such a stubborn disease, so it is easier to understand why Yanjin Shop continues to grow like a "dark horse"!
Food safety issues are also a major problem plaguing the snack industry, when the post-90s and post-00s groups pay more and more attention to the concept of healthy eating, the frequent outbreak of food safety complaints from these traditional snack brands may be a major incentive for consumers to drift away.
In the 12315 complaint publicity area, you can also see 7 new complaints from BESTORE, involving related reports on food safety issues;
Therefore, how to effectively eliminate or reduce the rate of consumer complaints, it may still be necessary for BESTORE to increase the quality control of the whole link from the source supply chain to the channel circulation, after all, food safety is no trivial matter, and every major food safety incident occurs, it is a huge overdraft of brand credibility!
In the past 2023, the revenue of BESTORE has increased by 21.69% year-on-year, which is the only positive growth among its four core businesses, so in 2024, BESTORE needs to continue to strengthen this traditional advantage, and at the same time, it needs to make up for its shortcomings - the e-commerce business with a year-on-year growth rate of 32.58% in 2023!
As of the end of 2023, BESTORE has a total of 3,293 stores, including 1,256 directly operated stores, a net increase of 258, and 2,037 franchised stores, a decrease of 191, during the reporting period, BESTORE added 567 offline stores and closed 500 stores (of which 324 stores chose to close due to losses), and there is still some room for optimization in the rationality of the layout of offline channels.
Of course, in the past 17 years, BESTORE has indeed accumulated its own unique advantages:
For example, the layout of the long chain of raw materials in the supply chain is built under the accumulation of exploration and running-in, and has certain barriers;
In addition, in terms of building a brand matrix, BESTORE has also made great achievements, not only for children, but also for young people who are concerned about health, it has also launched a snack chain brand that focuses on fat loss and full meals, and even Xie Tangyou, which is tailored for diabetics, and has also launched a chain specialty coffee brand FLATMOS, which focuses on urban white-collar workers......
On the whole, BESTORE has done its best to win over existing and potential user groups.
Looking forward to the end of 2024, BESTORE can deliver a satisfactory answer!