On the evening of October 29, Xiang Piaopiao (603711. SH) released its third quarterly report showing that its revenue in the first three quarters was 1.974 billion yuan, an increase of 4.29% year-on-year, and achieved a net profit of 39.3955 million yuan. In the third quarter, revenue and net profit increased sequentially, with revenue increasing by 123% sequentially.
"National Milk Tea" Xiangpiaopiao is proving with its performance that it is still needed by the market and is striving to revitalize it.
Stable chassis: deep ploughing the market, consolidating the business layout
At present, The main business of Xiangpiaopiao is the research and development, production and sales of milk tea beverage products, which are mainly divided into two major product sectors: brewing and ready-to-drink. According to the announcement of the main operating data in the first three quarters, the sales revenue of brewing in January-September was 1.412 billion yuan, an increase of 9.05% year-on-year; the sales revenue of ready-to-drink products was 531 million yuan, down 7.56% year-on-year.
It should be pointed out that because the ready-to-drink sector is still in the market input period and affected by the epidemic, the sales growth rate of ready-to-drink beverage products has declined, but the brewing plate of Xiangpiaopiao's main plate has still maintained a good growth trend, and the basic operation of Xiangpiaopiao is still resilient.
According to public information, Xiangpiaopiao is the pioneer of cup milk tea, founded in Zhejiang in 2005, and has launched a brand with solid cup milk tea. According to AC Nielsen data, the market share of Xiangpiaopiao reached 63.1% in 2018, which has far surpassed other similar enterprises and become the "bellwether" in the segment of cup brewed milk tea, and since 2021, it has maintained the first market share for 9 consecutive years.
Xiangpiaopiao can grow into a category leader, in addition to the first-mover advantage obtained on the milk tea track, the traditional channel empowerment is also a key factor in its rapid rise - the financial report shows that the distribution model is still the core sales model of Xiangpiaopiao, in the third quarter of 2021, Xiangpiaopiao has a total of 1232 dealers in the country, and in the first three quarters of the dealer channel to achieve revenue of 1.766 billion yuan, an increase of 2.57%; key sales market - East China regional revenue of 771 million yuan, an increase of 7.56%.
The good performance of offline channels is not unrelated to the sinking strategy of its brewing business and the optimization of the dealer system. Since the beginning of this year, under the strategy of "preservation, mining increment, and focusing on home consumption", Xiangpiaopiao has deeply tapped the potential of the sinking market, promoted the "thousands of counties and ten thousand towns" plan, carried out a series of channel construction, sales promotion, brand communication and other measures, and focused on improving the penetration rate of terminal outlets.
At the same time, around the two main lines of "focus" and "decentralization", Xiangpiaopiao focused on the management optimization of the dealer system: on the one hand, focusing on the head to continue to cultivate large dealers with high performance contribution and great potential; on the other hand, for smaller dealers, decentralization is taken to strengthen independent operation, thereby stimulating the organizational energy efficiency of the overall dealer system.
Another specific embodiment of Xiangpiaopiao's implementation of the "focus strategy" is the tilted investment in the resources of high-potential stores, that is, it hopes to change the past in the terminal to carry out flood irrigation operations, but to refine 30% of the stores to improve the sales efficiency of a single store, and finally through the traffic of the head terminal to pull the sales of the rest of the terminals, thereby improving the overall use efficiency of resources, which has produced a very good effect on pulling store distribution and stimulating consumer purchases.
At the same time, during the reporting period, Xiangpiaopiao focused on promoting the refined management of the channel of the ready-to-drink business on the basis of optimizing the implementation of the channel combination strategy of "origin channel, potential energy channel to create momentum, and harvest channel sales". Up to now, the above channel strategies have been successful in Wuhan and other places, effectively driving the growth of sales revenue in the region. The company is gradually promoting this successful experience to the core 95 cities in the country to provide impetus for the growth and development of the ready-to-drink sector.
In addition, the main health concept and high-value packaging of juice tea have become a new choice for consumers in some areas for holiday gifts. It is reported that this year's Mid-Autumn Festival gift boxed products of Meco juice tea have achieved a breakthrough in sales in Bozhou, Anhui, and the gift market is expected to become a new opportunity point for ready-to-drink.
In the view of industry insiders, although new categories and new formats in the field of FMCG are emerging in an endless stream, xiangpiaopiao has been able to maintain the steady growth of brewing revenue for sixteen years of operation, which shows the solid internal strength and operational resilience of the enterprise. The company's ability to continuously sink channels to obtain increments in the brewed stock market is also a good signal that enterprises can achieve long-term ism.
Maintain growth: "brewing, ready-to-drink" two-wheel drive + "Internet transformation"
Looking at the performance of Xiangpiaopiao since its listing in recent years, the overall upward trend is closely related to the "brewing + ready-to-drink" two-wheel drive strategy.
In July 2018, Xiangpiaopiao launched a new ready-to-drink series of new products , Meco Juice Tea , achieved explosive growth, and in less than 6 months of the product's listing, the revenue reached 200 million yuan. The good market performance announces the launch of Xiangpiaopiao's two-wheel drive strategy of "brewing + ready-to-drink", and officially enters the "second curve" growth cycle.
From 2019 to 2020, Xiangpiaopiao will continue to further promote product innovation, channel construction and management of brewing and ready-to-drink plates, and at the same time strengthen interaction and communication with young people at the brand marketing level, and strive to rejuvenate the brand. In addition, Xiangpiaopiao also actively lays out the field of pan-brewing, and the launch of new products such as meal replacement shakes, milk tea self-heating pots, and hot and cold double-bubble jam tea has further met the diversified consumption needs of young people and also reserved for the future revenue increment of the brewing plate.
Driven by the above-mentioned "two-wheel drive" strategy, Xiangpiaopiao's performance also increased from 2.640 billion yuan in 2017 to 3.761 billion yuan in 2020, and net profit increased from 268 million yuan in 2016 to 358 million yuan in 2020.
In the first quarter of this year, Xiangpiaopiao launched a fruit juice tea upgrade product with a juice content of 5 times the national standard. In addition, Xiangpiaopiao continued to focus on the upgrading of health, and innovatively launched two new products of zhen milk tea and milk tea, which achieved good performance and also reflected the continuous innovation of the company's product strength.
In this regard, Orient Securities said, "Xiangpiaopiao is doing the right thing and is also going in the right direction." It is very optimistic that Xiangpiaopiao's products will continue to innovate, and the ready-to-drink sector is expected to become the second growth curve of Xiangpiaopiao. ”
In addition to adhering to the core strategy of "brewing + ready-to-drink" two-wheel drive, Internetization is also an important weight for Xiangpiaopiao to expand the incremental market.
From 2021 onwards, the company has further clarified the positioning and mission of the Internet business, focusing on the original generation of the Internet (Generation Z and cutting-edge white-collar workers), taking user needs as the origin, and carrying out adaptive product development, channel expansion and integrated marketing. The financial report shows that in the first three quarters of this year, through the development of high-value-to-price and cost-effective Internet products, accelerating the expansion of emerging e-commerce channels such as Douyin, Kuaishou, Pinduoduo, Retail Pass, and Xintong, and deepening marketing cooperation with Platforms such as Tmall, e-commerce channels achieved revenue of 160 million yuan, an increase of 31.54% year-on-year.
It is understood that from 2014 to 2020, the average compound growth rate of Xiangpiaopiao's e-commerce channel revenue for 6 consecutive years has exceeded 128%.
In addition to the growth in performance, Xiangpiaopiao's self-built Internet private domain traffic has also increased significantly. It is reported that from January to June 2021, the internet added AIPL population (AIPL four letters represent: brand recognition population, brand interest population, brand purchase population and brand loyalty population) 96.4261 million, an increase of 429% over last year; the amount of one cup and one yard scan code exceeded 57 million, and the total number of members reached 27 million.
In the view of industry insiders, the Internet transformation of traditional FMCG brands will benefit from the advantages of their extensive product reach and stable supply chain of offline channel network, and obtain stronger private domain traffic import capabilities. It is believed that with the orderly advancement of the Internet strategy, it is expected to further improve the stickiness between the Xiangpiaopiao brand, products and users, and fully empower the long-term operation of enterprises.
Scramble for a breakthrough: Attack the sinking market
Since last year, Xiangpiaopiao has been increasing the layout of sinking channels, including building high-potential terminal stores and building more than 50,000 land dumps in hundreds of counties and county-level cities.
For the new tea drinking track that has now been "inner rolled", Xiangpiaopiao's current advantage in the sinking market is obviously a competitive "moat".
According to quest mobile sinking market report, the sinking market has more than 600 million users, accounting for more than half. The potential of the sinking market is considerable, so that new-style tea brands are also constantly exploring, such as the launch of the third- and fourth-line brands xixiao tea, and the honey snow ice city, ancient tea, Shanghai aunt and so on have also opened a chain of tea brands in the market.
According to Xiangpiaopiao, by the end of 2020, the company has sold more than 13 billion cups of milk tea, of which a large part comes from the sinking market, which also allows Xiangpiaopiao to maintain a leading position in the cup milk tea industry. At the same time, in the process of channel sinking, some successful model markets have emerged. For example, a county-level distributor in Woyang County, Anhui Province, has a year's milk tea sales of tens of millions.
For users of the sinking market, as low as 5 to 10 yuan a cup of Xixiao tea or Michelle Ice City, may not have 3 yuan a cup of fragrant fluttering affordable. Therefore, the sinking market is one of the power points of Xiangpiaopiao in recent years.
Xiang Piaopiao said that China's county area market is vast, and the return of population has brought further growth to the county and township population. In the peak season of brewing milk tea in the fourth quarter, the company will focus on increasing the intensity of "high potential store construction" and "strong attack on the sinking market", facing 147 core cities with a large population base, good historical sales performance and sufficient brand potential precipitation, increasing the number of terminal coverage in districts, counties and townships, increasing peak season sales, and helping to achieve annual performance.
The industry generally believes that under the premise of stabilizing the basic disk, the cultivation of Xiangpiaopiao's ready-to-drink business is mature, coupled with the further landing of the Internet strategy, it is believed that with the arrival of the peak season of milk tea sales in the fourth quarter, Xiangpiaopiao, which has been prepared for "strong soldiers and horses", is expected to bring more surprises to the market in the future.