Wen | AI Finance and Economics Agency Zhang Mengyi
Editor| Lu Jia
In 1992, eating a bowl of beef rice from the Yoshinoya family was still a thing to show off and be proud of.
But now, the aura of foreign fast food has gradually disappeared. In the hearts of many users, Yoshinoya has also become "unpalatable" and cost-effective. Many stores in China have also fallen into the predicament of a sharp decline in customer flow and a decline in performance.
It is understood that Yoshinoya's business entities in China are Hop Hing Group and Japanese parent company, the former responsible for the northern market, and the latter directly operating the southern market.
Since 2017, Hop Hing Group's net profit in China has fallen all the way, and it has suffered a loss in 2020. Recently, Hop Hing Group, which has been listed on the Hong Kong Stock Exchange, has also ushered in a situation of privatization and delisting. At the same time, the southern market, which is directly operated by Yoshinoya's Japanese parent company, is not optimistic, and Yoshinoya has said that overseas markets, including the Chinese market, will close 50 stores.
Faced with pressure, Yoshinoya began a series of transformation attempts. A number of offline Yoshinoya stores began to keep up with the new trend of catering, selling pre-made dishes and small hot pots, but the effect has yet to be verified. At the same time, Hong Mingji, the actual controller of Hop Hing Group and the franchise right of Yoshinoya in the domestic northern market, also registered a social media account, transformed into a social talent, while creating an entrepreneurIAL IP, while discussing the philosophy of life and the secret of success, and tried his best to get his own brand attention, but it was still thunder and rain. In addition, today, under the current situation that capital loves the noodles and does not love rice, the Yoshino family is still difficult to hide its loneliness.
<h1 class="pgc-h-arrow-right" data-track="101" > agents are facing delisting, and users complain that the cost performance is not high</h1>
On September 6, Hop Hing Group, a Yoshinoya Northern City franchisee, announced that the Hung family, led by major shareholder Hong Kexie and including Chief Executive Officer Hong Mingji, had proposed to privatize the company and withdraw its listing status on the Hong Kong Stock Exchange. Hop Hing Group said that this is an acquisition proposal made by the group's major shareholders, but the acquisition proposal must also be approved by independent shareholders before it can be implemented.
It is understood that the privatization is priced at HK$0.08 per share, a premium of 73.9% to the closing price of HK$0.046 on September 1, before the announcement, and the privatization requires a total of HK$229 million.
As for the reasons for the privatization, Hop Hing Group explained that the liquidity of the group's shares has been at a low level for a long time, with an average daily trading volume of about 4.304 million shares, accounting for only about 0.04% of the number of issued shares. After the privatization of the Group, the form of privately operated business is more flexible, and it is necessary to develop and implement long-term business strategies and pursue other business opportunities without being subject to regulatory restrictions or compliance liabilities. Hop Hing Group also said that this move has no impact on Yoshinoya's store operations and store expansion.
Looking back at the popularity of the Yoshinoya when it first entered China, the current situation is really regrettable. In March 1992, Chinese mainland's first Yoshinoya opened in Wangfujing, Beijing, and at the beginning of the store, the store set a record of selling 2,000 bowls of beef rice per day on weekends, when a bowl of Yoshinoya sold for 6.5 yuan, which was a high price, but it was still very popular with Chinese consumers.
On 1 December 2011, Hop Hing Group acquired a part of the Hongshi family for HK$34.75, including two fast food franchise chains in the mainland, Yoshinoya and DQ, under the operation of Hung Hing Group, as of 2020, the number of Yoshinoya stores reached 390, nearly double that of a decade ago, covering Northern provinces and cities such as Beijing, Tianjin, Hebei and Liaoning, and its turnover also rose from HK$1.46 billion in 2011 to HK$2.1 billion in 2019.
In recent years, due to the backwardness of product updates and the impact of the epidemic, Yoshinoya is gradually losing popularity in China, and its performance is in decline. Yoshinoya's contribution to Hop Hing Group's revenue is about 80%, but the financial report shows that since the net profit of 167 million yuan in 2017, the net profit of Hop Hing Group has been at a declining level, and by 2019, the net profit has dropped to 104 million yuan; in 2020, due to the impact of the epidemic, Hop Hing Group also lost 81.9 million yuan. At the same time, Hop Hing Group's net profit margin also fell significantly, from 7.54% in 2017 to -5.03% in 2020.
Along with the slowdown in performance, there is also the speed of Yoshinoya's store opening. In 2018, Hop Hing Group opened 28 new Yoshinoya stores, but the number of stores opened every year after this did not exceed 10, and in the first half of this year, Hop Hing Group only opened 6 stores, mainly due to the shortage of funds. Hop Hing Group has said that the group will slow down the pace of opening stores, focus funds on ensuring operations, and will also work with suppliers to resist the financial pressure caused by the epidemic through various efforts.
According to data from Hop Hing Group, the operating efficiency of Yoshinoya's single store is slowing down today, and the brand's sales revenue is not as good as in previous years. From the first half of 2017 to the first half of 2019, the sales revenue growth rate of Yoshinoya's single store was 4.5%, 1.7%, and 0.7%, respectively. In the first half of this year, although the growth rate of Yoshinoya's single-store sales revenue increased sharply, considering the low base in 2020, the actual growth rate of single-store sales revenue was not high. According to the data, in the first half of 2021, Yoshinoya's sales revenue was 741 million yuan, a year-on-year growth rate of 32.3%, but Yoshinoya's sales revenue reached 751 million yuan in the first half of 2016, that is to say, Yoshinoya's current sales revenue is less than the level of five years ago.
The southern market, where Yoshinoya operates directly from its parent company in Japan, is also facing a store closure crisis. According to the 2020 financial report released by Japan's parent Yoshinoya in April this year, it lost 7.5 billion yen (about 450 million yuan) last year. In recent years, the revenue growth of Yoshinoya's overseas business has also slowed, and 60% of its overseas business is Chinese. According to Yoshinoya, Yoshinoya announced that it will close 150 stores at home and abroad, and 50 in overseas markets, including the Chinese market.
Along with the decline in performance, there is also the public reputation and image of the Yoshinoya, and in recent years, the aura of "foreign fast food" has gradually disappeared in China.
AI Finance and Economics noted that as far as the Japanese fast food category is concerned, a large number of local brands have emerged on various takeaway platforms, and the prices are cheaper, the amount of side dishes is larger and richer. Taking Beijing as an example, the Japanese sushi category of the Meituan platform shows brands such as Sakura Pu Yuanqi Roast Meat Rice, Beef Stick Grilled Meat Rice, Nara Fawn Exquisite Bento, and Box Uncle Japanese-style YakiniKu Rice, and the per capita consumption amount generally does not exceed 25 yuan, and Yoshinoya has not been able to rank in the forefront of this category of restaurants in terms of price and sales.
(Photo: Screenshot of takeaway platform)
At the same time, the rise of local snack categories such as yellow braised chicken, snail powder, Lanzhou ramen and related brands is also squeezing the market of Yoshinoya.
In fact, in Japan, Yoshinoya, which is known for its low quality and fast food, is not cheap in China, and the price has lost its advantage. AI Finance and Economics noted that in the Beijing store, a variety of beef rice in the Yoshinoya store are priced at about 40 yuan, a bowl of enoki mushroom beef double rice 38 yuan, hot three pepper beef rice 39 yuan, large signature beef rice is also 37.5 yuan, in the fast food pricing is expensive. Some netizens said on the review platform: "Yoshinoya is not delicious and expensive, a bowl of fat beef rice sold at such a high price, more than ten years ago, everyone thought that foreign brands represented 'tall' when they could still sell, but now it is not OK." ”
<h1 class="pgc-h-arrow-right" data-track="102" > Yoshinoya "transformation", operator bosses should also be Internet celebrities</h1>
In order not to be abandoned by the times, the Yoshinoya also tried to transform. From "catering + hot pot" to "catering + new retail", it has almost tried the new trend in the domestic catering industry.
In February 2020, Yoshinoya launched the "Family Kitchen" product, which sells prepackaged products for signature beef rice such as cooked beef, salmon, wakame, and kimchi. In April of the same year, Yoshinoya staff appeared in Tencent's live broadcast room to promote their own products. On November 18, 2020, Yoshinoya announced the launch of a new brand, "Kishiki", which focuses on retail business, including beverage snacks and home kitchen products in addition to pre-packaged food, semi-finished products and ingredients.
In May this year, Yoshinoya also followed the example of brands such as Hefu Lao noodles and Laoxiang Chicken to launch hot pot categories on the basis of fast food, adding self-service small hot pot in 11 stores in 8 cities such as Beijing and Shanghai, with 68 yuan per person, which can "eat and drink unlimitedly" within 100 minutes to break through the pain points of low unit prices and short rice markets. In addition, Yoshinoya also launched a small hot pot set, including suki pot bottom, meat, vegetables and staple foods, priced at 36-48 yuan, focusing on one-person food scenes. But the results don't seem to be ideal.
What's more, boss Hong of Hop Hing Group, who was not very public before, is also determined to turn to social networks and create Internet celebrities to increase brand popularity. The elder of the fast food chain not only opened a personal Weibo account, a Douyin account, and a headline number, but also entered the Himalayas to sell paid courses and was very active on social networks.
As of now, the number of Hong Mingji's Weibo followers has reached 1.59 million, and his Weibo posts are very enthusiastic, and he updates at least one Weibo update every day. Hong Mingji has also invested a lot of energy in Douyin, starting from the release of the first Weibo in October 2020, in less than a year, Hong Mingji's Douyin account has published 95 video works, often sharing life experiences and life insights in front of the camera.
(Photo: Screenshot of Hong Mingji's social media account)
In Hong Mingji's view, the business model with social networking as the core will definitely become the mainstream, and he must become a social expert. Hong Mingji once admitted that he was originally a very low-key person, unless he had to accept an interview, and now he has to go to the front desk and show himself through social media, which is actually a very big challenge, "but there is no way, this road must be taken."
Nowadays, many fans like to leave messages and interact under Hong Mingji's Douyin, and many Douyin videos have been viewed more than 1,000 times, and the number of comments has reached hundreds. However, the personality of middle-aged successful entrepreneurs, the knowledge of success learned, and the shooting methods of traditional television media conveyed by these videos do not match the preferences of young people and the network communication environment, and these videos have neither diverted the flow of Yoshinoya nor boosted the sales of Yoshinoya stores.
But whether it is to make new retail, launch a small hot pot, or create Internet celebrities and establish a new media matrix, it seems that they have not changed the declining popularity of Yoshinoya.
In the view of Zhu Danpeng, an analyst in the Chinese food industry, doing new media can improve the spread of Yoshinoya, but its scene, supply chain, products, hardware, and decoration are still very backward, essentially "changing soup without changing medicine". "Yoshinoya has not kept up with the pace of consumption upgrades, nor has it docked with the core needs of the new generation of users. In the context of today's consumer end constantly forcing the industrial side, its brand aging, product aging, scene aging, resulting in service system and customer stickiness can not go up, the decline is also expected. ”
<h1 class="pgc-h-arrow-right" data-track="103" > Capital loves "eating noodles" and does not love "just rice"</h1>
In addition to the aging of its own brand, Yoshinoya is facing the problem of dramatic changes in China's consumption environment. In the current situation where capital prefers "flour noodles", various branded Chinese noodle chains and fast food chains emerge in an endless stream, causing a huge impact on foreign fast food with halos. Yoshinoya is limited by the Japanese beef rice category, and it is difficult to continue to expand users.
Now, capital seems to love "eating noodles" more. Since 2020, many noodle brands, including Meet Small Noodles, Wuye Mixed Noodles, Hefu Lao Noodles, Zhang Lala, Ma Yongji, and Chen Xianggui, have successively obtained financing. According to incomplete statistics, from January to July 2021, there were more than 70 investment and financing incidents in the catering field, of which 15 were noodle tracks, and at least 5 were investment and financing above 100 million yuan. And the valuation of noodle companies has also risen, such as Chen Xianggui ramen, MaJi Yonglanzhou beef noodles valuation has now reached 1 billion yuan.
In contrast, rice fast food brands have much less financing movement and the amount of financing is far less than that of flour fast food brands. According to ai finance and economics, in the whole year of 2020, three rice fast foods, including rural base, little girl head and sharp bones, have obtained financing, of which only the village base has a financing amount of more than 100 million yuan. In 2021, as of now, there is little news of new financing for rice fast food brands.
<h1 class="pgc-h-arrow-right" data-track="104" > why is "rice not as fragrant as noodles"? </h1>
Some insiders said that the regional characteristics of rice fast food have limited the development of restaurants to a certain extent. In China's complex demographic and geographical environment, noodle fast food is more suitable for different consumers.
"The core rice fast food in various places, such as steamed vegetables in Anhui, small bowl dishes in Hunan, pot rice in Guangdong, meat sandwich steamed buns and lamb steamed buns in Xi'an, have obvious differences, and many well-made rice fast foods in the country, such as steamed kung fu, hometown chicken, and rural base, are made in a regional center, and the scale threshold of rice is still quite high." The cross-cutting attribute of the surface class is stronger, which can solve the problem of regional expansion and can go further. Cai Hantong, founder of Sichuan Kitchenless Supply Chain Management Co., Ltd., said.
In addition, some people in the catering industry said: "The eight major domestic cuisines have different tastes, consumer choices are many, brand expansion is relatively slow, it is difficult to occupy or monopolize the market, and the economic investment in restaurants is much higher than that of noodle restaurants, and the requirements for supply chains and central kitchens are very high." Therefore, whether it is taste or supply chain, it is difficult for rice to standardize and go to the national market. ”
The troubles of the expansion of rice fast food brands are also reflected in Yoshinoya. Its Japanese food products are light in taste, the consumer group is niche, and what is more difficult is that in the face of various new Chinese brands, Yoshinoya cannot give consumers a sense of freshness.
According to the "2021 Fast Food Industry Development Report" released by the China Hotel Association, in the first quarter of this year, the market share of Chinese fast food has exceeded 85%, and the market share of Western fast food has been less than 15%, and the number of Chinese fast food stores has reached 6 times that of Western fast food stores.
With the advent of the era of mass consumption, the development of Chinese fast food ushered in a dividend period. From snail powder, pot rice, to yellow braised chicken rice, more and more local snacks have been discovered into Chinese fast food, moving towards branding, scale and nationalization. In recent years, with the blessing of capital, new brands such as Hefu Noodles and Bully have grown rapidly and gained a firm foothold in the market. The new Chinese noodle fast food is also constantly upgrading and iterating in concept building, brand packaging, visual communication, marketing methods, and operation methods.
The "Yoshinoyas", who neglected innovation and reform and managed obsolete management, have fallen into the inferior position in the competition and have no longer the charm of the past.
This article is originally produced by AI Finance and Economics, an account of Caijing Tianxia Weekly, without permission, please do not reprint it on any channel or platform. Violators will be prosecuted.