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The flagship store of miyue ice city opened in Zhengzhou International Trade 360 is particularly conspicuous.
When the red carpet was spread to the sidewalk, there were two rows of flower baskets. The little brother in the black “struggling youth” cultural shirt stood at the door with the poster of the new product and shouted, “the new product is on the market, coconut milk stewed noodles, steamed bread ice cream, as well as kebabs and cakes.” This success aroused the curiosity of young people. For a time, the store was full of people. In contrast, the book beside it also burned fairy grass, which seemed a little lonely.
Honey Snow Ice City, which has 18000 stores, has always followed the low-cost and people-friendly route. This time, it opened a 268 square meter super large collection store to build a third space and play with catering localization. Has the new tea industry been “rolled” to this extent?
The concept of the third space has long been a commonplace in the new tea industry. At the beginning of the birth of Naixue brand, it pursued the goal of “benchmarking Starbucks”, maintained the way of “big store model + third space” store expansion, and successfully ran the first share of tea in the world. Like tea, tea beauty and color, etc. also made great efforts in building the third space.
This time, honey snow ice city was unwilling to show weakness. After the opening of the first flagship store, there was the news of “planned initial public offering of shares in a shares”.
In a short time, the king will not be determined among brands, but an infinite war will be ignited in the fields of rapid expansion, obtaining traffic and creating new concepts.
The business model that has hit the ceiling,
Worthy of market valuation?
Compared with Naixue and Xi tea, which are often about 30 yuan, the 2-piece cone, 5-piece cup of lemonade and 8-piece cup of milk tea in mixue ice city are a series of magical existence. Where it goes, other milk tea shops basically have no way to live, because it is too cheap. It seems that only the bubble water in the convenience store can compete.
It is such a milk tea brand whose main market is sinking. Inadvertently, 18000 stores have opened and stood in front of the IPO.
The 24-year-old honeysnow ice city has accepted only a few external investments. In January this year, honeysnow ice city completed the first round of financing, led by meituan Longzhu and Gaoling, followed by CPE Yuanfeng and other institutions. It is understood that the amount of financing in this round exceeded 2 billion yuan, and the post investment valuation reached 20 billion yuan.
Also since then, the news about the listing of honey snow ice city has come out from time to time. Now the boots fall to the ground and the rumors come true.
However, does the current business model of Michelle ice city really deserve a market valuation of 20 billion?
Some people will always ask, honey Snow Ice City drinks are so cheap, how do you make money? Many people will blurt out, “small profits but quick turnover”, but it’s really not.
Different from the direct marketing mode of Naixue and Xicha, the main franchise mode of Michelle ice city is the franchise mode, and the single store franchise implemented by it requires the franchisee’s wholly-owned operation, and Michelle ice city does not participate in the sharing. In other words, the franchise store needs to be responsible for its own profits and losses, and the profits or losses have nothing to do with the headquarters of Michelle ice city.
If you don’t make money by selling milk tea and ice cream in a single store, is the franchise fee the main profit source of honey snow ice city? In fact, the franchise fee is only “small money”. The county-level franchise fee of honey snow ice city is only 7000 yuan, even in the provincial capital City, it is only 11000 yuan. The income of honey snow ice city from the franchise fee is actually very limited.
Michelle ice city, which does not rely on franchise fees and selling products to make money, looks more like a supplier of milk tea raw materials. The self built supply chain of Michelle ice city runs through the upstream and downstream. Henan Daka Food Co., Ltd. is specially responsible for the production of various core raw materials of Michelle ice city, and Zhengzhou Baodao Trading Co., Ltd. provides warehousing and logistics services. The more stores, the more money Michelle ice city makes in the supply chain , people can’t help sighing, “it’s really a pinch.”
In this case, the survival rate and the number of stores under the snow ice city are particularly important, and the scale expansion is imperative. However, there are so many university towns and densely populated “key locations” in a target city, and there is less one to open, and the centralized opening of stores will inevitably dilute the flow between each other.
In addition, honey snow ice city is also facing the threat from the two strong enemies of Xi tea and Naixue. At present, the public’s impression of honey snow ice city still stays on the “Wallace of the tea industry”, which is difficult to get rid of the label of “xiariba people”, and it is still blank in the high-end market.
In fact, Michelle ice city also tried to launch the high terminal brand “m +”, but it didn’t arouse any spray, and its business model seemed to have hit the ceiling. However, with the addition of capital, Michelle ice city had to participate in the Infinite War of new tea.
On September 28, Zhengzhou International Trade 360’s first flagship store of honey snow ice city opened. In addition to milk tea and fruit tea, it also sells coffee, ice cream, cake and fried string, as well as magical combination products such as coconut milk stewed noodles and steamed bread ice cream with obvious local characteristics in Henan.
The 268 square meter flagship store is divided into a traditional beverage area, a “Honey snow canteen” selling peripheral and snacks, and a new area selling fried string, coffee, coconut milk stewed noodles and other products.
Theme stores and creative stores have always been the operation of happy tea and Starbucks. In order to fight the “battle of milk tea”, honey snow ice city has also embarked on the road of the third space, and even played catering localization.
According to the staff of Zhengzhou miyue ice city flagship store, the flagship store welcomed the climax of visitor flow on the second day of opening, and the turnover reached 40000 on September 30.
Can the localization of the third space and catering really win the battle?
Create a third space,
Can Michelle Ice City win?
The concept of “third space” was put forward by American urban sociologist ray oldenberg in his book wonderful place. It refers to an informal public place between home and workplace where people can relax freely. Drink shops, libraries, urban green spaces and other places that can provide people with rest can be called the third space.
Starbucks, which entered China in 1999, is regarded as a typical case of “third space”. The consumption scene created by Starbucks close to the business district is deeply linked to urban life. It is a fashionable lifestyle for petty bourgeoisie white-collar workers to talk about business and take a computer all afternoon at Starbucks.
Naixue tea is very optimistic about this business model. From the beginning of brand establishment, it has pursued the goal of “benchmarking Starbucks” and maintained the store expansion mode of “big store model + third space”. However, its founder Peng Xin is not satisfied with focusing Naixue on the business field and persistently wants to extend the scene to the end.
In 2019, Naixue universe began to build, developing five store types of “Naixue’s gift”, “Naixue Wine House” blablablabar, “Naixue dream factory” and “Naixue Pro”, creating a series of scenes such as alcoholic drinks, cultural innovation and Western food.
Hi tea, which is also a new tea brand in the head, did not focus on the “third space”, but also chose to open big stores in the urban center and core business district.
However, both Naixue and Xi tea seem to be put on the shelf by the “big store model”, which is quite difficult to ride a tiger.
At present, the space created by Naixue is more like a place where users queue up to buy tea. Not only does it not further shape the brand image through space, but because of the excessive demand for space, it raises the site cost and reduces the profit space.
According to the prospectus, in the next 2-3 years, the annual opening cost of Naixue will reach 450 million yuan. In order to reduce the cost and profit, Naixue will launch a smaller Pro store with fewer personnel, and it is planned that 70% of the new stores will be in the light cost mode in the next 1-2 years, and the income situation remains to be tested.
Hi tea who tries to open a big store is also used to the image of high height, which is undoubtedly a burden for hi tea sub brand “Hi small tea” who takes the “sinking road”.
It seems that life is better in honey snow ice city. However, under the inner volume of the industry, honey snow ice city can not calm down and start a flagship store, which is an attempt to the third space.
However, unlike Naixue and Xi tea, the low-end brand image of honey snow ice city has been deeply rooted, which is difficult to explore in the market. Even if a creative store is opened, it is not easy for the public to accept. Users’ “high-end” cognition of the third space will become a stumbling block on the road of development.
In addition, the place where honey snow ice city really makes money is its supply chain. Whether the first attempt of the third space can bring sustained traffic and how it will operate in the future is unknown. But it is clear at a glance that the high cost of the third space is obviously a great burden for honey snow ice city.
The profit growth space is limited, and the profit can only be improved by reducing the cost, which is also the profit dilemma of honey snow ice city.
The same is to create a third space. Why do the spatial functions of the new tea brand and Starbucks present two diametrically opposite situations?
Compared with milk tea, coffee has wider versatility and wider social applicability. In addition, the public facilities in the business district where the milk tea shop is located have been very perfect. Consumers who stroll and chat have multiple choices, which is not limited to hall food consumption. As a result, consumers’ demand for staying in stores is not so strong.
In fact, to some extent, the physical third space function is being replaced by the Internet.
DT finance and economics once pointed out that the data in the statistical bulletin of cultural development in recent five years show that offline scenes have not been valued by people, and the number of entertainment places and employees has shown a downward trend. The appearance of takeout, small program order and code scanning order also reflects the consumers’ attention to efficiency and utilization of waiting time and the decline of demand for third space to a certain extent.
From this point of view, it is very obvious whether the honey Snow Ice City entering the third space can succeed. Let the flagship store become a product innovation center and develop “hard core” products, then this store has played its value.
KFC sells spicy soup, and honey snow ice city sells “stewed noodles”,
What happened to the catering?
In addition to the third space, honey snow ice city has also moved its mind on catering localization. Henan characteristic stewed noodles, steamed buns and milk tea are a little strange. However, this “strange” combination has brought a lot of traffic to honey snow ice city. On September 30, there was an endless stream of young people who came to punch in, and more than 200 cups of coconut milk stewed noodles were sold.
The snow ice city is not the first one to make such a match. KFC also sells the local classic snack hu la soup in Henan, which is called “Henan Sanbao” together with the matching Youmo head and vegetable corner.
From the perspective of business strategy, whether KFC or Michelle ice city, the launch of localized food is not entirely for sales, but the marketing creativity of special nodes. Its purpose is to obtain attention and win traffic.
Twenty years ago, KFC launched the first Chinese chicken rice. Since then, McDonald’s, KFC and DEX have been fighting on Chinese fast food.
Western fast food follows the product “concentric circle” strategy, that is, fried chicken is the core of all products, while chicken rolls and various hamburgers are in the second ring, coffee, coke and egg tart are in the third ring, and the outermost layer is the new products that are frequently launched and most of them will disappear.
Snail powder, Hu chili soup and other products with “Chinese flavor” are always at the periphery of the “concentric circle”. Snail powder is only used as retail products, while soybean milk, fried dough sticks and Hu chili soup are only sold as breakfast, which has won the attention of the public without affecting the sales. In the end, only a few may stay, or exist for a long time. In most cases, they only belong to supporting roles.
The fact that the public sees is that McDonald’s and KFC have gained a burst of people and the spread of hot marketing topics because of the launch of some Chinese products. However, social media have mixed opinions on KFC’s move to launch hu la soup. Many consumers in other regions expressed the hope that hu la soup can also be sold in their own cities, while many local people in Henan responded, “it is recommended that you sell hu la soup outside Henan. After all, a hu la soup of 50 meters in Henan is not available to outsiders and locals disdain to drink”.
Can the “stewed noodles” and “steamed bun” of miyue ice city be recognized by the public? Some netizens make complaints about “not eating good face with coconut milk” and “roast beef”.
Although I don’t know how long the new products launched by snow ice city will last, it is certain that this is indeed an attempt to tap the increment of the local market.
Whether building a third space or catering localization, brands should have a clear understanding of what are “hard core” products, explosive products and auxiliary products.
Products need to be continuously upgraded, but only taking into account the flow and quality can they be expected in the future.
Author: ran Yi; Editor: Yi page; Source: new entropy (ID: baoliaohui), reprint authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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