China Food

The three squirrels woke up


“  
if enterprises do not layout these new retail channels, it means the progress of competitors and the retrogression of themselves.
 ”
Double eleven welfare
Some people are still waiting awkwardly, and some have begun to taste the sweetness of new channels silently.
With the gradual release of the third quarterly reports of listed companies, a new trend has quietly emerged: more and more listed food enterprises have clearly expressed in their financial reports that they will strengthen efforts to expand new channels such as special price shopping, community e-commerce and real-time retail in the same city.
The importance of new channels lies in the direct pull on performance under the current severe consumption form.
For example, three squirrels (SZ: 300783), a typical snack giant, achieved a net profit of 90.43 million yuan in the third quarter, with a year-on-year increase of more than 18%. In this quarter, it further proposed the strategy of “all channel operation and all category coverage”. In addition to actively laying out live e-commerce, it also said that it had settled in many community group purchase platforms. Liangpin store (SH: 603719) In the third quarter, it realized a net profit of 123 million yuan, with a year-on-year growth rate of more than 20%. In its financial report, it said that new channels such as social e-commerce and community group purchase were quickly arranged in the first half of the year.
The two leading companies have achieved year-on-year growth in net profit through a certain degree of channel reform. The driving force of this new channel on sales is also affecting more enterprises.
Yanjin shop (SZ: 002847) previously mainly relied on traditional channels such as supermarkets, and its performance has also entered the decline channel with traditional supermarkets at this stage – in the first half of the year, the net profit of Yanjin shop decreased by 62.59% year-on-year. In the semi annual report, Yanjin shop, which “knows later”, began to “wake up”, which clearly stated that it should “Actively carry out business transformation and adjustment in the post epidemic era, and actively respond to the channel changes brought about by community group buying.” in the third quarter, it emphasized the layout of new retail channels such as community group buying.
Share price performance of Yanjin shop (from January 2021 to now)
Just like the scene in the early days of the rise of e-commerce, more and more enterprises have “awakened” in the food track and are facing new channel changes, from passive diversion to active selection of new channels.
If they were still struggling between traditional offline channels and new retail channels, enterprises showed a clear-cut turn in this earnings season. There is no doubt that the attractive business potential brought by the new channels is behind this attitude change.
new channel of not advancing or retreating

If enterprises do not layout these new retail channels, it means the progress of competitors and the retrogression of themselves.

According to the data of the National Bureau of statistics, the total retail sales of domestic social consumer goods in 2020 was 391981.1 billion yuan, a year-on-year decrease of 3.9%; while the domestic online retail sales reached 11760.1 billion yuan, a year-on-year increase of 10.9%.
The consumption trend is stimulating the reform of the supply side, and the new channels of online retail are becoming the undertakers of this trend. Since 2020, new channels such as special price shopping, community group buying and local retail have risen rapidly and gradually expanded, becoming a new force that the whole food industry and even physical retail have to pay attention to.
For listed food enterprises, although most of their sales still rely on traditional dealer channels, new channels such as special price shopping, community group buying and local retail can not be ignored. Some ambiguous head enterprises have even been directly tortured by investors. What progress has the company made in community group buying.
Among these latecomers, the newly emerging segments such as community group buying, special price shopping and live e-commerce have grown the most rapidly in recent two years.
Taking the community group purchase channel as an example, Alibaba’s financial report for the first quarter of fiscal year 2022 previously showed that from April to June this year, Alibaba’s community e-commerce Gmv grew by about 200% month on month. Compared with the increasingly obvious growth stagnation of traditional retail listed enterprises, the influence of this new channel can not be underestimated.
For food enterprises, if they do not layout these new channels, it means giving up opportunities to industry competitors, and they will have to face the loss of market share.
As a representative of the rise of the leisure food track, Yanjin shop’s profit increased by more than 80% in the past two consecutive years, showing excellent growth. However, its main deep cultivation also buried hidden dangers offline. With the gradual decline of the business supermarket channel, the performance of Yanjin shop, which invested heavily in this channel, was greatly affected, and even suffered a single quarter loss in the second quarter of this year.
Yanjin shops rely on the traditional channels of supermarkets and distributors, which is a kind of market barrier. The price increases of dealers, the entrance fees of supermarkets and the heavy charges of store fees actually block many local brands and small brands, making it difficult for them to break through regional restrictions and carry out national layout.
However, new channels such as special price shopping and community group buying provide opportunities for these new brands and regional brands to overtake in corners and quickly reach incremental consumers. Therefore, even if the original channels are not diverted, the position of leading enterprises in the industry will become precarious.
For example, with the rise of prosperity and optimization, unknown enterprises such as Qianwei kitchen, grandma Xinjiang milk and Yunnan Shanqi toothpaste have developed rapidly and “shared” some market shares from industry leaders.
There is no doubt that “where the market is, the product should be” is applicable to any commercial product. In today’s difficult to find increment, a more comprehensive and balanced channel layout will be the standard configuration of food listed enterprises. It is imperative to do a good job in online and offline channel coordination.
de intermediary era

The rising new channels have a common feature, that is, reducing the intermediate links as much as possible.

Although different retail formats are committed to meeting consumers’ diversified pursuit of “more, faster, better and more economical”, each has its own characteristics, which is difficult to be completely replaced, but “disintermediation” is already the general trend of the Internet era.
Live broadcasting e-commerce, and the live broadcasting room becomes the manufacturer’s sales room; Community group purchase, and the platform connects both ends of supply and demand. New channels minimize intermediate links and try to reduce costs and increase efficiency by de intermediation, so as to form a price advantage on the consumer side.
This is obviously contrary to the original circulation link of retail intermediaries. In the traditional dealer channel, the value chain of a channel often includes dealers, distributors, wholesalers, and finally the terminal. The price is constantly increased in the middle, and the final cost is passed on to consumers. In contrast, the intermediate links and channel price increases of new channels have decreased significantly, and naturally obtain price advantages at the terminal.
Zhongtai Securities pointed out that through the traditional circulation channels, the price increase rate relative to the ex factory price is 45% – 50% after layers of price increase by manufacturers – first batch Merchants – second batch Merchants – terminal retailers. The channel chain of community group purchase is manufacturer supplier platform consumer. By shortening the supply chain, the efficiency is improved and the channel price increase is reduced by 25% – 30%.
It can be seen that the rise of new channels is the natural result of consumers voting with their feet.
On a larger level, traditional dealers neither Contact consumers nor produce goods. In essence, they are more like parasites in the retail circulation of goods. Their contribution is to take a share in the circulation of goods. With the rise of “de intermediation” new channels, the value embodiment of traditional dealers will be smaller and smaller, and its transformation will become inevitable.
For the above food enterprises, expanding more valuable incremental markets through new e-commerce channels such as live e-commerce, community group purchase and special price shopping can obtain more accurate customer needs and lay the foundation for long-term product categories and market layout.
Zhu Xi, head of Coca Cola (China) community group buying, once said that for beverage brands, community group buying is a very favorable platform to promote potential single products or new products.
Under the community group purchase platform, the brand does not need to distribute goods on a large scale and invest a large amount of marketing expenses like the traditional offline channels when launching new products. It only needs to test the response according to the market response, change and iterate quickly, and the trial and error cost is low.
increment,
in sinking Market

Special price shopping and community group buying naturally fit with the price sensitive sinking market.

In recent years, the trend of traditional e-commerce growth dividend peaking has become more and more obvious, and the sinking market has become a new driving force for the e-commerce industry.
According to Nielsen’s interpretation of 2019 retail market trend, the population of cities below the third and fourth tier cities in China is as high as 953 million, far exceeding the 427 million population of first and second tier cities. However, there is still a gap between the penetration rate of online shopping and mobile terminal compared with the first and second tier cities. At the same time, users’ online shopping enthusiasm is getting higher and higher, and the consumption expenditure of fourth tier cities is as high as more than 21%.
It is not difficult to understand why sinking the market has become the strategic focus of Internet enterprises in the past two years.
Typical, such as pinduoduo, its successful rise comes from the attention and development of the sinking market. According to the data, by the end of 2020, the number of active buyers for many years had reached 788.4 million, becoming the largest e-commerce platform in China. Pinduoduo has opened the door of special price shopping. So far, the track is still expanding rapidly.
Public data show that the sales scale of Taobao special edition, which is positioned in the sinking market, has doubled five times in the past half year, with more than 190 million active users annually; Jingxi Pinpin, a community group purchase application under Jingdong, increased sales and Gmv nearly four times in the second quarter compared with the first quarter.
For food enterprises, people outside the Fifth Ring Road and the sinking market of fourth, fifth and sixth tier cities are also market space that can not be ignored, and special price shopping and community group buying are important channels for them to occupy the sinking market.
For example, “China’s first grain stock”, Jinjian rice industry seized the favorable opportunity of the rise of new retail channels early, reached strategic cooperation with 13 online platforms such as Xingsheng optimization and meituan optimization, and quickly penetrated into the sinking market.
Public data show that in 2020, only one platform will be selected in Xingsheng, and the sales of Jinjian rice industry will exceed 500 million yuan, close to 10% of its sales, becoming an important growth point.
In addition to the three squirrels mentioned above, they signed a strategic cooperation agreement with meituan preferred in the first half of the year. More enterprises are seeking to seize the sinking market through community group purchase and surpass the former in the established industry pattern.
According to the in-depth study on China’s sinking market in 2020 released by toubao Research Institute, the number of e-commerce sinking market users will increase to 569 million in 2020, and the increment of at least 202 million person times needs to be explored and expanded. It can be predicted that under the visible coverage of community e-commerce to the sinking market, it will certainly become the channel object competed by various brands.
is written at the end
“When the times abandon you, they won’t even say goodbye.”
The current retail market is the intersection of the slow growth and decline of traditional channels, the rapid rise of new channels and the opening of new territories. The current urban-rural structure and residents’ consumption level determine that the retail circulation channel is bound to deepen towards “sinking” and “de intermediary”.
Under the general trend of China’s consumer market, traditional food enterprises that are still “conservative” should learn from three squirrels and liangpin shop. It’s time to “wake up”.
Author: Jing Yu; Editor: Yang xuran; Source: tide Business Review (ID: tide biz), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246); Double eleven welfare PS: Click to read the original text to buy products ~ fbic2022food aily daily food joins hands with the world’s top commercial and industrial partners to create food   Fbic222 global food and beverage Innovation Conference & the first Food Expo “new food era – brand ecology” will be held in Shanghai from May 31 to June 2, 2022. We invite you to witness it together. (click the picture to view the detailed introduction).

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