China Food

Happy cake, old brand, take a new path

Happy Cake, is it really “happy”?

Text: Tang Bohu

Source: bohufn (ID: bohufn)

On December 20, the baking brand Happy Cake completed a financing of 100 million yuan. This round of financing is led by the old shareholder Yashang capital, and followed by the new investors Chunjian capital and Fushan investment controlled by Yunda.
Speaking of happy pastry, many people know that the reason is very simple – no matter where we are, when we open meituan, we always find it within the scope of distribution.
It makes people wonder how a baking brand can radiate across the country, even in rural areas?
13 year old brand, from Shenzhen to the whole country
In the public perception, most baking brands are regional players. For example, the stores of qianjixi cake are mainly concentrated in Central China, and weiduomei is mainly in East and North China.
At first, happiness cake was also a local brand rooted in Shenzhen. In 2013, the five-year-old happy cake has opened more than 40 stores in Shenzhen and is also a supplier of China Resources Vanguard.
However, it was also this year that the rapidly expanding happy pie had a thorny and embarrassing problem – employees’ wages could not be paid. Brand founder yuan Huohong learned from the pain and decided to move to the Internet.
He realized that the high rent and labor costs of physical stores are too heavy on the brand, and the radiation range of stores is limited after all. Most cakes are planned consumer goods, and production tasks can be allocated through advance booking. The Internet just solves the problem of product display and payment.
Soon, the happy west cake closed most stores, cut off 300 sales outlets of Huarun, and retained only 15 elite stores.
After that, the Happy Cake adopted the way of price differentiation and used the lower single product price than that of its peers to drain and improve the sales volume. At the same time, open channels by linking meituan online and cooperating with convenience stores offline.
In 2015, happy cake became the first cake brand in Shenzhen, and its e-commerce road has really embarked on a journey.
Due to the high requirements for freshness and process of baked products, in order to ensure product quality, yuan Huohong launched the “central factory + satellite factory + self built cold chain logistics mode” in Happy Cake. The advantage of this is that the brand can achieve “0 inventory production” through automatic order circulation and order production, and the self built cold chain logistics can meet the user’s requirements for delivery time.
Happy Cake began to recruit City partners in various places. The partners were responsible for investment and production, while the brand headquarters was responsible for raw material supply, site selection and decoration, brand operation and other process guidance. For happy cake, this model can realize standardized operation at low cost, and it will soon spread across the country.
Up to now, the brand has covered more than 300 cities in China, including Lhasa, Tibet, Urumqi, Xinjiang and other regions.
(source: Happy Cake official website)
Layout of counties, towns and villages,
Want to be the “Honey snow ice city” in the baking industry?
The channel war of happy cake has been quite effective. As early as 2017-2018, it has completed four rounds of financing.
This time, the old brand, which has been established for 13 years, plans to use 100 million yuan of new financing for the development strategy of “county, town and village plan”, and plans to cover more than 2000 county-level cities in China by 2024. Its founder yuan Huohong also said that in the future, happy cake will start the listing plan.
Whether it can be listed will not be discussed for the time being. It is surprising that this move of happy cake can see the shadow of honey snow ice city?
Honey Snow Ice City, established in 1997, opened its stores in 2007, built its own logistics park in 2014, and then entered the rapid incubation period. By 2020, its stores have exceeded 10000.
On the one hand, the success of honey snow ice city is that it has stepped on the node of the outbreak of the industry. After 2015, the tea brand entered the fission period.
On the other hand, thanks to the brand positioning, the franchise mode and parity route of honey Snow Ice City, the brand can realize store expansion at low cost and be quickly accepted by emerging markets.
For the happy pastry that implements the urban partnership mechanism, in the past two years, the domestic baking market has entered a period of rapid development, and the sinking market also has a blue ocean.
AI media consulting data show that in 2020, the per capita consumption of baked goods in China is about 7.3kg, far less than half of that in the United States and Japan. In the next few years, the domestic baking market will maintain a growth rate of about 7%, with considerable prospects.
In counties, towns and villages, there is still a large market gap in the baking industry, which is very friendly to brands taking the parity route.
This is consistent with the price route of happy cake. It has always been lower than the average price of its peers. On the brand’s official website, the price range of 2-pound cake is 148-268 yuan, while the lowest price of the same size cake is 198 yuan in 21cake.
In terms of production mode, as a rare national player in baking brands, happy cake has 500 distributed production centers. Moreover, its urban partnership mechanism can save a lot of money for its expansion. For brands, it is not difficult to continue to extend the production chain.
In addition, happy pastry has always implemented an online ordering mechanism. Consumers can order through the official website, wechat mall, meituan and other channels. In addition, the brand has established a large-scale private community. Compared with baking brands that are highly dependent on stores, it has more customer channels, and this method is equally effective in counties and towns.
At the same time, as a 13 year old brand, happy cake has a place in the baking industry. In September, according to the list of “top ten baking brands in China in 2021” released by the third China catering Marketing Summit, happy pastry ranked second. Higher brand awareness can undoubtedly help it open up a new market faster.
From these aspects, happiness cake is stationed in the township area, both at the right time and in the right place.  
“Eat crabs first” does not mean a sure win
From transforming into an Internet cake brand to carrying out county, town and village plans, happy cake has always been at the forefront of the industry.
However, with the intensification of competition in the baking industry, “wide coverage + low price” no longer means a stable win.
On the one hand, the baking track has shown a trend of differentiation in the past two years, and the competition has intensified.
Internet cake brands with similar positioning to happy cake are rising rapidly, such as panda buzou, 21cake, nuoxin, etc. they have their own strengths in product innovation and brand marketing, and have begun to carve up the market share of their region.
For example, when pandas don’t go, the delivery personnel wear panda doll clothes to perform and interact with consumers to create a sense of birthday ceremony. The brand has achieved an annual revenue of more than 800 million only three years after its establishment.
At the same time, new Chinese baking brands and cross-border players have entered the bureau one after another, and are more favored by capital and consumers, eclipsing the old brands. This year, new brands such as Zetian Benjia, Momo dim sum Bureau, Hutou Bureau and Standard Chartered cake bank have obtained financing one after another.
Among them, Mo Mo dim sum Bureau was established in 2020. It follows the national tide route and quickly makes a circle with the baking method of “making things in the west at the midpoint”. At present, it has completed five rounds of financing and a single store valuation of more than 100 million.
Although the baking products of Naixue tea, a tea brand, are only the supporting role of tea, the actual sales volume is considerable due to its fast development and sufficient creativity. In the first half of 2021, it has achieved sales of nearly 470 million yuan.
Although happy cake has cultivated the market for many years, it is difficult to resist such an attack.  
On the other hand, with the upgrading of consumption, the baking industry entered the second half, and the competition among brands gradually changed from “product + channel” to “product + marketing point + channel”. The marketing point is a big problem for some old brands that lack innovation.
Take happy cake as an example. As a brand that has been operating for 13 years, its embarrassment is that it can neither bring its own heritage like daoxiangcun, nor have distinct recognition like the new brand with its own “net red” gene.
Although the categories covered are relatively complete, so far, there is not a well-known explosive product of happy cake, such as half cooked cheese of Haolilai and gongs of Zetian’s family.
Moreover, because it implements a highly process production mode, it is difficult to be like an independent brand in cake and bread styles.
Over time, for consumers, happy cakes have become synonymous with convenience and mediocrity.
In fact, it has tried to change in the past two years. The “snow swan” cake launched on the official website and the Christmas fruit cake are the products of the beauty economy.  
Unfortunately, no one can see it.
On the way to becoming “Honey snow ice city”, it lacks a snow ace ice cream that can create a sales miracle and a song called honey snow ice city.
Since you want to be the “No. 1 baking brand in China”, while embracing counties, towns and villages, happiness cake should think about how to strengthen product R & D capability? How to build a brand story? How to stand out in the face of a baking battlefield full of opponents?
For it, these issues are late but come.
Reference source:
[1] E-commerce Daily: the founder graduated from primary school. Happy cake is his fourth venture
[2] Egg solution Entrepreneurship: in-depth analysis of happy pastry, holly, master Bao, yuanmai Hill… How deep is the water in a bakery?
[3] Marketing Tactics: “bottom fishing in the baking industry”, what does pandas rely on to get out of the industry?
[4] Observation on catering brands: the baking market is hot and cold. What do baking brands rely on to win the future?
[5] Red meal network: new and old brands have a fierce battle. Is baking still a good business?
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