BESTORE has rarely cut prices in the history of the store and sued "Zhao Yiming Snacks" in a high-profile manner, why?
Recently, the snack industry has been very lively, and the protagonist is BESTORE. What is relatively rare is that at the end of last month, the new chairman Yang Yinfen made a public statement: What is in front of us is no longer a question of living a difficult life, but a question of whether we can survive. As a result, BESTORE started a rare price reduction in history: the average price of more than 300 products was reduced by 22%, and the highest price was reduced by 45%. A giant with a market value of more than 20 billion is also facing the problem of surviving with a broken arm today, what is the reason behind it?Founded in 2006 and headquartered in Wuhan, BESTORE focuses on providing consumers with high-end snacks, including snack R&D, processing, retail, etc. In 2020, BESTORE was listed on the Shanghai Stock Exchange and became the first stock of high-end snacks. According to the data, BESTORE is the No. 1 enterprise in the leisure snack industry, with a revenue of about 9.4 billion yuan in 2022. In today's economic downturn, the word "high-end" of BESTORE has also been greatly challenged. This conclusion applies not only to the present, but also to the past 5-7 years. As Pencil Road has mentioned many times before, in the past 5-7 years, after the exclusion of channel brands and new energy vehicles, none of the newly established high-end (manufacturer) brands have been listed. Especially in the last 1-2 years, high-end consumer brands are a product of the times. The so-called "consumption upgrade" is just **+ appearance upgraded, and the product quality has not changed much. In the past, there were two representatives of high-end snack listed companies, one was BESTORE and the other was Three Squirrels, which were established in the year. But in lockstep, both have recently adjusted their "high-end" positioning. The three squirrels officially said that they have implemented the "high-end cost-effective" strategy in 2022, adjusting from "high-end" to "high-end cost-effective". For BESTORE, in addition to its own price reduction, it also sued a company it once invested: Zhao Yiming Snacks. It is a snack discount brand that was founded in 2019. At that time, Zhao Yiming's snacks completed 1500 million yuan A round of financing, BESTORE is the co-investor: with 45 million yuan of **, obtained 3% of its shares. But in April this year, BESTORE sold this part of the equity: for a price of 10.5 billion yuan, with a net profit of 60 million yuan. Surprisingly, 22 days after BESTORE withdrew, Zhao Yiming Snacks merged with the "Snacks are Busy" strategy, and the total number of stores reached 6,500 after the merger of the two mass snack brands. BESTORE believes that when he was a minority shareholder, Zhao Yiming did not truthfully disclose the situation, which led to the company making a decision that may not be the maximization of profits. Personal opinion: Behind this incident, the essence is the difference in the value of "high-end snacks" and "affordable snacks". Taking "Zhao Yiming Snacks" as an example, the common slogan in the store is "We are very cheap". And the business model of mass merchandising + discount is also destined to its best civilians. The Tao is different, and it is not conspiratory. The two companies are destined to take two paths, or this is also an important factor, so that "Zhao Yiming Snacks" would rather combine with the non-listed company "Snacks are very busy", rather than combine with the listed company "BESTORE". The rise of mass snack brands represents the mainstream trend of "parity", rather than high-end. Personally, I believe that in the next 3-5 years, not only the snack industry, but also all consumer brands, the mainstream trend will revolve around "affordable people's livelihood", and it will be difficult for high-end brands. From the perspective of our national conditions, there are 600 million people with an income of less than 1,000 yuan, and about 400 million middle class, there are very few really rich people, and the proportion of people with assets of 10 million is about 05%。I don't understand why we should serve a minority group first when people's livelihood consumption has not been resolvedWhy don't you leave the road and go to a small road?At present, the issuance resources in the capital market are very limited, and there are many companies that want to go public, but the money is too small. Consumer companies are already making way for technology companies, and even for people's livelihood consumer companies, the listing is not going well. Even if there are surplus resources in the future, they should be left to them first (Minsheng Consumer Company). We must concentrate our efforts on doing big and important things. At present, people's livelihood consumption is bigger and more important than high-end consumption. Therefore, I believe that in the next 3-5 years, high-end consumer brands will have multiple challenges: 1. They will face market challenges with insufficient consumption power, and it will be more difficult to grow. 2. The challenge of limited issuance resources in the capital market makes it more difficult to go public. 3. The challenge of insufficient self-quality chain and product strength makes it more difficult to upgrade product quality. Entrepreneurs still have to be down-to-earth, whether it is to serve the people or high-end users, to achieve a basic premise, that is, excellent products. In addition, the price-performance ratio should be reasonable. Cost-effective is not synonymous with "low price", people's livelihood consumption must be cost-effective, and high-end consumption must still be cost-effective.
At any time, the quality of the product must always match the first. To sum up, the adjustment of BESTORE is an adjustment that follows the trend, and it gives an inspiration to business operators: at present, people's livelihood consumption is the king, and high-end is a rugged mountain road, and the road is far and difficult.