Author |Lu.
Going overseas is no longer a choice, but something that must be done", this is the common perception of domestic consumer brands in 2023.
In the past year, there has been an increasing number of Chinese new consumer brands competing in Southeast Asia, Japan and South Korea, the Middle East, Europe and the United States, as well as Africa and Latin America. It can be said that the boundaries of the global market are gradually becoming blurred in the era of brand navigation.
What is the significance of overseas markets for Chinese brands?In addition to manufacturing companies that are already well-known overseas, how can domestic consumer brands try to expand into overseas markets?Regarding these questions, we try to find answers from Chinese companies that have chosen to go overseas in the past year.
I speed up and open a store overseas
In the past three years, for new tea brands, they can only be described as "suffering". From the product innovation war set off by yellow peel and orange at the beginning, to the first battle in the sinking market and the opening up of the franchise tide, the competition in the new tea drink track has become more and more fierce.
According to the 2023 New Tea Drink Research Report, the market size of new tea drinks is expected to reach 149.8 billion yuan in 2023, with a growth rate of 443%。But by 2024 and 2025, growth could fall to 197% and 124%, the trend from the incremental market to the stock market has emerged. For new tea beverage companies, the overseas market is a difficult test of "going out without going to sea". As a result, 2023 has become the year when new tea drinks go overseas.
Judging from this year alone, almost all brands active in the new tea beverage track have started or increased their efforts to expand overseas markets. Among them, Heytea began to recruit overseas business partners in March and opened its first store in London in AugustIn October, Mixue Bingcheng announced its expansion plan to increase the number of stores in Japan to 1,000 around 2028: this year's National Day, the new brand Tianlala in the sinking market opened 6 new stores in Jakarta, the capital of Indonesia, at the same timeNayuki's Tea also recently announced that its first Thai store will open in Bangkok in December.
It is not difficult to find that a considerable number of the above-mentioned companies have set their sights on the Southeast Asian market, and this tacit understanding shows the unified logic of enterprises when considering the direction of going overseas.
According to public information, there are 11 countries in Southeast Asia with a total population of about 6800 million, dozens of official languages, and the economic and social development of various countries vary greatly. But these 11 countries also have some common characteristics, such as a high proportion of Chinese and familiarity with Chinese culture;The temperature in the tropics is high throughout the year, and there is no obvious off-peak season for tea and coffee consumption. Data shows that in 2022, Southeast Asian consumers' consumption of new tea drinks in one year has reached 36$600 million (about 266.6 billion.)800 million RMB).
Whether it is cultural origins or regional climate, these characteristics are enough for Chinese new tea brands to list Southeast Asia as the "first stop to go overseas". And Mixue Bingcheng, which has a keen sense of business, has already secretly started the development strategy of horse racing. At present, Mixue Bingcheng has 320,000 global stores, with a total of nearly 4,000 overseas stores, including more than 3,000 stores in the Southeast Asian market.
In March this year, when Mixue Bingcheng submitted its prospectus, it had opened 317 stores in Indonesia, with a revenue of 2,541080,000 yuan, net profit of 223550,000 yuan. Statistics from Vietnam Finance show that in April this year, the number of franchised stores in Indonesia has reached 1,500, and the total number of stores in Vietnam has reached 1,000, making it the largest beverage chain in Vietnam, surpassing the well-known local brand Highland Coffee (605 stores).
The Vietnam News Agency reported that Indonesians even joked: "*There is vacant land, ** there is a honey snow shop". It can be said that the overseas expansion of Mixue Bingcheng is to win by quantity, and overseas expansion not only means that it can grasp a larger global market, but also has brought considerable economic benefits.
Overseas arbitrage of domestic ** chain
China's consumer goods go overseas is divided into three stages: at the beginning, Chinese enterprises go overseas to find business, which is the traditional first-class, commodity OEM manufacturing type to go to sea, but with the help of China's first-class chain advantages, the products are sold abroad;The second is to go overseas with distribution, whether it is through local merchants, distributors or online Amazon, it is only to increase overseas sales channels, and it is still the logic of selling goods. However, among the brands that have gone abroad this year, especially a number of brands with mature domestic chains or overseas channel resources, they have directly played "brand export" and really put their business overseas.
For example, MINISO, which has three major markets in China, India and Vietnam, will combine local manufacturing advantages to produce different categories of goods when expanding overseas markets. And configure independent standard warehouses in all overseas markets to make the market supply more timely.
The advantage of this is that a large number of orders can be placed at the top of the market according to the demand for goods in the global end market, thus diluting the average production cost. When the goods are produced from the factory, they are directly sent to the sales terminal, reducing transit and warehousing costs, and there is no middleman to raise the price, which can ensure the low price of the store.
In addition to using this "quantity to price" chain strategy to enhance the best advantages, the rapid capture of changes in the end market demand, as well as the flexible adjustment of production management methods according to the consumption trend of different markets, has also become a mature application of Chinese enterprises in overseas markets.
For example, in the Southeast Asian market, MINISO mainly promotes cycling gadgets, sunscreen sleeves, etcIn order to cater to the local folk customs, nail polish that is easy to tear and pull has also been launched in Malaysia and other countriesSpice culture prevails in India, so it enters as a "light luxury" and sells perfumes that last a long time.
When expanding overseas markets, it has become an effective way to adjust strategies in a timely manner and borrow mature resources to seize the market. For example, in the expansion of overseas markets, MINISO did not insist on using the franchise model of the domestic market, but adopted the development model of "focusing on the first-class business model, supplemented by direct stores and franchise stores".
In the franchisee-based expansion model, the brand will charge franchisees a franchise fee, take a share of the revenue, and also have the right to guide the product display and activities of the terminal store, so it plays the role of a manager and a supplier. The relationship between the brand and the merchant is more equal, the former is responsible for product design and brand management, responsible for sales, and the latter is responsible for operating stores and distributing goods.
For example, in the Mexican market, MINISO has partnered with Carlos Slim, the richest man in the region, who owns the retail group Carso Group, which operates a number of businesses such as Grupo Sanborns and Sanborns Department Store, the second largest restaurant chain. For example, in the Vietnamese market, MINISO chose Le Bao Min, a former Canon distributor, which has more than 200 subordinates** in 64 provinces in Vietnam.
The research institute believes that the reason why MINISO will adopt this differentiation strategy is that compared with the domestic market, its brand does not have enough popularity and influence, so it needs to use local business resources to rapidly expand its scale and seize the market. Up to now, the number of ** stores in MINISO's overseas stores has exceeded 80%.
This light way of conquering the city can indeed allow the brand to maximize the use of the local resources of the best businessmen to quickly take stores and open stores. Therefore, MINISO is ostensibly expanding its market share through rapid store opening. But with the help of cooperation with local ** merchants, the brand is actually already doing wholesale business with concentrated customers and large orders.
It should be pointed out that the adoption of the first-class business model may also lay hidden dangers for future brand management. When the sales share of individual merchants gradually accounts for the majority of the local market, brands also become more dependent on the revenue and profits created by oligopolistic merchants, which will make the brand's right to speak be snatched away by the first merchants, which will affect the stable operation of the local market. However, for Chinese companies that are still in the expansion stage, there is no need to worry about this issue at this time.
Overseas high-growth party**
In the cognition of many Chinese brands, they still retain the traditional brand thinking of "the aroma of wine is not afraid of deep alleys" and "we must rely on quality to speak". However, in the global market, the complex and vastly different cultural backgrounds, business environments, and consumption habits in different regions have posed new challenges to overseas enterprises, and flexibility is the best way to adapt to different markets.
For example, what helped MINISO quickly knock on the door of overseas was to cleverly take advantage of the super IP that is well known to global users. Taking the movie "Barbie" IP series products as an example, the series has produced more than 120 SKUs, covering 12 categories, and has been released in China and the United States at the same time during the half-month movie release cycle. The product was launched for two weeks, and the sell-out rate reached 70%. The Barbie theme store was launched for a week, and the sales performance increased by 170% month-on-month.
At the same time, with the help of Sanrio, Disney Pixar, Tokidoki, We Bare Bears, Minions and other well-known IPs to launch a series of blind boxes, MINISO opened the UK's first blind box store on Shaftesbury Avenue in London, England. To this end, in 2022, MINISO will invest 1400 million yuan for joint authorization. In order to ensure that entering the MINISO store, users can find first-line brands everywhere combined with high-quality and low-cost products.
What helped Mixue Bingcheng quickly break the circle was to open stores intensively, get acquainted with each other, and make friends. Indonesia's ** Honey Snow Ice City bright red logo and the familiar snowman logo can be seen almost everywhere in the area, from shopping malls and crowded streets to rural areas and even marinas.
The Instagram account "MixueIndonesiasia" has been operating since December 4, 2019 and currently has 260,000 followers, and its Snow King emojis and daily marketing topics often occupy the hot topics of X (formerly Twitter).
In the offline operation, Mixue Bingcheng will not only combine the local culture, but also localize the store design, ** image, product taste, etc., and the Snow King of Thailand wears a crown, gold and silver jewelry, and imitates the local clothing style. And almost every time it opens a store in a new area, Mixue Bingcheng will release a version of the theme song in the local language to better match the local atmosphere.
Attracting the attention of overseas consumers is a phased goal, and how to retain customers for a long time is the most important thing. For chain brands that rely on offline channels and build their own stores, in order to successfully break through in the fierce overseas market environment, they also need to stimulate purchase demand in the process of random, casual and casual shopping by consumers to maintain a long-term high growth trend.
MINISO's solution is to add three levels of super stores in the store system: city image store, national and global super stores. More and more social media users have reported that they have seen MINISO in Manhattan SOHO in New York, Times Square in New York, Oxford Street and other overseas landmark core commercial centers, not only sharing the same floor with Burberry and LV, but also becoming neighbors with Galeries Lafayette, and covering an area almost twice that of China.
It can be seen that MINISO wants to make a breakthrough through the "Qianping" store in the selection of business districts and brand positioning, realize the high-end breakthrough of products overseas, and build a core competitiveness based on "China's efficient ** chain + global super IP + store scene value".
Different from MINISO, Mixue Bingcheng focuses on an ultimate cost performance. In Vietnam, the price of Mixue Ice Cream is 10,000 VND (about RMB 2.) per stick92 yuan), each cup of milk tea fruit tea only costs 25,000-30,000 VND (about 7.).29-8.75 yuan). This ** is significantly lower than the average for Vietnamese drinks**.
Not only that, in terms of franchise policy, Mixue Bingcheng can be said to be some of the most radical brands in Southeast Asia at present. For example, in some areas of Vietnam, Mixue Bingcheng will even waive franchise fees, management fees and training fees for franchisees during the three-year contract periodIn the Kuala Lumpur and Selangor areas of Malaysia, old franchisees can be exempted from the franchise fee for two years when they open a new store, and a new franchisee can be exempted from the franchise fee for one year.
The dense stores and abundant online marketing have brought traffic to Mixue Bingcheng, and also lowered the threshold for franchisees to join. There are many franchisees who say on ** that the popularity of Mixue Bingcheng is very high, and many young people know it without promotion. Based on the popularity advantages created by dense stores and active online marketing, Mixue Bingcheng is snowballing bigger and faster in terms of attracting investment and joining and continuously increasing market share.
In the past, when it came to the topic of going overseas, Chinese companies seemed to be easily constrained by superficial problems such as unfamiliar market environment and difficult localization, but they ignored the fierce competition in the domestic market, which has enabled many brands and even industries to have replicable market expansion capabilities.
Looking back at the year of 2023, a number of companies with a "sense of small commodities" such as Mixue Bingcheng and MINISO have chosen to go overseas, looking forward to achieving large-scale upgrades and obtaining practical benefits in overseas business, and overtaking in the battle for the head of the subdivided category.
But in fact, their overseas practice is not only the expansion of channels from the domestic market to the foreign market, but also allows Chinese companies to try to open their horizons and think about their own development from a higher and longer-term perspective - this may be the biggest gain of domestic consumer brands going overseas.