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Text |Tech Planet, Author |Xi Rui.2023 is the year to embrace the world again.
Young people are no longer consumerist**, they are more focused on the value of the object itself. The way the world is connected has changed, and value for money has become their primary concern. A walk-and-go trip, a well-planned show is how people smooth out wrinkles in their hearts.
Wealth and business opportunities are born here, and those companies that can't keep up with the tide of the times are not happy. Including the large companies with a market capitalization of hundreds of billions of dollars – they are busy reducing costs and increasing efficiency, and new businesses are lackluster. But the competition is raging, and the ranking of the Internet company Iron Throne has been changing. Many people leave, either actively or passively.
Everyone is a grain of sand in the tide of the times, but every tiny individual deserves attention. The annual series planning of Tech Planet will focus more on ordinary people under the torrent of the times, pay attention to the choices and destiny of individuals, and pay attention to the trends and trends of business, we always believe that they have left a rich footnote to the world.
To this end, Tech Planet has launched a series of planning "Please Answer 2023", the first of which focuses on new consumption.
Low price and rationality may be two key words that can summarize the consumer market in 2023.
In 2023, brands will not wait for the fantasy of "revenge consumption", but will usher in "strict" and "calculating" consumers. It's not that they don't spend, but they want to spend less money on something better.
This shift in the collective view of consumption affects all consumption tracks. Brands continue to attract consumers' attention with more cost-effective products, but it is becoming more difficult for consumers to pay for them.
As 2023 comes to an end, Tech Planet has a dialogue with different characters in different new consumption tracks. They come from new tea, coffee, beauty and skin care, as well as this year's popular mass merchandising snack track. From brand founders to ordinary employees, they are the people closest to the consumer market, regardless of their status. Their stories and feelings may provide a glimpse into consumer trends in 2023.
2023 may not be a "peak year for consumption", but those who are still on the track have no intention of quitting the game. Even if the consumption track has not created a wealth myth for a long time, they have not given up.
For the expectations of 2024, the most important thing for consumers is to live. But compared with "live" a year ago, these three words this year have more hope.
Industry: Beauty & Skincare, Narrator: Head of Brand Operations.
I've always been in the consumer industry, and I used to work in e-commerce in Hangzhou. Last year, I started a fresh brand with my friends, but it was very average, he had his own ** channel, but it was still difficult to build IP.
This year, I'm back in the consumer space and into the skincare space, which is my old business. The company is a new brand that has just been created, and I am responsible for building the brand from 0-1. In fact, for a small team, you have to be responsible for everything.
When I returned to the industry, I found that the track had changed a lot. This year, because of the sewage discharge incident in Japan and the overall environmental impact, I thought that domestic brands would have a chance. Consumers will pay more attention to domestic brands. But consumers have also become much more rational and will not completely choose domestic products because of the so-called support for domestic products. Today's consumers will pay more attention to the product itself, you can meet my needs, can really have the same effect as foreign brands, will really place an order.
Our brand's products are only available this month. The entire pricing strategy in the early stage is affected by the big environment this year. Because considering the change in the current consumption viewpoint, our ** main parity is within 100 yuan. The combination of lotion + lotion is only 188 yuan, and a lot of samples are given.
Although we launched our product late, I've been talking to my peers this year. In fact, this year, the whole beauty and skin care are relatively bland. In the first half of the year, everyone's expectations for the 38 festival promotion were high, and the final results did not meet expectations. Then to 618 and Double 11, everyone has grown, but it will never go back to 2019.
For new brands, in fact, it is difficult to do any channel now. We first launched the Douyin channel, ** have not opened a store yet. The gameplay of spending money on marketing and going to the top live broadcast room is no longer suitable for now, and no brand dares to invest money like this. So even if we are just starting out, we have begun to think long-term, albeit slowly, we must do a good job of repurchase, so that we can break even on our own.
Whether it's beauty or skin care products, everyone is now paying more attention to conversion in marketing, not just our small brand. I've lowered my expectations a lot now, and I just hope that in 2024 there will be some improvement.
Industry: Offline Pavilion, Narrator: Wuye Mixed Noodles Franchisee.
In my first-tier city, almost all the franchisees of Wuye noodles have closed their stores, and only a few stores remain. I was one of the lucky ones.
At the end of last year, I joined Wuye Mixed Noodles for a year. My luck is more luck, my store is opened in a park, and the customers are all white-collar workers working in the park, and there are more repeat customers. I can guarantee that there will be business from Monday to Friday. But in the store on the street or in the mall, it can only do business on weekends, and there are basically no people on weekdays.
So I don't do takeaway orders either, and the profit is relatively low. Many of the Wuye noodle franchisees I know have gone out of business, and everyone has no business.
I've been able to survive more because of the location. Stores may be a few hundred meters apart, and they may all be different. There is also less competition in the park, there are only two noodle restaurants, and white-collar workers in the park will come to me if they want to eat noodles.
Actually, it's my first time doing catering, and I used to do a supermarket chain. During mealtimes, I worked as a laborer in the store. Although I am one of the few franchisees who have not lost money, I still do not recommend everyone to do a catering franchise. Especially young people who have their own savings, don't just open a store and start a business. 2023 is really very hard, a hard year, taking care of this 100-square-meter store, I am only enough to earn my own salary. can only survive and barely keep the capital.
In 2024, I just want to live. Because the number of companies in the park is also decreasing, the passenger flow is also much less.
Industry: Wholesale snacks, narrator: Employees of the marketing department of snack brands.
My last job was as a marketing worker on an e-commerce platform. But in fact, everyone knows that the Internet is gradually declining, and the mass snack track is on the rise. So in June this year, I crossed industries to the offline retail industry.
In May this year, our company's branch has just landed. When I joined the company, half of the entire office building was empty. But in just 4 months, the entire floor was already full. This year, the total number of employees in the company may have tripled, and now the company has nearly 1,000 people. These are completely two scenarios with the Internet industry, and the change of personnel is the most intuitive impact on me.
Although a lot of hot money came to the industry, the people in the industry did not enjoy the dividends. In addition to having endless snacks, the company does not have more benefits, far less than the heyday of the Internet, and may even be inferior to the Internet companies after the shrinkage of benefits.
My treatment is the same as that of the previous company, and now it is still a single and double holiday, and many systems are not standardized. Strictly speaking, the treatment is a little worse. But I didn't come here for money, but for the track and the company.
I found that most of the people who came here had the same thoughts as me. There are a lot of people from other listed retail companies in our company, as well as people from leading new consumer brands. Everyone is aiming for this track and the company is still in a period of rapid development, hoping to accompany the company to go public.
But it's different from accompanying Internet companies to go public before. In the past, it was to be financially free, but now we are also very sober, and the listing of the company does not help us much in the accumulation of personal wealth. We're all looking for this experience, which will make us more valuable in the workplace in the future.
The industry is growing much faster than I imagined, even faster than the Internet industry. It's quite unexpected that this industry has entered a wave of mergers without going through a "vicious war".
Mass selling snacks should be one of the few tracks that is growing this year, and I'm glad to have jumped here. Although in the second half of this year, my work state is relatively saturated, and I am dealing with things that I have not experienced every day. Because online and offline are indeed quite different. In fact, a lot of work is not my scope of responsibility, but the company is still in a 0-1 state, and the division of departments is very rough, and I have to do all of it.
There is a different way to describe it, my current mentality is similar to "lying on the salary and tasting the guts", and the work is a lot harder, so I hope that the company I bet on can become the final winner of the industry and successfully go public.
Industry: New Tea Drink, Narrator: Wen Feng, founder of Chayu brand.
Chayu is a regional tea brand in southwest China, and we have more than 400 stores in Sichuan, Chongqing, ** and other regions.
The tea market has seen significant changes in the first and second half of this year. At the end of last year, we put the expansion of stores at the top of the list in 2023, and at that time, there will be significant growth in 2023. Before May, the brand development was still good, but from May onwards, the brand development began to fail to meet expectations.
At the beginning of this year, many individual entrepreneurs wanted to join, so there was a wave of collective store openings in the first half of the year. There is no shortage of franchisees for all brands, and they are all grabbing stores. Some shops may not have been able to transfer at all during the epidemic, but in the first half of this year, the direct transfer fee has increased by 50%, and there are still many people who are willing to accept it.
However, since May, the franchisees who have opened new stores have found that the market is not as good as expected, the business has not met expectations, and the competition is very fierce. Therefore, in the second half of the year, the enthusiasm of many franchisees to start a business is decreasing. I have communicated with many brands, not only our brand, but also the whole industry since May.
In fact, this year's Hey Tea and Nai Xue's tea opening franchise did not have a particularly big impact on us. On the franchisee side, their franchisee group is not the same as ours. They may need to invest in franchisees who are stronger and have some resources. We are more in need of entrepreneurial franchisees.
The impact on the consumer side is not large, because the distribution of our stores and business districts is also different, and the overlap of consumers is not particularly large. There may be more influence on the brands of ancient tea, tea Baidao, and Shanghai aunt.
However, this year's battle between Luckin and Cudi has had a very big impact on the tea brand. Because the consumer groups of coffee and tea are more overlapping. This has led to many tea brands also choosing to reduce prices, on the one hand, they directly choose to reduce their prices, and on the other hand, through marketing activities, half price of the second cup is a disguised price reduction.
In addition, there are only so many consumers overall. Nowadays, many cities have a street for milk tea. In the past, there may have been a bubble tea shop on one street, but now there are more than 10 or even more than 20 on one street. Since May, our overall strategy has been adjusted, and we pay more attention to the profitability of old franchisees, including product research and development, event marketing planning, and the adjustment of **.
Looking back on 2023, the changes in the tea industry are still relatively large.
In 2019, the tea industry was still in a stage of rapid development. After three years of intermediation, we expect that we may catch up with the development momentum of 2019, and there may be at least two or three years of rapid development, but we did not expect that 2023 will come directly to the stock period.
First of all, consumers' preferences for categories are changing, and national style tea drinks are more popular this year. Consumers now also prefer fresh milk tea, which is healthy and has a more prominent tea taste, so we have also switched to pure milk tea this year. And this year, the concept of consumers has also changed, consumers are not actually unwilling to spend money, but just want to buy better products with less money.
In the future, the focus of next year will still revolve around the old franchisees. There will definitely be development, but it will certainly not set relatively high goals or be as radical as in previous years. At this stage, the brand's main task is to improve the profitability of the store.
Industry: Coffee, Narrator: Xu Lanyue, founder of Silver Flow Coffee.
My partner and I started a business in the light food track before. In 2020, we felt that the competition in the coffee track was too fierce and we were in a wait-and-see state. Until the pandemic stimulated us, we wanted to look for long-term needs that were not affected by the outside world. At that time, I thought that coffee was such a category.
Last year, when the epidemic was locked down at home, my partner and I completed the preliminary launch of the Yinliu Coffee brand remotely, including logo design, company registration, etc.
We only opened our first store in December last year, because there were still restrictions on movement in Shanghai in the second half of last year. It may take two or three months from the first to the second, and about a month from the second to the third, but it gets faster and faster in the end.
As for the results of the past year, they are generally in line with my expectations. We currently have more than 40 stores, about 35 of which are in Shanghai. The first few months of the franchisee are the run-in period, and most of the stores that have been open for more than three months can be profitable.
Shanghai should be the city with the most competitive coffee market. It's not that there are many shops in Shanghai, but that there are too many professional players.
I think Shanghai may end up being a chain brand, because professionalism can only be solved by spending money. The soft decoration of some coffee shops in Shanghai in the Christmas season may have exceeded the hard decoration of the entire small coffee shop in other places**.
This year, the coffee field is in the first battle, which will definitely be pressure for us, but the capital preservation line of each brand is different.
Most of our stores are in office buildings or on the B1 floor, and the rent of the shop is less than 15,000 yuan, and it is generally a few thousand yuan if you are out of town. We focus on the combination of coffee + bagels, and many companies will choose us for afternoon tea and group meals, so we are still differentiated from many coffee brands.
The impact of Luckin and Cudi on us is more topical. Their sauce and fragrant latte, including the competition between them, will become a topic of attraction for consumers, which will affect consumers' consumption decisions.
On the contrary, the competition between them will affect our location. Since the second half of the year, Luckin and Cudi have stolen too many positions. Because many office buildings will have business protection, they will not allow multiple coffee shops to open. They were so fast that after grabbing an office building, we couldn't open it even if there was a vacancy.
At this time, there are often some brands that are in a hurry to take the store but will be impulsive, and the store that has accepted the best quality may not be able to achieve profitability. Therefore, at present, we are not deliberately increasing the speed, but still find more suitable stores. I have to admit that we have not expanded our store as fast as before in recent months.
In the past year, I feel that the overall environment will be more affected by the overall environment. There have been relatively big changes in the economy this year, and from January to March in the first half of the year, many people are still in a wait-and-see state. Around May this year, after everyone was confident, there were many customers during that time, whether they were consulting about opening a store or actually coming to the store to consume. But by the end of the month, it was starting to get a little sluggish again.
More importantly, both the platform side and the consumer side are immersed in the atmosphere of low prices. The consumption frequency of our stores has been increasing, and it seems difficult for us to analyze who has stolen my traffic, but the whole low-price link will make merchants feel pressured. From the perspective of the brand, I think this year is okay, but if I stand from the perspective of franchisees, I am sure that many people will think that they are forced to get involved in the first war.
Our brand's countermeasures are more to reduce costs at the upstream ** chain end. The cost of each cup of product should have dropped a few cents compared to the beginning of this year, whether it is milk, coffee beans, cups, and bags, all of which have been reduced, so our relative reduction in selling prices has not reduced the profits of franchisees.
I think the overall coffee market next year should be better than this year. At present, many coffee shops in small cities are not professional, and there are still many opportunities in second, third and fourth-tier cities.