This article is originally from WeChat***dt Business Observation, ID: DTCAIJING, Text: Shi Youqi Data: Shi Youqi, Editor: Zhang Chenyang Design: Zheng Shuya, Operation: Su Hongrui Producer: Li Jingyu.
BESTORE has been a bit of a bit late.
First of all, on November 27, BESTORE issued an announcement, announcing that it would implement the largest price reduction for the first time since the establishment of the brand 17 years ago, with an average price reduction of 22% for 300 hot-selling products, and a maximum price reduction of 45%.
Then he openly tore up with Zhao Yiming, a snack wholesaler, and fell into a lawsuit.
There are all kinds of signs that BESTORE, which was once proud of "high-end snacks", seems to have to put down its body and make some changes in order to survive.
The founder Yang Yinfen previously mentioned in an open letter: "BESTORE wants to reduce the cost and achieve the best people, everyone thinks it is expensive, then it must be changed, and it will die if it remains unchanged."
In addition to complaining about the high price, "DT Business Observer" is more curious: What happened to BESTORE?Why did the road of "expensive price" once work, but now it can't?
In August 2006, BESTORE opened its first store opposite Wuhan Plaza.
Like most of the newly opened shops on the street, the newly opened BESTORE has an area of only 30 square meters, a total of 4 employees, and the way of promotion is also very down-to-earth - Yang Hongchun, who has just stepped down as chairman, leads the clerks to invite passers-by to try food for free at the door.
In the era when consumers mainly went to the snack shelves of the downstairs stores and supermarkets to buy snacks, BESTORE's snack collection store form of "bringing delicious snacks from all over the world to customers' doorsteps" can be regarded as a model innovation.
At that time, the only brand with a similar model was Laiyifen, but Laiyifen's stores were concentrated in Jiangsu, Zhejiang and Shanghai, while BESTORE was in Wuhan, both of which were offline channels, so there was no head-to-head competition.
Under this new model with a sense of freshness, BESTORE first gained popularity in Wuhan, and then opened stores intensively in central China with Wuhan as the core.
However, BESTORE has really made a leap forward, relying on e-commerce.
In 2012, BESTORE established an e-commerce company. This year can be said to be the first round of reshuffle between snack brands.
On the one hand, Baicaowei, which has been in the online channel for less than two years, has reached 1400 million yuan.
On the other hand, the old snack brand Want Want, which still mainly relies on traditional channels, has fallen into negative growth for three consecutive years after its market value broke through the highest point of HK$170 billion in 2013.
In 2012, BESTORE, which bet on e-commerce, relied on e-commerce to achieve the soaring rise from a regional snack brand to a giant in the snack industry in the future.
In 2015, BESTORE's online sales exceeded 8200 million yuan. In 2016, BESTORE won the title of No. 1 in the category of Double 12 casual snacks. According to the BESTORE prospectus, from 2016 to 2019, the proportion of online revenue in the company's main business increased from 3369% rose to 4858%。
In the stage of taking off with e-commerce, BESTORE got rid of Laiyifen, which still mainly relies on offline channels, but at the same time, it also ushered in a new opponent - three squirrels that mainly focus on e-commerce platforms.
In 2019, BESTORE's revenue was 77100 million yuan, and the revenues of Laiyifen and Three Squirrels were 4 billion yuan and 10.2 billion yuan respectively.
From the perspective of revenue, before 2022, the three squirrels have always pressed BESTORE.
In the position of the second child, BESTORE hopes to differentiate itself in brand positioning by targeting specific groups of people.
Since 2015, BESTORE has been marketing to specific groups of people through cooperative variety shows, film and television drama implantation, etc. From "Where Are You Going, Dad 3" to "Creation Camp 2019" to "Brother Who Overcame Difficulties", and from "Ode to Joy 2" to "Mr. Love" and "The Silent Truth", BESTORE targets the brand's main consumer groups - young mothers aged 18-40 and exquisite white-collar workers.
However, the embarrassing thing is that the above marketing methods can also be seen in the three squirrels. For example, it was BESTORE that was implanted in "Ode to Joy 2", and in "Ode to Joy 1", when "Ode to Joy Five Beauties" was trapped in the elevator, Qiu Yingying played by Yang Zi opened her mouth to "have three squirrels that I like to eat the most".
BESTORE needed a new story, a new story that could differentiate itself from other brands.
In 2019, when the three squirrels went public with the title of "No. 1 National Snack Stock", BESTORE announced in January of the same year that the brand would move towards the positioning of "high-end snacks".
In order to move towards "high-end", BESTORE first replaced the logo of the painting style and replaced it with a concise text pattern. At the same time, he joined hands with Chen Man, a photographer in the fashion circle, to shoot a "snack blockbuster".
In terms of store location, BESTORE has densely integrated its stores into shopping malls.
According to an interview with Chen Zhangwei, head of BESTORE Development Center, in 2019, as of July 1, 2019, BESTORE has more than 800 mall stores, and 70% of the 200 new stores in the first half of 2019 are located in shopping malls.
For consumers, the most obvious embodiment of high-end may be more and more exquisite packaging and more and more expensive **.
We compared the per capita consumption of major snack brands, and the unit price of BESTORE before the price reduction reached 565 yuan, higher than Laiyifen, Three Squirrels and other brands, ranking first among the above snack brands.
Taking BESTORE's best-selling "peeled melon seeds" as an example, before this price reduction, a bag of 120g was sold for more than 10 yuan, while the price of 500g of white melon seeds with similar products was only 15$8.
A bag of more than a dozen yuan, just buy and buy hundreds, but a bag of not much things" may be most people's feelings about BESTORE.
This kind of "high-end" with high price, exquisite logo packaging, and tall stores as the main embodiment did have a considerable number of people pay for it at the beginning of its implementation.
According to Nielsen's survey, as of October 2019, 47% of consumers in key first- and second-tier cities across the country recognized BESTORE as a "high-end snack".
Why do people buy it?
One explanation is that under the "high-end" marketing, it does believe in the quality and brand power of BESTORE.
Another answer may be: feel "face-saving" and can give gifts.
On Xiaohongshu, there are many notes posted about receiving "BESTORE" as a benefit for the company, and in the titles and comments, there is no lack of: In which direction can you kowtow to meet such a boss and a fairy company.
In 2022, BESTORE pointed out in its financial report that its business operating income increased by 53% year-on-year49%，The main focus is on the sales scenario where the product is used as a "gift".
That is, in 2022, BESTORE's revenue will exceed that of three squirrels, becoming the first brother in the snack food industry.
Sitting on the throne of the snack industry is not a peace of mind.
As described above, for consumers, BESTORE's "high-end" embodiment is more focused on stores, packaging and advertising, rather than the product itself.
From the perspective of the production chain, to be a "full-category" BESTORE essentially takes the road of "brand + channel". In terms of business process, BESTORE adopts the OEM model - that is, the company is responsible for exploring product categories and developing new products, while the processing link is provided by certified suppliers.
In 2022, BESTORE will have 1,655 omni-channel SKUs, and 603 new products will be launched throughout the year, but BESTORE's R&D expense ratio has been 06% or less.
The founder of "Daily Black Qiao" once shared in an interview that domestic snack brands that adopted the OEM model generally had a situation of "sharing ** chain" before. When the same foundry establishes cooperation with different brands, and a popular product appears, it will soon be copied by other companies, and in the end, the product will fall into a homogenization situation.
In other words, BESTORE's snacks are produced by foundries and then sold on an OEM basis. Not only is it difficult to achieve differentiation in product taste, but it is also difficult to ensure quality.
Last year, BESTORE was "hanged" on the hot search because of the plastic paper eaten by moon cake products. As of December 14, 2023, there have been 2,210 complaints related to BESTORE in terms of black cat complaints.
What's even worse is that the profit margin of selling such an expensive good store is not high.
Compared with major domestic listed snack food companies, in 2022, BESTORE's revenue will be higher than that of Qiaqia Food, but its profit margin will be almost a quarter of that of Qiaqia.
When the time comes to 2023, the life of BESTORE is really difficult.
Judging from the financial report, from Q1 to Q3 in 2023, the total revenue of BESTORE will be 599.9 billion yuan, a year-on-year decrease of 14%;Net profit attributable to the parent company 19.1 billion yuan, a year-on-year decrease of 33%, of which Q3 net profit attributable to the parent was 00.2 billion yuan, a year-on-year decrease of 98%.
The former "snack brother" is now moving towards the test of life and death, **something went wrong?
First of all, there is the stalling of e-commerce. Since last year, BESTORE's online channel revenue has shown weakness.
In 2022, BESTORE's e-commerce channel revenue will be 469.8 billion yuan, down 33%。And in 2023, the stall of e-commerce continues.
The weakness of e-commerce is not just a problem encountered by BESTORE. The three squirrels who rely more on online channels are also having a hard time: in the first half of this year, the revenue of the three squirrels on the Tmall and Jingdong e-commerce platforms fell by 29 year-on-year49% and 4111%。
On the one hand, the dividend period of the rapid development of e-commerce has passed, and it is inevitable that the growth rate of traffic will slow down.
On the other hand, with the development of the Internet, information is becoming more and more transparent, and more people understand that high-end BESTORE is actually "factory OEM goods". In that case, why not just go to the "homologous factory"?
On Xiaohongshu, in the past 90 days, there have been more than 4,500 notes related to "snack substitution", "snack homologous" and "snack ** business".
BESTORE, Three Squirrels, and Baicaowei are all frequent customers who have been "replaced" in the "snack substitution".
Under the channel, BESTORE encountered a more menacing "mass merchandiser snack store".
According to the data of Narrow Door Restaurant, Zhao Yiming, who started in 2019, will open 1,441 stores in 2023 alone, almost three times that of BESTORE.
It is also a snack collection store, although the quality of the mass snack store is controversial, but it is indeed wider and cheaper.
In previous interviews, Yang Yinfen believes that mass sales of snacks: "The business models are different, the operating costs are different, the brand positioning is different, and the industry ecology is different. ”
However, these "differences" do not seem to avoid a head-on encounter between the two. Yang Yinfen admitted frankly in a recent interview that the current difficulties of BESTORE are related to "the siege of mass snack stores in the industry".
On the surface, the reason for the decline of BESTORE is the failure of the e-commerce channel, but in essence, it is still the asymmetry of quality and quality.
In the past, people would pay for "consumption upgrades", "brand stories" and "celebrity endorsements", but now, the Internet has gradually eliminated the information gap, consumption has returned to rationality, and cheaper competitors have emerged, and fewer and fewer people are willing to pay for BESTORE.
In other words, on the snack track, a good story may not be as good as a consumer's heartfelt sentence - delicious and inexpensive.
Title picture Header picture**: BESTORE official Weibo).