Introduction:As a typical Wenzhou businessman, Chen Chuanwu turned a small chicken chop shop known for its cheapness into a 10 billion business, and also became a logistics service provider behind the development of many brands
Jin Mei|Author Stone Business Review |Produced
Cold chain started
In the 90s of the last century, most of the people who were a little brave and wanted to make a lot of money chose to go to the sea to do business, and Chen Chuanwu of Lucheng, Wenzhou was one of them.
In order to do a vigorous career, in 1995, he decisively resigned from his stable job and began to go to the sea to look for opportunities.
In 1992, the well-known quick-frozen food brand Sanyuan was founded, and this year, the quick-frozen brand Longfeng from Taiwan, China, also entered China. Since then, with the gradual formation of the cold chain of circulation and consumption, domestic quick-frozen food has entered a stage of rapid growth.
So Chen Chuanwu aimed at the quick-frozen food industry and founded Wenzhou Baiyun Food, specializing in the production of quick-frozen food. After two years of hard work, his quick-frozen product sales channels spread throughout Wenzhou, at this time another frozen food giant Missy was born, and the domestic frozen market became more and more lively.
At that time, Unilever's cold drink brand and Luxue had been in China for many years and had been unrivaled in the Chinese market, but the consumption of this product was very fragmented and dependent on the sales network was very strong, which was very tricky for Unilever. At this time, Chen Chuanwu's rising cold chain company has become a lifesaver for He Luxue.
Chen Chuanwu knows that his mature sales network in Wenzhou and the surrounding areas is a timely rain to expand the brand with Luxue, and he has no opponent in Wenzhou's cold chain market. Therefore, when negotiating with Unilever, Chen Chuanwu not only successfully signed the first right to Lu Xue, but also obtained an additional investment of 1,000 freezers and refrigerated trucks from Unilever.
This 1+1>2 cooperation has broadened the channels with Lu Xue, and also made Chen Chuanwu's strength soar again, and his first-class cold chain products such as cold drinks, frozen meat, food, etc., have gradually become more diverse.
But the wealth that came in soon began to eat him back.
Faced with a large number of product throughput every day, problems such as upstream inventory backlog and downstream payment arrears inevitably arise. In 2000, there were also more and more threats from entrants in the frozen market, and Chen Chuanwu had to find a way to break through as soon as possible.
The most important thing at hand is to solve the problem of overstocking, which is the only way to save the company's precarious cash flow. Looking at the goods in the warehouse, Chen Chuanwu suddenly thought of a way: sell it out by himself!In this way, Chen Chuanwu and his partners opened a snack bar called "Zhengxin" on the streets of Ruian.
Since the main purpose of the snack bar is to sell inventory and return funds, the ** of Zhengxin snack bar is very cheap, and this kind of cheap snack instantly attracts a large number of customers. As a leader in the local cold chain, Chen Chuanwu's warehouse has a backlog of goods, which also creates a dazzling menu of Zhengxin snacks.
Since the snack bar business is so hot, as long as this model is replicated infinitely, it will produce a 1+1>2 effect.
Wenzhou people are not afraid of small business, buttons, labels, signs, trademarks, trinkets, small toys, these outsiders do not look down, too lazy to do the "gadgets" Wenzhou people do, but once Wenzhou people have accumulated capital, they will want to make the business bigger. Chen Chuanwu, who has already done great things, is no exception.
His first plan to expand his store was ambitiously in Shanghai.
However, the national expansion of Zhengxin snacks has not been smooth. Because Zhengxin Snacks does not have brand endorsement, no one is willing to join at all, so the number of stores has been stagnant. What's more tricky is that those who have joined, due to the different tastes and dietary preferences of users in different regions, plus the loss of ** advantages under the cost of franchise fees, the sales performance is not ideal.
Chen Chuanwu gradually recognized this cruel reality: Zhengxin snacks have no brand moat at all, it is easy to be copied, people only need to imitate it according to the gourd, and there is no need to join at all. Competitors have further compressed the revenue space of Zhengxin snacks, and the model of low-cost FMCG has fallen into a bottleneck.
Reinventing the new
Chen Chuanwu does not believe in evil, why can others make a chain but not himself?He began to inspect large chain restaurants and FMCG stores across the country to study their business philosophy and franchise model.
Zhengxin snacks have more than 10 types of hamburgers, chicken wings, meat skewers, drinks, etc., and hundreds of single items. This not only increased the difficulty of management, but also increased the burden of procurement, logistics, processing and other processes, so Chen Chuanwu drastically cut 90% of the product, leaving only chicken cutlets, barbecue and drinks.
McDonald's and KFC have entered the Chinese market for more than 30 years, and they have not only brought fried chicken to China, but also brought a set of world-class white feather chicken breeding standards and the whole industry chain model. Among all the Chinese food chains, chicken is the most mature in China. From food safety standards, to breeding, production, processing, cold chain transportation, warehousing to stores, and then to supporting service providers, chicken has a mature and complete upstream and downstream chain, sufficient market supply, and chicken meat is relatively stable.
Chen Chuanwu decided to concentrate his firepower and make the chicken steak the lowest level.
Their target customers are young people with spending power of less than 15 yuan and can't afford to eat KFC, so the store and decoration are not so important, Chen Chuanwu changed the store from the mid-range decoration door to the street stall, Zhengxin snacks became Zhengxin chicken steak, and the number of directly operated stores began to grow rapidly.
With a certain scale effect, Chen Chuanwu began to consciously screen high-quality ** merchants to get chicken and ingredients better and cheaper than his opponents. In the past ten years, Chen Chuanwu has subsidized tens of millions of dollars to the chain, so that Zhengxin Chicken Chop has always had negative returns, but he is firmly strategic forward-looking and has never stopped expanding his position.
In 2013, a sudden outbreak of bird flu suddenly changed the course of the story.
Bird flu hit, the chicken ** chain broke, the chicken ** soared, and the chicken steak stores closed down one after another. Zhengxin Chicken Chop, which has 500 directly-operated stores, has withstood fluctuations and maintained no price increases, but the company's performance has also fallen to a record low.
Just when the employees were losing confidence, Chen Chuanwu made a decision that surprised everyone: on the one hand, he carried out internal share reform, distributed his shares to employees, and invited employees to be store managers, on the other hand, he corrected the new chicken steak direct sales model, opened up the franchise, and entered the brand expansion period.
Chen Chuanwu said that he is not afraid of disasters, "every disaster is a big opportunity", once he comes, he expands once. After a round of visits, Chen Chuanwu found that the competition in the catering franchise market is very fierce, and the franchise fee continues to fall. Since everyone is falling, it is better for Zhengxin to drop directly to the end and take the opportunity to let more people participate.
For employees, Chen Chuanwu's secret is just two words - sharing, that is, really sending the money down. Through the three iterations of the "Store Manager Responsibility Letter, Individual Contracting System, and Single-store Shareholding System", Chen Chuanwu divided the profits of the store in a real way, and let them have a deep relationship with the store through shareholding, so that everyone can become a small boss and encourage them to open a store.
In order to reduce the difficulty of joining, Zhengxin Chicken Chop only needs to pay a one-time franchise fee of 30,000 yuan, and a deposit of 10,000 yuan will be returned in full after 3 years of cooperation if there is no default. After they changed the store from the mid-range decoration door to the street stall, the rent and decoration can be done for about 20,000 yuan. Coupled with the material cost of 10,000 yuan for the initial purchase and the equipment cost of about 1-20,000 yuan, 80,000 yuan can open a Zhengxin chicken steak.
This is definitely very cheap in the industry, KFC, McDonald's franchise cost is about 5 million, Tex, Spicy House, Xiaolongkan and other meals, hot pot single restaurant franchise investment is between 1 million and 3 million, even if the yellow stewed chicken rice, Juewei duck neck and other single store franchise investment is also 100,000-300,000.
The operation of "everything is simple" not only reduces the management cost for Zhengxin, but also lowers the threshold for franchisees, and the low price driven by all this also makes consumers flock to it.
From 2013 to 2015, Zhengxin Chicken Chop had 85, 249 and 890 franchise stores in a single year, and by the end of 2015, Zhengxin Chicken Chop stores had reached 3,000.
The rapid expansion of franchise stores is a great test of the company's internal management and resources, from the first class of raw materials, production, logistics, to store management, the company's senior management has been looking for ways to break the situation.
Chen Chuanwu chose Zhengxin's next breakthrough method: "further reduce costs, lay out upstream links, and consolidate the first chain". In 2014, Zhengxin Chicken Chop opened the whole industry chain model, covering food research and development, production and processing, packaging and printing, logistics chain and chain management, etc., in order to ensure the quality and safety of products, has set up independent production bases in Shanghai, Shandong, Anhui and Hubei.
In 2015, Shanghai Zhenxing Food was put into production, and Suzhou Zhengxin processing base was laid. There is also a new self-built Kompasu logistics system, with multiple warehousing centers, and cold chain logistics distribution can reach all towns and villages in the country.
After some operation, in just 4 years, Zhengxin chicken steak has developed 150,000 franchisees and thousands of directly-operated stores.
The bigger story
In 2015, after the ** chain was very mature, Chen Chuanwu began to look forward to a bigger story.
To allow more people to join Zhengxin, brand appeal is needed. So he invited grassroots actor Huang Bo to endorse Zhengxin Chicken Chop. In the popular variety show "Extreme Challenge" in which Huang Bo and many other stars participated, stars such as Huang Bo, who nibbled on chicken steak in front of the camera, were also on the hot search.
In addition, Chen Chuanwu placed tens of millions of yuan in subway advertisements in many cities, further narrowing the emotional distance with the sinking market. The brand marketing strategy of celebrity endorsement + offline promotion has instantly improved the brand recognition of Zhengxin Chicken Chop, and the company has entered a highlight period of 4000+ stores per year.
The larger scale has made Zhengxin's ** chain explode with greater energy and cost advantages. The ** activity of "chicken steak 10 yuan, and a drink worth 5 yuan" made a long queue in front of Zhengxin chicken steak.
China's market is pyramid-shaped, and the further down it goes, the bigger it gets. At the bottom of the pyramid is a vast rootless long-tail area with unlimited potential and imagination. There are nearly 300 prefecture-level cities, more than 2,800 county seats, more than 40,000 townships and towns, 660,000 villages, and a population of nearly 1 billion.
Consumers in the sinking market not only seek low prices, but also pay more attention to cost performance. Zhengxin chicken steak self-built product chain and logistics cold chain, effectively reducing costs, while the headquarters provides semi-finished raw materials to ensure that the product quality of the franchised stores is stable, the taste is unified, and the price is low and the quality is guaranteed.
Zhengxin's small shop business model and low price ** almost perfectly fit the vast sinking market. In 2016, the annual sales of Zhengxin chicken steak exceeded 7 billion, which is unparalleled in the same category. This year, 7,000 new stores were opened, which can be described as a "rocket" expansion.
With the new chicken steak of today's 2More than 50,000 stores, if each store consumes 100 chickens per day, Zhengxin consumes 2.5 million chickens per day, which is enough to influence the ** chain of Chinese chicken. Through the continuous optimization of the first chain, Zhengxin has built a very high entry threshold.
In October 2017, Zhengxin Chicken Chop Chain, which has served for more than ten years, was completely independent from the company and established Kompsu Logistics. Relying on 7 major warehouses to connect more than 50 pre-warehouse distribution centers all over the country, it takes the front warehouse as the origin like Kompasu, covering a range of 300-500 kilometers around, providing first-class and first-chain supporting services for more than 20,000 catering stores inside and outside the group, and there is no need to find third-party logistics.
It is also the only cold chain in the country that can be delivered directly to township stores. The company's executives revealed: "Even if it opens to 30,000 or 50,000 again, there is no pressure on my side, and I am ready." Therefore, in addition to Zhengxin, Kompasu Logistics now serves more than 60 other chain brands.
Chen Chuanwu said: "In the future, the proportion of restaurant chains will be higher and higher. The real chain is not to open one or two stores, but to leverage the resources of the first chain. Zhengxin wants to use scale to solve the problem of low-cost, high-volume production of the first chain. ”
In the past 10 years, Zhengxin Group has invested billions of yuan to set up 13 processing plants across the country and branches in most provinces (autonomous regions and municipalities directly under the central government) across the country. As a typical Wenzhou businessman, Chen Chuanwu has turned a small chicken steak restaurant known for its cheapness into a business of tens of billions of yuan, and has also become the first-chain service provider behind the development of many brands.
Of course, the quality problems of Zhengxin chicken steak also occur from time to time. While making the enterprise bigger, doing a good job in fine management to make the enterprise stronger is an equally important issue in front of Zhengxin.