Going to sea in a bunch, is the "second growth curve" of Chinese food overseas?
The domestic market is gradually saturated, and the involution is upgrading, forcing catering brands to turn their attention overseas and seek a second growth curve. Just this year, brands such as Luckin, Heytea, Dalongyi, and Xiaolongkan have accelerated the pace of overseas layout. "It's the right time to go to sea", so, how can Chinese food go to sea smoothly?
in the days ago".2023 The 18th China Catering Entrepreneurship and Entrepreneurship Forum"Canyinjcom) specially invited Liang Minjun, founding partner of ATM Capital, and Zhang Jianshan, head of Yao Overseas Entrepreneur Club, to talk about the challenges and opportunities on the way to the sea, and provide advice for restaurant companies to go overseas. (The following is a condensed version of the two guests' sharing records for your reference).
01 Opportunity: Less competition, stable cost, and great promise
Liang Minjun talks about Southeast Asia: the supply is insufficient, the competition is small, and good things are not sold.
ATM Capital was officially established in 2017 as:The only VC with a Chinese background that focuses on the new economy of Southeast AsiaAt present, ATM Capita has invested in more than 20 companies in Southeast Asia, including J&T Express, which was listed at the end of last month. ATM Capital is inIn 2019, it officially entered the new consumption track
Regarding the current situation of the catering market in Southeast Asia, Liang Minjun gave two main views:
First, the Southeast Asian consumer market is still in the stage of insufficient supply, and good things are not worried.
Through four years of in-depth insight into the new consumer market in Southeast Asia, ATM Capital found that the Southeast Asian market is very different from China. China's consumption is relatively weak, the catering market is characterized by oversupply, and the competition between brands is fierce, which will lead to the birth of new brands and the relatively fast launch of new products. On the other hand, in Southeast Asia, the characteristics of its consumer market tend to be more similar to that of China more than 10 years ago. On the consumer side, the demand is strong and the average age is low, and consumer confidence is very highOn the supply side, due to the relative backwardness of the ** chain plate, its overall supply is insufficient.
This makes the consumer market in Southeast Asia,Whether it is catering or consumer goods, as long as the thing is good and reasonable, it will be easy to survive in Southeast Asia and not worry about selling
Second, the class in Southeast Asia is seriously solidified and the proportion of entrepreneurs is low, which is a major reason for the limited market supply and low degree of competition.
According to Liang Minjun's analysis, affected by the national conditions, the proportion of entrepreneurs in China has surged in recent years, and the class is forming but not solidifying. Due to the long period of economic development in Southeast Asia, the class has been solidified to a certain extent, and most people will not have the idea of starting a business as a boss, which leads to the limited market situation. Therefore, catering brands that have gone overseas to Southeast Asia in the last two or three decades are easy to take root, and the survival rate is even higher than in China.
There are many cases worth mentioning here, such as Mixue Bingcheng, which has opened thousands of stores in Southeast Asia, and Southeast Asia has also become a very important strategic market for Mixue Bingcheng. Another example is MINISO, which is outside of catering, and it is understood that the average profitability of its stores in Southeast Asia is two to three times that of Chinese stores.
Liang Minjun emphasized that in summary, catering has a very big opportunity in Southeast Asia. Liang Minjun analyzed, especially in several island countries, under the influence of the West, there are more fried chicken, hamburgers, and Japanese restaurants, and the overall category is still relatively poor, which is also a big opportunity for the layout of Chinese food.
Zhang Jianshan talks about Mexico: young people, strong consumption power, stable costs, suitable for investment.
Yao Chuhai Entrepreneur Club is a company that helps Chinese food to land overseas, and currently focuses on the Mexican, Latin American, and European markets. In order to better serve the overseas catering enterprises,Several core members of the Yaochuhai Entrepreneur Club are promoting the construction of the first-class chain of catering logistics
For overseas markets such as Mexico, Latin America, and Europe, Zhang Jianshan also believes that "there is a lot to be done". Here, Zhang Jianshan shares his own insights and insights on these markets.
First, people are young, with high income and strong spending power.
Zhang Jianshan specifically mentioned Mexico, a country with an average age of only 29 years old and a per capita GDP of 19,247 US dollars (2022 data), which has excellent performance in terms of consumption desire and spending power.
The second is the strong export of Chinese culture, which has laid a cognitive foundation for Chinese food to go overseas.
In recent years, China has been exporting high-quality culture. Overseas, we can often see domestic hit dramas. Now in the Latin American and Southeast Asian markets, "The Legend of Zhen Huan" is a big hit. This cultural potential has made young people overseas very willing to try some Chinese food.
Third, the rent is low, and the overall investment cost is not high.
Zhang Jianshan said that the overall investment cost of the Mexican catering market is not high, especially the rent, which is about the same level as in China in the 90s. And the rent is very stable and will not double with the boom of the store's business, which is very friendly to catering businesses. Then, low cost means high profit margins, which is also a good condition for Chinese food to go overseas.
02 Challenge: The preparation cycle is long, and it is difficult to quickly expand the store
Questions from the audience. So, in such a favorable background, is it a sure win?
Zhang Jianshan: Change thinking, establish new cognition, and cater to the characteristics of overseas markets.
Zhang Jianshan pointed out that there are certain risks for enterprises to enter any new market. The risk lies in our perceptionsThe inherent perception of culture and the inherent perception of the market may lead to the decision-making bias of enterprises in an unfamiliar market。Therefore, the bosses can no longer think about overseas investment with domestic thinking.
For example, it is not uncommon for Zhang Jianshan to open a restaurant in 7 days in China, but in many places overseas, it is simply not possible, and even, 7 days is not enough time for a restaurant to customize a table. Because, in the overseas market, it is almost impossible to buy industrialized, standardized countertops, tables and other facilities, but the customization cycle is very long, which leads to the preparation cycle of opening a store is extended.
Behind this is a practical problem that all restaurant owners must face - the overall chain is not perfect, from the store facilities used in the early stage of opening, the ingredients and raw materials in the business, there is a certain gap compared with China. This means that it is almost impossible for a brand to open thousands of stores a year and expand stores at a high speed as it does in China. After Chinese food enters the overseas market, it is not that it does not want to open stores quickly, but the objective conditions do not allow it.
Therefore, Zhang Jianshan emphasized that the brand layout is local, and it is necessary to fully understand the local cultural situation and respect the local culture. In this regard, Zhang Jianshan proposed for overseas enterprisesTwo suggestions: one is to open a few stores first, establish brand awareness, and then achieve rapid expansion through franchise authorization;The second is to register locally, recruit locally, and take the international route through the thinking of multinational companies
Liang Minjun: The boss should go out in person to understand and gain insight into the local market.
What are the opportunities and challenges for overseas markets?Liang Minjun first mentioned that for catering products, toAdapt to the tastes of the locals, at the same time,Some local food safety certificationsIt is not the same as China, and some ingredients that need to be imported need to pay attention to customs issues.
Regarding the strategy of going overseas, Liang Minjun mainly mentioned the following suggestions:
First of allBe sure to go out and inspect by yourselfrather than learning about overseas markets through employee reports.
Secondly, it is better to beSet up a separate company, build an independent team, or even do it in the form of independent equity. When the architecture is mature enough, think about how to use systematic organization to improve the entire management and operation system.
The third is to gather to go to seaGather the best chain, upstream and downstream manufacturers to go to sea together, which can greatly avoid a series of problems caused by the imperfection of the ** chain. In this sector, ATM Capita is also helping many enterprises to integrate and dock resources, and in the case of resource matching, the probability of success in going overseas is greater.
Finally, I would like to borrow the views of the two guests to encourage all the "people who go to sea".The overseas market is a blue ocean of Chinese food, and the opportunity is a challenge. However, for brands that choose to go global, the problem is not a professional problem, but how to understand the difference between the local market and the Chinese market, how to deal with the local people, and how to change the perception to understand and cooperate with the local regulatory environment.