Recently, when I visited the mall, I found that many BESTORE products were on sale**, and even started to buy 89 back 30 activities.
After flipping through the recent news, it turned out that Yang Yinfen, the newly appointed chairman and general manager of BESTORE, proposed to focus on "strengthening business innovation and comprehensively improving operational efficiency", and implemented the largest price reduction for the first time in 17 years, with an average price reduction of 22% for 300 products and a maximum reduction of 45%. This large-scale price reduction action is "to return to the image of the good store as a neighbor and move towards a route of good quality and close to the people." If you don't take this path, you are dead. ”
In recent years, BESTORE's performance has been under pressure, and its revenue performance has declined for five consecutive quarters, and the recently disclosed three quarterly reports show that the revenue in the first three quarters of this year has fallen by 1433%, the net Q3 profit in the third quarter fell 98% year-on-year, which can be said to be very severe.
Yang Yinfen bluntly said that BESTORE is facing the most difficult challenge since its establishment, "At present, what is in front of us is not only the problem of difficult life, but the problem of whether we can live." ”
The reason for this is that many experts believe that it is because of the decline in consumption power, consumers have tightened their money bags and paid more attention to cost performance when buying things. At the same time, it is also because the snack industry is too volatile, in addition to the high-end brands such as BESTORE, Three Squirrels, and Laiyifen, as well as the mid-range brands such as Xue Ji Roasted Goods and Grain Emperor, there are many large-scale snacks such as snacks are very busy on the Internet, e-commerce, and live broadcasts, sellers, and many white-label products can also occupy a place in the mass sales of snacks.
Since the beginning of this year, e-commerce platforms have launched tens of billions of subsidies, Jingdong has returned to low prices, Ali has returned to the first level, and then the market value of Pinduoduo, which has risen with a low price advantage, once surpassed Ali, all of which interpret the changes in the consumption trend, and low prices are the first choice of consumers.
Returning to the competitive perspective of BESTORE's large-scale price reduction, from focusing on high-end quality snacks to choosing to gradually turn to the cost-effective route in order to resist mass sales of snacks, the difference between BESTORE and the three squirrels' improvisation and their stance on the needs of consumers' first characteristics is actually very similar to the dispute between JD and Pinduoduo in the e-commerce field.
How?
In Yang Yinfen's view, BESTORE's top priority is to adapt to market changes: "The reality that consumers think we are 'expensive' also shows that our products must be more accessible to the people." We want to work with our partners to improve efficiency, reduce costs, and ultimately achieve the best people-friendly through technological innovation and digital tools. ”
Reduce costs and increase efficiency
At the end of last year, the three squirrels who implemented the "high-end cost-effective" strategy had an operating cost of 34 in the first three quarters of this year4.8 billion yuan, down 10 percent year-on-year74%, selling expenses 82.4 billion yuan, down 3157%；The administrative fee is 16.3 billion yuan, a year-on-year decrease of 1739%；R&D expenses are 018.7 billion yuan, down 3445%。The decline in total operating costs exceeded the decline in revenue in the first three quarters of this year.
** Quotient optimization
From a longer-term perspective, what BESTORE, Three Squirrels or JD.com can do in the future is to make the expensive ones cheaper, like Pinduoduo, through screening and optimization of the ** chain, so that the cheap products will become better in the future.
The key problem is that BESTORE and Three Squirrels still adopt the OEM production model as a whole, even if some macadamia nuts and other nut categories have achieved the optimization of the best chain from raw materials to self-built factories, but for BESTORE with nearly 1,600 SKUs, the market profit space that it can squeeze out is still limited.