Luxihe Ten years of Chinese baking reform, how to get out of the road of sustainable brand growth?

Mondo Finance Updated on 2024-02-06

After the ups and downs of the consumer market in the past three years, brands have reached a critical time when they need to re-answer who I am and where they are going.

Recently, the "Evergreen Road The 3rd New Wave Brand Conference" organized by Inspur New Consumption and more than 60 first-line brands, platforms and industry ecological partners was held in Shanghai!

In two days, more than 1,000 outstanding founders, executives and investors from the upstream and downstream of the consumer industry attended the event, including more than 40 first-line platforms, brands and investment experts from Tencent, Dewu, Mars Wrigley, Liby Group, Yuanqi Forest, Sephora China, Bubble Mart, Babycare, Sumida River Coffee, Jiahua Capital, Cathay **, etc., focusing on the industry experience and future brand play in the past three years.

Among them, Zhu Huawei, vice president of Luxihe Group, reviewed the development of the baking industry in the past 10 years, and deeply shared Luxihe's ideas and playing methods in the face of industry problems such as homogenization, as well as the key and underlying logic of the brand's foothold in the fierce competition.

Zhu Huawei, vice president of Luxihe Group.

Thanks to the new changes on both sides of supply and demand, the Chinese baking track in previous years has become more lively than ever. According to incomplete statistics, from 2005 to 2013, 13 brands in the Chinese baking industry opened their first stores, with an average of 16 brands.

But in the period from 2014 to 2020, this number suddenly became 12In 3 years, 74 brands appeared in 6 years.

In 2021, in just one year, 70 more brands appeared on the market, showing a blowout. However, behind the rapid development, many industry problems are slowly emerging.

* Chain, ping efficiency, store model, site selection, organization and operation ......When growth can no longer solve all problems, and time cannot exchange space, many players in the Chinese baking track began to gradually shrink the battlefield, make up for their shortcomings, and return their attention to these core capabilities.

It is worth mentioning that Luxihe still dares to expand rapidly in 2021 and 2022, with a total of 377 stores as of 2022, and has received hundreds of millions of yuan in financing from Longbai Capital and Bailian Zhigao Capital in the face of the general financing of the industry.

The confidence of contrarian expansion is that it has 8 factories across the country, and the improvement of the chain system has given it more space for batch replication. And the stores also cover first, second and third-tier cities, and even township stores.

The key point of Luxi River to impress investors is not to rely on big actions to hold high, but to do a series of small things seriously.

In Zhu Huawei's view, any high-growth market will face the problem of homogeneous competition. In the face of the impact of capital and homogenization, the prerequisite for the brand to maintain its action is to sink down to cultivate internal strength and continue to deepen and precipitate infrastructure.

The final winner or loser who determines the survival of the brand is still the product capability, the best chain capability, the organization and talent management capability.

In the future, there are still opportunities in the baking industry, but the overall market threshold is gradually rising, as Zhu Huawei said, "the core keywords of consumer goods are turnover and efficiency, only every component, every link to achieve the ultimate, in order to create a sustainable development system." ”

Presentations |Zhu Huawei.

Edit |Guan Cong.

Hello everyone, I am Zhu Huawei, Vice President of Luxi River, and I would like to thank Inspur New Consumption for this opportunity to talk to you about baking.

From the perspective of industry segmentation, Luxi River belongs to Chinese baking under the baking category, and today I will share three topics with youThe first is to talk about the recent status quo of Chinese baking, and then share with you the latest developments in Luxihe in recent years, and finally where the industry should go in the future.

Judging from the data, in fact, the imagination of the entire baking industry is very large. According to 2019 statistics, this industry has a market value of more than 230 billion, and it has maintained a growth of 10% in recent years. It is estimated that by 2024, the market capacity of the baking industry will reach 400 billion yuan.

On this basis, Chinese baking occupies 40% of the market share and has a market capacity of about 200 billion. With such a large market capacity, of course, it will attract many players to enter.

From 2013 to 2023, Chinese baking has undergone a decade of great changes in the emergence of concepts, market recognition, capital pursuit, and mass competition.

The brand history of Luxihe is also a microcosm of the decade of Chinese baking. In 2013, we opened our first store in Nanjing, and at that time we realized the importance of the ** chain.

Because for the chain,How to standardize and improve the efficiency of production, how to save costs and ......These are all things that need to be thought about at the beginning, so Luxihe has tried to build a first-class chain system from the fifth store.

In 2016, Luxi River achieved cross-regional development, from Nanjing to Nanning, and reached a cooperation with Nanning MixC City. We are the first in the industry to open the store from the original street shop to the mall.

In 2018 and 2019, the baking industry suddenly ushered in a lot of attention, and we also saw the development prospects of the entire industry. However, Luxihe did not choose to blindly expand at this stage, but turned around to build its own back-end capabilities, and then gradually deployed across the country, entering first-tier cities such as Beijing, Shanghai and Guangzhou, as well as some second-tier cities to open stores.

Any fast-growing market will face the problem of homogeneous competition, but Luxihe has always firmly chosen to be itself and continue to deepen Chinese baking. Because our original intention is to bring Chinese pastries back to the daily life of ordinary people, so that ordinary people can afford to eat and buy.

Affordability is the unswerving pursuit of cost-effectivenessHowever, Luxihe does not do absolute low prices, we reduce product costs through large-scale production and procurement under the premise of ensuring product quality, so that people can eat good pastries at the minimum cost.

Buyable is all about finding ways to add more consumer touchpointsAfter building brand awareness through shopping mall, Luxihe chose to return to street stores and community stores, so that more people can buy them at their doorsteps.

In the development of Luxi River, quality and taste have always been our beliefs. We have an obsession with products, and working hard to provide consumers with delicious products is our lowest logic.

In terms of product categories, Luxihe has always adhered to ingenuity, and continues to try and innovate while inheriting the traditional categories of peach crisp, old chicken cake, mung bean sorbet, and jujube paste walnut crisp.

For example, we have launched multigrain, sugar-free peach crisp, which enriches the taste and taste of the product while being healthy, and innovatively launched a new category of soft peach crisp. And on the basis of the original classic flavors, the product system is enriched with new flavors such as coconut milk, walnuts, and egg yolks.

Let the peach crisp this large single product category develop in the direction of refinement and health, so as to carry forward these thousand-year-old craftsmanship and continue to pass it on.

The cornerstone of innovation is quality, and for products, it is difficult to get quality assurance without good chain support. In order to standardize and strict product quality, we have built our own factories in Langfang, Dongguan, Nanjing, Nanjing, Hangzhou, including Shanghai, to ensure that the products can arrive at the store within 6 hours, so that consumers can eat the freshest pastries in the first time.

With the support of the best chain capabilities, we have opened new stores in 13 provinces and more than 40 cities across the country. Intensively open stores around existing factories to penetrate the regional market. In this way, we can reduce our management costs and logistics costs on a larger scale, and give full play to our total cost leadership.

Chain stores are the first step, and if you want more people to eat Luxi River, you must find ways to increase channel penetration. To this end, we have set up an e-commerce center, trying to cut into e-commerce platforms such as Douyin and Pinduoduo, so that our products can be purchased in areas where there are no stores.

For a traditional industry such as baking, the refinement and digitalization of marketing methods have always been an industry problem.

We have also made some attempts in this regard, launching our own mini program and membership operation system to enrich the way of digital transformation. At the same time, we will increase the construction of informatization internally, and show the indicators and standards of products in the form of data, so as to make them more visible.

Users are the biggest asset, Luxihe hopes to be a pioneer in the private domain of the baking industry, create private domain traffic assets through the precipitation of users, and constantly improve the consumer shopping experience.

From the perspective of the future development pattern, Chinese baking still maintains a strong growth rate, and I think this development is the general trend.

First of all, because consumers have put forward higher requirements for the supply side in their yearning for a better lifeAnd Chinese baking can provide a better product experience.

The second is the rise of the national tide and the development of information technologyWith the continuous iteration of chain management tools, chain enterprises can have a faster store opening speed.

But there are also many problems in this industry at present, such as the competition of product homogeneity. In this regard, Luxi River has done a lot of addition, subtraction, multiplication and division.

For example, we have changed the packaging to make it smaller, which not only conforms to the trend of healthy consumption, but also reduces the burden on consumers and makes the product more friendly, more portable and more refined.

The Chinese market is a three-dimensional and complex ecology, each region has its own preferences and tastes, and product differentiation between different regions is an urgent problem to be solved.

Luxihe has made many differentiated products by undertaking the popular tastes and special pastries of the local region, so that our regional market has better products to provide to consumers.

At present, the construction of the industry's overall chain is still in a backward state compared with foreign countries. Therefore, the key to future competition lies in how to improve the level of its own ** chain.

In addition, including our single-store profitability, management level, store opening speed, as well as talent management, informatization and channel expansion speed, these capabilities need to be continuously improved and improved by Luxihe.

Only by achieving the ultimate in every component and every link can we create a sustainable development system. Because the core keywords of consumer goods are turnover and efficiency, only by doing these two things well, can the development of the whole enterprise be more sustainable.

Related Pages