Honey Snow Ice City 10,000 stores are running wildly, and there are still hidden mines

Visual China.

Text | itlaoyou-com

Twenty-five years later, Mixue Bingcheng has opened more than 36,000 stores in China, Vietnam, South Korea and AustraliaAccording to the statistics, on the health road of Zhengzhou City, which is about 800 meters long, there are 8 Mixue Bingcheng stores, with an average of one store every 100 meters.

Now, the largest local ready-made tea company has officially sprinted to the IPO of Hong Kong stocks.

According to the prospectus submitted by Mixue Bingcheng to the Hong Kong Stock Exchange, in the first nine months of last year, Mixue Bingcheng sold a total of 5.8 billion drinks, and the average unit price of its drinks was about 6 yuan, and the most popular chilled lemonade was priced at only 4 yuan.

The low price does not affect the profit of Mixue Bingcheng. In the first three quarters of 2023, Mixue Bingcheng achieved a net profit of about 2.5 billion yuan, a year-on-year increase of 511%, with a net profit margin of more than 28%.

Why can Mixue Bingcheng achieve rapid expansion?In the first ten months of 2021, Mixue Bingcheng opened 10,000 new stores, bringing its total number of stores to more than 20,000. And why can Mixue Bingcheng achieve profitability at such a low unit price?

The most important thing is how a cold drink shop that once focused on shaved ice became the largest catering giant in China?

Overseas, the company that can compete with the number of Michelle Bingcheng stores is Starbucks Coffee in the United States. As of November 18, 2023, Starbucks has more than 38,000 stores worldwide.

On the basis of large-scale stores, Starbucks has built a global first-class chain system, which purchases coffee beans from Latin America, East Africa and other places, and then transports raw materials to global stores through globally distributed production warehouses, first-class roasting factories and logistics distribution centers.

According to statistics, Starbucks has to handle 70,000 global deliveries per week.

Starbucks' global** chain first locks in the origin of raw materials to ensure the stability of the quantity and quality of coffee bean supplyTo this end, Starbucks also operates eight coffee bean planting support centers around the world to help coffee growers grow scientifically and prevent disasters.

Secondly, Starbucks also ensures that the logistics system is efficient and the cargo damage rate is low. In order to ensure the quality of service, Starbucks transports all coffee beans from the origin warehouse to the ** roasting factory.

For example, the management department will regularly understand the sales data and combine the sales data with the inventory structure to dynamically adjust the inventory structure.

Taking Starbucks as an example, there is no "mysterious formula" for catering companies to do a good job of self-built ** chain, the key is that the enterprise relies on the volume of stores to continuously strengthen cost reduction and efficiency increase in the ** chain link.

The same goes for Michelle Ice City.

In the upstream, after building its own ice cream powder factory in Kaifeng, Henan Province in 2012, Mixue Bingcheng established Henan Dajia Food Co., Ltd. in the following year, planning and building Henan Dajia Food Industrial Park, and gradually realizing the self-production of core raw materials.

For the tea and fruits required for ready-made tea, Mixue Bingcheng goes deep into the upstream production area and locks in a certain batch of products through a large sales scale, so as to form the best advantage of raw materials.

Taking lemon as an example, in Anyue, Sichuan, the hometown of lemons in China, "Mixue Bingcheng directly cooperates with the top of the production area to 'wrap around' a certain quality of lemon by locking the share, which is enough to form the best advantage and scale effect in a single product." Liu Shuisheng, the founder of the fruit chain, said.

According to the prospectus, in the first three quarters of 2023, the cooperative planting base established in Anyue, Sichuan Province provided 440,000 tons of lemons.

In terms of logistics, Mixue Bingcheng established a warehousing and logistics center in Jiaozuowen County in 2014, and gradually built a complete self-operated logistics warehousing system, and realized the delivery of raw materials within 12 hours in more than 90% of domestic county-level areas.

Through the self-built ** chain, Mixue Bingcheng looks like a tea company, but Lizi is a ** chain platform company, with more than 90% of its revenue coming from the sale of raw materials to stores. In the first nine months of 2023, Mixue Bingcheng's revenue from the sale of store materials to franchisees exceeded 14.5 billion yuan, accounting for 94% of the total revenue3%。

For Mixue Bingcheng, tea is only one direction of its external export chain capabilities, and the self-built chain system based on the catering format can also cover multiple categories, such as coffee, fried chicken, etc.

In 2017, Mixue Bingcheng launched the ground coffee brand "Lucky Coffee" in a low-key mannerIn 2021, Mixue Bingcheng will introduce fried skewers, braised noodles and other categories in the "Snow King Castle Experience Store".In 2022, Mixue Bingcheng invested in the Korean fried chicken chain "Chicken Packing".

The core of Mixue Bingcheng is tea, and the periphery is coffee that is highly related to the "drinking" scene, as well as fast food and other meal scenes, which is in line with Zhang Hongchao's corporate mission internally

Two dollars for people around the world to eat and drink well. ”

In addition, the most intuitive advantage of self-built ** chain is to greatly reduce marginal costs, so that there is more room for commodity pricing and profit increase. According to a report by CIC Consulting, the procurement cost of milk powder and lemons of the same type and quality in 2022 is about 10% and more than 20% lower than the industry average, respectively.

Therefore, even if the company is positioned at a low price, it still achieves high gross profit. According to the prospectus, in the first nine months of 2023, the gross profit margin of Mixue Bingcheng was 297%。

It is on the cornerstone of the self-built ** chain that Mixue Bingcheng has been able to expand into a 10,000-store catering enterprise and has always maintained low prices.

Compared with various catering companies with the same scale of 10,000 stores, Mixue Bingcheng can insist on the lowest pricing.

Starbucks from overseas, the average customer unit price is more than 40 yuan;Wallace, which has more than 20,000 stores, has an average order value of 1894 yuan;Gu Ming, which submitted its prospectus almost at the same time as Mixue Bingcheng, has an average customer unit price of 1476 yuan. (Data from Narrow Door Dining Eye).

Compared with the same period last year, according to the data of Narrow Door Restaurant, the average customer unit price of Mixue Bingcheng is 736 yuan, the second highest selling fresh ice cream, the unit price is only 2 yuan.

In 2003, Zhang Hongchao opened a restaurant in an abandoned aluminum factory in Zhengzhou, and the burgers on the menu cost only 3 yuan, and Yangzhou fried rice only sold for 25 yuan, the ice cream cone is priced at 2 yuan, and if you spend it in the store, it will only sell for 1 yuan.

Over the past 20 years, both the national income level and the price level have risen simultaneously. In 2020, data from the National Bureau of Statistics showed that the per capita disposable income of residents nationwide was 32,189 yuan, double that of a decade ago.

But the ice cream in Honey Snow Ice City still only sells for 2 yuan.

In the middle of last year, the price of many drinks in Mixue Bingcheng increased by 28% year-on-year, and the price of peach Sijichun increased by 16% year-on-year, which seems to be a high increase, but the pricing of the two drinks only increased to 8 yuan and 7 yuan respectively, and did not exceed 10 yuan.

Since its establishment, "low price" seems to be engraved in the corporate genes of Mixue Bingcheng, which relies on the scale of 10,000 stores and self-built ** chain to achieve, but also in the new economic environment, it has achieved the favor of consumers for Mixue Bingcheng.

According to the "2023 China Consumer Insights and 2024 Outlook" released by Nielsen IQ, compared with January 2023, the data in July 2023 shows that the proportion of consumers who are more concerned has increased from 20% to 36%, while the proportion of people who are less sensitive has decreased from 29% to 15%.

It is not only the economic environment that has created the changes in the current consumption trend, but also the fact that Mixue Bingcheng has taken root in the sinking market since its inception. Compared with Heytea, Nai Xue's tea, etc., which hit the mid-to-high-end market and "rolled up and died" in first-tier cities, Mixue Bingcheng aims to penetrate into a wider range of people and carry out market education on new tea consumption habits.

According to the latest data, the number of stores in third-tier cities and below has reached 569%, accounting for 17 in second-tier cities7%, and Mixue Bingcheng is very optimistic about the growth space of new tea consumption in the sinking market.

By 2028, the market size of freshly made tea in cities below the third tier will account for half of the total Chinese market.

Perhaps, the direction of Mixue Bingcheng's bet cannot simply be attributed to "consumption downgrade", but based on the overall trend of consumption, for tea, coffee and other categories, a "consumption popularization" of the sinking market.

As Huang Zheng, the founder of Pinduoduo, said: consumption upgrading is not to let Shanghainese live the life of Parisians, but to let people in Anqing, Anhui Province have kitchen paper and good fruits to eat.

Similarly, for Mixue Bingcheng, the consumption upgrade is not to let Shanghai people drink more high-quality hand-poured coffee than Starbucks, but to let people in Jiaozuo, Henan Province also drink freshly made tea and freshly ground coffee.

Mixue Bingcheng seized the market gap opportunity in the sinking market, but there were many entrants, such as ancient tea and Shuyi burning fairy grass, which were strong enemies in the sinking market, and Hey Tea and Nai Xue's tea were also making efforts to sink the market.

In the future, the competition of new tea drinks will be more involuted, and the challenges encountered by Mixue Bingcheng will never be less.

Of course, the low price tag is not all advantages for Mixue Bingcheng, which to a certain extent hinders the diversification of Mixue Bingcheng to hit the high-end.

In 2009, Mixue Bingcheng opened a high-end version store in Zhengzhou, using Compac milk syrup to launch high-end ice cream, but the store was closed two years laterIn 2018, Mixue Bingcheng launched the high-end tea brand M+, with a unit price of up to 20 yuan, and finally failed to operate and quietly closed the store.

Under the frantic rush of 10,000 stores, what Mixue Bingcheng got was not all good news.

For Mixue Bingcheng, which takes franchise as one of the core models, franchise store management is an unavoidable problem.

According to the prospectus, as of the end of September 2023, the closure rate of Mixue Bingcheng is 237%, which is much lower than the closure rate of similar catering franchise brands.

The store closure rate is not high, but it does not mean that the large number of franchisees managed by Mixue Bingcheng will be smooth sailing. From 2012 to 2015, many large franchisees of Mixue Bingcheng "self-reliant brands" outside the system, and Wang Wei, the founder of "Tianlala", was a big franchisee of Bengbu, Anhui Province, Zhoukou's "Mi Ke Lan Qi" and Xinxiang's "Ice World Drink" were the first franchisees of Mixue Bingcheng.

In order to prevent franchisees from "defecting" to open stores, Mixue Bingcheng has a potential limit on the number of stores opened by a single franchisee, such as a single franchisee's stores cannot exceed half of the total number of stores in the place.

According to the prospectus, there are currently more than 16,000 franchisees in Mixue Bingcheng, and each franchisee has an average of 226.

Of course, in different markets, the franchise rules of Mixue Bingcheng are also constantly changing, and sometimes it will affect the interests of existing franchisees.

In September last year, a local franchisee of Mixue Bingcheng in Vietnam told ** that the initial contract of Mixue Bingcheng promised that the store protection distance was 500 meters, but the reality was that it was only 200 meters, and the customers of the store were diverted.

In fact, the relationship between Mixue Bingcheng and franchisees is interdependent and growing, but franchisees cannot fully trust the brand, and Mixue Bingcheng will not greatly delegate power to franchisees, and must always supervise the operation of stores.

The management of 10,000 store franchisees is indeed a complex and meticulous project, even if Mixue Bingcheng has strictly controlled the access of franchisees, but it is inevitable that there will be mistakes, especially food safety issues.

In March 2023, according to the Market Supervision and Administration Bureau of Haidian District, Beijing, there are 7 Mixue Bingcheng stores in Haidian District that have violated the Food Safety Law of the People's Republic of China.

In addition, according to the "21st Century New Domestic Products and Trendy Brands - 2021 New Tea Drink List" jointly released by the 21st Century Innovation Capital Research Institute and 21 Data Journalism Lab, the ESG (negative index) score of Mixue Bingcheng is at the bottom, and the main reference indicators include the number of stores that have been punished, notified, and **, the number of user complaints, and the number of lawsuits (defendants).

To refine the management of more than 3With 60,000 franchise stores, Mixue Bingcheng has encountered the old problem of catering franchise enterprises. The new question is how to enter the overseas market.

According to the latest data, the total number of overseas stores of Mixue Bingcheng exceeds 4,000, mainly distributed in Southeast Asia. According to statistics from Vietnam Finance, as of April 2023, Mixue Bingcheng has 1,500 stores in Indonesia and more than 1,000 stores in Vietnam.

In Vietnam, the price of Mixue Ice Cream is 10,000 VND (about RMB 2.) per stick92 yuan), each cup of milk tea or fruit tea only costs 25,000-30,000 VND (about 7.).29-8.75 yuan), the price is still close to the people.

However, in the face of overseas markets, Mixue Bingcheng will encounter more problems of localized development, such as how Mixue can replicate the domestic self-operated ** chain system in Southeast Asia.

At present, Mixue Bingcheng has its own logistics warehouse in Bangkok, and franchisees purchase lemons locally, and tea, milk tea powder, ice cream powder, small plastic cups, coarse and fine straws, etc. need to be shipped by the headquarters, so there will be occasional out-of-stock problems.

In May 2023, Mixue Bingcheng will be out of stock to varying degrees in Malaysia and other regions, and even out of stock to the point of only selling lemonade.

In Australia, which is farther away from China, Mixue Bingcheng has no first-chain factory for the time being, and most of the materials have to be transferred from China, and only fresh milk and other raw materials are ordered from the local area, and the overall cost pressure is very great.

Not only that, but the market competition for overseas new tea drinks is also becoming more and more volatile. At present, there are already bubble tea brand HAUS, which is also engaged in catering, Kopi Kenangan, a take-out coffee brand known as "Indonesian Luckin", and Ban Ban, a high-end tea brand.

Perhaps, overseas, Mixue Bingcheng can't solve all the troubles with scale, and the old road of "covering up problems with speed" is becoming more and more difficult to follow.

According to "Late LatePost", Mixue Bingcheng has officially invited experts to do research for it, and it can cover at least 450,000 stores, which means that Mixue Bingcheng can continue to run wild for a while.

But one day, the growth myth will come to an end, the high-growth store scale and revenue will continue to slow down and tend to stagnate, and the problems of poor management of franchisees and difficulty in building overseas ** chains, which have been relatively ignored in the past, will be magnified.

As the volume becomes larger, small problems that appear in small areas may become more complex systemic problems and become more difficult to deal with after the growth rate slows.

Perhaps, Mixue Bingcheng should take precautions and preemptively eliminate hidden dangers is the best policy.