As the Lunar New Year approaches, the Guangzhou branch of the new Chinese-style bakery brand Hutouju has torn off the money-seeking posters that had been pasted on the office door, and the company’s internal work continues as usual.
Another piece of news related to the Tiger Head Bureau may have given the new consumer brand a little bit of a sigh of relief after experiencing disputes over debts being claimed by employees and suppliers. On January 12, according to media reports, Tiger Head Bureau had received financing from Sequoia Capital and GGV Capital, with a financing amount of about tens of millions of yuan.
This is tantamount to a life-saving straw. After all, before this, Tiger Head Bureau not only defaulted on wages and payment for goods, but also successively reported layoffs and closed stores in batches. The business crisis has attracted widespread attention.
It’s just that, although the “life extension money” has been received, it will take some time to improve the business situation.
On January 12, an employee of the Tiger Head Bureau who was owed wages told the Time Weekly reporter that the company’s October 2022 salary will not be settled until early January 2023, and the November salary still has half a month’s worth. However, the company stated that the relevant wages will be paid before the Lunar New Year.
On January 16, after the news of the financing came out, another employee of Tiger Head Bureau told Times Weekly reporter that the company still pays wages according to the previously set time, and the wages for December 2022 will be paid on January 28. issued. “As for the year-end bonus, don’t think about it.” The employee said.
Tiger Head Bureau Guangzhou Branch/Source: Photographed by Times Weekly reporter
It’s not just that the wages of the employees have not been settled. A Hubei dealer of Hutou Bureau told the Times Weekly reporter that Hutou Bureau still owes him hundreds of thousands of yuan in payment, and the specific payment time has not yet been determined.
Cutting- edge brands, winning financing from star institutions, rapidly expanding stores in China by relying on young and eye-catching brand positioning, and a business crisis broke out after the capital suspension of blood transfusion… The ups and downs of the Tiger Head Bureau are exactly the development track of the baking industry in recent years the epitome of.
Today, Hutouju, which has received a new round of blood transfusion, has adjusted its business model, and its store expansion has shifted from direct sales to open franchises. With the inflection point in the operation of the Tiger Head Bureau, the development of the baking track has also entered the second half.
In view of the current business situation, from January 12th to 16th, a reporter from Times Weekly contacted Hutou Bureau several times, but no reply was received as of press time.
baking star stranded
Hutouju, full name “Hutouju Standard Chartered Cake Shop”, is a Chinese dim sum brand that emerged from Changsha in 2019. Compared with traditional Chinese dim sum, Hutouju strengthens the imprint of the brand’s target audience of young people, and provides daily freshly baked dim sum for young people and young families.
In January 2021, Tiger Head Bureau completed the Pre-A round of financing led by Sequoia China, followed by IDG Capital and Challenger Capital. As of July, Tiger Head Bureau has completed a round of financing of nearly 50 million US dollars. This round of financing was jointly led by GGV Capital and Tiger Global Fund, and Sequoia China, IDG, and angel investor Song Huanping followed.
With the support of capital, Hutou Bureau has expanded its territory in China. According to the information previously released by Hutou Bureau, as of November 22, 2022, Hutou Bureau has opened more than 80 self-operated stores in 10 cities across the country within three years. These stores are basically located in the core business districts of first- and second-tier cities with high rents.
But the Internet celebrity brand, which was once in the limelight, is now facing difficulties.
According to Die Zeit reporter, the Guangzhou branch of Hutou Bureau alone has recently laid off workers twice.
On January 16, Chen Yuan (pseudonym), who had been employed by Hutou Bureau for several months and was recently laid off, told the Times Weekly reporter that she had witnessed two layoffs in the Guangzhou branch of Hutou Bureau during her tenure. At the beginning of January 2023, there were more than 60 employees in the Guangzhou branch before the layoffs, but now there are less than 40.
Chen Yuan revealed that the reason for the company’s layoffs is that under the influence of the epidemic, some of the company’s projects have been suspended, and so many employees are no longer needed. But in her opinion, “The time between the two layoffs in the Guangzhou branch is too close, and it is obvious that I can’t hold on.”
According to media reports, in the middle of 2022, the Tiger Head Bureau has started personnel optimization, and the customer service team, member center, and information center have been disbanded one after another. According to reports, at the peak of the company’s functional line, there were as many as 300 to 400 people, and only a hundred people remained after layoffs.
Tiger Head Bureau Guangzhou Branch/Source: Photographed by Times Weekly reporter
Lan Qian (pseudonym), who had worked in Tiger Head Bureau for half a year, told Times Weekly that due to the impact of the epidemic in the past two years, the efficiency of Tiger Head Bureau has not been very good. For this reason, the company has laid off employees in stages as early as 2021. .
In addition to the layoffs, Tiger Head Bureau was also exposed to arrears of wages and payment for goods. Beginning in September 2022, the wages of Tiger Head Bureau employees have been delayed, and the company only paid half of the October wages to employees near the end of the year. At the same time, the employees of the company also received a notice that starting from December 21, all functional employees of Hutou Bureau will have a holiday. During the holiday, all employees will be paid according to the minimum wage in the city where they are located.
Because of the arrears of payment for goods and decoration, the office of Hutou Bureau in Zhujiang New City, Guangzhou was also posted with the information of arrears of decoration payment, which also occurred during December 2022.
In response to the above situation, Hutou Bureau once responded that in response to the impact of the epidemic, the company temporarily adjusted the wages of some non-front-line employees, which accounted for a relatively small proportion. The decoration supplier is negotiating the final payment due to construction disputes, and the company will communicate with the supplier.
During the same period, the store size of Hutouju also shrank rapidly. On November 22, 2022, the official account of Hutouju released the article “I want to talk to you about some changes in Hutouju” (it has since been deleted), frankly admitting that the company is facing huge financial pressure and decided to temporarily withdraw from some regional markets. At present, the stores in Chengdu, Chongqing and Beijing have all been closed. As of January 16, the data of Zhaimen Restaurant shows that there are currently only 43 Hutouju stores nationwide.
track foam clearing
The decline of the tiger head game is related to many factors.
As a brand with a heavy warehouse in offline channels, the impact of the epidemic on passenger flow will undoubtedly have a fatal impact. At the end of May 2022, Hutou Bureau opened its first store in the southwest region, and decided to close the store at the end of October, with the official opening time in the middle of less than half a year.
It took about a year to get a new round of financing, which also cut off the “blood transfusion” pipeline of Tiger Head Bureau. In 2021, Hutou Bureau won two rounds of financing in succession, but in 2022, the company “has nothing to gain in the financing market.
In addition, although it is a start-up company, in the mouth of employees, the internal operation efficiency of Hutou Bureau is quite “big company disease”. Chen Yuan told Times Weekly reporter that the company’s review process is relatively procrastinated when it comes to daily work, including project loans, contract stamping and other matters that need to be reviewed by the Shanghai headquarters.
Taking the entry process as an example, “The entry contract of Hutou Bureau needs to be stamped by the Shanghai headquarters before it can be issued to employees, but until I recently resigned, after 3 months, I did not get a stamped labor contract.” Chen Yuan Said.
Corresponding to the criticism of operational efficiency, it seems that Tiger Head Bureau has not yet explored an independent and sustainable development path.
Source: Hutou Bureau official Weibo
The development of Hutouju reflects the changes in the new Chinese baking track.
Since 2022, as the popularity of consumer financing has decreased, financing events in the baking industry have decreased. According to IT Juzi data, from January to October 2022, there will be 12 investment and financing incidents in China’s bakery industry. In contrast, in 2021, iiMedia data shows that from January to August 2021, there were as many as 22 investment events in the baking industry, and the amount reached a record high of 5.7 billion yuan.
However, due to the limited space for product innovation in the bakery industry, similar product tastes, and insufficient industry consumption stickiness, the new Chinese-style bakery brands in the current market are facing serious involution, product homogeneity, and brand knockoffs.
All these circumstances mean that at present, rather than being able to tell stories, being able to reduce costs and increase efficiency in operations and develop a sustainable business model is the key to winning in the competition for new Chinese bakery brands in the future.
New Chinese Baking Second Half
Facing changes in the industry, Hutou Bureau has made operational adjustments.
In December 2022, Hutou Bureau announced the opening of franchising, saying that in the future, it will shift to a parallel scale of direct sales + business partners, and start overseas business incubation. Regarding why the franchise store model is adopted, Hu Ting, the founder of Hutou Bureau, said that in the daily baking market, a certain scale of market coverage is the only way to be a brand. From the perspective of profit efficiency, management division and profit distribution, the partnership system is more conducive to large-scale growth in a changing environment.
Chen Yuan told Times Weekly that in order to attract franchisees, Tiger Head Bureau is adjusting its marketing efforts. Today, in addition to continuing to invest in KOC, Tiger Head Bureau has suspended the live broadcast and streaming of the brand’s online e-commerce, and currently mainly promotes offline stores.
Source: Hutou Bureau official Weibo
Momo Dessert Bureau, another star brand in the baking track, has also adjusted its development direction.
Established in 2020, Momo Dim Sum Bureau focuses on the product concept of freshly baked and prepared, and the inheritance of national tide culture. In 2021, it has obtained three rounds of financing from institutions such as Meituan Dragon Ball and Qingliu Capital. In 2021, Momo Dim Sum Bureau will also start from Changsha, its birthplace, and expand its presence in Beijing, Shanghai, Wuhan and other cities. According to the plan of brand founder Wang Yuxiao in 2020, the goal of Momo Dim Sum Bureau is to open 100 stores in three years.
However, by the end of 2021, after realizing the pressure of operation and management brought about by the national layout, the Momo Dim Sum Bureau shrank its front and turned to deepening the Hunan market to polish its business model. According to the data of Zhaimen Restaurant, from January to November 2022, the number of Momo Dim Sum Bureau stores will only increase by 12. Compared with the 58 stores opened in 2021, the number of new stores has decreased by nearly 80%.
In a media interview in December 2022, Wang Yuxiao said that the brand will make product adjustments in the future. Compared with the past to follow market preferences for safety reasons, Momo Dim Sum Bureau will differentiate its products from the market in the future. In addition, Momo Dessert Bureau is currently building its own factory.
In contrast, Luxihe, which has recently “contradicted the trend” and obtained financing, seems to be the most stable brand on the track.
Recently, Luxihe received hundreds of millions of yuan in financing, led by Bailian Zhigao Capital and Longbai Capital. It is reported that the financing funds will be mainly used for supply chain construction and digital upgrading.
Luxihe was established in 2013, focusing on new Chinese pastries such as peach cakes and egg yolk cakes. Since its establishment, it has adopted a fully self-operated store model and established central factories in Nanjing, Hangzhou, Guangzhou and Beijing. As of 2022, Luxi He has more than 350 stores nationwide. It is worth mentioning that this financing is the first round of financing accepted by Luxihe.
On January 16, Tan Zhiwang, a partner of No-Session Innovation Capital, told the Times Weekly reporter that due to the low popularity of consumer investment, investors tend to be conservative when choosing consumer investment targets. “For start-up brands with uncertainties, everyone will have more concerns, while relatively stable companies with a long history will be favored. This is also the reason why Luxihe, which has a good overall operating foundation, obtained financing.” Tan Zhiwang analyzed.
But Tan Zhiwang further stated that there is no need for the outside world to be too harsh on the tiger head game. “In the process of enterprise development, it is normal to have some stumbling blocks. As a start-up brand, the explorations made by Hutouju and the brand recognition formed are worthy of recognition. The changes in the market are also problems that most start-ups will encounter at present, and it is necessary to give the brand time to optimize and adjust.”
When the tide goes out, the real competition in the new Chinese baking circuit has just begun.
This article is from the WeChat public account “No. 19 Business Research Society” (ID: time_biz) , author: Li Xinting Ye Manzhi, 36 Krypton is authorized to publish.
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related events
- Baking stars are waiting for life extension money2023-01-18
- Hutou Ju, a new Chinese bakery brand, has completed a round A financing of nearly US$50 million2021-07-14
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