Following Li Ning’s registration of the “Ning Coffee” trademark to sell coffee in offline stores, and Wanda’s registration of the “Wancha” trademark to enter the tea drinking track, another traditional industry giant is eyeing the new consumption track.

On May 19th, Moutai’s first ice cream shop opened in the lobby of Zunyi Moutai International Hotel. The products it sells are all added with Moutai liquor, each priced at 39 yuan, and the “sauce-flavored ice cream” is also socializing There was a lively discussion on the platform.

“Currently, the downward pressure on the economy is increasing, and the main business of enterprises is affected by multiple factors, resulting in stalled growth. In order to alleviate the negative impact of the stalled growth of the main business on the development of enterprises, (enterprises) have considered seeking new growth breakthroughs across borders.” Executive of Chanson Capital Director Shen Meng said.

However, milk tea, coffee, tea and other tracks have low entry barriers, models are easy to replicate, scale expansion is simple, and the turnaround period is short, so the risks are relatively small, which makes them the most common species for traditional enterprises to explore new businesses.

However, blindly doing new business crossovers will also face new challenges – if you squeeze into the competition of the new track that is already a “Red Sea”, it will be difficult to gain an advantage in the short term, and when the business front is extended, It is also a burden for the main business, and it is easy to cause problems such as resource dispersion and difficulty in persevering through the early difficulties.

“Many new outlets seem to have very good prospects, but they are actually a trap,” Zhu Danpeng, an analyst in China’s food industry, told All Weather Technology. “If its main business is not strong and its sideline business stretches the front too long, there will be too many problems. many questions.”

The development of cross-border business, whether it is Maotai, Li Ning, or Wanda, may need to be cautious.

Cross-border “mix and match” intensifies

Moutai’s ice cream has three flavors: original, vanilla, and tiramisu. Each ice cream is added with a certain amount of Moutai wine. According to Chinanews, the ratio of milk to wine is: every 1kg of milk is mixed with 50g 53 degrees Feitian Moutai.

Because of the alcohol content, the official also responded: Moutai ice cream is not currently sold to minors, and it is recommended not to drive after eating.

It is understood that Moutai ice cream is a product jointly launched by Moutai and Mengniu. At present, pre-packaged products are expected to be introduced to the Guiyang market on May 29, and gradually spread to the whole country. Consumers can place orders on the “i Moutai” APP, and through cold chain delivery, consumers in other cities also have the opportunity to buy Moutai ice cream.

In the future, Moutai’s distributors can also open ice cream franchise stores.

It is not actually Maotai’s first initiative for wine companies to make ice cream across borders. As early as 2019, Luzhou Laojiao cooperated with Zhong Xuegao to launch the “Broken Piece” ice cream, which sold more than 1,000 copies on the first day. In addition, HEYTEA has also launched Wuliangye ice cream.

Not only wine companies, but in August last year, Wuling Hongguang also launched three ice cream products in the shape of cars, which are mainly used as tools for summer promotion and drainage of stores.

From the perspective of research and development, the research and development cost of ice cream is not high. In cooperation with dairy companies such as Mengniu and Yili, companies often only need to lend IP and provide a small amount of raw materials to complete mass production. Moreover, the shape of the ice cream can be integrated with the brand symbol, which also makes it easy to meet the publicity needs of the enterprise. This is also the reason why ice cream is particularly popular in cross-border choices.

In addition to ice cream, milk tea and coffee tracks are also two popular options.

Just last month, Wanda Group registered multiple “Wancha” trademarks. Wanda Films stated on the investor interaction platform that “Wancha” is a special drink project of its own brand cinema launched by the company at the end of 2019. It is currently sold in about 140 of the company’s subordinate cinemas.

The brand name of “Wancha” has a long history. In 2019, Wanda opened the first “Wancha” milk tea shop in Guangzhou Zengcheng Wanda Cinema. Afterwards, Wanda and COSTA launched a fusion model – Wancha and COSTA Quick Selection Fusion Store, which was quickly rolled out in many Wanda cinemas across the country.

In the cross-border coffee business, the news that Li Ning has begun to provide coffee services in stores has recently attracted much attention. According to Tianyancha data, Li Ning Sports (Shanghai) Co., Ltd. applied for the registration of the trademark “Ning Coffee NING COFFEE”.

Li Ning responded to the media that the company pays attention to the consumer buying experience at retail terminals, and hopes to improve the comfort and experience of customers when shopping by optimizing in-store services. Providing coffee service in the store will be an innovative attempt by Li Ning for the retail terminal consumption experience link.

From the current point of view, coffee is just an additional service when you go to the store for consumption. A Li Ning clerk said, “Coffee drinking is not currently open to the public, and customers who come to the store can buy a product of 499 yuan for a free drink.” And currently, only large stores can provide coffee, while most of the smaller stores do not have this service.

From this point of view, in the short term, the coffee business may not directly create commercial income for Li Ning.

As for the layout of coffee, PetroChina and Sinopec went earlier and took bigger steps.

In 2018, PetroChina established Kunlun Hospitality Coffee and began to set up freshly ground coffee in its convenience stores. According to Kamen, there are currently more than 120 coffee shops and more than 8,000 stores with retail coffee. In 2021, the total sales of its coffee products will exceed 100 million yuan.

Sinopec launched “Easy Coffee” in 2019. In order to fit the gas station scene, “Easy Coffee” has launched a unique menu: 92# (black and white coffee), 95# (fashionable special drink), 98# (boutique series), was also ridiculed by netizens as “petroleum coffee”.

In February this year, China Post also stepped into the coffee track, opening its first nationwide “Post Office Coffee” in Xiamen. In terms of operation mode, post office coffee is similar to post oxygen tea, both of which are operated by China Post and third-party companies.

“Post oxygen tea” was launched by China Post last year, and it was on the hot search for a time, triggering discussions inside and outside the industry. At that time, some media speculated that if the milk tea shop was opened at the postal business point, its 54,000 business points would be the first in the country once it was opened, or it would become Heytea, Nai Xue’s tea, Michelle Ice City, etc. A strong competitor of the brand.

However, as of May 25, according to Dianping, there are currently only 5 post-oxygen teas in the country, and their scores are only between 3.7-4.1, which is far from the speculation at that time.

As an Internet giant, ByteDance has been paying attention to the tea drinking track for a long time. Last year, Byte launched the tea brand “Taoyuan Yuye” on Douyin, invested in Changsha’s local tea brand “Ningji”, and registered trademarks such as “Byte Tea” and “ByteTea”. In May of this year, it was reported that ByteDance was setting up a food and beverage team in Beijing, and the products were mainly new tea drinks.

Not only China Post and ByteDance, but also beverage giants Wahaha and Wanglaoji have already explored this “window”.

Why cross the border?

Why have milk tea, coffee, and ice cream become popular cross-border options?

In terms of business models, the barriers to entry in the milk tea, coffee, and ice cream industries are low, the models are easy to replicate, and scale expansion is simple. As a consumer product, it has a shorter turnaround period and lower input costs, so it is relatively less risky and has a higher fault tolerance rate.

Moreover, these businesses meet the core needs of the new generation.

“The core needs of the entire new generation have become a field for the industry to invest in. Milk tea, coffee, and ice cream are the categories with the highest participation and the highest consumption frequency of the new generation.” Zhu Danpeng said.

In addition to high consumption frequency, ice cream, coffee, and milk tea also have relatively low unit prices. For traditional enterprises, they are also low-threshold options for expanding their reach.

Taking ice cream as an example, industry insiders believe that Moutai’s main purpose in the ice cream business is to interact with young people rather than increase its revenue.

According to data released by consulting firm Roland Berger, Chinese consumers under the age of 30 consume only 8% of alcohol, which is far lower than that of low-alcohol drinks such as beer, wine and pre-mixed wine. Moreover, in the eyes of many consumers, the collection value and investment value of Moutai are much higher than the drinking value, especially for young people.

For Moutai, it is more and more necessary to reach young groups with products.

In fact, Maotai has also been trying to get close to young people. In 2019, Moutai launched Yumi Blueberry Craft Brewing and entered the fruit wine track. But from the price point of view, the price of this wine in the flagship store of Jingdong Moutai is 279 yuan, which is still high compared to similar fruit wines.

In contrast, the 39 yuan Moutai ice cream is not only a loud gimmick, but also further lowers the consumption threshold.

On the other hand, Moutai’s pre-packaged ice cream will be sold on the “i Moutai” APP, which may also have the intention of attracting users to the “i Moutai” APP.

Li Ning’s in-store coffee service is to a certain extent an exploration to save offline stores.

In terms of sales channels, from 2019 to 2021, Li Ning’s domestic offline sales accounted for 75.6%, 70.5%, and 70.3% of total sales, showing a downward trend year by year; online channel sales accounted for 22.5% in the same period. , 28%, 28.4%, increasing year by year.

While the proportion of offline sales has declined, the number of Li Ning’s stores has increased year after year. As of the end of 2021, Li Ning has a total of 7,137 stores including dealers, which also means that the efficiency of its offline single stores is getting lower and lower.

In the 2021 financial report, Li Ning said that the company will continue to optimize channel construction and layout during the year, focus on large stores in shopping malls, continue to promote the implementation of high-efficiency large stores such as flagship stores, and continue to optimize store structure to accelerate the processing of loss-making, inefficient and small-scale stores .

In order to improve offline efficiency and attract consumers to the store, it is necessary to improve the service of the store.

Different from Maotai and Li Ning, Wanda Cinema’s current performance pressure is even greater.

In 2019 and 2020, the operating income of Wanda Films was 15.435 billion yuan and 6.295 billion yuan respectively, and the net profit was -4.722 billion yuan and -6.841 billion yuan respectively; it will be able to turn losses into profits in 2021, with a net profit of about 106 million yuan. Yuan.

However, in 2022, due to the impact of the epidemic, Wanda Cinema’s performance in the first quarter of this year fell into a trough again. According to its financial report, its net profit in the first quarter was 45 million yuan, a year-on-year decrease of 91.42%.

On the other hand, in the financial reports of Wanda Films in the past few years, the sales revenue of goods and catering has always occupied the top three positions, and its gross profit margin will reach 63.49% in 2021.

Using idle movie theater space to develop milk tea business can not only convert offline space advantages into commercial benefits, but also increase revenue for theaters when the industry is down.

It’s just that the new tea drinking track is already a sea of ​​red, and it is still unknown how much value-added benefits the milk tea brand can bring to Wanda Movies.

The pitfalls of new business

In fact, there are already successful cases in cross-border new businesses.

Take Xiabuxiabu as an example. In 2016, it launched a sub-brand “Couco”, which was the first to test the “hot pot + tea” leisure experience format. Many milk teas became popular on the Internet, and the hot pot business of Coco is also here. Driven by rapid development. At the moment when Xiabuxiabu’s business is frustrated, Kuocuo and its derived milk tea brand are also regarded as an important trump card.

After getting together, hot pot + milk tea was also imitated by the industry, and Haidilao also added self-service milk tea to the service.

But by comparison, there are still relatively few successful cases across borders.

Shen Meng told All-Weather Technology: “And either the enterprise is desperate and sinks its boat, or it enters an industry with relatively weak competition, and can quickly and strongly seize the share by virtue of its own accumulated capital advantages.”

For example, the relatively successful business of creating a “milk tea + hot pot” leisure experience in Xiabuxiabu was because it had the advantage of being the first in the industry, and the competition in the tea industry was not fierce at that time. have not yet emerged.

At present, when companies deploy cross-border business, they often only see that they have a certain cost advantage, such as the original store network, the original brand influence, and the current per capita consumption of the target consumer business is low. The level of consumer demand and competition should not be ignored.

From the point of view of competition on the track, whether it is coffee, tea, or ice cream, the competition has reached a white-hot stage.

According to data, in 2018, the number of brands on the ice cream line in my country was only about 60. By August 2021, it has grown to more than 300.

In the past, domestic and foreign giants such as Yili, Mengniu and Haagen-Dazs firmly controlled the domestic low, medium and high-end ice cream market. However, with the rise of new consumer brands such as Zhong Xuegao and Aoxue, the ice cream market has also ushered in changes.

Almost every once in a while, there are popular ice creams on the Internet. From the original “double yolk egg”, “coconut ash” to “Zhizhi Taotao”, none of them can last forever. Although Moutai ice cream has detonated traffic and topics in a short time, it is not easy to keep the popularity going.

In the tea drinking track, by the end of 2021, there will be 378,000 new tea drinking stores, with a chain rate of 36%. Among them are Michelle Ice City with 20,000 stores, coco with 12,000 stores, Gu Ming with 4,500 stores, and Tea Baidao with 4,200 stores. There are also two highly sought after by capital, Hey Tea and Nai Xue’s tea.

Under the fierce competition and blind expansion in the early stage, since the end of last year, a series of events such as price cuts, store closures, layoffs, and continuous losses have been staged in the leading enterprises of new tea drinks.

In this context, can cross-border tea drinking really make a “blood road”? This will take time to answer.

The competition in the coffee track is even worse. Starbucks and Luckin are still standing. MANNER, Seesaw, Mstand, Tims and other brands have also received financing and are chasing after them. If Li Ning wants to create direct commercial income from the coffee business, there may be a long way to go.

As Zhu Danpeng said, many new outlets seem to have very good prospects, but they are actually a trap. Scattered resources and difficulty in persevering through the early difficulties will all become new problems.

Once, the dairy giant Yili also tried to cross the border. In August 2019, Yili officially entered the mineral water market through the acquisition of Aershan Shuizhi Mineral Water Co., Ltd. (now renamed “Aershan Yili Natural Mineral Water Co., Ltd.”).

Relying on Yili’s distribution network and sales channels, it should not be difficult to launch mineral water products. But this is not the case. Yili’s mineral water business is not progressing as expected. According to its 2021 financial report, the recoverable amount of the asset group where the goodwill is located is lower than the book value of the asset group containing the goodwill. After an impairment test, the current period The goodwill was accrued for impairment of RMB 55.26 million.

Interlaced as a mountain, even if they have offline store resources, channel advantages, or other advantages, traditional enterprises will still face new challenges when they enter new industries, and the market will not give too many opportunities for trial and error.

The development of cross-border business, no matter what size industry giants are, is to cross the river by feeling the stones, and every step must be cautious.

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