Entering China2025 is a year for many consumer companies to seek to go public, and it is also an extremely strange year for the industry.
In the past few years, from big cities to county seats, there have been all kinds of snack stores such as Hao Xianglai, Zhao Yiming, and Snacks are very busy, and the main one is cheaper than online shopping.
For example, some common mineral water brands, supermarkets, convenience stores, etc., are basically priced at 2 yuan, but the price of these low-priced discount stores can be 0.9 yuan, which is quite abnormal.
Many people wonder: so cheap, what kind of money do merchants make, why can they open thousands of stores a year?
As everyone knows: all the gifts of fate are secretly marked with prices behind them.
Chain snack companies burn money on a large scale, largely for financing and listing, and finally make up for it from the capital market.
This is similar to Didi and Luckin, burning money first, burning to a large enough scale, you can get the capital market to tell a story.
For example, in February 2023, BESTORE invested 45 million in Zhao Yiming’s snacks, but just eight months later, BESTORE sold all its equity, discounted it by 105 million, and earned 60 million.
It stands to reason that I have earned so much in such a short period of time, and the return on investment is even better than that of Warren Buffett.
But unexpectedly, a month later, a whistleblower sued Zhao Yiming.
They said that they were suspected of concealing major matters and infringing on the right to know of minority shareholders.
It turned out that just after BESTORE sold its shares, Snacks was very busy and soon announced that it had merged with Zhao Yiming, and the two families established Mingming together was very busy.
According to the valuation of the capital market, the value of the new company is nearly 10 billion, and the equity price has more than doubled.
If BESTORE sells its equity after the merger of the two parties, it can earn 200 million, which is more than selling snacks at home…… And they quietly completed the merger, and many shareholders were unaware.
In 2024, Mingming is very busy, with retail sales exceeding 55.5 billion in 2024, and the number of stores has exceeded 15,000.
The scale of 10,000 stores is a powerful weapon for mass snack companies to hit the market.
However, at this critical juncture, a strange story happened again.
On March 3, Fujian Wanchen Biotechnology Group Co., Ltd. (hereinafter referred to as “Wanchen Biotechnology”) issued an announcement saying:
Chairman Wang Jiankun was detained and placed on file for investigation.
Wanchen Biotechnology is the parent company of Haoxianglai, and Wang Jiankun is the chairman of Haoxianglai.
Wanchen Biotech announcement
Last year, Wanchen Biotech expected revenue of 30 billion to 34 billion yuan, and the net profit after deduction was 210 million to 270 million yuan.
In 2023, Wanchen Group’s revenue will increase by 16 times! (The reason is the crazy expansion of opening stores, of course, the money also depends on financing).
Statistically, there is nothing wrong with it, and it is even very aggressive.
But in this excellent situation where everything is competing and full of vitality, why was the chairman of the board of directors placed on file for investigation?
Strangely, Yang Yinfen, the chairman and actual controller of BESTORE, also suddenly resigned on the same day, allowing Cheng Hong, the company’s director, to take over as chairman of BESTORE and act as general manager.
The two giants of the snack industry, one was filed, and the other voluntarily resigned, on the same day.
This can’t help but make people think.
In addition, in December 2024, Yanjin Shop announced that it would quit Mingming and transfer its equity to Hunan Xiaomang Enterprise Management Co., Ltd.
In January this year, the regulatory authorities fined Zhao Yiming and Snacks 1.75 million yuan on the grounds that the merger process was not compliant.
This is not only a response to the whistleblower, but also opens up the unbearable side of the booming of mass merchandiser discount snack stores.
The reason for the punishment of the regulator is that it violated the Anti-Monopoly Law, which means that Zhao Yiming and Snack Very Busy have a very high market share in the bulk snack market segment, exceeding the concentration declaration standard.
However, companies do not passively accept the investigation until the transaction is completed, which fully reflects their serious disregard for antitrust compliance.
Looking beyond the internal problems of the enterprise, the crazy expansion model of snack stores has also aroused many people’s questions.
For example, with so many stores, do franchisees really make money?
According to the report of Jiemian News, snack chain enterprises have fought a price war, and their revenue has gone up, and they have also achieved capital expansion.
But the franchisee’s profits are meager or even unprofitable, and some franchisees complain:
“My store is sandwiched between a miscellaneous snack discount store and a Zhao Yiming, originally Zhao Yiming was 88% off on the 7th of each month, but now it has become a 68% discount on goods every Wednesday and Thursday, and I have no choice but to launch a greater discount, 61% off every Wednesday and Thursday, and competing products will even hit 49% off and 46% off, consumers are very sensitive to price, and if the price is not reduced, the flow of people will be visibly reduced.”
Not being able to make money is still secondary, and the franchise fee is still very high.
At present, the franchise cost introduced by Zhao Yiming’s snack official website is basically about 600,000 yuan, and the rent of the decoration store is calculated separately, plus Zhao Yiming requires the first batch of franchisees to purchase 180,000-250,000 yuan.
In other words, if you want to open a chain store of Zhao Yiming, you will need to invest 1 million yuan, and many shopkeepers have no choice but to cut the meat to stop the bleeding because it is difficult to support the high franchise fee in the future.
I thought it was selling snacks, but it turned out to be charity.
On the other hand, consumers have also discovered the “low-price routine” of low-cost snack stores.
Yes, some drinks and snacks are indeed far cheaper than supermarkets, but many white-label and miscellaneous bulk foods are different.
In these discount stores, the proportion of white label products accounts for more than 60%.
Big brands have low prices, small portions, white labels in bulk, and real profits, this is the profit strategy of mass snack stores.
Through low prices, large-scale, high revenue, impact listing, and seek capital returns, this is the real realization model of the mass snack group.
Wu Xiangjun’s inference is not chasing after the wind, according to the report of the self-media “One View Business”: Ming Ming is very busy and has recently signed a contract with Shenzhen Jiufu Investment Consulting Co., Ltd.
Shenzhen Jiufu Shenzhen is a professional consulting institution in capital market and investor relations management, mainly serving enterprises in the capital market such as IPO, mergers and acquisitions.
Ming Ming is very busy signing a contract with Shenzhen Jiufu, what does he want?
Last year, Zhang Liaoyuan, chairman of Three Squirrels, made a statement at the “111 Squirrel Conference”, saying that some discount snack stores are now open all over the streets and alleys, and the prices are very low through capital subsidies.
In addition, the online low-price platform has also made the sales of many offline mom-and-pop stores, convenience stores, supermarkets, and community supermarkets worse and worse, and many physical stores have closed.
This model is not conducive to the business ecology.
Low prices are just a temporary excitement, if it is just to drum up the wealth of the listing, to play such a game of chess with thousands of stores, I think, the injured will eventually be thousands of small franchisees, small entity operators, and they are the majority of the economic ecology.
If none of them make money, what’s the point of going public?
Looking at the more and more snack shops opening on the street, I suddenly thought of a sentence:
“All the cheapness of fate’s gifts has already been secretly marked with a price.”
The next time we see “1 yuan mineral water” and “1.9 yuan coke”, we also have to take out the calculator to calculate the story inside – after all, the routine of the capital market is much more complicated than the snack ingredient list.
