Recently, Xiangpiaopiao disclosed its semi-annual report, showing a loss for the first half of the year1.29Yuan, with a third consecutive year of losses in the interim report, and the loss amount has more than doubled compared to the same period last year.
What factors have led to the decline in Fragrant Cloud's performance? Fragrant Cloud has been vigorously promoting business transformation. As a traditional brewing tea giant, how competitive is it in new areas? Frost & SullivanFrost & SullivanXu Biao, Executive Director of Frost & Sullivan Greater China, was interviewed by Modern Express to discuss the reasons behind the decline in Fragrant Pastries' performance and the future development of the brand.
Modern Express
once claimed"Selling 10 billion cups a year, enough to circle the Earth three times if connected"The fragrance is fragrant, and it has reported a loss for the third consecutive year in its interim report. In the first half of this year, Fragrance Fairy achieved revenue8.59Yuan, a year-on-year decline21.05%Net loss1.29Yuan billion, a decrease compared with the same period last year107.57%In recent years, Xiangpiaopiao has focused on transforming into juice tea and ready-to-drink milk tea, launching new products such as sparkling water and frozen lemon tea. However, since last year, with the entry of new tea brands like Hito, Nescafé, and giants like Coca-Cola and Fuwai Spring, the emerging soft drink market has become a red ocean. The past"National Milk Tea"How will we break through?
Half-year losses exceeded 100 million, and revenue from brewing products dropped by more than 30%
⬆The performance of Xiangpiaopiao in recent years
Sixth year after listing"Milk Tea No.1"Xiangpiaopiao is facing the test of declining performance. Previously, revenue had declined for two consecutive years. After the non-recurring profit and net profit decreased by nearly 60% last year, in the first half of this year, the company achieved revenue8.59Yuan, a year-on-year decline21.05%Net loss1.29Yuan billion, an expansion compared with the same period last year107.57%Looking at the vertical comparison, this is the third consecutive year that Xiangpiaopiao has reported a loss in its interim report.
As the main domestic producer of cup solid milk tea, Xiangpiaopiao claims to have been doing so for a continuous period10The annual market share remains at the top. However, milk tea, which was a major source of profit in the past, is now experiencing rapid market decline. The semi-annual report shows that during the first half of the year, Fragrant Floating's brewed products achieved operating revenue.4.53100 million yuan, a year-on-year decrease31.37%The company stated that the main reason is the impact of the Spring Festival epidemic prevention and control policies as well as the company's prudent inventory management strategy during the peak sales season for brewed products.
In fact, for instant milk tea sales, they have always been greatly affected by seasonal fluctuations. The first and fourth quarters are traditional peak seasons, while the second and third quarters are off-peak seasons. In the first quarter of this year, Fragrance Fairy achieved revenue4.96Yuan, a year-on-year decline28.28%Net loss5968Ten thousand yuan, compared with a profit in the first quarter of last year297.5Ten thousand yuan.
this year1In January, Xiangpiao Piao Piao once stated that due to rising raw materials, the prices of hedged milk tea products (including classic series and high-quality material series) have been increased by a certain percentage.2%-8%Not equal. However, it seems that the price increase has not been able to reverse the company's performance downturn.
"There are now more substitutes and milk tea shops. You can buy and drink offline products without having to hoard them.""Now, milk tea is not just about putting in pearls; it's richer than eight-treasure porridge and can be found everywhere on the streets and alleys. Instant milk tea has no advantage at all."……On social media, many netizens have been discussing the declining performance of Xiangpiaopiao.
"The old Fragrant Scent products are in decline, and new products have not grown up, which has not been of much help to the performance. Instead, they have eroded the profits of the original products."Some industry insiders told the Modern Express reporter.
In recent years, Xiangpiaopiao has focused on transforming into a juice and milk tea company by acquiring a Hong Kong time-honored brand."lanfang garden"The brand has launched its ready-to-drink milk tea. However, at present, the new business still finds it difficult to shoulder the heavy burden of the company's transformation. The semi-annual report shows that in the first half of this year, Xiangpiao Piao's ready-to-drink products achieved operating revenue3.88100 million yuan, a year-on-year decrease5.94%Among them, fruit juice tea achieved operating revenue3.58Yuan, a year-on-year increase0.2%.
The company stated that in the first half of this year, it launched a series of new products, including Xiangpiaopiao Cold Brew."Crispy Bubbly Milk Tea"fragrant milk tea"Dominant Coconut",MECOCupful of fruit juice tea"Litchi Bai Xiang""Mango Barbecue"Lanfang Garden bottled"Hong Kong-style frozen lime tea"bubble water"Salty Lemon Seven"Wait, the market response has been positive.
However,8month23On the same day, reporters randomly visited several supermarkets in Xinjiekou, Nanjing and found that none of the aforementioned new products were on sale. In addition to the traditional fragrant milk tea brewed with instant coffee powder, the two supermarkets also hadMECOCupfuls of fruit juice tea are sold, including several flavors such as cherry berry, red pomegranate white grape, peach red pomelo, Thai lime, etc., all priced at6Around RMB yuan about.
The soft drink battle erupted, with Fragrant Scent welcoming the enemy from all directions
Xu Biao, Executive Director of Frost & Sullivan Greater China, told the Modern Express reporter that the core reason for the recent decline in the performance of Xiangpiaopiao is still the weakening trend in the tea milk beverage industry where it operates."Similar to the recent decline in the instant noodle market, which is mainly due to the rise of takeout and ready-to-eat foods. Similarly, under the general trend of increasing resident income and consumption upgrading, the brewed milk tea industry has been greatly impacted by freshly made tea beverages."
In Xu Biao's view, the market scale of new tea drinks exceeds one hundred billion yuan, and freshly brewed tea drink stores have now covered all levels of cities and even rural areas. The rapid development of the freshly brewed tea drink industry is not only due to the operational capabilities of the tea drink brands themselves, but also because the progress of the entire industrial chain has enhanced the product quality and service of freshly brewed tea drinks, including the production of raw materials and materials, cold chain transportation, digital operations, takeaway services, etc."On the other hand, compared to brewing milk tea, freshly made tea drinks can better meet consumers' new consumption concepts for fresh, healthy beverages with high aesthetic value. Although Fragrant Puff has launched many innovative products, such asMECOLanfang Garden milk tea, etc., but when it comes to affordable ready-made teas represented by Huiyue Ice City, or even popular teas like Xicha and Naixue's teas, there are also a large number15For products priced below RMB10, it's hard to say that Fragrant Blossoms has a price advantage, let alone new product launches or marketing capabilities."
The price of the original flavor and taro-flavored three-in-one cup of fragrant milk tea sold at a supermarket in Nanjing12.9Yuan, red bean-flavored three-in-one cup17.9Yuan. In the same region, the price of freshly made milk tea sold at Miki Snow City is6Yuan to8The yuan is not equal.
In recent years, Fragrant Floating has successively launched fruit juice tea, milk tea, bubble water, and other fields, which have already become a red ocean."0sugar0fat0card"The beverage unicorn, Yuanqi Forest, which has seen rapid growth in innovative products such as sparkling water and light milk tea, has been targeted by multiple forces since last year"encirclement and suppression"Last year, Coca-Cola introduced its North American online celebrity bubble water product in China, also targeting"0fat0card0sugar", there are widespread rumors outside"Two Lees"This year, we have also invested in Yuanqi Forest"Kill Order"New tea drink leaders, such as Xicha and NaiXue, have also entered the bottled beverage market, focusing on fruit juice teas and sparkling water. Currently, the beverage products of these two brands are widely stocked in major supermarkets. There are also many emerging brands like Hankou No.2 Factory, GuozihuoRuo, Shengqi BoBo, Qingting, etc., which have seen a flurry of activity in the soft drink market over the past two years.
last year8In January, Xiangpiao officially announced Wang Yibo as the brand spokesperson, and at the same time launched a new product, Bopop Milk Tea. Prior to this, under WahahaKellyOneWang Yibo was also found as the spokesperson, and"Angry pop-pop"Series of bubble drinks.
Another similarity between Xiangpiaopiao and Wahaha is that behind their signing of Wang Yibo, both are considered to be related to"A thousand gold girls"Yes. Zong Fuli, the daughter of Wahaha's founder Zong Qinghou, once strongly advocated for the company to replace Wang Lihong with Xu Guanghan; and Jiang Xiaoying, the daughter of Jiang Jianqi, the founder of Fragrance Fairy, is also2016Joined the company in [year] and gradually began tailoring solutions for Fragrant Scent"Youthfulness"Policy.
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In Xu Biao's view, after the decline in traditional milk tea brewing business, Xiangpiaopiao has been continuously developing new products. However, competition in these so-called emerging categories is already very fierce, and revenue growth often requires substantial advertising and marketing investments as well as channel expenses to sustain."Facing competitors such as the soft drink giants Liulai and Yihuan Forest, as well as emerging brands like Nuocoin Tea, there are significant challenges for Fragrance Piao Piao to replicate its success in the tea milk brewing segment. Whether it is building a new brand image among young consumers or expanding sales channels for new products on a large scale, continuous investment and a marked improvement in operational efficiency are required, along with long-term transformation and upgrading of the enterprise."
Some institutions are also optimistic about the performance of Xiangpiaopiao in the second half of the year. Tianfeng Securities believes that"After cultivation, the company's instant beverage segment has made significant improvements in product R&D ideas and channel operations. In addition, the price increase at the beginning of the year to hedge against cost pressures, along with the scale effect on the sales side, is expected to drive improved profitability."However, the brokerage still significantly downgraded its earnings forecast for Fragrant Scent, to2022Annual revenue from55.75RMB 100 million downgraded to35.52yuan, and net profit attributable to the parent company was4.89RMB 100 million downgraded to1.86100 million yuan.
*This article is reprinted from Modern Express. Reporter Gu Wei text/photography, Zheng Rui/later stage , Original title: Financial Bolex | Half-year Loss Doubles, Xiangpiaopiao's Transformation into the 'Red Sea' ">
What factors have led to the decline in Fragrant Cloud's performance? Fragrant Cloud has been vigorously promoting business transformation. As a traditional brewing tea giant, how competitive is it in new areas? Frost & SullivanFrost & SullivanXu Biao, Executive Director of Frost & Sullivan Greater China, was interviewed by Modern Express to discuss the reasons behind the decline in Fragrant Pastries' performance and the future development of the brand.
