Source of this article: Times Finance Author: Li Xinting
"Consumption 100" is an interview column that conveys new voices of business leaders. It outputs opinions, insights and thinking, and inspires everyone who is curious about the consumer world with insights. This is the second issue, let’s see how Jiumaojiu faces the sense of crisis.
"The epidemic has indeed accelerated the reshuffle process for our industry." said Zhao Yuanyuan, vice president of Jiumaojiu.
Although its revenue and profits have reached record highs in the past year, Jiumaojiu still has a strong sense of crisis for the future.
More than two months ago, Jiumaojiu officially announced that it would gradually open the franchise and cooperation business of its Taier Pickled Fish (hereinafter referred to as "Taier") and Shande Shanwai Sour Soup Hot Pot (hereinafter referred to as "Shanwai").
For Jiumaojiu, which has long been focusing on steady development and "strong centers and weak stores" in terms of organizational management, it is not easy to say goodbye to the all-direct operation model. However, the surging army of catering franchises, the exponentially increasing level of market competition, and the complexity of the market outside the existing management radius have all made Jiumaojiu aware of the limitations of the existing business model.
It has become imperative to turn the knife edge inward and make changes. In addition to opening up the franchise and cooperation model, more changes are also taking place and brewing within the group in terms of store type adjustment and management system.
"In fact, it is not just open to franchises. Each brand of the entire group is making corresponding adjustments in response to current consumer trends and changes in the entire consumer market." Recently, He, the CEO of Jiumaojiu, who has just assumed the new position for more than a month, said As a result, in interviews with media such as Time Weekly, he further revealed the progress of the group's franchise business and future business plans.
has been established for 28 years. Such proactive communication of operation and management methodology is rare in Jiumaojiu's development process. This may also be one of the signals of its change.
Joining is a natural progression
"We released the open franchise information around February 3rd, and we received a large number of resumes before the end of the year. Many people asked why there were no interviews, so we started working on the fourth day of the new year. "He Chenggong revealed that currently, in terms of Taier, the group has screened out 60 projects nationwide. Shanwai Waiwai expects to open cooperative stores in major cities across the country from June to August.
In the catering industry in 2024, all direct-operated brands will gradually open to franchise. Following Jiumaojiu, in March, Haidilao, which has been established for 30 years and has opened more than 1,300 stores through its self-operated model, and Peijie Lao Hotpot, which is the leader in Chongqing hot pot direct sales, both announced the opening of franchises. According to
, the continuous opening of fully direct-operated brands for franchising is a reflection of the mature development of the catering franchise system. This allows each brand to better balance the relationship between franchisees' income and brand protection. At the same time, increasingly fierce market competition has also put forward higher requirements for catering brands’ store expansion efficiency and market insight, and the franchise model can help brands accelerate market penetration and make up for resource shortcomings.
"The group has opened stores in about 150 cities around the world. In the process, we found that franchisees have a better understanding of the local consumer market and consumption habits. If we let them help us manage the brand, they will also be better able to improve product structure, pricing, Adjustments in marketing can be made according to local conditions. This kind of fine-tuning can allow the brand to better adapt to the local market and enhance its competitiveness in the local market," said He Chenggong.
Based on the above considerations, Taier is currently mainly targeting provinces and autonomous regions such as Xinjiang, Tibet, and Taiwan with far-reaching management radii, domestic airports, high-speed rail and other transportation hubs that have special requirements for operating qualifications, as well as Australia and Australia, which have certain operating barriers relative to domestic operations. New Zealand is open for franchise business.
Picture source: Taier Pickled Fish
As for which brands to choose for franchise cooperation, Jiumaojiu has also carefully considered: the profit model of Lai Meili Sour Soup Grilled Fish has not yet reached expectations; the dance training requirements for hot pot are high, and it is very demanding for franchisees. The burden is relatively large. In contrast, Taier has the highest reputation and the strongest brand potential in the group; Shanwai, which specializes in sour soup hot pot, has a business model specifically designed for the franchise business.
"First, the standardization level of Shanwai Waiwai is very high, and employees can quickly get started with the operation after training; secondly, the brand model is very light. Traditional hot pot brands require stores to be 500 to 600 square meters, and Shanwai Waiwai stores are 200 square meters. It can be up to 400 square meters, and the area is relatively small, so the investment is relatively small. At the same time, the number of employees in the store is slightly lower than that of Taier, so the cost of personnel training and management is also lower," He said.
In addition, the per capita consumption of Taier and Shanwai is relatively close to the people among the group brands. The annual report shows that as of the end of 2023, Taier’s per capita consumption is 75 yuan. Shanwai's current per capita consumption in first-tier cities is 80 to 90 yuan.
When it comes to the selection of franchisees, Jiumaojiu insists on "valuing quality over quantity". He Chenggong revealed that opening up cooperation and franchising is a brand new attempt for the group. At this stage, the group will first focus on quality rather than quantity, so no specific goals have been set yet.
Delegate power to stores and franchisees
"Overall, in the future, the dual model of direct operation and franchise will achieve better synergy. At the same time, the operating standards and delivery quality of directly operated stores and franchise stores will remain consistent." He Chenggong said. . According to Jiumaojiu's plan, next year or the year after, the group will also adopt a franchise model in overseas markets with smaller market capacity and higher development costs. Since
has opened the door to join, it also means that it needs to endure more tests and bear corresponding risks. Management is out of control and product quality fails to meet unified standards, thus affecting the brand and reputation. Many past cases of franchise models in the catering industry have provided lessons for Jiumaojiu.
Picture source: Cichang Pot’s official Weibo
It can be said that the short-term development of a successful franchise model depends on the team, the mid-term development depends on the brand, and the long-term development depends on the supply chain.
has its own thoughts on how to ensure the taste and quality of products in franchised cooperative stores. "The standard for measuring products can be divided into two dimensions: texture and taste. Taste is mainly affected by raw materials, and seasonings affect taste." Ether Two For example, in order to ensure product quality, 70% of the core raw materials and seasonings of Taier franchise stores will be supplied by the group. "
This relies on a complete supply chain layout. As of the end of 2023, Jiumaojiu has a total of 726 stores worldwide. At present, Jiumaojiu has established 3 self-operated warehouses and 18 third-party warehouses across the country, with material distribution covering 24 provinces and more than 100 cities across the country. At the same time, Jiu Maojiu is also accelerating the construction of its national supply chain center base in Nansha, Guangzhou; its hot pot base and compound seasoning production base and a central kitchen in the southwest region, as well as its East China regional supply chain headquarters in Songjiang, Shanghai. Carry out construction.
While strictly controlling the quality of franchise stores, Jiumaojiu also regards franchise stores as a powerful means of communication between the headquarters and the first-line market, and has opened up certain business adjustment authority for franchise stores.
"For the local market, if the franchise store deems it necessary to carry out some marketing activities, adjust product prices, or provide some product development plans. Under the premise of complying with the brand tone, store profit model and food safety requirements, we will Think about it seriously," He Chenggong said.
Jiumaojiu is also trying to become more flexible in its internal management system. "In the past, the group was 'centralized', with the headquarters having a stronger say, while store staff did not have much decision-making power. Currently, we are slowly adjusting the management structure to allow store manager-level staff on the front lines of stores to go out and Bring more customers in," He Chenggong said.
"Not just focusing on young people"
As of the end of 2023, the total number of Taier stores has reached 578, and the goal in the next stage is to open 1,000 stores. In addition, Taier’s directly-operated stores will also be opened in third- and fourth-tier cities this year.
However, at present, consumers who pay more attention to cost-effectiveness and the smoke-filled market environment are forcing catering companies to adjust their existing business models.
In the past year, Taier, which once only accommodated four guests or less, opened a six-seater restaurant. In terms of takeout business, Taier also launched single meals. The adjustments happen in small details, but the effects are significant.According to He Chenggong, previously, the Taier store that launched single-person takeout packages saw an increase in takeout orders of up to 60%, which contributed to an increase of about 15% in the store's turnover.
Jiumaojiu will also adjust its direction to target store types, management systems and new brand incubation.
targets different customer groups, and Jiumaojiu will launch different types of stores. For example, Taier's airport store will be designed to be smaller than regular stores, more oriented to single-person dining scenarios, and will serve food faster; while the main brands Jiumaojiu and Taier will also open 40-square-meter stores in the future. ~50 square meters of takeaway specialty stores mainly radiate to areas with no brand stores within 5 to 10 kilometers around; in terms of brand incubation, Jiumaojiu has been paying attention to some targets with growth potential on the market, especially those with business models that can match the current situation. There are business synergies, which is in line with the group's multi-brand development strategy.
It is worth mentioning that while more and more consumer brands are focusing on young consumers, Jiumaojiu has chosen to further broaden its consumer base. "There have been some subtle changes in consumer trends in the past two years. Jiumaojiu hopes to expand the target market by adjusting the pace of development and build a comprehensive product matrix to cover more age groups." said Zhao Yuanyuan, vice president of Jiumaojiu Group.
The catering industry is in a development stage of accelerated reshuffle. Data from the "China Catering Brand Power White Paper 2023" shows that from January to August 2023, the number of registered catering companies reached 2.197 million; the registered sales of catering companies reached 762,000, which has exceeded the entire year of 2022.
In the great waves, Jiumaojiu also saw opportunities. "In our view, the catering industry has shown a new trend. If in the field of Chinese food, there can really be a brand that has the ultimate cost-effectiveness, is delicious and nutritious, meets everyone's health requirements, and has all-consumption scenarios and all-consumption Crowd, then such a company will definitely be able to stand out in the fiercely competitive market," said Zhao Yuanyuan.
