Article produced by Radar Finance | Edited by Meng Shuai | Deep Sea
It took more than 21 years for Zhengxin Chicken Steak to expand from 0 to 25,000 stores; while the number of stores dropped from 25,000 to more than 10,000, Huang Bo was invited to do it The endorsement of Zhengxin Chicken Steak only took less than three years.
When it comes to the achievements of Zhengxin Chicken Steak, there are actually only a handful of catering players that can reach the same level of 20,000 stores.
Why did Zhengxin Chicken Steak, which was once so popular among consumers, fall into this situation today? Some analysts pointed out that in addition to the increasingly fierce competition in the industry, there are multiple factors such as the failure to properly match consumer thinking and behavior, excessive store density that affects the core interests of franchisees, and consumer eating habits that pay more attention to health and nutrition. Under the combined influence of factors, Zhengxin Chicken Steak is no longer as popular as before.
However, due to the excessive pace of expansion, Zhengxin Chicken Steak has become more and more difficult to operate and manage, resulting in frequent problems including food safety, reduced service quality, and poor consumer experience, which has further accelerated the deterioration of the brand image. and deterioration of reputation.
"On the whole, Zhengxin Chicken Steak has stepped into the trend of the times, but it has failed to keep pace with the times." A market person said.
10,000 stores have closed in three years, and “Zhengxin Chicken Steaks have been abandoned by young people.”
While most catering brands have set 10,000 stores as their goal, one such brand has gone in the opposite direction. On the road of constantly closing stores, and the protagonist mentioned above is Zhengxin Chicken Steak, who once set the flag to open 100,000 stores.
The entrepreneurial story of Zhengxin Chicken Steak can actually be told from the last century. In 1995, Chen Chuanwu founded Wenzhou Baiyun Food Co., Ltd. However, the company had not yet entered the chicken steak business at that time. Instead, it mainly relied on the business of producing and distributing quick-frozen food, with marketing throughout Wenzhou.
When the new millennium approached, the company's business began to transform. In 2000, the company opened the first Zhengxin snack bar in Wenzhou, Zhejiang, which officially kicked off the development of the Zhengxin brand. At that time, this snack bar mainly sold oden, sausages, fried chicken and other products.
Because the location is located in a place with a strong commercial atmosphere and a large flow of people, and the products are rich, the business of the small store was very prosperous as soon as it opened. After a period of operational exploration, Zhengxin began to embark on the road of expansion by continuously replicating stores in batches.
In 2012, Chen Chuanwu made another bold decision, decisively cutting off 90% of the categories, leaving only the popular chicken steak and several popular meat skewers on the menu, and renamed the brand Zhengxin Chicken Steak. Although the above-mentioned move seemed like a big gamble at the time, Zhengxin's sales increased dramatically as a result.
In 2013, Zhengxin officially opened the franchise model. With the help of the franchise model, Zhengxin has ushered in a stage of rapid expansion. In July 2017, the number of Zhengxin stores officially exceeded 10,000, achieving 10,000 stores for the first time. However, for Zhengxin, who has great ambitions, 10,000 stores is obviously not the end of brand development. Zhengxin, which has crossed the threshold of 10,000 stores, has not stopped its pace of expansion.
In 2018, Zhengxin Group launched the "Forest Plan" and launched a slogan to charge towards the goal of 100,000 stores. It is understood that the "Forest Plan" is a brand-new plan specially designated for Zhengxin's goal of 100,000 stores. At that time, Zhengxin had 45 areas across the country with more than 80,000 employees. According to data disclosed by Zhengxin Group, the number of chicken steaks sold by Zhengxin in 2018 exceeded 720 million pieces. If calculated based on a unit price of 10 yuan, Zhengxin’s annual revenue from selling chicken steaks alone would exceed 7.2 billion yuan.
Time has arrived in 2019. November 22 of that year is another day with extremely special significance for Zhengxin Group. On this day, Zhengxin Group held a massive celebration event in Jinggangshan Scenic Area as scheduled. The purpose of Zhengxin Group's event was to celebrate the happy event that Zhengxin Group's stores exceeded 20,000. On the day of the
event, Zhengxin’s “family members” arrived early and waited for the ceremony to begin in an orderly manner. The full enthusiasm, neat formation, and the eye-catching and refreshing "20,000" number from a high altitude aroused the enthusiasm of everyone present.In order to celebrate this milestone day, Huang Bo, the spokesperson of Zhengxin Chicken Steak, also came to the ceremony.
Just as the joy of reaching 10,000 stores had not hindered its pace of expansion before, Zhengxin Chicken Steak, which had reached 20,000 stores, still persisted in its dream of opening more stores. According to data disclosed by Zhengxin, as of March 2021, the number of Zhengxin Chicken Steak stores has exceeded 25,000, which is 3 times that of KFC and 6 times that of McDonald’s, and 1/3 are directly operated. It has been less than ten years since the franchise was opened.
However, Zhengxin Chicken Steak, which once had great momentum in opening stores, has now gone downhill. According to data from Zhaimen Restaurant, as of press time, Zhengxin Chicken Pai has 11,619 stores across the country. In less than three years, the number of Zhengxin Chicken Steak stores has shrunk by more than 10,000, and more than half of the stores have been closed. As of September 2018, the number of Zhengxin Chicken Steak stores was 15,165. This means that the number of Zhengxin Chicken Chops, which once had more than 25,000 stores, is now less than the level of 5 years ago and only smaller than that of 2017. It was better when we first broke through 10,000 stores in the new year.
Along with the news of a large number of store closures, Zhengxin Chicken Steak has become a hot search topic in a manner that most catering brands do not want to see. As of press time, the topic "Zhengxin Chicken Steak is being abandoned by young people" has attracted 120 million views on Weibo and more than 100,000 interactions. At the same time, topics such as "Nearly 10,000 Zhengxin Chicken Steak stores closed down in three years" have also attracted the attention of many netizens.
Some franchisees said that Zhengxin Chicken Steak has lost its brand dividend. At the same time, some franchisees complained that "the franchise fee is far more than what is shown on the official website" and "renovation is mandatory every three years, and you can only quit if you don't pay."
It is worth mentioning that, in addition to the well-known Zhengxin In addition to chicken steaks, Zhengxin Group actually has three other brands, namely Zhengxin Burger, Zhengxin Shake Tea, and Zhengxin Roast Duck Neck. However, compared with Zhengxin Chicken Steak, the scale of the first three brands can almost be described as "negligible". According to data from Narrow Door Restaurant, as of press time, Zhengxin Burger has only 22 stores, Zhengxin Roast Duck Neck has only 10 stores, and the number of Zhengxin Shake Tea stores is even less, with only 2.
Why is Zhengxin Chicken Steak no longer popular?
In fact, for most catering brands, it is not easy to have more than 10,000 stores. According to incomplete statistics from Radar Finance, as of now, there are only a few domestic catering players with more than 10,000 stores, including Mixue Bingcheng, Juewei Yabo, Wallace, and Luckin Coffee. The number of McDonald's and KFC stores in China has not yet exceeded 10,000.
It is understood that Wallace, Juewei Yabo, Mixue Bingcheng, and Luckin Coffee achieved the achievement of over 10,000 stores in 2018, 2019, 2020, and 2023 respectively, and Zhengxin achieved this as early as 2017. Be the first to break into the "Wandian Club".
Not to mention the number of catering brands that can reach 20,000 stores, there are only a handful of them. The only players that can compete with Zhengxin Chicken Steak at the level of "20,000+ stores" are milk tea brand Michelle Bingcheng and local fried chicken burger brand Wallace, which have become popular among consumers due to their cost-effectiveness in recent years.
Radar Finance learned that the affiliated company of Zhengxin Chicken Steak brand is Shanghai Zhengxin Food Group Co., Ltd. Tianyancha shows that the company was established in January 2006, with Xia Chunlei as its legal representative and a registered capital of RMB 45,454,546. While the topic "Zhengxin Chicken Steak is being abandoned by young people" has aroused heated discussion among netizens, only 3 of the 14 branches of Zhengxin Chicken Steak Company are still in existence, and the rest are in a state of cancellation.
So how did Zhengxin Chicken Steak, which was once so prosperous and had a weak hand in opening a store, come to its current situation? In fact, Zhengxin Chicken Steak operates in an extremely competitive market. Relevant data shows that in 2021, the fried chicken market size has exceeded 300 billion yuan, and is expected to reach 413.4 billion yuan in 2024, with an average annual growth rate of about 10%.
Radar Finance can obtain 100,000+ related results after searching the "fried chicken" keyword through Tianyancha. After limiting the scope to "within 1 year of establishment", it can still obtain 18,599 related results.According to incomplete statistics from Radar Finance, in addition to Zhengxin Chicken Steak, brands such as Zhenghao Chicken Steak, Big Face Chicken Steak, and First Best Chicken Steak are all working hard to carve up valuable shares of this market. Since the threshold for entering the catering industry is low, even those selling skewers and fried skewers are potential rivals of Zhengxin Chicken Steak.
Chinese food industry analyst Zhu Danpeng told Radar Finance that Zhengxin Chicken Steak actually has certain advantages in terms of cost performance. However, behind Zhengxin Chicken Steak's certain cost-effectiveness advantages, it has also exposed its own problems in food safety, service system, customer stickiness and other aspects.
When the entire industry entered a high-quality development node, Zhengxin did not well match the core needs and appeals of the entire consumption upgrade. Because the consumer thinking and behavior of the consumer side were not taken into account during brand development, Zhengxin Chicken Steak will be squeezed by other brands and categories in the entire competition process. Therefore, the "store closing trend" of Zhengxin Chicken Steak can be It is said to be a process of "boiling a frog in warm water".
also believes that Zhengxin Chicken Steak’s previous layout of more than 20,000 stores has helped the brand form a scale effect, but the radical expansion strategy has also led to the brand’s problem of excessive store density, which makes Zhengxin Chicken Pai not only has to face competition between itself and rival brands, but there is also "infighting" between different stores within the brand.
It is reported that Zhengxin Chicken Steak emphasized the regional protection when promoting the franchise, that is, there will be no franchise stores within 300 meters of the bustling commercial street, and there will be no franchise stores within 500 meters of other areas. However, according to the data monitored by Jihai Brand, in third-, fourth- and fifth-tier cities where stores account for more than 50%, the proportion of "encrypted stores" where Zhengxin stores are located "500 meters around existing stores" All exceed 30%, and among them, fourth-tier cities even exceed 37%.
It is worth noting that Zhengxin Chicken Chop is not the only one experiencing the same dilemma. According to Jiemian News, the once-popular No. 1 Chicken Steak is now in the cold, with its number of stores dropping from 1,000 in 2021 to more than 300. Another sister brand of Asiang Rice Noodles, "Jili Chicken Steak", which became popular during the epidemic, currently has only 7 stores left.
The reason behind the cold reception of many chicken steak players may be another reason why Zhengxin Chicken Steak is facing the difficulty of closing a large number of stores. With the gradual transformation and upgrading of the consumer market, people's consumption concepts have also undergone tremendous changes. National health awareness has continued to increase, and consumers' demand for nutrition and healthy diet has become increasingly strong.
In this context, Zhengxin chicken defecation, which uses frying as one of the main cooking methods, is no longer as popular as before. Just relying on price and convenience, Zhengxin Chicken Steak can no longer impress consumers with increasingly picky tastes. How to make breakthroughs in product innovation, quality improvement and environmental optimization has become a question that many players in the track need to constantly explore. subject.
has been involved in food safety turmoil many times before.
However, Zhengxin Chicken Steak, which has been involved in the "store closing wave" this time, has also been involved in food safety turmoil many times before.
According to Bailu Video, as early as August 18 last year, some netizens exposed that employees at Yizhengxin Chicken Steakhouse were stepping on the operating table to cut their toenails. Later, the owner of the store involved responded that he had learned about the situation in detail internally, and he did see the clerk cutting his toenails on the surveillance video. Since we are a private franchisee, the employee we hired may not have paid enough attention to food safety, so we have dismissed the employee. If anyone made a purchase in the store that day and feels there is a problem, a refund can be processed based on the consumption record of the day, and will be strictly managed in the future.
After one month, the market supervision department in Zhuzhou, Hunan Province carried out a special food safety inspection at the "Zhengxin Chicken Steak" store in the jurisdiction. It was discovered that employees were wearing jewelry, personal belongings were mixed with food ingredients, and the purchase inspection was asking for tickets and certificates. Problems such as insufficient delivery and poor hygienic environment in the store.
In October of the same year, the Beijing Fangshan District Market Supervision and Administration Bureau disclosed that Zhengxin Chicken Steak Beijing Shouxiang Catering Center Store violated relevant regulations because the party involved failed to use the tools and utensils used for food processing and preparation.In accordance with relevant regulations, the Beijing Fangshan District Market Supervision and Administration Bureau issued a correction notice to him, requiring him to make immediate corrections.
In November, just before it became a hot topic due to a large number of store closures, Zhengxin Chicken Steak was exposed to another food safety scandal. According to a report from the Zhangjiajie Yongding District Market Supervision and Administration Bureau, at 10:40 a.m. on November 8, the bureau received feedback from netizens that there were rats in the operation room of a chicken steak restaurant in Yongding District.
Subsequently, the bureau immediately arranged for law enforcement personnel to go to the scene to conduct verification. After investigation, the store involved was a Zhengxin Chicken Steak franchise store within the jurisdiction of Guanliping Street, Yongding District. Netizens reported that the situation was true. The law enforcement officers of the bureau immediately sealed the store in accordance with the law and launched an investigation into its illegal activities in accordance with the law.
Radar Finance noticed that some consumers also complained to Zhengxin Food on the Black Cat Complaint Platform. As of press time, the cumulative number of complaints against Zhengxin Food on the platform reached 376, including 21 new complaints in the past 30 days.
Among the complaints initiated by consumers, it can be seen that foreign objects were found in the food, the chicken steak was undercooked, stomach discomfort after eating the meal, insufficient portion, normal ordering but the store was closed, and merchant service attitude was not good. issues including Jia Jia etc.
Some people in the industry believe that during the rapid expansion of the brand, Zhengxin Chicken Steak may have been too focused on the number of stores and neglected the quality of stores. This has led to poor management, frequent food safety incidents, and poor service in some Zhengxin Chicken Steak stores. Problems such as declining quality and poor consumer experience have further affected the brand's image and reputation.
Can Zhengxin Chicken Steaks come up with new measures to help the company return to high growth? Radar Finance will continue to pay attention.
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