Punch Wei Long's bubble

According to Enniu's data, on May 8, 20021,Wei Long completed the A round of financing, with a financing amount of 3.56 billion yuan, which was invested by CPE and High Postage Skills, followed by Sequoia China, Tencent and Yunfeng Fund. After this round of financing, the valuation of Wei Long reached 70 billion RMB. Then only five days later, Wei Long submitted an application for listing and officially launched the IPO.

All kinds of news are revealed to us: spicy brother is going to go public.

According to the survey data of relevant institutions, the valuation of Wei Long at this time has been greater than the sum of three squirrels+good shops+shares from Iraq. The high valuation is based on the fact that there is little investment in Wei Long, and the angel lineup in this investment shows that the flour products industry is a high-margin industry, and Wei Long has sufficient cash flow, so there is no need to expand the strategic grain and grass reserves of enterprises through continuous financing.

So, what is listed in Wei Long at this time? Is Weilong's 70 billion valuation a bubble? What should we do after Wei Long goes public? Where are the core barriers? This article will explain this in detail.

1, brand image shapes new Wei Long.

The most important reason for the rise of Wei Long lies in Wei Long's shaping of its own brand image.

In 2005, the additive storm swept the whole spicy strip industry. In the absence of industry norms, many spicy strips produced by black workshops are not up to standard, and spicy strips have been demonized since then. It is because of this storm that Wei Long has a chance.

At that time, Weilong's spicy strips were not famous, and consumers only accepted gluten of all sizes. Because of the variety of spicy strips, delicious or novel spicy strips abound, Wei Long can't meet the needs of consumers in taste and creativity. However, all the players on the Wei Long circuit looked further and saw the big reshuffle of the industry in advance.

In 2004, Weilong purchased special production equipment from abroad, which was unscathed in the additive storm. In addition, Wei Long has continued to transform its production lines and introduced fully automatic production lines to avoid health problems caused by human contact.

In addition, in order to gain the trust of consumers, Wei Long publicly filmed the production process and workshops of spicy strips to show the hygienic image of spicy strips in Wei Long, and has since gained a firm foothold in the industry. At the same time, this round of industry reshuffle has eliminated many competitors for Wei Long, and the spicy strip industry is dying, but Wei Long has revived it.

Wei Long, who tasted the sweetness of public shooting, paid more attention to his product image.

In fact, in the early development of Wei Long, soil was the most inseparable word. As a low-cost fast-moving consumer goods, spicy strips are also insulated from the word high-end, and transparent packaging in Wei Long is full of cheapness. In order to break the inherent impression of consumers, from 2065438 to September 2006, Wei Long launched the Apple-style spicy strip packaging, and opened an Apple-style store offline. With the help of Apple's high-end image, it raised its own positioning and exported the brand concept of "Wei Long is a spicy apple" to consumers.

More importantly, Wei Long's cleverness lies in Wei Long's clear understanding of consumers' product positioning: Wei Long who was eaten as a child, the post-80s and post-90s who can play sentimental cards, the young people who pursue the stimulation of taste buds, and the post-00s who have little money in their pockets. All consumer positioning can be summarized in three words: young people.

In 20 17, Wei Long produced an H5 game "Eight Lords of Wei Long", which attracted the attention of many users. The final outcome of the game is to remind users to eat spicy strips. It can be said that every marketing step in Wei Long is as close to young people as possible. This is also the fundamental logic of Weilong's transformation from a spicy strip manufacturer to a national brand: with the help of big ip, it gives its own product connotation and self-built intellectual property rights are close to consumers.

The book "Brand Driving Force" once mentioned: "For enterprises, every contact between consumers and employees and brands will have a direct effect." From this perspective, every contact between Wei Long and consumers has brought positive and good results, which makes some consumers think of Wei Long every time they mention spicy strips, that is, the brand has surpassed the industry itself.

2. Brand barriers that spicy strips can't build

Stripping off the gorgeous shell of brand marketing in Wei Long, there is still a fascinating question: Is the brand barrier in Wei Long high?

If this question was put before 2005, the answer would not be very high, but today, the answer is unknowable. As we all know, Wei Long's products are not irreplaceable, and the spicy strip industry can run out of two or three enterprises.

As far as the types of products in Wei Long are concerned, they are mainly divided into five categories-seasoned flour products: large and small gluten, cooked and so on. Bean products: kissing bean skin, tearing vegetarian meat by hand, etc. Amorphophallus products: Amorphophallus cool and so on. Vegetarian: eat kelp, spicy lotus root, etc. Meat products: shredded beef from Deng Ying, spicy fish, etc.

Generally speaking, the types of products in Wei Long are similar to those on the market, except for three products, namely, big and small tendons, intimate cooking and cold konjac. The first two are because of the early appearance of products, which have planted emotional seeds in consumers' hearts, while the latter is endorsed by products. However, it is worth noting that when it comes to Wei Long, most consumers will only consider gluten products.

Gluten products are characterized by low production threshold and easy imitation. This makes us not only face the pressure of traditional spicy brands such as Yufeng, Hua and Genji, but also face the competition from snack manufacturers such as three squirrels and good shops. Wei Long now has a complete range of products, mostly because it is a helpless choice under the fierce market competition. However, outside the spicy track, Weilong basically did not stir up any waves. Take a simple example: When it comes to konjac, no one will think of Wei Long.

That is to say, up to now, the products with high competition barriers in Wei Long can't represent the Wei Long brand, but the products that can represent the brand image can be easily replaced. It is not difficult to explain why Wei Long is eager to enter the secondary market. With the strength of capital, Wei Long may have a second spring.

3. Inherent attributes are hard to break.

According to relevant data, the gross profit margin of gluten products can reach about 50%, which is at a high level in the whole food industry.

But obviously, consumers are willing to "pay taxes" for their own tastes. According to the survey data, the unit price of the reformed Weilong Dajin package rose to three yuan, but in 20 19, Wei Long still occupied a place in the field of leisure snacks with an operating income of 4.9 billion yuan. However, how long can consumers be willing to pay taxes on taste buds?

In fact, from the very beginning, Wei Long was the representative of high-salt, high-sugar, high-calorie and high-stimulating food, and the label of junk food was accompanied by spicy strips from beginning to end. Even if the packaging of Wei Long's products moves towards high-end, the inherent impression of junk food has not disappeared.

This also shows that a big problem facing the spicy strip industry now is how to remove the label of junk food.

In essence, it is a foregone conclusion that the label of junk food cannot be removed. However, all enterprises on the spicy track can change consumers' inherent impression of products by changing packaging and marketing strategies, just like Wei Long.

In addition, because of the inherent properties of spicy strips, basically no consumers will regard spicy strips as necessities. Many consumers may eat spicy strips for the second time after eating them once, that is to say, consumers need a long time to repeat this cycle of buying products. Wei Long's high income depends more on its own economies of scale-as long as enough people buy it, the buying cycle of consumers is not important.

4. Will there be a snack "cat"?

Qiaqia melon seeds, Zhou Heiya, and Iraq, the gross profit margin of established retail giants has been falling; Three squirrels, the share price of the emerging e-commerce snack giant in the good shop rose first and then fell, and the snack company did not live well.

Then, will Wei Long, whose valuation exceeds the sum of the market value of three squirrels, good shops and, become the Maotai in snacks?

According to Zhu Weihua, a senior analyst in the field of food and beverage, the value of food enterprises depends on three parts: product strength, brand strength and channel strength. From these three aspects, it seems that the domestic snack field can't run out of Maotai.

In terms of product strength, the domestic retail categories at present mainly include roasted seeds and nuts, meat products, biscuits, candied fruit, bean products and flour products. No matter what kind of products, there is a common feature: low added value and strong substitutability. Consumers can choose brand snacks today and food produced by independent workshops tomorrow. In other words, consumers can easily divert their attention from a snack, and because there are few snack brands for a specific product, apart from Wei Long, this is one of the reasons why Wei Long can get a 70 billion valuation.

In terms of channel strength, the channel selection of domestic snacks is similar, either from online to offline or from offline to online. That is, the channel conversion between e-commerce and traditional supermarkets. After a channel is on fire, other snack brands will quickly join this channel, thus losing their unique competitiveness.

In terms of brand power, domestic snack brands seem to have brand influence. Snack brands represented by three squirrels and good shops even win some category sales champions of e-commerce platforms every year, but when it comes to customer loyalty, basically all snack brands are missing. Due to the high degree of homogeneity of the industry as a whole, consumers' attention is easily diverted and will not be fixed on a certain brand. What affects consumers' nerves more is brand discounts and promotional offers, so you can often see 399-200 promotions on the Taobao interface of three squirrels and good shops.

On the other hand, from the product level, Maotai is the national wine of China, and it is a mellow Maotai-flavor wine. From the channel point of view, the scarcity of Maotai makes it almost impossible for consumers to see Maotai in small supermarkets and convenience stores, and the purchase behavior is mostly realized in e-commerce flagship stores, professional distributors and large supermarkets. Needless to say, some elderly people I know with strong financial resources don't drink unless they are Maotai or Wuliangye. This is also the reason why the price of Maotai is getting higher and higher-consumers' demand for Maotai is far greater than supply.

In the field of food, supply far exceeds demand, and the low threshold of the track makes potential entrants eager to move, and the fierce Red Sea is in the track. Therefore, even in this orbit, it is difficult for Wei Long to escape from the shackles.