"after a series of declining performance,Zhou's Black DuckOpened the franchise model. "

Author: Pang Shifan

Edit: tuya

Product: financial graffiti (ID:caijingtuya)

Under the background that the number of stores lags behind its competitors and net profit growth drops sharply, Zhou's Black Duck (01458.hk) recently held a franchise signing ceremony at its headquarters in Wuhan, Guangxi Nanning, the franchise model announced in the company's interim report this year has finally been launched, and the company's sales model has been upgraded to direct marketing + franchising.

Since the news, the company's shares soared 21.87% on November 19, rising to HK $4.75 per share at one point in the day, when the branch announced a temporary suspension at 11:27 on November 19. Zhou's Black Duck, which resumed trading on November 20, rose 20.94% to as high as HK $5.66, but closed down 0.85% from the previous day to HK $4.64. As of Friday, it closed at HK $5.14.

The number of stores and net profit growth is not as fast as that of competitors.

But before that, Zhou's Black Duck, whose gross and net profit margins have always exceeded those of its competitors, showed a downward trend in various operating indicators for the first time last year. Net profit fell 29.09% in 2018 compared with the same period last year, and its share price fell to its lowest point. The situation has not been reversed until the first half of this year. On the contrary, delicious food and Huang Shanghuang still maintained rapid growth in 2018. In particular, through the expansion of stores and product lines outside the province, Huang Shanghuang's revenue increased by 28.41%, the highest in the past five years, and the net profit of tasteless food increased by 27.69%. So far, according to the third quarter reports released by both sides, both have maintained a good momentum, compared with the same period last year.Tasteless food和Huang ShanghuangNet profit increased by 26.06% and 37.25% respectively, but Zhou's Black Duck's net profit fell 32.4% in the semi-annual report compared with the same period last year.

Zhou's Black Duck is clearly aware of the current problems and announced in its semi-annual report that the company is planning to launch a franchise model to expand capacity to ensure the operation of the supply chain. On November 15, the company issued an announcement on the change of senior executives, which was made by Zeng inProcter & Gamble CoZhang Yuchen, who works in a number of consumer goods companies, including L'Or é al, serves as CEO. Then the company launched the franchise signing ceremony in Nanning, Guangxi, and Guangxi Minghe Food Co., Ltd. officially became one of the first franchisees of Zhou's Black Duck. The new CEO will focus on building the business model of the combination of direct marketing and franchising in the coming year, and look for some quality partners with will and resources in the markets such as Yunnan, Hainan and Northeast China, which the company has not yet entered.

Before Zhou's Black Duck opened its franchise, compared with the listed leisure halogen companies, Joss Foods has always adopted the sales model of direct chain as the guide and joining chain as the main body. More than 90% of the company's main business income comes from product sales through franchise channels, while Huang Shanhuang is the same as Zhou's Black Duck now, using a combination of direct chain and franchise chain.

The joining mode of tasteless food has led to its rapid expansion. At present, the number of stale food stores across the country is more than eight times that of Zhou's Black Duck, more than three times that of magnificent food, reaching 10598 by the first half of this year. The huge sales network gives it a competitive advantage. Like Zhou's Black Duck, it also chooses to layout in high-flow areas such as transportation hubs and shopping centers, and a large number of stores improve the convenience for consumers to buy. Promote the rise of the repurchase rate.

The formation of scale advantage can also bring about a reduction in procurement costs, when the fluctuation of raw material costs can easily affect profits, the increase in the number of stores and individual store revenue is particularly important to the company's revenue increase. Huang Shanghuang chose to implement the strategy of expanding stores outside the province after the change of management in 2017. at the same time, when the advantage of scale is not as good as the best, the implementation of raw material reserve plan to enhance the enterprise cost control capacity, the company's internal management optimization can effectively reduce management fees.

In addition to the purchase cost of raw materials is higher than that of other brands, Zhou's Black Duck has also chosen different models of other brands in packaging and weight in order to control its quality. compared with tasteless simple bags, the MAP lock fresh packaging used by Zhou's Black Duck 90% of its products increases the cost, and because the weight of each product is fixed during packaging, the retail price is higher than that of other brands. But for young consumers, halogen products often have the characteristics of ready-to-eat, impulsiveness and high frequency, fixed packaging with high price and large weight may not be favored, and at present, all-category leisure snack brands have entered the halogen track one after another. mostly 50g, 100g products, through low price, small weight, independent packaging strategy, make the industry competition more fierce.

In terms of taste and variety, tasteless food has formed a product combination of nearly 200 varieties, which is mainly composed of halogenated meat such as halogenated duck by-products, supplemented by halogenated vegetarian foods, packaging products, gift products, etc. Zhou's Black Duck, on the other hand, has made innovations in taste. It has previously focused on sweet and spicy taste, but in order to develop the South China market, it has specially customized non-spicy duck feet, duck wings and secret black duck for light tastes in Guangdong, Fujian and other places, and the effect is remarkable. In this year's semi-annual report, South China became the fastest-growing region, with an increase of 28.8% over the same period last year.

Expand sales channels through multiple channels

In terms of sales channels, due to intensified competition in online channels and further decline in traffic dividends, Zhou's Black Duck launched "Little Hot Kiss Lip Bite balm" with Royal Nile Square last year, and this year launched limited make-up gift boxes with beauty make-up brand. and launched a series of customized products specifically for online channels such as food gift bags to increase online sales. While Huang Shanghuang personifies IP, andCoca-ColaJointly launch the "Le Huang driving" campaign, build five retro-themed stores to invite fans to travel with Huang Shanghuang, and promote joint peripheral sales through fans' tide-tapping cards.

On the other hand, Ji Wei Foods continues to cultivate the takeout business. After launching the O2O system in 2016, it relies on a large number of offline stores for rapid distribution, and some stores even support 24-hour delivery. As of the first half of this year, the cumulative number of members registered with Ji Wei has exceeded 50 million. Zhou's Black Duck began to lay out its takeout business this year. In addition to third-party platforms, it can also take takeout orders through WeChat Mini Programs and attract customers through stores and Wechat platform marketing activities.

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