Original title: can't sit still! SeeNongfu SpringWith great success, Xu Jiayin re-promoted Hengda Bingquan's plan to go public in a small and large way. Source: time Finance and Economics.
“EvergrandeI think I want to learn from Nongfu Spring and use a revenue of 20 billion yuan to gain a market capitalization of 500 billion yuan. " On April 1, Chen Wei, an expert in the beverage industry, commented on time Finance about Xu Jiayin's idea of promoting the listing of Evergrande Mountain Spring.
After paying sky-high tuition fees of more than 4 billion yuan (RMB, the same below), real estate boss Xu Jiayin decided to continue to gamble on mineral water.
On March 31, Xu Jiayin, chairman of Evergrande Group, said that Evergrande transferred Bingquan and Evergrande Cereals and Oil a few years ago because of their small match with the overall size of the group.
"now with the diversified development of Evergrande, in order to realize the fully closed industry of clothing, food, housing, transportation, recreation, tourism and entertainment, Evergrande Bingquan, including Evergrande Cereals and Oil, has bought back 49% of its equity." Xu Jiayin mentioned that the next step is to put Evergrande Bingquan, Evergrande grain and oil packaging on the market. According to Xia Haijun, president of Evergrande Group, Evergrande currently holds a 49% stake in Evergrande Bingquan.
It has been nearly five years since Evergrande sold Evergrande Bingquan for 1.8 billion yuan. China Evergrande announced on September 28 that it would sell grain and oil, dairy products and mineral water business to three buyers for 2.7 billion yuan, focusing on the main real estate and other related businesses. The purchasers of the mineral water business are Shenzhen three-dimensional Turin Automobile sales and Service Co., Ltd. and Lipu (HongKong) Limited at a price of 1.8 billion yuan.
Unlike five years ago, the mineral water industry has undergone earth-shaking changes-Nongfu Spring landed in Hong Kong stocks last year, and its market capitalization once exceeded 500 billion yuan. Founder Zhong Kui also became the richest man in China and even Asia with the upsurge of Nongfu Spring's market value.
And the earning power of Nongfu Mountain Spring, a "water seller", also far exceeds that of Evergrande, a real estate giant. According to official figures, Evergrande's gross profit margin was 24.2% in 2020, while Nongfu Spring's gross profit margin was 59% in the same year, far exceeding the former.
"Evergrande should once again take a fancy to the mineral water track, want to learn from Nongfu Spring, with a revenue of 20 billion yuan to bet the market value of 500 billion yuan plate." On April 1, Chen Wei, an expert in the beverage industry, commented on time Finance about Xu Jiayin's idea of promoting the listing of Evergrande Mountain Spring.
On the same day, around Evergrande Bingquan listing planning, current product sales, channel layout and other issues, Times Finance contacted Evergrande, but as of press time, there was no reply.
A sky-high tuition fee of 4 billion
Evergrande officially joined the mineral water industry at the end of 2013.
On November 9, 2013, on the night of global attention in the AFC Champions League final, Guangzhou Evergrande players wore brand new jerseys with the words "Evergrande Ice Spring" on their chest for the first time. During the broadcast interval of the game, the Evergrande Bingquan advertisement is also frequently broadcast on the big screen.
The next day, Evergrande struck while the iron was hot and held a press conference to announce the official launch of its latest high-end mineral water brand-Evergrande Bingquan. Since then, Evergrande Bingquan began a round of large-scale promotion and marketing. According to Xu Jiayin, Evergrande invested 1.3 billion yuan in the first round of all-media advertising.
Evergrande Bingquan received an order of 5.7 billion yuan in just three months after a series of brand bombardment. At the Evergrande Bingquan National Partnership Conference and ordering meeting in January 2014, Xu Jiayin also said that Evergrande makes mineral water out of long-term strategic planning considerations, and Evergrande will do whatever it takes. The sales target of Evergrande Bingquan in 2014 is 10 billion yuan, which will reach 30 billion yuan within three years at the rate of 10 billion yuan per year.
The ideal is very plump, but the reality is very bony. Over the next few years, Xu Jiayin gained only expanding losses from Evergrande Bingquan.
In July 2015, Evergrande planned to list the new third board of Evergrande Bingquan separately, which also exposed the family background of Evergrande Bingquan.
From 2013 to May 2015, Evergrande Bingquan lost 552 million yuan, 2.839 billion yuan and 555 million yuan, respectively, according to audit data from PricewaterhouseCoopers. In less than three years, the cumulative loss is nearly 4 billion yuan, which obviously runs counter to Xu Jiayin's target of 30 billion yuan. With high losses, Evergrande got rid of this hot potato in 2016.
In Chen Wei's view, Evergrande Bingquan's marketing thinking has always been a problem-want to use the thinking of primary school students to do college students' problems.
"the train of thought of real estate marketing is relatively rough, which is to locate different buildings in different regions, and advertising slogans and spokesmen can be lack of continuity or relevance. But as far as Evergrande Bingquan is concerned, the style of advertising slogans and spokesmen is very different, which makes people feel that Evergrande Bingquan marketing strategy lacks integrity and does not figure out what kind of consumers they want to attract. " Chen Wei said to time Financial Analysis.
According to time Financial Statistics, since entering, Evergrande Bingquan has adopted a wide variety of advertising slogans, including "drinking every day, healthy and long life" to "healthy and beautiful" to "a place of water for the world", "Mom and Dad I want to drink", "cooking and making tea", "I only love you" series of slogans. Evergrande Bingquan's choice of spokesmen is even more random, from Chinese movie stars Jackie Chan and Fan Bingbing to South Koreans Kim Soo-Hyun and Chun Ji-hyun.
On the other hand, some consumers believe that the high pricing of Evergrande Bingquan is the main reason why the market share cannot be increased and the performance is at a loss.
When Evergrande Bingquan first entered the market, the main product 500ml mineral water was set at about 5 yuan per bottle, exceeding the price line of the bottled water market in the same period, whether it was 1 yuan.Master Kang、Coca-ColaThe prices of Binglu, farmers, Wa, Yibao and Evergrande Bingquan are all several times that of the latter.
In September 2015, Evergrande Bingquan held a press conference to announce a reduction in the price of all its products, the price of mineral water in 500ml was reduced to 2.50 yuan, and the national retail price of 350ml, 1.25L and 4L products was adjusted to 2.50,5 and 12.50 yuan respectively from 3.8,6 and 25 yuan, a drop of up to 50%.
"Evergrande Bingquan initially did not have any channels and market basis, and it is inevitable to fail to set a high price when there is no pricing power. If Evergrande Bingquan competed with Nongfu Spring with the price of 1-2 yuan per bottle at that time, the result would be difficult to say. " On April 1, a consumer told time Finance.
Adjust positioning
Shenzhen three-dimensional Turin Automobile sales and Service Co., Ltd. and Linpu (Hong Kong) Co., Ltd. began to readjust Evergrande Bingquan product line in 2017.
Evergrande Bingquan initially wanted to continue its high-end position, and launched a new mid-and high-end water product, "metasilicic acid mid-and high-end natural mineral water", priced at about 10 yuan per bottle in 2017. In February 2018, Evergrande Bingquan launched another baby water, focusing on the "low sodium" concept, cutting into the children's water market segment.
But since then, Evergrande Bingquan has also launched a more approachable product, releasing a new strategic product, "low-sodium water series", featuring a 3-yuan water price belt to fill the gap in the brand's low-and middle-end water market.
At present, the price of mineral water in Evergrande Ice Spring is about 2 yuan per bottle, the price of low-sodium natural mineral water is about 3 yuan per bottle, and the price of 4L natural mineral water is 9.9 yuan per barrel, which is similar to the pricing of similar products such as Nongfu Spring and Baishishan.
In terms of channel construction, according to official data, Evergrande Bingquan business covers more than 30 provinces and cities across the country, establishes cooperation with more than 1000 dealers across the country, and has 500000 sales outlets across the country.
On April 1, Liu Wen (a pseudonym), a staff member of Evergrande Bingquan supplier, told time Finance: "We can receive a lot of orders from Evergrande Bingquan every year, and their business should be relatively stable."
However, compared with Nongfu Spring, Yibao, Baishan and other brands, the channel layout of Evergrande Bingquan still seems to be inferior to the former, even in Evergrande's former "hinterland" of Guangzhou, Evergrande Bingquan can not be seen frequently.
Time Finance noted that Evergrande Bingquan has already sold goods in Guangzhou's China Resources Wanjia, Da Runfa and other large supermarkets, but in convenience store channels such as 7-11, Evergrande Bingquan products have not yet been sold.
In addition to adjusting product pricing and product lines, Evergrande Bingquan has also accelerated the construction of water sources in recent years.Changbai MountainAnd other places to acquire water sources and build factories.
Chen Wei told time Finance that at present, Evergrande Bingquan only holds the plate of part of the regional market, and the overall volume has a large gap compared with Nongfu Mountain Spring, Wa and other enterprises. He predicts that after Evergrande returns to the helm of Evergrande Bingquan, there may be mergers and acquisitions of local mineral water brands and factories in China. "this accelerates the construction of channels and supply chains, as well as the rapid expansion of assets, easy listing and higher valuations."
Can you counterattack?
Compared with the collapse of Evergrande Bingquan from 2013 to 2016, the high-end water market has grown rapidly in recent years.
The "Research report on Market prospects and Investment opportunities of China's bottled Water Industry in 2018-2023" released by China Business Industrial Research Institute shows that China's bottled water industry will carry out the second round of reshuffle in the future, and the sales of former domestic bottled water high-end brands are growing rapidly. led to the rise of market share, bottled water enterprises centralized attack on the high-end water market.
FrostSulliavan also analyzed that China's packaging water market will be about 213.4 billion yuan in 2020, and it is expected that industry sales will maintain an average annual compound growth rate of 12% in the next five years, driven by the upgrading of the mainstream consumer price belt, and faster growth will be achieved in natural water and natural mineral water with higher retail prices.
Obviously, Evergrande Bingquan, which has long been positioned at the top end, still has a chance to counterattack.
However, in Liu Wen's view, what will limit Evergrande Bingquan in the future is its own degree of market investment.
"the unit price of mineral water is very low, so it is necessary to achieve economies of scale with small profits and quick turnover, and only through uninterrupted, large-scale marketing and channel investment can we occupy the market. But at present, Evergrande's main real estate business is still in a recovery period, and it is difficult to say how much ammunition it can deliver to Evergrande Bingquan. " Liu Wen said.
Evergrande has a debt ratio of more than 100% in recent years, while Nongfu Spring has a relatively low debt ratio, which has remained between 30% and 40% in recent years, according to official data.
However, Liu Wen also said that unlike a few years ago, Evergrande has accumulated a lot of experience in the field of consumer goods, and its brand reputation as a consumer goods is actually not bad. "if you are willing to invest money, or find investors, it is still possible to do so."