Internet celebrity discount store fell first.
investment community learned from Tianyan Quar that Shanghai Bangbangmiao Technology Co., Ltd., the parent company of discount store brand Boom Boom Mart (hereinafter referred to as Boom Market), said in a contract dispute lawsuit with suppliers this year that has stopped business and does not have cash flow , and is preparing to file for bankruptcy .
was established in 2020. The Prosperity Market started in Shanghai and focuses on expired products, that is, selling expired consumer goods at large discounts. It quickly opened more than 20 stores in just one year. In early 2021, the Prosperity Market also officially announced a financing. However, less than two years after its establishment, the prosperous market fell rapidly after a brief glory, and its speed was surprisingly fast.
As new consumer investment slows down collectively, the expiration commodity track that was once sought after by VCs is undergoing subtle changes. In the early stage of the epidemic in 2020, the product was unsalable, which led to the first wave of temporary product chain stores. There were even unicorns with a valuation of 1.5 billion US dollars, and a number of well-known VCs were crowded with the track. Now that the noise has dispersed, the knockout of discount stores has begun, the fall of the prosperous market may be just the beginning.
focuses on expiration goods, and two rounds of financing in one fell swoop
is now facing bankruptcy
The birth of the prosperity market began by accident.
At the beginning of 2020, the epidemic came unexpectedly. The retail industry suffered a heavy blow. Fan Zhifeng, founder of the Fengrong Market, laid off employees in large quantities, and only 6 people were left. At this time, Gu Xiaojian, who was engaged in the online tail-to-stock wholesale business, also suffered layoffs. So, Gu Xiaojian and Fan Zhifeng decided to sell the last goods and clear the stock, and each dissolved two teams.
Fan Zhifeng removed the shelves of the convenience store and transformed them into a pile with the atmosphere of a street discount store. He also launched a clearance notice in the private domain group, intending to sell the final goods at one time at a cheap time. Unexpectedly, cheap discount brands were so popular that there were a long queue of more than 200 people outside the store on the second day of the business.
Within two days, the store's daily turnover exceeded 100,000, and the two were so busy that they were over. There was no man available during the epidemic, so Fan Zhifeng brought the whole family to the store to help, and even called his mother-in-law over. Such a "grand occasion" lasted for more than 10 days. The two teams originally planned to be disbanded miraculously survived. It was at this time that Fan Zhifeng and Gu Xiaojian discovered a new business model, and the "good sale" of the expiration food discount store was born.
Not long after, Fan Zhifeng relied on this model and founded his own brand in August 2020 - Prosperity Market Boom Boom Mart.
(Picture source: Xiaohongshu video screenshot)
Before starting a business, Fan Zhifeng had rich career experience. According to public information, in 2010, Fan Zhifeng graduated from Tongji University business administration major and entered the automotive beauty industry for his first job. In the past ten years, Fan Zhifeng worked in five different companies, including Meichetang and Oriental Hui, and has been exposed to industries such as automobiles, logistics, e-commerce retail and supply chain, and O2O operations.
Job experience in different industries has given Fan Zhifeng a keen sense of smell. The Fengrong Market adopts a franchise model, and consumers are positioned as women aged 15-35. The store combines discounts with "national trends" and has a very two-dimensional style, so it has become a check-in point for internet celebrities and quickly attracts a large number of customers. The marketing expenses of the prosperous market are also very high. Fan Zhifeng revealed that basically a store has a marketing expense of about 40,000 yuan per month.
In March 2021, Boom Market officially announced its first financing, from the Challenger Capital, founder of Yuanqi Forest , with a financing amount of tens of millions of yuan. In addition, the unofficial financing was also established, Yimo Capital invested in the Angel Round.
Tang Binsen brought not only funds to the prosperity market, but also long-term cooperation with Yuanqi Forest. In addition, the Prosperity Market has reached cooperation with many Internet celebrity consumer products such as Vitality 28, Cheese Dr. Good Hope Water, Wang Xiaoluo, Ramen Talk, Food Man, Wang Bobao, and Laboratory.
financing and the support of big-name products made the prosperous market very popular for a while. After its establishment in one year, Fanrong Market has opened more than 20 stores with a turnover of more than 150 million. Fan Zhifeng plans to develop more than 60 stores in 2022, and is expected to have more than 1,000 stores nationwide by 2023. He once decided to make the prosperity market the Chinese Tang Jikede .
In the investment promotion announcement in November 2021, Fanrong Market even revealed its IPO plan. The announcement stated that after the company goes public, it will repurchase the top 50 franchise stores at 3 times the 3-year franchise margin and one-time goods margin.
However, before franchisees could go public, news of the Boom Market was seeking to sell in the second half of 2021. Although the company did not admit it, the negative news did not stop.
Starting from March this year, the prosperity market was entangled by lawsuits from various suppliers. The company Shanghai Bangbangmiao Technology Co., Ltd. has been listed as the person subject to execution many times, and the legal representative of Fan Zhifeng was also restricted from consumption. At present, there have been at least 15 judicial disputes published in Fanrong Market, and most of the cases are "sale contract disputes", and the company has owed payments from multiple suppliers.
In July 2022, in a first-instance judgment on a "sale contract", the defendant Shanghai Bangbangmiao Technology Co., Ltd. stated, "Because the business has stopped and there is no cash flow, the defendant is preparing to file for bankruptcy." In less than two years, the prosperity market is about to end its short life.
Young people "pull" out a trillion-dollar market
This is a rapidly rising and rapidly silent consumer track.
Fan Zhifeng founded the prosperous market in 2020, which was the year when discount store brands exploded. Since then, countless brands such as Love Discount , Xiaoxiang Life, HiTe Shopping, and Aotle have sprung up like mushrooms after a rain. In just two years, discount stores have expanded rapidly, which is also the two years since VC/PE has entered the market in large numbers.
In June 2020, Hao Special Sale, which was just founded, won the A round of financing of Jinshajiang Venture Capital, Yunjiu Capital, and Sunrise Capital in tens of millions of yuan. This is a brand founded by Gu Xiaojian and Fan Zhifeng. Before the two founded the Good Sale, the predecessor of the brand was aimed at the B-end and was a "promotion and purchase" that specialized in operating expiration food wholesale and retail.
also gained inspiration from the sale of last-dish goods. Good sales took a different path from the prosperity market and built a hard discount store. At present, Haote Sales has established a partnership with more than 200 brands including Wangwang , Ferrero, and Hangao, and has won five rounds of financing. The investors include leading institutions such as Wuyuan Capital and Jinshajiang Venture Capital.
In February 2022, the more subsisting new hard discount chain "Otel" received nearly 100 million yuan in round A financing led by Innovation Works and followed by Wujie Capital. Otel uses Chengdu as its base camp and is mostly shopping centers in second- and third-tier cities. Previously, the company has received tens of millions of yuan in angel rounds and angel + rounds of financing exclusively invested by Lenovo Venture Capital.
In addition, there are many discount brands such as Discount Niu, Ai Discount, Hi Shopping Cat, Sansheng Warehouse, etc., which have obtained financing one year before or after the establishment or transformation. There are many well-known institutions such as Sequoia China, Meihua Venture Capital, and Zhongding Capital. It is not difficult to find that these discount stores were established around 2020 and around 2021, and their financing was also concentrated in the first half of 2021 to 2022.
During this period, the new crown epidemic has caused major brands to be severely unsalable, and many products that expired cannot be delivered to the shelves. Discount stores ushered in explosive growth at this time. Simply put, the epidemic has made the intraday food popular, and the intraday food has made the intraday food popular.
Expiry food, as the name suggests, is a product that is on the verge of shelf life but is still within the shelf life . The main reason for the emergence of expiration food is the inventory backlog caused by overcapacity in the food market. Before 2010, the inexpensive food only sold small-scale products through convenience stores. Later, as the industry scale expanded, the direct-sale store model gradually developed. In the post-epidemic era, the inexpensive food ushered in an outbreak.
On the consumer side, a series of layoffs and salary cuts have made young people's consumption willingness more conservative. The "wool" of big-name products can not only buy a sense of luxury with a small amount of money, but also satisfy consumers' "taking advantage". Therefore, discount stores quickly accumulate a large number of young consumers. In addition to the expiration foods often sold in discount stores, big-name cosmetic samples and snack scraps are also popular among young people.
Investors have noticed changes in consumption among young people. Shanghai Securities data shows that in 2021, the market size of expiration food has rapidly grown to 31.8 billion yuan, and is expected to reach 40.1 billion yuan in 2025. Overall, in 2021, the market size of my country's discount retail industry has reached 1.62 trillion yuan.
This business also attracts Internet retail giants. In October 2021, Hema Fresh quietly opened a fresh food outlet store in Shanghai, with most of its products being fresh consumables or expiration foods; three months later, the first discount supermarket of Suning opened in Ma'anshan , announcing that it will spread to Jiangsu, Zhejiang and Shanghai, and plans to open 100 stores in 2022.
fanaticism continued until the first half of this year. In May 2022, Linshi Mofa from Chengdu received an angel round financing of nearly 10 million yuan. Linshi Mofa was founded in 2021. The founder Feng Hui was the former strategic partner of Yonghui Cloud Chuang and has many years of experience in chain management. Just two months after its establishment, Linshimofa opened nearly 10 stores in Chengdu, Sichuan, and currently has a single SKU of 1,000-1,500.
In addition, in June 2022, the new discounter "Xiaoxiang Life" from Jiangsu completed a round A financing of tens of millions of yuan, with investors including Hongli Venture Capital, Qingsong Fund, and Xida Capital; in the same month, Xianfeng K2VC, starVC, Gaorong Capital, angel investor Wang Gang, and Blueprint Venture Capital invested in another emerging brand "Haitegou".
However, it comes and goes in a hurry. A month later, Hao Special Sale was revealed to have been fined 7,000 yuan for selling expired chocolates, and the quality control problems of expired foods were at the forefront. Food spoiled, damaged packaging, counterfeit products, or some brands you have never seen before are placed on the shelves, but the products are "low-priced" but not beautiful, and the reversal will be staged immediately.
At the same time, discount chain stores surged in a short period of time. Under a large number of publicity and promotions, the last-term goods that were delayed due to the epidemic were soon facing run out. When demand exceeds supply, discount stores in the air outlet cannot get low-priced supply as before, and the supply side becomes the most uncertain factor.
When the fanaticism fades, there will always be people who will stop and think calmly. The business model of expiration discount has also been questioned by some entrepreneurs and investors.
VC tightens the money bag
New consumption knockout competition has started
Is this a long-term business?
" Expiry food industry did not exist a year ago . Why are there still people going to enter now? It's so stupid and have a lot of money." At the beginning of this year, Lou Chunbin, a veteran who had been engaged in expiration food entrepreneurship, posted several short videos on his Douyin account, and used his blood and tears history to "popularize" the expiration food industry, and made the above sigh.
In his words, the food industry was still very profitable before 2019, but now there are so many entrants. The biggest problem is that the supply is gone and the gross profit is also very low. Wang Pan, an entrepreneur who had wanted to join an expiration discount store, was persuaded to leave after a field trip: "I went around Langfang, Tianjin last summer and found that expiration foods are basically counterfeit brands of internet celebrity foods, and it feels unreliable."
investors also maintained a wait-and-see attitude. Li Xing, a consumer investor at a PE institution in the Yangtze River Delta, revealed that when the track began to be popular in 2020, he also investigated many projects of food stores, but in the end he did not take action. "I really don't understand why the store is popular. It is not easy to do retail business, let alone retail for the last item. The supply chain of the industry is inherently unstable, and there are also some degree of compliance issues."
witnessed the closing and withdrawal of discount stores. Consumer VC investor Xiao Yun recalled that at a project investment meeting two years ago, the team also reported to a well-known discount brand for expiration, but the project was eventually rejected. "Now these discount brands have used capital to expand and hype up the collection price. In this way, they may not be able to get the goods, and they can only sell standard products. The result is a convenience store model. "
When players in the track branded the retail of tail goods and opened up franchise one after another, Xiao Yun joked with a smile: "I smelled the strong smell of leeks. "
But those who believe it still think it is a business worth doing. Zhao Peng, co-founder of HiTegou, said in a public speech in June that discount brands are definitely not a temporary industry, but a long-term sustainable industry. In his opinion, the consumption of this industry is young, broad and potential.
Looking at the global discount brand market, there is TJMAX in the United States, Olezi in Germany, and Don Quixote in Japan. When the wind of new consumption is blowing in this land of China, every new consumer brand that makes a discount store has full confidence to create China's "TJMAX." , Olezi, Don Quixote.
But the discount world of China, which is not stable, is likely to not accommodate so many players. Just like the end of the prosperous market, the emerging discount retail track ushered in its first major reshuffle.
such scenes not only happen in the discount retail track. As we have seen, when VC/PE tightens its wallet, the bubble of new consumption begins to burst. The hustle and bustle of the past are no longer there, how long can those Internet celebrity brands with valuations of over 100 million yuan last?
* In the article, Wang Pan, Li Xing and Xiao Yun are pseudonyms
