htmlOn March 28, the domestic leader in cup milk tea Xiangpiaopiao (603711.SH), released its 2018 performance report, and the company achieved a total revenue of 3.251 billion yuan, an increase of 23.13% compared with 2017. Among them, the brewing sector revenue was 2.804 billion yuan, the ready-to-drink sector revenue was 419 million yuan, and the Meco juice tea became a brand new hit with sales of over 200 million yuan in less than half a year.
product matrix tends to be reasonable, and the ready-to-drink sector is exploding.
Since its establishment in 2005, Xiangpiaopiao has always followed the development strategy of "focusing and focusing" and has been focusing on the milk tea product segment for a long time. In the early days of its establishment, the milk tea industry was in a raging stage. Xiangpiaopiao quickly seized a large amount of market share by focusing on the main business of brewing milk tea in cups and using high-quality products and services. Public information shows that from 2008 to 2012, Xiangpiaopiao's sales scale soared from 500 million yuan to 2 billion yuan, with a market share of about 60%, and it has firmly established itself as the leading position in the cup-filled milk tea industry.
With the changes in the market environment such as industrial structure, consumption types, and consumption characteristics, Xiangpiaopiao quickly adapts to the times to implement transformation and upgrading: on the one hand, the brewing sector continues to develop new products and launches "good materials series" products, which complements the taste, price and other hierarchical echelons with classic brewing milk tea products, and at the same time, it introduces new products in packaging and expands consumption scenarios; on the other hand, it has also begun to explore new businesses and finds a new focus - ready-to-drink business.
It is reported that since 2017, the company has officially started to increase its ready-to-drink business and launched ready-to-drink liquid milk tea " Lanfangyuan " and Meco milk tea, which are very popular among the younger generation of consumers. In 2018, Xiangpiaopiao continued to focus on product innovation and optimization, successfully opening up the market opportunities of non-milk tea beverages represented by Meco Juice Tea, and quickly grew into a new hot product. As of the end of December 2018, Meco Juice Tea achieved sales results of over 200 million yuan in less than 6 months after its listing. The favorable situation of juice tea not only improves the product matrix, but also greatly makes up for the seasonal shortcomings of brewing milk tea in the past: the ready-to-drink products have a longer sales cycle throughout the year, and the hot seasons have a greater demand for beverages, which is conducive to the company's rapid expansion of revenue scale. Up to now, the company has formed a product matrix of brewed milk tea series (classic series + good ingredients series) and ready-to-drink series (liquid milk tea + juice tea).
channel expansion helps instant drinking to quickly sink, and it is expected to create another Xiangpiaopiao
In addition to the reasons for product taste and marketing promotion, it is also due to Xiangpiaopiao's continuous efforts in channel expansion in recent years.
In order to further improve the relationship with dealers and improve channel operation efficiency, Xiangpiaopiao strives to promote "dealer integration" and implements the "three specialties" model: that is, to increase the enthusiasm of dealers through specialized, full-time and special incentives, and accelerate the channel downward to thousands of county markets across the country. In addition, implement the differentiated marketing strategy for different regions and implement the "three-way" policy: that is, promote strong areas to connect to every village, second-class markets to connect to towns, and relatively weak markets to connect to county-level counties.
Relying on the dividends of channel sinking, ready-to-drink products quickly spread to the vast market, which not only expanded the scale of the demand side, but also greatly mobilized the enthusiasm of marketers and ensured the soaring revenue of this sector.
In addition, it is worth mentioning that the ready-to-drink sector and the brewing sector have also formed a good synergy effect: in a strong market, ready-to-drink products can be introduced into the channel of brewing products to achieve rapid increase in volume; in a weak area, the rapid entry of ready-to-drink products can also drive the display and sales of brewing products, ultimately achieving synchronous growth, and giving birth to "1+12" marketing results.
In terms of capacity construction, the liquid production base built by Xiangpiaopiao in Huzhou has been put into production normally. The liquid production base built in Guangdong Jiangmen has entered the equipment debugging stage. The main factory building of the liquid production base built in Tianjin has been basically completed. In addition, at the end of last year, the company also decided to build a new liquid production base in Chengdu to further ensure the production capacity and radiation range of the ready-to-drink sector.
According to data from multiple third-party institutions, the scale of the beverage industry has exceeded 600 billion yuan, of which the tea beverage industry accounts for about 19%, and the scale is at the level of 100 billion yuan.The main consumer group of this category is the younger generation represented by students. The population coverage is very wide and the consumption scenarios are limited. Products can be laid in supermarkets, restaurants, etc. Currently, the sales scale of the main products on the market is in the billions. Once Xiangpiaopiao's juice tea is fully launched into the market, with the support of capacity expansion, it is expected to create another "super large single product" in the future.
Based on this, Southwest Securities analysts believe that judging from the current market response, the logic of Xiangpiaopiao Juice Tea's popular products is about to be verified, which is expected to drive a big explosion in ready-to-drink business. As the sales season begins after March, juice tea will further increase, and the trend of hot products is obvious. The ready-to-drink sector will be the main source of the company's future revenue growth, and it is expected to create another "Xiangpiaopiao"
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