Laiyifen: The national territory has become a large-scale smart retail in an all-round way

On the evening of 8.24, Laiyifen (603777.SH) released its semi-annual report. The report shows that Laiyifen achieved operating income of 1.993 billion yuan during the period, a year-on-year increase of 11.17%. Focusing on consumption upgrades, under the large-scale expansion, Laiyifen's store and channel expansion, product category innovation have achieved outstanding results, and the layout of smart retail has gradually improved, which may lay a solid foundation for the continued outbreak of future performance.

As of June 30, 2018, the total number of Laiyifen chain stores has reached 2,628, with nearly 17,000 special channels and nearly 1,400 product categories. Throughout the first half of the year, Laiyifen has accelerated the pace of breakthroughs in terms of channel layout and product innovation, forming an omni-channel pattern.

Industry-leading scale advantage during the outbreak of omni-channel expansion

In the past ten years, the Internet economy has risen strongly, especially the rapid development of e-commerce has changed people's consumption patterns. The major e-commerce giants have gradually gained a firm foothold in the market by relying on Internet traffic dividends. However, as the cost of online customer acquisition has increased significantly, the development model of pure e-commerce has begun to hit the ceiling, and more people have changed their development direction——hug the line Down. On this basis, the traffic value of offline retail has been revalued, and retail companies with physical advantages are actively carrying out deep integration of online and offline.

As a veteran who has been deeply involved in the industry for nearly 20 years, Laiyifen chose to continue to strengthen the offline chain and online channels, expand the scale, and expand the road with an omni-channel layout, forming direct stores, franchise stores, special channels, E-commerce and Laiyifen APP platform and other omni-channel terminal network systems.

As of June 30, 2018, the total number of Laiyifen stores reached 2,628, an increase of 369 over the same period last year, an increase of 16.33%. Compared with the end of 2017, there are 168 more stores, accounting for 84% of 200 new stores in the whole year of 2017. The pace of store expansion has been significantly accelerated, and the number of omni-channel members has exceeded 23 million. In terms of breakdown, there are 2,352 directly-operated stores, an increase of 275 year-on-year, an increase of 13.24%; 276 franchised stores, an increase of 94 year-on-year, an increase of 51.65%, showing strong expansion potential.

In terms of regional layout, the national layout of Laiyifen has become large-scale. In addition to strengthening the traditional advantageous areas in East China, the stores also cover 110 large and medium-sized cities in North China, Central China, South China, and Southwest China, and are located in Shanghai, Jiangsu, Zhejiang, Beijing, 19 provinces, autonomous regions, and municipalities directly under the central government, including Anhui, Chongqing, and Guangdong.

As a supplement to chain store terminals, Laiyifen has added nearly 17,000 special counters, special shelves and other special channels to meet the needs of dealers, large customer group purchases and the KA market. Supermarkets, hypermarkets, convenience stores such as Lawson, Tangjiu, Sinopec Yijie, Meiyijia, Wuhan TODAY, and Yuqinyuan, as well as new business formats such as Jingdong Xintongtong and Suning Xiaodian, have further strengthened the reach of Yifen channels. reach ability.

What is particularly worth mentioning online is that thanks to the company's continued promotion of the development strategy of "Laiyifen APP + third-party e-commerce platform", the Laiyifen APP relies on strong technical support and continuous technological iterative upgrades to form a With users as the core, data as assets, and experience-oriented smart platforms, the total installed capacity has reached nearly 6 million, and the performance has increased by nearly 40% year-on-year. From January to June, online e-commerce achieved operating income of 184.6835 million yuan, an increase of 34.12% from 137.7036 million yuan in the same period of the previous year. The second half of the year is the peak season for e-commerce consumption, and the company's e-commerce business is expected to achieve rapid growth.

New product research and development, rich product SKU, food safety traceability

"In the past, 120-160 new products were launched every year. In the first half of the year, we added nearly 300 new products. On the basis of strictly controlling product quality, we accelerated the development of new products and enriched our own categories." According to the introduction of the company, for The company has started to develop products suitable for different channels, different packaging designs and packaging specifications, and has established an omni-channel product system.

The company continues to make efforts to create an IP-based brand image and popular products, and has also established a cultural media subsidiary to create Laiyifen IP, and continuously enhance brand value through animation. It is understood that the 52-episode animation "Super Yizi" carefully crafted by Lai Yifen has been completed. The dissemination of the "Yizi" series of images endows "Laiyifen" with a younger, more fashionable and dynamic brand image, expands product popularity, and enhances the company's influence and reputation.

The expansion of categories has further improved the platform's ability to meet users' purchase needs, and the repurchase rate has increased significantly in the first half of the year. According to financial report data, as of the end of June, the total number of online and offline omni-channel members of Laiyifen exceeded 23 million.

For food companies, safety is the first priority, and every step of Laiyifen is very steady. The company pays close attention to quality control, strictly monitors products, and further promotes the management and application of food safety traceability system. At present, in terms of PC-side traceability, there are 325 traceable products and 10,342 traceable batches; the traceability system QR code packaging is online, with 103 products and 54 TOP120 products. From January to June, the national supervision department conducted random inspections on 344 batches of products in 78 stores under Laiyifen, and the passing rate of random inspections was 100%. Laiyifen's "Food Quality and Safety Traceability System", which was launched last year, has been listed as one of the demonstration sites for key product traceability projects in Shanghai.

This is also in line with Laiyifen's original intention of building a "snack food and health industry community" and the "customer-oriented" business philosophy it has always adhered to. The company will continue to manage tangible costs, control intangible costs, enhance tangible value, tap intangible value, and continuously improve product awareness, consumer experience, brand recognition and other intangible values in the minds of consumers. During the reporting period, the company won the title of "2017 Top 20 Comprehensive Economic (Brand) Member Enterprises in the National Nut Roasted Seeds Industry" recognized by the China Food Industry Association Nut Roasted Seeds Professional Committee, and the "2018 China Retail Technology Innovation Award" recognized by the China Chain Store and Franchise Association. , and the "Seventh China Food Health Seven Star Award-Health Leading Award" issued by relevant media.

Strategic transformation for the future

Under the premise that consumption upgrading, new retail and smart retail have become the consensus of the industry, since September 2017, Laiyifen has actively adjusted its development strategy, giving priority to scale expansion and upgrading while maintaining a reasonable profit level. Market share, actively plan for the future.

However, scale expansion and smart retail transformation will inevitably bring about substantial expenses, and Laiyifen has entered the "new normal" stage of change. Some brokerage analysts pointed out: "The expansion of stores will inevitably drive revenue growth, but both franchise stores and e-commerce businesses require heavy investment, which will put pressure on profit margins in the short term. With the establishment of smart retail platforms that integrate online and offline As the industry matures, the overall profit level will gradually recover. At the same time, the saving effect of franchising on sales expenses and management expenses will gradually be reflected in the long run.”

This is very similar to the transformation path of Wal-Mart in the United States. Through the launch of new e-commerce brands and equity acquisitions of e-commerce platforms, digital information construction, and store upgrades, this traditional retail leader has realized professional e-commerce services in line with its huge physical store system. Combined, it has reshaped the pattern of online retail and faced its rival Amazon. These investments will undoubtedly increase a lot of operating costs. According to the fourth quarter financial report of the 2018 fiscal year released by Wal-Mart, the net profit for the quarter was 2.175 billion US dollars, a year-on-year decrease of 42.1%.

By copying American experience and global strategy, Wal-Mart China announced on March 7 this year that it will launch new supermarket formats, create technology smart stores, develop a new generation of stores, continue to add 30-40 new stores, and upgrade 50 existing stores. A package plan, fully marching towards smart retail and new retail. Looking back on JD.com’s early development, it also relied on sacrificing a certain amount of profits to continue to promote the company’s market layout and expand its scale.

Retail industry analysts concluded: "What is more interesting is that when Wal-Mart made efforts to advance online to surpass Amazon, Amazon did the opposite and began to lay out physical stores in an effort to gain an offline fulcrum. It can be seen from this The integration of online and offline is a global trend, and after going through the pain of change, the future performance of related companies is expected to reach an inflection point, and the net profit level will rebound rapidly.”

With continuous optimization of offline stores, continued development of online platforms, improvement of omni-channel commodity categories, and smart retailing to enhance consumer experience, Laiyifen focuses on the long-term and is sending positive transformation signals to the market.

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