The first live broadcast sold 100 million yuan. Did Tai Er rely on Douyin to make a comeback?

In recent years, with the rise of short video platforms such as Douyin, the live streaming e-commerce industry has flourished, bringing huge business opportunities to many individuals and brands. Showing products and conducting real-time interactive sales through live streaming platforms has become an emerging marketing method. This article will conduct an in-depth analysis of the factors behind the success of Tai Er’s first live streaming sales, including the advantages of live streaming and how to effectively use live streaming platforms to promote and sell products.

"Why don't you believe in pre-prepared meals?"

The internet-famous catering brand "Tai Er Pickled Fish" was on the hot search again some time ago, this time because of the brand's first live broadcast on Douyin.

On October 26, Tai Er became a hot search topic due to the topic of "being removed from Dianping". On the same day, Guan Hongyi, chairman of Jiu Mao Jiu, the parent company of Tai Er Pickled Fish, posted a message on WeChat Moments implying Meituan: "Yesterday, Tai Er conducted its first live broadcast on Douyin. Today, Dianping can no longer find Tai Er due to technical reasons."

In the first live broadcast on Douyin, Taier's live broadcast room put on sale 25 products, including a 95-yuan pickled fish set meal for two people and a 69-yuan coupon for 100 yuan. On the day of the broadcast, Taier's official battle report on Pickled Fish stated that the GMV of the first Douyin show successfully exceeded 100 million yuan.

Tai Er and Dianping reached a "reconciliation" on October 28. On the same day, the two parties issued a joint statement on Weibo, saying that there were recent media reports that the search for "Tai Er" on Dianping showed a temporary abnormality. The two parties immediately launched active and effective communication and targeted rapid investigation. After preliminary judgment, it was caused by differences in the rules of the two parties in marketing and technical interfaces. At present, the relevant content of "Tai Er Pickled Fish" can be searched normally on Dianping.

Image source: Tai Er Pickled Fish Official Weibo

Tai Er seems to have lost its popularity for a while, with netizens criticizing its signature dish, pickled fish, for being a pre-made dish. But with the hot sales in Douyin live broadcast rooms, this internet celebrity brand has once again proved that it is still strong.

How did Tai Er become so popular? What is the market competition between pre-prepared food and pickled fish? How should Tai Er resolve the doubts about pre-prepared food?

1. Seemingly Two, Not Two

The boss of Tai Er is Guan Hongyi. Guan Hongyi has mentioned many times that he named Tai Er because he is "Tai Er". In Tai Er's store, it is written on the blackboard: Because the boss was so focused on the product, he forgot to open the door, so he was named "Tai Er".

This style of play has a certain sense of being wise but appearing foolish. It seems to be self-deprecating, but in fact it is self-praising. This is also very consistent with Lao Guan's personality of "seemingly stupid but not stupid".

Objectively speaking, it is no accident that Tai Er has become an Internet celebrity restaurant. Guan Hongyi’s catering management philosophy is more advanced than his peers.

The ideal catering model in Guan Hongyi’s mind has three major elements: first, it must be delicious; second, there cannot be too many products, otherwise the food will not be cooked well; and third, the degree of standardization must be high.

Many people compare Tai Er Pickled Fish with hotpot, but in fact, there is a big difference between the two in terms of business model. Traditional hotpot restaurants often have a large number of SKUs on their menus, while Tai Er's menu only has one main dish, Pickled Fish, and even the taste is unique.

Lao Guan’s SKU minimalism concept has reached its extreme : “I have been thinking about how to make a model with fewer SKUs and a higher degree of standardization. After much thought, I finally felt that the minimum SKU is just one product, and finally decided that we should make one product.”

At the same time, Tai Er's other dishes are relatively few in number, with only a few SKUs constituting the entirety of the concise menu. Without too many choices, young people naturally do not have a fear of choice. The existence of pre-prepared dishes allows diners to eat fish in just a few minutes, which directly increases the turnover rate. The minimized number of SKUs also gives Tai Er greater purchasing convenience and inventory efficiency, further reducing costs to a low level.

Secondly, Lao Guan is very good at making jokes. "No sharing of tables, no extra seats", "No reception for more than four people", "Win free snacks with secret codes", "Sauerkraut tastes better than fish"... There are too many rules for eating at Tai Er, but he has also gained a lot of fans by being rebellious.

Photo by New Retail Business Review

The weird dining memes have created a strong curiosity among young people. Delicious restaurants are all the same, but interesting souls are rare. In this regard, Lao Guan can be called a "master of psychology."

As Zhao Yuanyuan, vice president of Jiu Mao Jiu Group, said: "Delicious, beautiful and fun are indeed the core needs of contemporary young people when consuming food and beverages."

What’s even more “scary” is that do you think the “no dining for more than four people” is just a joke by the manager? In fact, it is a means to improve the efficiency of the floor space.

According to census data, the current average household size is 2.9 people, with 18% of urban households having one person and 30% having two people. In other words, a table of four people at most can meet the dining needs of a core family. "Too large" dining units with more than four people are mostly for gatherings, which will prolong the dining time and easily dilute the average customer spending, becoming a burden on the efficiency of a single store.

Finally, in terms of restaurant management model, Guan Yihong implemented the store partner system, which allowed the group headquarters and stores to form a bond of interests, and made the store managers, employees and headquarters work together, thus ensuring work efficiency and brand service.

Having said that, if you think that Lao Guan can always be successful by relying on these tricks, then you obviously underestimate the dangers of the catering industry.

2. Sudden changes in the world

Jiu Mao Jiu, which was listed on the Hong Kong Stock Exchange in January 2020, is the parent company of Tai Er Pickled Fish. Jiu Mao Jiu is also the first "Internet celebrity restaurant chain" to be listed in Hong Kong.

In the first half of 2023, Tai Er Pickled Fish generated revenue of 2.188 billion yuan, a year-on-year increase of 47.3%, making it the undisputed revenue pillar of its parent company Jiu Mao Jiu.

Why has Tai Er become the mainstay of Jiu Mao Jiu?

Firstly , the sauerkraut fish category is suitable for all ages , and people with different tastes from the north and the south love it; but more importantly, the years when Tai Er flourished were the time when pre-prepared meals became popular.

In 2019, the market size of pre-prepared meals was only 244.5 billion yuan, accounting for only 5.2% of the catering market; three years later, in 2022, the market size of pre-prepared meals has rapidly grown to 419.6 billion yuan, accounting for nearly 10% of the catering market.

Pickled fish tastes good, but it is very simple to make, making it one of the most suitable categories for pre-prepared dishes. The ease of making pickled fish means a low threshold for making fish, and a large number of competitors have begun to dilute Tai Er's market share. In the past two years, especially after the epidemic, it has been difficult to see long queues in front of Tai Er's stores.

The figures in the financial report also revealed the bottleneck of Tai Er. In 2022, Tai Er's overall revenue fell by 5.69% year-on-year. At the same time, Tai Er's table turnover rate, same-store sales growth rate, and store-level operating profit all declined to varying degrees. Among them, the table turnover rate, an important evaluation indicator in the catering industry, has been declining for four consecutive years. It is an indisputable fact that Tai Er's consumer traffic has obviously declined.

Tai Er is making progress, and others are also surging. In an environment of increasingly fierce competition, Tai Er's original "dining rules" were gradually broken, and the rule of not accepting more than 4 people dining became obsolete, and 6-person tables began to appear in stores.

In order to cater to the trend of affordable consumption in the post-epidemic era, Tai Er has begun to lower its prices. At present, some stores in Shenzhen have begun to provide single-serving pickled fish meal, and Tai Er's low-price strategy is gradually extending.

Image source: Taier Alliance Mini Program

In 2022, the average per capita consumption of Tai Er customers dropped from 80 yuan in 2021 to 77 yuan. In the first half of this year, it fell again by 3.85% year-on-year to 75 yuan. At the same time, Tai Er had to face the biggest criticism of the brand by diners - pre-prepared dishes. "Why should I spend money to eat pre-prepared dishes in a restaurant?" has become a hurdle that diners can't get over.

3. Fight to the end

In the Beijing Business Daily's investigation, except for Tai Er, other sauerkraut fish theme restaurants such as Yu Ni Yi Qi, Emei Restaurant, and Yu Shi Hu Pickled Fish all use "purchased frozen basa fish chunks or fish fillets delivered from the central kitchen, etc."

According to a report from Tai Er, most of the dishes in the restaurant are supplied and managed in a unified manner through centralized procurement and processed in a central kitchen. The store only needs to perform the simplest cooking steps such as heating before they can be served on the table.

According to data from the China Chain Store & Franchise Association cited by Guohai Securities, the proportion of pre-prepared meals used by leading domestic chain catering companies is already very high. The use of pre-prepared meals by stores such as Zhen Gongfu, Yoshinoya, Xibei, and Xiao Nan Guo accounts for more than 80%.

However, Tai Er, who was born with a rebellious nature, believed that as long as it made high-quality pre-prepared dishes, the brand could still win consumers, not only in the offline market, but also in the online market. In addition to the self-heating sauerkraut fish pot, the launch of other products such as sauerkraut beef noodles also directly demonstrated the brand's belief in carrying out pre-prepared dishes to the end.

When the development of pre-prepared meals is in full swing, the elimination war has quietly arrived. Under the interweaving of ice and fire, the leaders are enjoying the dividends of the industry, while the tail has to face the cruel survival of the fittest.

Shu Rui, chairman of Guangzhou Guanxing Agricultural Technology Co., Ltd., said in an interview with Guancha.com: "Many experts are discussing that within 3 to 5 years, more than 90% of the existing Chinese pre-prepared meal companies will be eliminated. There is no shortage of categories or production of pre-prepared meals in China. What is most lacking is quality, brand and standardization."

Tai Er is confident in making high-end pre-prepared meals that integrate online and offline business. However, at this stage, Tai Er still cannot solve the problem of consumer education.

In the inherent concept of most Chinese people, they are still accustomed to the daily diet of "do it yourself and have enough food and clothing". Chinese families spend much more time in the kitchen every day than families in Europe, America, Japan and other regions. Most Chinese people are willing to go to restaurants to eat, and they are also attracted by the "craftsmanship" of the restaurant chefs. As a result, the emergence of pre-prepared meals has even deprived consumers of some of their right to choose.

Whenever you go to a chain restaurant, you will find that almost all of them use pre-prepared dishes. On the one hand, pre-prepared dishes can ensure the consistency of the products; on the other hand, according to the "2021 China Chain Catering Industry Report", the introduction of pre-prepared dishes can reduce labor costs by 45%, which is equivalent to saving more than 9% of costs. At the same time, pre-prepared dishes can also reduce the area of ​​the kitchen, ensure faster and more dishes, and increase the turnover rate.

In order to improve efficiency, businesses have given up individuality and chefs and become mechanized manufacturers. In short, the general trend of pre-prepared meals leading the kitchen revolution is irreversible.

However, given that the general trend is irreversible, the vast majority of consumers still want to “eat with clarity”.

Ouou, a representative of the post-90s generation, expressed his views: "As a young person, I am not so opposed to pre-prepared meals, but only when I buy pre-prepared meals and cook them at home. If I pay for a meal in a restaurant and end up eating semi-finished products, I will not accept it. In addition, I believe that consumers should have the right to know which dishes are pre-prepared before dining, and then choose whether to pay for them. It is the consumers who should regulate pre-prepared meals, not the pre-prepared meals that regulate the consumers."

The French, who also love gourmet food, have come up with their own approach on this point: as early as next year, France will introduce regulations that will force restaurants to label "pre-prepared meals."

Merchants have the right to choose whether to prepare pre-prepared meals; consumers naturally also have the right to choose whether to eat pre-prepared meals. This is what is considered fair.

Tai Er won a great victory in the first live broadcast on Douyin, but this does not mean that the future pattern has been opened up.

If Tai Er wants to continue its pre-prepared food business, it needs three things: first, high-quality development, to be the "high-tech" in pre-prepared food; second, more specific regulations need to be introduced to make information transparent to both consumers and businesses; third, time and market are needed to allow consumers to slowly digest the fact that we have entered the "pre-prepared food era".

In the era of pre-prepared meals, Tai Er and its peers can be described as both enemies and friends. They must work together to justify the reputation of pre-prepared meals, but they also have to fight each other in brutal competition.

Author: Koala is a Deer Editor: Ge Weiwei

Source: WeChat official account: New Retail Business Review (ID: xinlingshou1001)