After the GMV of the first live broadcast exceeded 100 million, why did Tai Er Pickled Cabbage Fish become the center of attention?

Recently, the "old internet celebrity" in the catering industry, Tai Er Pickled Cabbage Fish, has been pushed to the forefront of public opinion. Let's take a look at the specific situation~

On October 26, many netizens reported that they could not find "Tai Er Pickled Fish" on Dianping.com, and the search results were suspected to be hidden by the platform. On the same day, terms such as #Dianping.com removed Tai Er Pickled Fish# and #Tai Er Pickled Fish was blocked by Meituan after its first broadcast on Douyin# became popular searches.

Just the day before, on October 25, Tai Er Pickled Fish started its first live broadcast on Douyin, and launched a number of big discount activities such as "69 yuan flash sale 100 yuan voucher", "139 yuan flash sale 200 yuan voucher", and "99 yuan special meal for two (original price 156.07 yuan)". The overall discount was 30% off or even lower.

By comparison, it was found that the coupons for Tai Er Pickled Fish on Dianping are "47.5 for 50 yuan" (95% off) and some other package coupons with 12% and 11% off.

On the day of the premiere, Tai Er Pickled Cabbage Fish officially released a battle report stating that the GMV of the Douyin premiere exceeded 100 million yuan.

After public opinion fermented, the public relations person in charge of Jiu Mao Jiu Group, the parent company of Tai Er Pickled Cabbage Fish, responded: "It is currently under study, and Meituan shows that (Tai Er’s store) still exists."

On the afternoon of October 27, when searching for "Tai Er Pickled Fish" on Dianping.com, the search results were displayed normally. Meituan did not explain why the search results were hidden and then released.

In fact, many consumers are familiar with Tai Er Pickled Fish.

Tai Er Pickled Fish, with its keen sense of the Internet, created an image of a boss who was both "confused" and "too foolish"; it used hunger marketing methods such as "no sharing tables, no extra seats", "no dining with more than four people", and "no takeout"; and it stimulated consumers' rebellious psychology through labels such as "no smoking or betel nut eating in the store", and successfully shaped itself into an attitude-filled and unruly "Internet celebrity brand".

As the "top stream" in the sauerkraut fish industry, in the early days, one could often see long queues in front of Tai Er Sauerkraut Fish stores.

After a rapid growth, the 2022 financial results released by the parent company Jiu Mao Jiu showed that the company's revenue and net profit both decreased year-on-year last year, with net profit falling 85.50% year-on-year.

However, according to its 2023 H1 financial report released on August 22, both revenue and net profit have rebounded in the first half of this year. Data shows that Jiu Mao Jiu's revenue in the first half of 2023 was 2.879 billion yuan, a year-on-year increase of 51.63%, and its net profit was 222 million yuan, a year-on-year increase of 285.12%.

Overall, the once "top-tier" Tai Er Pickled Cabbage Fish is now facing greater challenges. Not only is the market segment of pickled cabbage fish fiercely competitive, but the rise of pre-prepared dishes is also squeezing the development of brand stores such as Tai Er Pickled Cabbage Fish. How to break through has become a problem that Tai Er Pickled Cabbage Fish needs to face.

1. Why did the former “Internet celebrity” stop his wild success?

Tai Er Pickled Fish at that time accurately grasped the traffic code and grasped the consumption mentality of young people.

For a long time, Tai Er Pickled Cabbage Fish has been a typical example of brand marketing. In addition to the popular hunger marketing, reverse marketing, and personality building, Tai Er Pickled Cabbage Fish, although "rebellious", has hit the hearts of young people everywhere. Not only does it use young people's language such as "stupid" and "pour your own water" to create brand personality and character, it also launched IP peripherals such as dolls and hats, as well as anniversary pop-up stores with different themes such as "Tai Er Pickled Cabbage Museum", "Tai Er Chinese Medicine Hall", and "Tai Er Bathhouse".

It can be said that Tai Er Pickled Cabbage Fish was already well versed in the path that many brands are still exploring today.

As a result, this brand, which was founded in 2015, quickly entered a stage of explosive growth, and its performance soared. Data shows that the operating profit of Tai Er Pickled Fish increased from 20 million yuan in 2016 to 97 million yuan in 2018, and reached 125 million yuan in the first half of 2019, a significant increase.

Tai Er Pickled Fish has also become an important performance growth pillar for its parent company Jiu Mao Jiu, with its revenue share in Jiu Mao Jiu increasing from 47.5% in 2019 to 72.3% in 2020.

Relying on the rapid success of its pillar brand "Tai Er Pickled Fish" and the stable development of "Jiu Mao Jiu Northwest Cuisine", its parent company Jiu Mao Jiu officially landed on the Hong Kong stock market on January 15, 2020, becoming the first "Internet celebrity chain restaurant" to be listed in Hong Kong.

So far, Jiu Mao Jiu (Guangzhou) Holding Co., Ltd. mainly has five Chinese catering brands in different segments, namely "Jiu Mao Jiu Northwest Cuisine", "Tai Er Pickled Cabbage Fish", "Shuang Chongqing Hot Pot Factory", "Uncle Na Wei is a Chef", and "Lai Meili Green Pepper Grilled Fish".

Among them, the recognition of Tai Er Pickled Fish among consumers and its turnover rate, which once surpassed Haidilao, have greatly increased the capital market's confidence in Jiu Mao Jiu. On the day of listing, the stock price rose by more than 50%, and the total market value reached HK$13.8 billion (about RMB 12.2 billion). After listing, Jiu Mao Jiu has also maintained a soaring development trend.

It wasn't until 2022 that Jiu Mao Jiu's rapid growth suddenly came to a halt.

Financial report data shows that Jiu Mao Jiu's full-year revenue in 2022 was approximately 4.006 billion yuan, a year-on-year decrease of 4.16%. Net profit decreased by 85.50% year-on-year, from 340 million yuan in 2021 to 49.28 million yuan in 2022.

Overall, Jiu Mao Jiu’s two major pillar businesses, “Tai Er” and “Jiu Mao Jiu”, both decreased year-on-year, down 5.6% and 20.4% respectively from the same period last year.

In the profit warning issued earlier, Jiu Mao Jiu stated that the main reasons for the decline in performance were:

1) Due to the impact of the epidemic, restaurants are unable to fully operate in most areas, but still incur certain fixed operating expenses;

2) Recognized a net foreign exchange loss of approximately RMB78.9 million, which was a non-cash item due to the depreciation of RMB against Hong Kong dollars.

However, in the face of the sudden brakes on performance, especially the sharp drop in net profit, the epidemic has had some impact, but it is not the core reason. After all, in the same year (2022), Haidilao achieved a net profit of 1.374 billion yuan, turning losses into profits.

In fact, a careful look at the financial report reveals that Jiu Mao Jiu faces some deep-seated, long-term challenges:

Although it operates multiple catering brands, Jiu Mao Jiu is still "walking on one leg". Its core revenue source is mainly Tai Er Pickled Fish, which accounts for nearly 80% of the total revenue, followed by Jiu Mao Jiu brand. In addition, the new growth curve is unclear. Although the "Shuang Hotpot" that is very popular this year is considered to be Jiu Mao Jiu's third growth curve, it currently accounts for a small proportion of the overall revenue.

In this context, the revenue and profitability of Tai Er Pickled Cabbage Fish are very important to Jiu Mao Jiu. But in reality, this once-popular online celebrity has gradually shown signs of growth fatigue, especially in terms of profitability.

The once proud turnover rate continued to decline, from 2018 to 2021, it was 4.9 times/day, 4.8 times/day, 3.8 times/day, 3.4 times/day, and in 2022 it was directly as low as 2.6 times/day. The "Internet celebrity effect" that attracted countless consumers has also begun to lose its effect. Consumers have begun to disenchant with the so-called hunger marketing and have begun to take a critical attitude towards brands labeled "Internet celebrities."

2. Cross-platform and self-innovation: How do "Tai Er Pickled Cabbage Fish" break through through the Internet?

As an early-developed internet celebrity catering brand, Tai Er Pickled Fish has benefited from the traffic dividend. But now, it is also facing a completely different market environment and greater competition.

The market for pickled fish is becoming crowded. On the one hand, the market size is expanding. According to iiMedia Research, the market size of China's pickled fish pre-prepared food reached 6.71 billion yuan in 2021, and is expected to increase to 20.47 billion yuan in 2025. According to Qichacha data, as of mid-August, 1,355 new pickled fish-related companies have been added this year, and 686 have been suspended.

On the other hand, large-scale brands are gradually forming. Brands such as Yu Ni Yi Qi, Yu Shi Hu, You Jia Pickled Fish, and Shan Cheng Wai Lao Tan Pickled Fish are becoming more recognized by consumers and have accelerated their pace of store expansion. Among them, Wang Yong, the founder of Yu Shi Hu, whose customer unit price is around RMB 35-40, said in an interview with the media this year that there are currently about 70 directly-operated stores with an overall revenue of about RMB 300 million, and more than 10 new stores have been added this year.

At the same time, the rise of the pre-prepared food market is also squeezing out multiple offline catering brands, including Tai Er Pickled Fish. According to iMedia Research, Dingding Lazy Food, which was founded in 2020 and mainly promotes pickled fish pre-prepared dishes, became the "No. 1 online sales of Chinese pickled fish pre-prepared dishes" in 2021; its online sales exceeded 800 million yuan in 2022.

Compared with the average customer spending of offline stores, these online pre-made pickled fish have a more obvious price advantage. Take Dingdong Lazy Food as an example. The three bags of pickled fish launched on the live broadcast platform only cost 76.9 yuan, and 2.525 million have been sold. On the Hema APP, the self-operated "Pickled Fish Black Fish Fillet 580g" is only 26.5 yuan per box.

In the face of these changes, Tai Er Pickled Fish is actually constantly overturning its previous "brand personality" and trying to adapt to the new environment. For example, it cancelled the rule of "no more than 4 people allowed to dine" and started to offer takeout online.

After making a series of compromises, coupled with the recovery of the entire cultural tourism and offline consumption in the first half of this year, Tai Er Pickled Fish's performance rebounded in the first half of the year.

However, faced with fierce competition and market squeeze, Tai Er Pickled Cabbage Fish is still facing great growth pressure. Judging from its recent cross-platform operations and low-price strategy, Tai Er Pickled Cabbage Fish is still looking for new growth points.

In fact, many brands are now operating across platforms. The ecosystems and users of different platforms are different, and the effects they bring to the brands are also different.

“Dianping and Douyin are very different. If you stratify consumers, those who order directly without coupons and those who repurchase are high-quality customers. Consumers who come through Meituan and Dianping have a certain degree of trust in the brand itself. In comparison, the Douyin platform can quickly increase its volume, and most of the customers who come through Douyin are new customers, which has a good effect of attracting new customers.” The manager of a craft beer chain brand told us.

Therefore, brands need to differentiate their operations across platforms and strive for benefits on different platforms. However, when brands operate on different platforms, they still need to balance their interests.

Another chain brand founder also said, "When operating on these Internet platforms, you can actually differentiate your business for different packages, such as launching different packages on different platforms to differentiate them. This can also avoid the risk of being directly compared with others in price to a certain extent."

Although Tai Er Pickled Cabbage Fish has become the focus of this public opinion storm, what it reflects is where the Internet celebrity restaurants should go after experiencing wild growth. How to flexibly change in the current environment and market is not only a problem faced by Tai Er Pickled Cabbage Fish, but also a challenge faced by many similar catering brands.

Author: Douya, WeChat public account: Spicy