In the past year or so, Internet giants such as Tencent and Byte have been “gathering together” (gathering the catering industry), and even Baidu, which claims to “never touch the catering again”, has been actively deploying new catering consumption and investing in precious foods. The investment amount and frequency of Xiaomeiyuan and Ke Ruyun have reached new highs.

According to public information, since 2021, Tencent has successively invested in catering brands such as chain Chinese noodle restaurants and Fu Lao Noodles, Xinchayinxicha, and Luwei fast food Shengxiangting. Brand Shark Fett and other catering brands, Meituan has invested in retail coffee brand Tims Coffee, cake brand Happiness Cake and so on.

Whether it is pasta, coffee, new tea, or hot stew, hot pot, baking, these popular catering categories in the market, none of the giants have fallen behind.

Compared with live broadcast, education and other businesses, the relatively traditional catering industry has always been quite satisfactory. Why is such a “slightly traditional” industry targeted by Internet giants instead? What is the charm of the restaurant industry?

#The logic behind the giant’s “dinner”

With the improvement of people’s living standards, the catering industry is “getting rid of” the previous homogeneous competition and developing rapidly towards the direction of chain and online. The catering industry has a low degree of capitalization and has huge potential for development.

According to the “2021 China Chain Catering Industry Report”, the chain rate of China’s catering market will be 15% in 2020. From 2019 to 2021, the chain rate of China’s catering market will increase from 13% to 18%, an increase of 5 in two years. percentage point. Although the overall growth trend is maintained, the chain rate of mature markets such as the United States and Japan in the same period is as high as 54% and 49%. Another set of data shows that the total revenue of listed catering companies in 2020 is less than 80 billion yuan, and the catering capitalization rate is only 1.6%, which means that China’s catering market has huge room for growth.

In the case of catering enterprises accelerating chain and scale, their demand for capital has also begun to rise sharply. From another perspective, for capital, the increase in chain degree also means huge arbitrage space. This provides an opportunity for Internet giants to enter the game.

Affected by the epidemic and the international political and economic situation, mainstream voices such as “stimulating consumption, expanding domestic demand, and promoting internal circulation” have made the consumption field a hot spot for investment. The catering industry itself has a huge capacity, taking into account the characteristics of “protecting people’s livelihood and promoting employment”, naturally attracting capital. favor. Under the dual blessing of favorable policies and digital empowerment, catering may usher in the strongest recovery.

And in the face of the uncertainty of the epidemic, the traditional business model that only relies on dine-in consumption is too passive. Only by realizing digital transformation and upgrading can catering companies improve efficiency and increase their ability to resist risks.

At the same time, the “Several Policies on Promoting the Recovery and Development of Difficult Industries in the Service Industry” put forward 7 rescue and support policies related to catering, all of which are favorable and targeted. “Basic disk” positioning.

In recent years, with the huge investment in the supply chain, the new catering industry represented by the central kitchen has flourished, and the industrialization and standardization of catering enterprises have been greatly improved. The infrastructure of the catering industry has been upgraded, and great changes have taken place. Taking pre-made dishes as an example, in recent years, with the continuous increase in the chain rate of catering enterprises, the demand for standardized dishes by catering enterprises has been increasing day by day. In addition, the demand for semi-finished and finished food in the consumer market has continued to increase. The catering industry is keeping pace with the times. Progress is continuously upgraded.

At the same time, the digitization of the management platform has also greatly improved the operational efficiency of catering companies. The efficient cooperation of the ingredients, processing and distribution, and the rapid development of the cold chain logistics and distribution industry make it possible for digitalization to penetrate the entire chain of the catering industry from the ingredients supply chain.

It is worth mentioning that, with the decline in the number of new Internet users, the peak penetration rate, and the intensive introduction of relevant policies such as e-commerce tax, games, and Internet finance, the dividends of the Internet have disappeared. The gathering of giants in the catering industry is also a positive move to break through the predicament.

#The style and preference of the giant “dinner”

Among the catering categories invested by the giants, it is not difficult to find that the giants prefer categories with a high degree of chaining in order to seek financial returns. Nu Skin ranks among the top three in terms of the number of invested projects in tea, coffee and roasting, and all have the characteristics of mature supply chain, standardization and high level of digitization. The single-store model is clear and easy to replicate, which is in line with the investment of capital “fast in and fast out”. Concept, which coincides with Tencent’s traffic play.

The biggest feature of Chinese fast food is standardization. Tencent’s favorite new catering brands, such as Hefu Lao Noodles and Luwei Fast Food Shengxiangting, mostly have the characteristics of significant brand value, obvious scale effect, capital-intensive, and high degree of standardization. They use huge funds to quickly spread Chinese-style fast food shops, and then use WeChat, QQ diversion, huge traffic supports the rapid expansion of the brand. This will not only help the brand to increase the valuation, but also help to magnify the financial return.

Recently, the “2022 China Catering Industry Annual Report” jointly released by China Hotel Association and Xinhuanet shows that in 2021, catering consumption will further increase, especially the young people born in the 1990s and 2000s, the willingness and level of catering consumption are higher than other customer groups. , As far as the catering market is concerned, young people have become the main force of consumption.

Those who win young people win the world. Internet giants are not only focusing on the new brands in front of them, but also the data and young people behind them, which can be said to be “swords” of young consumers. No big Internet company is willing to miss those new consumer brands that may become the next “Bubble Mart” and “Nayuki’s Tea”. The new brands they favor all have one thing in common, that is, the target audience is all Generation Z and millennial consumers.

Both HEYTEA and Tim Hortons coffee invested by Tencent have a “net celebrity atmosphere” that is close to the preferences of young people. It is also an important purpose for Internet giants to invest in new catering brands to familiarize themselves with and understand the consumption characteristics of the new generation of young people, so as to expand other businesses.

It is easier to see the clues from the “highly vertical” investment of Station B. What young people like, they will invest in Station B. The logic of Bilibili’s investment in catering is nothing more than pursuing the trend of young people and paying attention to the consumption behavior and consumption habits of young people. In June last year, Station B invested in the boutique coffee chain brand “Eagle Coffee”, which is more like a competition with the boutique coffee invested by Tencent to compete for the young people who love boutique coffee. In July of the same year, Station B also invested in Shanghai’s Internet celebrity burger “Pink Burger”, because of this incident, station B was also searched on Weibo, triggering public opinion discussions, and it was also the first time that station B invested in catering out of the circle.

It can be said that behind the new catering brands are young consumers, and they are the real “hunting” targets of big factories.

Whether it is new tea, coffee, lo-mei and hot pot, the catering brands invested by the giants can find the benchmark listed companies from the secondary market . For example, the new hot marinade brand Shengxiangting benchmarks Juewei Duck Neck and Zhou Hei Ya, and Rilakkuma Hotpot benchmarks the seabed. Laohe Xiabuxiabu, Manner and Tims China benchmark Ruixing and Starbucks, HEYTEA and Ningji benchmark Naixue…

The reason why giants gather to invest in these categories is also very simple. Taking listed companies as a benchmark for successful cases, the model has been verified, the valuation has a reference, and the cost of trial and error is low.

In addition, there is the “Luckin Effect” that cannot be ignored. Although Luckin’s capital story is a bit bloody, the development path of this coffee brand that has created the “fastest IPO record in the world” still brings us lessons: first , through subsidies, a company with a market value of 15 billion US dollars can be burned; second, the business model of “APP/mini-program order + takeaway” proves that the “Internet/digitalization” of Chinese catering is completely possible. Luckin made a sample for Chinese catering, attracting giants to invest in coffee, such as Tencent’s investment in Tims China, Meituan and Byte’s investment in Manner, and Bilibili’s investment in SEngine Eagle Group…

From the perspective of the investment track, the giants have directly copied the concept of “track investment” to catering. For example, Tencent is used to betting on both sides, the coffee track chooses Tims and Algebraist, and the pasta track has Hefu Lao Mee and Ma Jiyong. ; Meituan is fully blooming in the new tea drinking track, and voted for HEYTEA, Michelle Bingcheng and Gu Ming respectively…

According to public information, in 2021 alone, ByteDance’s investments in the catering industry include hot pot ingredients supermarkets, alcohol, light food, coffee, and tea. The sub-categories of its cross-border investment are very complete. Compared with Tencent’s investment, these investments by ByteDance are more focused on catering retail , and the catering retail model is also a model that has been actively explored and respected in the industry since the outbreak of the epidemic last year.

According to 36 Krypton’s news, in 2021, the overall GTV of Douyin’s local life will be 10.1 billion yuan. In terms of GTV composition, the catering business was 6.567 billion yuan, and the in-store business was 3.36 billion yuan. As of the first half of this year, with the help of the “live broadcast + group purchase” model that Douyin is good at, the GMV of Douyin’s local life has reached 22 billion yuan, which means that in just half a year, Douyin’s local life transaction volume has completed all of last year. year’s goals. In this context, it is natural for ByteDance to speed up the layout of the catering retail market.

In recent years, due to factors such as double reductions and peaking of Internet traffic, giants have been forced to “look down”. Offline, represented by catering, has the advantages of a huge user base and stable traffic, and has become a rare “traffic depression” in the eyes of giants. In the early days, Ali acquired RT-Mart, invested in Suning, and invested heavily in supporting his own son, Hema Xiansheng; JD.com joined hands with Walmart, expanded 7Fresh, and developed “new retail”, all of which are essentially “grabbing the offline entrance”, intending to deploy the local life market.

Data catering business owner internal reference

Data catering business owner internal reference

#Biggest “dinner” bugs that need to be vigilant

It is nothing new for Internet giants to cross-border catering. In the long run, the Internet’s entry into the catering industry will not only bring capital and technology, but also new management concepts, but the challenges brought by “cross-border” should also be met. Pay attention to.

First of all, it needs to be clear that the logic of “burning money for the market” does not hold true in the catering industry. Just like Haidilao is difficult to survive in Sichuan and Chongqing, Lanzhou Beef Sanjie will also encounter unacceptable conditions in the Pearl River Delta, and Momo Dim Sum Bureau has been attacked in Beijing… The thinking of “winner takes all” is not applicable in the catering industry. Barriers to consumption habits are hard to break. Catering that has been fattened by capital, if it chooses the business logic of “loss first and then listing”, it will make the catering industry go to a point of no return.

The second is “cross-border” investment, which may interfere with the catering management team. Catering is an industry that is “easier than it is to do”. From the supply chain to the SOP of the store, no link is easy, and it is a “labor-intensive” industry. However, compared with hard-core technologies such as chips, 5G, and AI, the cognitive threshold for catering is relatively low. “Talk about taste, brand, and marketing”, it seems that anyone can point the country and say a few words. Therefore, catering is an industry that is easily “underestimated”, which also easily leads to investors’ concerns about the actual operation and brand strategy of the company. , personnel management and other aspects of “intervention at will”. From this perspective, in order to develop healthily, the Internet giants from cross-border also need to bend down and respect the existing laws of the catering industry, and then find a suitable entry point to develop their advantages, which may be expected to achieve the expected purpose.

With the improvement of people’s living standards and the upgrading of consumption, from just-needed consumption to interest consumption , the main consumption force has become today’s young consumers in the Z era.

Perhaps the breakdown of catering consumption will also be opened up with the consumption patterns and concepts of young consumers in the Z era. Only by taking consumers as the core and fully guaranteeing the rights and interests of consumers can they become a “dark horse” on the road to the development of the catering industry.