Is it possible to build a “Night Starbucks” at the price of Michelle Ice City?

The "new consumer" brand in your impression: There must be a store in a landmark building, there are people queuing at the door, the price is very expensive, advertising is overwhelming, the social platform is upstart, the new XX for young people. The myth continues until the prospectus is submitted, and new consumer brands can get a question mark. Single-store revenue declines, user growth slows, stalls are too large, and losses increase year-on-year.

The spectators can only sigh, selling so expensive, but not making money?

The new consumer tavern brand that has only recently been known by more people: the store is very difficult to find, the price of the single product is very low, there is no such store before, and the prospectus is known to the world. After more than 15 years of hard work, the store opened quickly. The new store broke even in March, with a net profit of 70 million. It can make money even in the face of the epidemic.

After reading the prospectus, people around were surprised. Selling cheaply and making money, how is this done?

▲ The decoration style of Helen's store is also more uniform

Experience the bistro of "Night Starbucks" and find that the price is very high

Helens is an offline tavern chain brand.

Given that more than 95% of China's 35,000 pubs are independent pubs, Helens, which opened 351 stores across the country in 2020, is already the industry leader, with the number of pubs exceeding the second place by more than 4 times. This is a brand that wants to create a platform-based offline social and leisure space for young people. They position themselves as "Starbucks at night."

Out of curiosity, two friends and I went to an offline store in Guangzhou to experience it. The first feeling is that the location is not easy to find. Although Helens Guangzhou Haijiaolou Store is on the 2nd floor, there is no obvious store entrance prompt on the 1st floor. We still found the store based on the information of other customers on the review website.

▲ The store itself is difficult to find, there is only one sign, lack of guidance

But even when the store is hard to find, the store is basically full at 21:00 on weekdays. In the store community I joined, some people have been asking about the current waiting status. It can be said that the location of the store does not have an advantage, but relying on regular customers or guests who come here in particular, this store does not lack customer flow at all.

When ordering, I felt that the store I was consuming was not "Starbucks at night" but "Michelle Ice City at night" because the price was too cheap. When the price of a glass of wine in the mid-end pub is maintained at 38 or 48, there are still not a few drinks below 10 yuan. Most of the drinks are branded own drinks, and the price of a small number of branded beer is even the same as the price of convenience store supermarkets. .

The price is not Starbucks, but it is reminiscent of Michelle Ice City, which sells lemonade for 3 yuan.

▲ For comparison, Helens’s wine is cheaper than some convenience stores

The per capita consumption of most Helens stores is around 50 yuan, but we felt that the price was high after experiencing it firsthand. After purchasing the gift card, we enjoyed a 50% discount on a single product, and the consumption of three people would not exceed 30 per person. Of course, we are not very good at drinking, and the low consumption is also related to the fact that we only ordered 3 wines, but in general, the overall consumption is not high.

No minimum consumption is also one of the selling points of the store. We were not urged during the whole process without ordering for 20 minutes after entering the door. If you just want to sit in the store, you can sit until two o'clock in the morning by ordering a milk beer for 8 yuan, and you can even skip consumption for the big heart.

▲ From the details of some customized products, it can be seen that Helens is already a mature brand

The feedback on the wines has been mixed. Douyin's #Helen's可乐罐# Topic challenge became popular with the online celebrity item in the store—Whiskey Coke. The three of us don't like this drink very much, but it's really top-notch. It's not impossible to pour a bucket on the spot after drinking. The other "Melon Eaters" we ordered is a new series of youthful wine. Although it has no wine taste, it is very refreshing. On the contrary, it satisfied the three people who usually don't drink much.

There is no shortage of people recommending Helens's various wines on social networks. Many people who love it call its milk beer the standard of "Health Bureau". If you want to drink, there are other wines to choose from. People who don't like it will not even regard it as a tavern, and will not appreciate this kind of private label alcoholic beverages, and will even call it a "fake wine seller."

▲ Two types of drinks: whiskey cola barrels and people eating melons

But whether you like it or not, I have to admit that the low-consumption Helens attracts a large number of customers, who can fill an inconspicuous store on the working day.

The aroma of wine is not afraid of deep alleys, the "worst" remote stores make money in second and third tier cities

In the experience, it is not an illusion that we feel that the stores are not easy to find, but that all the stores of Helens are not so easy to find compared to other new consumer brands.

In terms of site selection, Xu Bingzhong, the founder of Helens, who has been in the pub business for many years, has his own methodology-Helens is good at choosing the worst positions. Xu Bingzhong found that most of the new customers of Helens are brought by regular customers, so when the user consumption frequency is high enough, it has become the choice of Helens to exchange word of mouth for passenger flow.

This is also related to the location of the first store of Helens. The first store of Helens is located in a remote corner of Wudaokou, Beijing, with an annual rent of 200,000 yuan, but 500 meters away from the first store, the annual rent can reach 2 million. However, the first store was a success, which may have made Helens lose part of its store traffic advantage, but the rent saved is real.

▲ Even if the location is average, Helens is not short of passenger flow

Helens’ prospectus shows that in 2020, Helens’ raw material costs will account for approximately 33%, labor costs 22%, and rental costs 17%. For comparison, we pulled out Nayuki's prospectus and found that Nayuki's tea accounted for 38.4% of the raw material cost, 28.6% of the labor cost, and 15.2% of the rental cost in the first three quarters of 2020.

The difference between the three values ​​is not very large, and even Nayuki's tea rental costs account for a lower proportion. However, considering that Nayuki's 507 stores are basically located in the core area, and the Helens 351 stores are in remote areas, Nayuki's cost will indeed be higher. On the basis of the small difference in the proportion of costs, the profit margin of the two brands is a bit large. In 2020, the net profit of Helens (increased revenue and decreased profit) under the influence of the epidemic in 2020 was 75.752 million, and Naxue's net profit was 4.484 million.

▲ Compare the two new consumer brands of Helens and Naixue's tea

In 2020, Helens's significant growth is in employee benefits and labor costs. Under the impact of the epidemic, Helens opened more than 100 stores in 2020. Xu Bingzhong believes that this is the result of the team's employees twisting together. This is not verbal encouragement from the boss, but real money. In 2020, employees of Helens generally received two salary adjustments, and the brand's investment in manpower was not hesitating.

Due to store expansion, the proportion of Helen Division's labor costs and rental costs are increasing. On the contrary, the proportion of raw material costs has fallen by 1.5% in 2020, which is also related to store expansion. A large part of the raw material cost of the tavern is the purchase cost of alcohol. However, in Helens, brand-owned beverages account for the majority, which are cost expenditures that can be further reduced by the effect of scale.

▲ Helens' own brand wine

The gross profit margin of Helens' own beverages in 2018-2020 is higher than that of third-party alcoholic beverages. The gross profit margins of self-owned beverages were 71.4%, 75.3%, and 78.4%, while the gross profit margins of third-party alcoholic beverages were 39.2%, 52.8%, and 51.5%. The data on both sides are examples of further reduction in procurement costs after the increase in passenger flow, as the founder said:

Give back to customers the cost reduction of every dollar and gross brought about by scale.

In the prospectus, there is also a more eye-catching data that the second and third tier cities counterattack the first line. The single store sales of Helens in the first-tier cities were 8,500 yuan, while the second- and third-tier cities reached 11,400 yuan and 10,900 yuan respectively. In terms of per capita consumption, second- and third-tier cities are also higher than those in first-tier cities. Among them, the number of users in the second-tier cities has the largest and the most rapid growth, with 112.2 users placing orders every day.

▲ Introduction to the pubs in first- and second-tier cities in the prospectus

When the location of the Helens Tavern has ensured a lower cost, more customers have ensured that the cost of raw materials is further reduced. In the second and third-tier cities, Helens has proven itself and has a more imaginative potential market, which is the kind that can make a single store profit in three months.

"Young people's first glass of wine" is a bit on the top, standardized business is charming and efficient

Whether Helens's wine is good or not, everyone has everyone's judgment. But for the capital market, Director Helen, who is already profitable and has a lot of room for growth, has a "first love face." Coupled with the fact that the target users are mostly young users, it really makes people a little bit superior.

Yes, Helens is a brand where young people gather. Its first store opened around the university, and its target users were foreign students and foreign tourists at the time. And as the old customers brought more new customers, it also had more young users. Many of these users were college students who were attracted by free drink marketing and old and new customers. Since then, many Helens sites have also been selected. They are all near the university town.

This is why Helens wants to create a "Starbucks at Night".

The first customers of Helens came into the store to sit quietly, chat with friends, and the atmosphere was more comfortable. The store’s service is also limited. Don’t bother customers. The essence of service is to form a good social space.

At the beginning (more than ten years ago) we thought that Chinese consumers did not like this kind of atmosphere. Later, Chinese customers were also attracted in. There are customers of different age groups and backgrounds. The market economy is characterized by self-evolution. Finally, the settled customer group possessed highly consistent characteristics.

People around the university town come back here to have a drink with friends. Young people who have just worked will come here for group building. Friends who have finished eating and watching movies will also spend the night in twos and threes here. Drinking in Helens is no longer a day that requires special preparation. Drinking here is as common as going to a supermarket.

▲ At 22:30 on Monday, the audience was packed

The consumption scene at night is also lacking. KTV, movie theaters, escape rooms, and script killing are all options for young people in their leisure time. Through standardized services, Helens provides customers with a place for social consumption at night. Don't worry about the restaurant closing, and you don't need to worry about the cinema being unable to communicate. "Starbucks at Night" has the space to socialize freely.

You can even meet strangers in Helens. In the Helens customer WeChat group I joined, there is still a good level of activity in the group without the participation of operators. Customers in the group ask about the ranking of the store, and there are also social opening remarks such as "Is there one?"

▲ The group is full of restless young people

When users gather, they also bet more affection on this social space. What happened after a Wuhan Helens store closed is a standard case.

At the beginning of 2016, the Wuhan Donghu store of Helens Wuhan closed due to the expiration of the lease. A journalism college student in Wuhan spontaneously filmed a documentary to record the last day of business, because this is a place to carry the youthful memories of him and his friends. On that day, many old customers of Donghu store came from different places to spend the last day together.

For Helens who wants to build a "Starbucks at night", this is a story that proves the influence of his brand. But to tell this story across the country, you may have to face some different challenges.

▲ Documentary filmed by customers spontaneously

Fortunately, although the founder has worked as a special scout, worked as a security guard after retiring from the army, and opened a pub in Laos, he is always moved to tears by customers and employees, but he is not a wild way to expand the store.

It is about feelings and dreams, and when it comes to reality, it is data-based, standardized and efficient.

The current Helens pubs are all directly operated stores, and hundreds of stores across the country will be integrated and operated by a core team. Professional functional departments conduct unified management of tavern site selection, tavern decoration, logistics procurement, music broadcasting and other links.

For example, 5 employees of Helen Division can control the background music of every tavern nationwide through the central music management system. The national unified music library will play music with different emotional tags based on factors such as business hours and holidays.

Based on this mature and highly standardized store expansion model, Helens expects to open about 400 new pubs throughout 2021 and increase the total number of pubs to about 2,200 by the end of 2023. This kind of efficient growth and healthy business model cannot find a rival in the current tavern market with a telescope.

▲ Cheap and provide social space, which makes Helens special

In Britain, where the pub culture is developed, people fall in love, get married, watch football, and socialize in the pub. In this 242,900 square kilometers of land, there are 12 chain brands that have opened more than 100 pubs, of which the largest Ei has more than 4,000 pubs nationwide.

In China, which covers 9.63 million square kilometers, there are currently more than 100 pub chain brands, and there is only one Helens. With a unique operating model, Helens has already fired the first shot.

In the future, perhaps we will see a more exciting "new wine and drinking market."

Not too interesting, not too optimistic.

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