Michelle Ice City hits the ceiling, the Michelle Ice City sinking in the market may not be able to get north, Shanghai, Guangzhou and Shenzhen

For the venture capital circle in the first-tier cities, Michelle Ice City is a magical existence.
Everyone drank Hi Tea and Nai Xue, and listened to the brilliance of Michelle Ice City in the sinking market.
At an inadvertent moment, I heard that its stores have exceeded 10,000, and after a wave of financing, the company is already preparing for an IPO.

For its competitors in the market, Michelle Ice City is also a magical existence.
Wherever Michelle Ice City goes, other milk tea shops basically have no way to survive, because Michelle Ice City is so cheap.

Three cones, five lemonade for a cup, and milk tea for eight.

Only the sparkling water from the convenience store can be combined with Michelle Ice City.
To some extent, Michelle’s competitors may not be other milk tea shops, but bottled water and beverages.

Is it profitable to join Michelle Ice City now?

Is it profitable to join Michelle Ice City now?

Although the price is rushing towards bottled beverages, the cost is higher.

This is due to the completely different cost structure of ready-made beverages and factory flow operations.
However, Michelle Ice City has never made money from high gross profit.
From the cold drink stall in Yanzhuang, Zhengzhou in 1997, the big business went abroad (Vietnam).
Small profits but quick turnover have always been the magic weapon of Michelle Ice City.

If the profit per unit product is not enough, it depends on the order quantity to pile up, and the order quantity corresponds to the flow and location.

This is why most of the small stores in Michelle Ice City are opened in places with a lot of people.
However, in the target cities of Michelle Ice City, business districts and schools with high traffic are all limited resources.

Those who are familiar with Michelle Ice City may know that ice cream is a key category of Michelle Ice City and played a very important role in its rise.

After all, the brand name of this company is Michelle Ice City, and the key word is "ice".

The Q&A community platform knows that above, someone used ice cream to calculate an account for Michelle Ice City.

According to 40% of the sales of ice cream, the cost of a 3 yuan cone is 0.
8 yuan, which is a gross profit margin of 73.

Calculating based on the price of a single product and the gross profit margin of 73.
3%, it is roughly necessary to sell about 58 cones per day to balance the profit and loss, not counting the cost of store rental.
Based on the industry's highest level of entry rate of 7.
5 per thousand, a single store needs 7,733 traffic to be able to book.

The location of such an adult traffic is undoubtedly limited resources in many places, and this calculation does not include many items such as rent costs and machine depreciation costs.

Of course, some people will say that ice cream may only be a drainage product of Michelle Ice City, and the profit comes from other products, but looking at the beverage menu of Michelle Ice City, it is generally not more than ten yuan.

And these products that need to be made on the spot, judging from the operating time of the clerk, are not enough to draw the conclusion that the profit will be much higher than that of ice cream.

That is to say, from the current point of view, joining Michelle Ice City may be profitable, but not much money, but if you continue to use the current business model and product tonality, less and less money will be a high probability event.

.
On the one hand, as mentioned above, large traffic locations are limited resources, and stores that are still expanding at a high speed will diverge from each other.

Another factor that needs to be considered is that its external competition-cross-border competition is also expanding.

On the track of bottled water, brands are quite competitive, with new brands, new products, and new concepts emerging one after another.
On the milk tea track, players who follow the mid-to-high-end route are also constantly doing market education to bring the market to the high-end zone, and it is only a matter of time before the high-line to the low-line market is transmitted layer by layer.

Why is Michelle Ice City cheap?

Why is Michelle Ice City cheap?

Another concern about Michelle Ice City is, why is Michelle Ice City so cheap?

The first thing to be sure is that Michelle Ice City’s products are cost-effective, which means that its products are good among products of the same price.
The ability to control is very strong.

So if you want to answer why Michelle Ice City is so cheap, you must first answer Michelle Ice City and how it became Michelle Ice City.

Being a drink and ice cream that everyone can consume is the corporate vision conveyed by Michelle Ice City, which stands in this position.
In many reports, it follows this line of thinking, portraying Michelle Ice City as an enterprise that realizes its dreams by adhering to its lofty vision.
But in fact, there has never been a company in the history of business that relied on kindness to become the number one in the industry.

In many cases, there is no great idea at the beginning of the story.
It is the story of ordinary people running for life, making some correct judgments and insisting on some right things on the way to cross the river by feeling the stones.
The story of Michelle Ice City is the story.
such.

In 1996, Zhang Hongchao, the founder of Michelle Ice City, was an ordinary poor man in Henan.
He was admitted to the Henan University of Economics and Law, majoring in public relations and secretarial education for adult education.
He started the shaved ice business out of the idea of ​​supplementing his living expenses.
At that time, the products were still very fashionable in the style of desktop street life.
At first it was a small stall, and later it was a small shop.
The name of the shop was "Cold Current Shaved Ice".
The things they sold were the kind of syrup and dried fruit poured on the broken ice at the entrance of the Children's Palace when I was a child.

Later, Zhang Hongchao also sold apples and went to Hefei to sell candied haws.
In short, he was a guy who could toss.
Although the official website of Michelle Ice City writes the company’s starting point in 1996, in fact the real starting point of Michelle Ice City should be 1998.
Zhang Hongchao, who failed various attempts in this year, returned to Zhengzhou to return to his old business.
Shaved ice, the first Michelle Ice City was born.

In order to save rent, most of the shops for small businesses were opened in the old city's corner of the corner.
So Zhang Hongchao and his shaved ice shop suffered four waves of demolition in the next four years.
Zhang Hongchao, who had changed places several times in a row, changed his mind in 2003, found an old factory building, and started home cooking besides cold drinks.
This shop is finally no longer the previous roadside stalls and small door faces, but a 1,500 square meter venue that can accommodate more than 200 people, but this also puts Zhang Hongchao on the back of a debt of 200,000.

After losing all the way and being expelled, Zhang Hongchao still persisted and became more courageous as he frustrated.
This mental strength is not something everyone has.
This is why we will see today, Michelle Ice City, a company that came over more than 20 years ago.

The tenacity of the grassroots entrepreneurship era is the core competitiveness of Zhang Hongchao's first stage of entrepreneurship.

Then came the key decisions at several key nodes, which helped Zhang Hongchao, from a small individual boss on the street, to an entrepreneur with a formal enterprise configuration.
Around 2006, a rainbow cap ice cream became popular in Henan, but this ice cream sold for 20 yuan.
The price was obviously too high.
Zhang Hongchao, who saw the opportunity, began to develop ice cream this year.

In the spring of 2006, Michelle Ice City Super Ice Castle (the cold drink window of Michelle Ice City’s home cooking restaurant) first launched fresh ice cream.
With a one-yuan coupon for home-cooked dishes, only one yuan is needed.
This is such a high price-performance ratio.
This ice cream went viral all of a sudden.

Strike while the iron is hot, in the spring of the second year, Michelle Ice City opened its first fresh ice cream shop.
A few months later, it had 26 franchise shops.
It is said that the first batch of franchised shop owners were Zhang Hongchao's relatives and friends.
Everyone followed Zhang Hongchao after he sold ice cream to make money.
This also included Zhang Hongchao's younger brother Zhang Hongfu (later mainly responsible for marketing and store operations).

Products and stores alone are not enough.
In 2008, Michelle Ice City did several major events.

In this year, Michelle Ice City has its own logo.
The previous logo is said to have been downloaded from the Internet by Zhang Hongchao.
In addition, the company also designed an official website, built an organizational structure, divided the division of labor between partners, and formulated a corporate culture.
Finally, this company is like a "regular company".

After the company is steadily moving on track, Michelle Ice City has done something that is of far-reaching significance for future development: build its own supply chain.
Many franchised restaurants have failed one after another in the past two decades, and the core issue behind them is the supply chain.
Catering companies that lay a solid foundation in the supply chain early are the main reasons for the final victory.
Haidilao is the number one king of supply chain construction in the catering industry.

Many people lament the forward-looking nature of the Zhang brothers.
In fact, to some extent, it is also because they have suffered a loss in the supply chain.

The melamine incident in 2008 caused many ice cream powder suppliers in Hebei to be shut down.
This also caused Michelle Ice City to be troubled by supply in the next three years.
This was the result of the establishment of the company in 2012.
Henan Dajia Food Co.
, Ltd.
is responsible for the production of various core raw materials of Michelle Ice City.

In addition to the supply of goods, there is also logistics.
Many of the raw materials of the franchised Michelle Ice City are supplied daily, in order to better control the timeliness and costs.
In 2014, Michelle Ice City built a warehouse and logistics center in Wen County, Jiaozuo, Henan, and implemented a logistics free shipping policy throughout the country.

So far, Michelle Ice City has completed a comprehensive set of brands, products, supply chain, logistics, and franchise systems, and everything is ready, just to open a store desperately.
In other words, join desperately.

Start with a solid back-end supply chain and logistics, and then expand the front-end franchise.
This is the opposite of many small brands.
I dare to be a cold bench in the early stage and have a business sense not to panic and worry.
For Zhang Hongchao, he has no experience in a large company.
For ordinary people without a prestigious school background, looking back now, his business insight is indeed remarkable.

As we all know, the initial fee of Michelle Ice City is very low in the industry.
Coupled with the control of prices and products at both ends of the supply and logistics, Michelle Ice City began to develop rapidly in the following years.

So far I have also answered, why is Michelle Ice City cheap? Controlling goods and logistics, the larger the quantity, the lower the cost.

Ceiling of Michelle Ice City

Although the larger the quantity, the lower the cost, but to a certain extent, it stabilizes.
Just as the cost of ice cream cannot fall from 0.
8 yuan to less than 0.
5 yuan, the increase in machine utilization will increase the depreciation cost.

And as mentioned above, as the stores become more and more dense, they will dilute the flow of each other, and a model cannot be applied forever, and the market is always changing.
Just as the glamorous hypermarkets 20 years ago are now in decline, this kind of decline has occurred in some more developed countries and regions many years ago, and now it is just being passed on.

It is the same between high-tier cities and low-tier cities.
We have argued in our article on hypermarkets that the next opportunity for hypermarkets may be in second-tier and lower-tier cities.
Because there is a development time difference between these cities and first-tier cities, there is a high probability that industry changes that occurred in first-tier cities in the past will be staged again in the sinking market.

The same goes for the tea industry, young people in small towns will not always like drinks made with syrup and powder.
Just like many people in first-tier cities today, they also came from that wave of products, but now many people have upgraded their consumption to freshly squeezed and sugar substitute products, and as mentioned above, the model of Michelle Ice City is born with traffic.
Sensitive, can't afford too large-scale diversion.

Moreover, some of the leading brands that take the mid-to-high-end route are already sinking the market, and the packaged beverages at the same price as Michelle Ice City are sinking.
The combined force of the two is undoubtedly great.

Didn't Michelle Ice City realize this problem? In 2009, Michelle Ice City opened a high-end store, replacing the ice cream powder with Compaq milk mix, but this store only lasted two years.

In 2017, Michelle Ice City launched the freshly ground coffee sub-brand "Lucky Coffee"; in 2018, the high-end brand "M+" was launched, but there was no splash.
In addition, Michelle Ice City is also "encircling the cities from the countryside", and entering the first-tier cities is not effective from the Beijing market alone.
Many stores are very close.

To some extent, the Michelle Ice City team, born and raised in lower-tier cities, is not good at impressing consumers in first-tier cities, nor is it good at creating high-end sub-brands.
Therefore, it may be necessary to introduce new blood, strength, and sufficient funds to initiate a major change.

This is probably the reason why Michelle Bingcheng took the first round of financing this year.
After all, Heycha and Nayuki are all equipped with capital leverage to expand at double speeds.
Michelle Ice City also needs some changes, some big changes.

Source: WeChat public account "Future Consumer APP"

Note: All pictures in the article are reprinted on the Internet, and infringement will be deleted!

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