Feihe's flywheel

The quality is 1, and the brand and channel determine how many 0 after 1.

Wen 丨 Chinese Shang Tao Lue Chen Lego

Feihe has turned his career into the career of more than 2,000 dealers, and will also share the dividends of the development of more than 2,000 dealers.

More than 2,000 dealers are more than 2,000 "small flying cranes".

With the support of Feihe, more than 2,000 "small flying cranes" use their respective resources to expand customers in various regions, such as Gunmala, to promote the growth of Feihe.

[Formation of the First Milk Fan Brand]

"If there is a young man who wants to enter the milk powder industry now, what suggestions would you give him?"

When the chairman of Feihe, Leng Youbin was asked in this interview program, he almost didn't think about it, and immediately returned a sentence:

"Do not do!"

His "persuasion" contains two layers of meaning. One is the hardships of personal companies for many years. The other is that this is not an easy industry.

The milk powder industry has a characteristic, which runs through the first, second, and third industries.

The upper reaches contains the agricultural system of pasture planting and cows; of which, the tour, which covers the multi -dairy system of procurement, R & D, production, quality inspection, including filtering, sterilization, wet mixing, and dry spraying multiple craftsmanship; its downstream is downstream; It is a sales service system with distribution, logistics, outlets, and brands; at the end, it corresponds to mass consumers with massive mass.

This is an industry that must be solid and even as thin as ice. There is no miracle of "high -rise high -rise buildings" in any ring, and every time you go further, you need to invest in resources, energy, and time.

Behind China's first, Feihe's long investment and hardships often make Leng Youbin feel too much memorable.

For example, high -quality milk sources are the basis of high -quality milk powder, and pasture is the decisive factor of the quality of milk source. Since 2006, Feihe has built large pastures, from farming to feed processing until he firmly grasps the initiative.

For example, in several production processes, Feihe chose the most complicated process route to obtain better solubility, nutritional activity, and freshness; since May 2020, the company has launched 11 new products, R & D speed, and the speed of R & D speed. Behind it is also densely invested.

For example, modern production capacity is not only a guarantee of sufficient supply, but also determines quality and efficiency. From 2004 to 2020, the factory area of ​​Feihe's annual production capacity expanded again and again, from Kodon to Qiqihar to Harbin. All site selection must be on the golden milk source that can produce high -quality milk sources.

But these are all done, it is 1, just 1, the test has just begun.

With the foundation 1, how to make consumers recognize the value of the product, and how to send the product to the consumer, it is the latter floor, how many 0 will be behind 1, they also constitute a test of corporate capabilities Essence

Behind Feihe became the first in China, in addition to writing 1 through industry and R & D, it also writes more 0 in the unique capabilities and advantages built by channels and sales.

In the past ten years, the Chinese milk powder industry has changed greatly: offline sales channels have continued to turn from business to maternal and infant shops. In addition, single offline channels have been broken and online channels have been developed.

According to data from Fhstri, the maternal and infant shops are the main sales channels of the Chinese milk powder industry, and their sales are close to 70%of the total sales. In low -line cities, its sales will account for higher.

There is an advantage that the maternal and infant shop does not have: you can provide a one -stop consumption scenario of maternal and infant products. And it is equipped with professional services to provide professional services, which can provide complete service support and experience for consumers who are new to parents.

Beginning in 2016, Feihe cooperated with the chain maternal and baby shop. It carried out nearly 80,000 scenes opposite to the seminar. While helping the mother and baby store drainage, it also promoted direct sales performance.

In 2017, Feihe's revenue increased from 3.724 billion yuan in the previous year to 5.887 billion yuan, achieving a year -on -year increase of 58.07%. Net profit increased from 417 million yuan to 1.16 billion yuan, an increase of 178.24%year -on -year. Among them, the support of the channel is indispensable.

In 2018, Feihe further adopted the "saturated attack" strategy to open the high -level city market.

In Beijing, a highly difficult place in Beijing, 80 selected maternal and infant shop outlets have become a fulcrum for Feihe to leverage the market. Feihe, with a series of activities called "Mini Show", innovatively architectural the core scene connecting brands and consumers.

The continuous investment and support of the cooperative mother and baby store allows the Feihe brand to obtain the maximum resource tilt, such as better shelf position, larger product exposure, and personnel explanation of the system. The performance of the supermarket sales.

The most important thing is that Feihe does not just use the mother and baby shop as a simple sales channel, but to form a real business community with a long -term cooperation mechanism of co -creation and win -win cooperation, which not only reduces market expansion costs, but also improves efficiency. Benefits and sustainability.

While firmly grasping the mother and baby shop, Feihe is continuously strengthening the channels of merchants.

In 2018, Feihe's "Mini Show" in the mother and baby shop, the "Carnival" and "Mom's Love" of the "Carnival" and "Mom's Love", held a total of 300,000 games. By 2021 1 million games.

The successful transformation and expansion of channels not only increased the network of Feihe to consumers, but also greatly promoted the improvement of Feihe's brand, thereby promoting its continuous higher performance. In 2018, Feihe's revenue exceeded 10 billion yuan to 10.392 billion yuan; from 2019 to 2021, this number continued to rise, from 13.722 billion yuan to 18.592 billion yuan to 22.776 billion yuan.

More importantly, Feihe's powerful channel capabilities and value established behind this dazzling performance. By the first half of 2022, offline revenue of dairy products accounted for 82.9%. In the first half of the year, Feihe held a seminar on the opposite side of about 500,000 scenes, obtaining more than 1.14 million new customers.

By the first half of 2022, the number of dealers owned by Feihe had more than 2,000, covering more than 100,000 terminal outlets, and formed a deep strategy with large -scale maternal and infant brands such as Baby Island, Pregnant Baby World, and Shaanxi Xiaofei Elephant alliance.

This large network that is still expanding the capacity is the driving force of Feihe's continued wings, which also makes the status of its market leaders unable to shake. Because behind this network, there are not only visible scale thresholds, but also invisible capacity barriers.

[Flying Crane Channel Huchenghe]

In late July 2022, a discussion appeared in the investment circle. The core topic was:

Do you want to continue to hold China Feihe?

Slowly, the discussion of the stock price of Feihe has gradually directed: Is its moat?

For this problem, if you do sufficient research, you can find a relatively certain probability answer.

In the front, we have seen a breadth offline sales network. They constitute the best support for Feihe output products and provide services.

This is the achievement of Feihe, and it is also the magic weapon to continue to win the market.

But the understanding of Feihe's sales is still not enough. When studying the sales expectations of consumer goods, there are three problems, which is always a test of investors: the market is not small? Sales speed? Is operational efficiency high?

These three issues are not only the key to finding the core capabilities of Feihe's sales, but also the basis for judging whether it protects the city.

In the past 20 years, Feihe has completed an amazing work: a mature single -layer distribution model has been established.

This means that more than 2,000 dealers owned by Feihe are basically first -level dealers. They have the power and motivation to expand the sales of Feihe's products through their own sales outlets. At present, Feihe's 100,000 outlets are a large network that has exceeded the total number of gas stations in China in 2019. It is paved by these more than 2,000 first -level dealers.

The first -level dealers have the power and the motivation to continue to expand the sales of flying cranes. This means that Feihe has turned his career into a career of more than 2,000 dealers, and will also share the dividend of more than 2,000 dealers.

It can even be said that more than 2,000 dealers are more than 2,000 "small flying cranes", pulling the brand together.

When these more than 2,000 "small flying cranes", with the support of Feihe, use their respective resources and capabilities to expand customers in various regions, and will drive the growth of Feihe.

No matter how big the industry, dealer resources and the Internet are limited, the more professional the industry.

Under the limited resources, once the pioneers seize the opportunity and establish a benign cooperative relationship, the latecomer wants to copy the system of the pioneers and consumes the resources and energy of the pioneer. , The first moat for the Feihe sales system.

However, Feihe's moat not only has the advantages of resources and the number of networks, but also includes a community of interests with the dealer. The dealers really sell their products as their own things, and the agile reactions and higher efficiency brought by it.

Among the many operating indicators of Feihe, two of them can explain its competitiveness in agile reactions and efficiency. One is its inventory turnover rate, and the other is the account receivable turnover rate. In layman's terms, it is better.

Inventory turnover is a key indicator of sales speed. Only by products and brands have a leading competitiveness, and at the same time, companies that cooperate well with dealers can be healthy in terms of production, orders, sales and other aspects.

From 2017 to 2019, Feihe's inventory turnover rate is above 6 or more, and this number of peers is basically below 2.5. After 2020, under the influence of factors such as the rising prices of the original ecological group and the rise in prices of raw milk, although its inventory turnover rate has declined in the short term, in 2021, it has risen to 6.3 again, and it still has a significant advantage compared to other peer companies.

After the vast majority of the accounting period was controlled in 2019 for 1-3 months, Feihe's account receivable turnover rate has also been significantly increased, and it has reached 60 in 2021.

This kind of competitiveness of "selling fast and repayment fast" has built another heavy moat for Feihe.

In the long run, reducing the level of distribution can ensure that the profit margin of dealers and terminal retail outlets remain at a high level. Under the premise of a win -win situation with abundant channel profit margins, the company's cooperation with dealers is stronger and more stronger, and it is also more. Sustainable.

In a single -layer mode, as long as the interests and development space of the dealers can be guaranteed, the company can also have larger space to choose more dealers, rather than handling fate to one or more large dealers, which is conducive to improving the company's product products Market penetration rates have achieved a better balance between dealers to fully develop market development and assist dealers to fully develop. Without relying on a single or several large senior dealers, it can also successfully avoid risks -the termination of any dealer's cooperation will not have a significant impact on the company's operations.

The leading product and brand force match the single -layer distribution model, so that the entire sales system of Feihe is under the efficient operation of the strong execution power, and the maximum extent enables the dealer The value creation chain of a virtuous circle: the stronger the flying crane, the more you can empower dealers; the stronger the dealer, the more you can make Feihe stronger.

For example, the face -to -face seminar is a weapon for Feihe to expand the market in the past few years. However, to allow thousands of counties and cities across the country to perform low -cost and efficiently for every offline market activity, it is not enough to rely on the power of the company.

The company's terminal service team is composed of its own team+dealer team. In each province, the provincial managers are guided by the province's activities. The event assistant is connected to the store, responsible for the planning and implementation of the event, and providing professional services to the nutritional consultant to cover large -scale channels, husband and wife shops, and single stores. They jointly drive efficient offline activities, accurately reach the actual consumer group, and ensure that Feihe maintains a lower sales cost level at a good efficiency ratio.

This is also the core advantage of the flying crane channel, and is another heavy moat for the company.

The online channels that have been reflected with offline channels are online channels that the company has begun to work since 2016 has also grown at high speed.

Today, Feihe has not only cooperated with large e -commerce platforms such as Tmall, JD, and Suning, but also created its own e -commerce website platform and applet. The online sales contribution rate has continued to rise in the past few years.

In 2021, Feihe's online sales increased by 29%year -on -year. According to the data reported in 2022, the company's e -commerce transaction users reached 4.06 million, an increase of 28%year -on -year. Among traditional e -commerce, JD.com's self -operating increased by 16%year -on -year, and Tmall Supermarket increased by 21%year -on -year. In the new track, Pinduoduo flagship stores increased by 300%year -on -year, ranking first; Douyin channel store self -a broadcasting industry ranked second, Vipshop increased by nearly 130%year -on -year, and the industry ranked first.

At present, online is the fastest growing channel in the sales channel of Chinese infant milk powder. The continuous growth online has also locks the future growth pole for the anchor of Feihe.

【Reconstruction Growth Curve】

Buffett has a famous investment saying: greedy when others are afraid, and fear when others are greedy.

Correspondingly, he always purchased the stocks abandoned by some high -quality companies because of their fell as expected or unexpectedly caused by a momentary performance or unexpected accidents. Full.

Feihe, now it seems that many investors are afraid, but is it worth "greedy"?

From the future development of the Chinese milk powder market and the product structure and layout of Feihe, it is worth it. But Feihe can eventually share the larger cakes in this market and continue to grow up high?

If the previous stock price performance, and the probability of finding the answer in the future, this answer is certain.

As a leader, Feihe has more than 22 billion yuan in revenue, and its market share is close to 20%.

Whether in any industry or the large -scale base, it is almost impossible to maintain high -speed growth. It is almost impossible to keep it at a high speed. This is the economy of a country, and the flying crane is no exception. However, in the future, it still has its own room for growth.

New national standards that are about to be implemented will improve the industry's internal control level. The acceleration of small and medium brands will almost become inevitable. This is naturally conducive to the further improvement of the market share of head brands. But on this basis, finding a new market and opening up a new growth curve is the key to maintaining continuous growth.

And this is related to the most important certainty of Feihe -whether its innovation and moat are still sufficient.

From 2020 to 2021, two of the new products launched by the company are worthy of special attention: Children's milk powder and adult milk powder.

The two new items of Feihe, as well as Xingfei Faifan 4 -segment milk powder with the same children's milk powder product line, and the classic 1962 and Xing Yun products that belong to adult milk powder. The line is the new growth pole that Feihe actively searches for himself. In the field of children's powder, Feihe achieved revenue of 1.92 billion yuan in 2021, an increase of more than 60%year -on -year, and its market share reached 17.3%.

The number of children in my country is five times that of the number of infants 0-3 years old. The four -stage milk powder of children aged 3 to 6 caters to the current reality of lack of per capita consumption of children in China. According to the statistics of Oriental Securities, the annual consumption of the per capita milk powder of domestic children and children is about 3.6 kg/person, and there is still much room for growth. After 2025, this market will start a new round of growth, and it is expected to reach a market size of 106 billion yuan by 2035.

The epidemic situation in the past two years has further strengthened consumers' awareness of drinking dairy products to consume protein, and also promoted the accelerated growth of adult milk powder.

According to the data from Euro Rui, the domestic adult milk powder market has maintained steadily in recent years, and the size of the retail market in 2021 is about 22 billion yuan. From the perspective of regional distribution, the growth rate of adult milk powder in low -line cities has even reached 22%. The reality of more than 264 million people in China at the age of 60 and above has also provided huge incremental space for adult -functional milk powder products developed for this group of people. In the field of adult powder, Feihe achieved revenue of about 680 million yuan in 2021, an increase of 29%year -on -year. This change reflects the rapid growth of Feihe children's powder and adult powder, which also means that it has cultivated the smooth cultivation of new growth poles. Children and middle -aged and elderly people with a total of over 100 billion spaces, once breakthroughs, will help flying cranes to a new level of development.

In the second half of 2022, Feihe will successively launch a series of new products, including Xingfei Fan Zhuo Yao, Xingfei Fan Zhuo Rui, and Xing Feifan registered through the new national standard formula. Adult functional milk powder is also prepared.

The product research and development mechanism and advanced production technology based on the mature system ensure that Feihe can match high -quality products in a timely manner for the new market. Feihe has a deep and breadth sales network at the same time, becoming a bridge equipped with these products to consumers.

Promoting Feihe channels to further, wide, and real observation indicators are its sales cost. During the new reporting period, Feihe's sales rate reached 32.42%. But behind this data, it is effective marketing, bringing a good effective ratio.

This is a fact that makes senior investors happy.

The derivative effect it brings is the influence of the brands and channels that are strengthened -timely response to consumer purchase preference changes in time, quickly adjust their channel structure, and better reach and serve consumers Advantages; obtain more consumer information through sales channels, build complete consumer portraits, and provide consumers with more accurate products and services.

If the quality of the product is 1, then the brand and channel determine how many 0 can grow after 1. The further expansion and consolidation of more than 100,000 terminal outlets with more than 100,000 terminal outlets became the thrust of "plus 0" for Feihe.

In the successful experience of global Internet giants Amazon, an important management concept -flywheel effect.

The essence of the flywheel effect is that the development of the enterprise is like the bite gear. It takes a lot of effort to spend a lot of effort from static to rotation, but as long as it moves, the gear will turn faster and faster.

This is also the successful password of Feihe: the huge investment in quality, channels and brands, and those who have paid for the year in the mother and baby shop and supermarkets.

It eventually achieved the flying crane with "quality does not give sales, brand does not give quality ways", and the flying crane that "more suitable for Chinese babies" has achieved 2000+ dealers, 100,000+ outlets flying cranes, and achieved achievements. Flying crane with the first share.

This is the power of the flywheel and the confidence of Feihe.

——End —————

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