One day, it increased by 700 million, Xiangpiaopiao understands traffic.

The performance of Xiangpiapiao, which has been in a downturn for three years, has finally found the key to traffic. It directly exploded during the recent May Day holiday, with a sharp increase in sales in live streaming rooms, and the stock price soared after the holiday.

Daily sales of 1 million, stock price limit up

During the May Day holiday, Xiangpiapiao received unprecedented attention due to a packaging incident, making it a hot topic and selling out in live streaming rooms.

The incident was triggered by a netizen who found "Meco Fruit Juice Tea," a product under Xiangpiapiao, with packaging in both Chinese and Japanese containing mocking remarks about nuclear-contaminated water in a Chinese supermarket in Japan. After being exposed on social media, it immediately sparked heated discussions. Some people praised "Xiangpiapiao's bold move," while others said "this in-your-face approach is so satisfying, I must buy it."

An official Weibo post from Xiangpiapiao further fueled public opinion. On the evening of May 4th, after the packaging incident escalated, Xiangpiapiao posted a few words on its official Weibo, putting an end to the matter: "Our employees are amazing!" Subsequently, this Weibo post quickly became a top trending topic, with over 330,000 likes at the time of writing, a stark contrast to the usual several hundred likes.

The surging traffic comes as it pleases, and the company's executives are not idle either. On the evening of May 5th, Yang Dongyun, the president of Xiang Piaopiao, entered the live broadcast room, announcing a reward of 100,000 yuan for "excellent employees" and donating all the live broadcast income from 8 pm to midnight to the environmental protection foundation.

On the other hand, Jiang Jianqi, the retired founder of Xiang Piaopiao, was photographed by netizens holding a banner at the airport, welcoming the returning employees. The banner read "Xiang Piaopiao welcomes the warriors back!"

These moves directly led Xiang Piaopiao to hit the daily limit on the first trading day after May Day. As of the close on May 6th, Xiang Piaopiao's stock price was 19.21 yuan per share, reaching a new high since July 2023, with a total market value increasing by 719 million yuan to 7.89 billion yuan in a single day.

The abundant wealth has turned into real sales. According to a third-party data platform, after the event sparked continuous discussions, over 10 million netizens flooded into Xiang Piaopiao's Douyin live broadcast room to purchase the same products on May 4th and 5th. The daily sales of the store's live broadcast skyrocketed from the original 2,500 yuan to 1 million yuan, an increase of 400 times.

Compared to Nongfu Spring being caught in a public opinion whirlpool and subsequently changing its packaging to "Mingzhi," Xiang Piaopiao's move seems to have accurately hit the emotional nerve.

Under relevant Weibo entries, 34% of netizens hold a positive attitude towards Xiang Piaopiao, representing the mainstream public sentiment. However, on Xiaohongshu (Little Red Book), some netizens occasionally attempt to "reconstruct" the truth of the matter, claiming that Xiang Piaopiao is "specifically staging scenes in Chinese stores" and "taking down the products after filming." Some also question whether this move may lead the supermarket owner into difficulties.

At the same time, Xiang Piaopiao, which has taken the initiative to ride the wave of public opinion, has not provided more details about the "facts" but has urgently catered to "emotions" to do business.

Now click to enter the Tmall flagship store of Xiang Piaopiao. The first thing that catches your eye is the emotionally charged slogan "Our employees are awesome." In the store, the Meco cup-packed fruit tea, which has attracted public attention, is deliberately labeled as "the same style as the hot search in Japan." The live demonstration of related products often includes the words "Domestic products cup sleeves are in urgent stock, and will be sent out after arrival." Even the link for Meco cup-packed fruit tea is referred to as "Domestic products link" by the host.

"The first stock of cup-packed milk tea"

Before this high-profile appearance at the airport, Jiang Jianqi had already "faded out" of the public eye for a long time.

Jiang Jianqi, 60, is the founder of Xiang Piaopiao and is known as the "father of Chinese cup-packed milk tea." As a supporter of the "positioning theory" of Trout, "the creator and leader of cup-packed milk tea" and "the cups circling the earth N times" are his proud works.

In the early years, the media described Jiang Jianqi as having "obvious characteristics of Zhejiang merchants" when they saw him in person. When it comes to the milk tea business, Jiang Jianqi's eyes "shine brightly" and his tone is high. When talking about marketing and packaging, he shows strong interest, "gesturing with his hands and leaning to one side."

In the era of "when the advertisement rings, gold weighs two taels," Jiang Jianqi relied on two legs, products, and marketing, and once brought Xiang Piaopiao to a historical height.

In 2005, Xiang Piaopiao Food Co., Ltd. was established in Huzhou, Zhejiang, Jiang Jianqi's hometown. Before that, Jiang Jianqi had worked at the Shanghai Railway Bureau, then resigned to start his own business, selling pastries and popsicles, until he found the "rich mine" of cup-packed milk tea.

Cup-packed milk tea meets Jiang Jianqi's imagination of "big business." First, in his understanding, the sales volume of drinks is larger than that of food. Second, the long queues at the milk tea shop prove that this is a demand that has not been fully satisfied, harboring countless business opportunities. Third, making cup-packed milk tea is convenient and conducive to branding.

In order to open up sales channels, Jiang Jianqi first targeted the student group, gradually taking over the surrounding supermarkets near schools by "putting an extra cup of milk tea in the packaging box and asking the boss to taste it." Then, at the 2005 National Sugar and Wine Fair, Jiang Jianqi made great efforts to "make friends" with distributors in order to better distribute the products. The company's revenue also successively broke through several billion, tens of billions, and hundreds of billions.

With the soaring sales volume, fierce competition followed. The biggest threat to Xiang Piaopiao was the Yolemei, which was popularized by Jay Chou's phrase "want to hold you in the palm of my hand." In order to fight back, Jiang Jianqi and Xiang Piaopiao focused on marketing, leading to a series of marketing cases: such as spending millions to advertise during the prime time of Hunan Satellite TV, customizing a song "Xiang Piaopiao," and the famous phrase "the sales volume circling the earth N times."

In 2017, Xiang Piaopiao, which made its third attempt to go public, finally opened the door to the capital market and became the "first stock of milk tea." Due to the previous lack of trust and polite refusal of venture capital, Xiang Piaopiao has a clear family business nature: before the issuance, Jiang Jianqi, as the largest shareholder, held 65.54% of the shares, and his brother Jiang Jianbin, wife Lu Jiahua, and only daughter Jiang Xiaoying held 10%, 8%, and 5% of the shares, respectively; after the issuance, the Jiang family still held nearly 80% of the shares.

In addition to holding shares, as the only daughter of Jiang Jianqi and praised as having "business talent," Jiang Xiaoying was appointed as the general manager of the company's Internet Innovation Center in 2016, responsible for e-commerce and new media operations, with a hint of inheriting her father's business. In 2019 and 2022, Jiang Xiaoying successively served as the general manager of Xiang Piaopiao's Internet Business Unit and the general manager of the Brand Innovation Center, and also served as a director of the company— and the Meco cup-packed fruit tea at the center of this incident came from her hands.

This "milk tea heiress" of Jiang Jianqi was born in 1993 and graduated from Zhejiang University. During her time at school, Jiang Xiaoying started a camping equipment rental business, and then successively launched the camping reservation management platform "Easy Camping" and the "Order is Here" data service for homestays, with the former being valued at up to 50 million yuan and the latter achieving a transaction amount of over 100 million yuan within a year.

After returning to the family business, Jiang Xiaoying focused on two main directions: online and youthfulness. Fruit tea that young people like, idols that young people follow, and platforms where young people gather have all become the focus of Xiang Piaopiao. Of course, a lot of money has been spent on marketing. From 2016 to 2023, Xiang Piaopiao's sales expenses have been consistently over 500 million yuan, 2 to 3 times the profit during the same period.

By the end of 2023, Xiang Piaopiao experienced a round of personnel changes. First, Jiang Jianqi resigned from the position of general manager (president), and was succeeded by 53-year-old Yang Dongyun. Public information shows that Yang Dongyun has previously served as the regional manager of Guangzhou Procter & Gamble, senior vice president of Super 8 Hotels, and executive president and director of Baixiang Food Group. In this new role, Yang Dongyun is fully responsible for the company's daily operations and management. In March 2024, Jiang Jianqi's brother, Jiang Jianbin, also submitted a resignation report, resigning from the positions of director and vice chairman of the company.

It seems that Xiang Piaopiao is in the process of "de-familialization." However, as of the end of the first quarter of 2024, Jiang Jianqi is still the largest shareholder of Xiang Piaopiao, holding 50.44% of the shares; his brother Jiang Jianbin holds 8.76%, his wife Lu Jiahua holds 7.01%, and his daughter Jiang Xiaoying holds 4.38%. As for the newly appointed professional manager Yang Dongyun, he holds 5.12% of the shares, ranking fifth among the largest shareholders.

Income is returning to growth, but there is still a way to go to reach the peak.

Before this surge in sales, Xiang Piaopiao had just managed to catch its breath from a three-year decline in revenue.

From 2020 to 2022, Xiang Piaopiao's revenue was 3.761 billion yuan, 3.466 billion yuan, and 3.128 billion yuan, with the revenue decline expanding from -5.46% to 9.76%. In terms of net profit, Xiang Piaopiao's net profit fell from 358 million yuan in 2020 to 214 million yuan in 2022.

Xiang Piaopiao once couldn't move, under the impact of new tea drink brands represented by Heytea and HEYTEA, as well as the healthy consumption trend of "0 sugar, 0 calories", the bubble milk tea containing plant fat powder has become a thing of the past and gradually abandoned by consumers. Even Xiang Piaopiao itself admitted in its financial report: "Faced with the trend of consumption upgrading, we did not timely launch more healthy and younger products."

However, with the arrival of the second-generation successor and the introduction of professional managers, Xiang Piaopiao has turned the tide amid the chorus of pessimism. In 2023, Xiang Piaopiao's annual revenue was 3.625 billion yuan, a year-on-year increase of 15.90%; net profit was 280 million yuan, a year-on-year increase of 31.04%, achieving the first increase in revenue and net profit in three years.

The number of distributors that had been declining also increased in 2023: from 1481 in 2019 to 1197 in 2022, a decrease of 284. By 2023, the number of distributors not only did not decrease but increased to 1531, an increase of 406 compared to the previous year.

"Xiang Piaopiao's current strategy is dual-driven, focusing on both bubble tea and ready-to-drink products," said He Songsong, China's partner of the L.E.K. Consulting's category innovation strategy.

The ready-to-drink category is the second growth curve that Xiang Piaopiao is heavily betting on. The company's newly developed Meco cup fruit tea and Lanfangyuan bottled frozen lemon tea are the two core products in the ready-to-drink category. Currently, Xiang Piaopiao is divided into two major categories: bubble tea products and ready-to-drink products. The former accounts for more than 70% of Xiang Piaopiao's total revenue, but the growth rate has slowed down, with a growth rate of only 9.37% in 2023; the latter, although accounting for less than 30%, with revenue of less than 1 billion, achieved a growth rate of 41.16% last year.

In the relatively weak e-commerce channel of Xiang Piaopiao, the ready-to-drink category brought a 50.22% sales growth, while the revenue of the bubble tea category in the e-commerce channel decreased by 16.15%.

"Lanfangyuan 0 sugar frozen lemon tea was the growth king in the beverage market last year, with a retail sales scale of 4-5 billion, and it also received much attention at the Sugar and Wine Fair. In the future, in the ready-to-drink track, Xiang Piaopiao will continue to focus on tea drinks for category innovation and continuously strengthen the growth curve of ready-to-drink products," He Songsong said. "The potential of Lanfangyuan frozen lemon tea will be even greater. Although it has only been on the market for a little over a year, we believe it will have a potential market of several billion in the future."

In 2023, Xiang Piao Piao made a series of reforms related to the ready-to-drink category. In addition to changes in the senior management, Xiang Piao Piao also recruited over 600 beverage sales professionals and formed an independent ready-to-drink business sales team with the original team, totaling a team of a thousand people. Furthermore, the company also prioritized the allocation of grassroots employees to the frontline sales department.

This directly led to an increase in sales expenses. In 2023, Xiang Piao Piao's sales expenses reached 860 million yuan, a year-on-year increase of 53.42%. Analysts at Huafu Securities believe that the increase in sales expenses is mainly due to the company's increased advertising and marketing expenses, as well as the additional manpower expenses after the formation of the ready-to-drink team.

The packaging event will undoubtedly increase the popularity of Meco cup fruit tea. For Xiang Piao Piao, which is currently undergoing a category transformation, likening it to a timely rain is not an exaggeration.

However, looking at the longer-term perspective, Xiang Piao Piao still has a long way to go to return to its former peak. Although its revenue increased significantly in 2023, it was still 353 million yuan less than the 39.78 billion yuan in 2019, and the stock price also has a considerable gap compared to the peak of 36.62 yuan per share in 2019.