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On July 30, Tai Er Pickled Fish, a subsidiary of Jiu Mao Jiu, which is listed on the Hong Kong stock market, announced a strategic partnership with Meituan to launch new explorations in home delivery and store delivery business segments, including opening brand satellite stores and exploring model innovations such as "God Membership". Both parties said they plan to open 50 brand satellite stores by 2024.

Securities Times e-company reporter found that since the beginning of this year, the layout of takeaway satellite stores by leading restaurant companies has become a new trend in the industry, including Lao Xiang Ji, Haidilao, Xiabu Xiabu and other brands have all deployed satellite store models. The latest data from Meituan shows that as of now, 120 brands have opened more than 800 satellite stores.

"Since the beginning of this year, with the increase in cross-border entrants, competition in the catering industry has become increasingly fierce. Against this background, many catering companies have actively explored model innovation, and satellite stores are essentially small stores that have built a convenient takeout model. These small takeout stores, with their lower overall costs, not only help reduce operating expenses, but also improve the efficiency and capacity of takeout services. As the effects of branded satellite stores become apparent, more chain catering brands will follow suit in the future." Zhu Danpeng, a Chinese food industry analyst, told Securities Times e-company reporter.

Catering companies have successively set up satellite stores

Before the announcement of the strategic cooperation, Tai Er Pickled Cabbage Fish had already quietly tested the brand's satellite stores. According to media reports, at the end of May this year, Tai Er Pickled Cabbage Fish opened "smaller stores, fewer employees, and no dine-in service" in four cities, Guangzhou, Shenzhen, Shanghai and Xiamen, to develop a pure takeaway business.

In response to this, Jiu Mao Jiu told the Securities Times e-company reporter that it was mainly due to the company's insight into the takeaway market. "In some stores that have launched single-person takeaway packages, the growth in orders and the contribution to turnover are very good. Therefore, the company chose to open stores of about 40 to 50 square meters in some places where there are no stores within a few kilometers around to specialize in takeaways. So far, Tai Er Pickled Cabbage Fish has opened more than 30 takeaway satellite stores in major cities across the country. In the future, the company will look for suitable areas to continue to expand."

According to the cooperation agreement, both parties said they plan to open 50 brand satellite stores in 2024. Meituan Waimai will provide one month's commission rebate for the newly opened Tai Er Pickled Fish brand satellite stores in 2024, and provide traffic support for the newly opened brand satellite stores to help the stores generate more orders. In addition, Meituan Waimai will also provide professional satellite store operation guidance and delivery services.

Tai Er Pickled Fish can be seen as a microcosm of chain restaurant brands setting up takeaway satellite stores. According to a recent research report by Huafu Securities, brands such as Xiabu Xiabu, Haidilao, Tai Er, Lao Xiang Ji, Binghuo Lou, and Nong Geng Ji have set up small, takeaway-focused "satellite stores" to reduce operating costs, improve efficiency, and attract consumers. This collaborative model of "large store dining + small store takeaway" has not only opened up new profit channels for brands and increased corporate revenue, but also enhanced brand competitiveness by saving costs and optimizing operations.

Shanxi Securities believes that satellite stores are small branches opened by catering brands using the brand influence of existing stores and optimized dishes with the help of food delivery platforms. Due to its low investment cost and high efficiency, it can help brands accelerate store expansion and bring new profit growth points. The store model has a high cost-effectiveness and enhances the brand scale effect. At the same time, compared with traditional pure food delivery stores, the food delivery products selected from brand satellite stores have brand reputation endorsement and higher food safety trust.

There are more than 800 satellite stores

In fact, the intensive exploration of satellite stores by catering brands may be due to multiple reasons such as reducing rental costs and adapting to new consumption trends.

Industry insiders said that brand satellite stores can enjoy brand assets, but the store type is more flexible and the area is smaller, which can effectively reduce rental costs. In terms of profitability, it can achieve higher labor efficiency and floor efficiency, and the investment return cycle is shorter. At the product level, it is usually based on single-person meal sets, and fewer SKUs can reduce production costs and inventory pressure. In addition, satellite stores can also help reduce the conflict between dine-in store business and takeaway business during peak hours.

Meituan's field visit data to brand satellite stores shows that the average store sales per square meter can reach more than 4,500 yuan and the labor efficiency can reach more than 35,000 yuan. If AI site selection capabilities are added to find locations with high brand demand and many orders, combined with savings in rent and decoration costs, a single store can pay back in just 8-10 months.

As a leading platform for food delivery, Meituan launched a commission rebate plan for 10,000 "brand satellite stores" in April this year, which included commission rebates, over 100 million yuan in traffic support, and free AI site selection and product selection measures, which also promoted the further development of food delivery "satellite stores".

Xue Bing, general manager of Meituan Waimai, recently said that he hopes to help catering companies achieve more efficient operations through the satellite store model. It is revealed that as of now, 120 brands have opened more than 800 satellite stores, and they hope to open more satellite stores with more brands in the future.

In addition to exploring the growth of takeaway scenarios, the two parties also reached a consensus on store growth cooperation. Tai Er Pickled Cabbage Fish stated that it will deepen its cooperation and exploration with Meituan's "God Member".

On July 4 this year, Meituan officially upgraded its "God Member" membership, which is one of Meituan's important business moves to the market after integrating its in-store and home delivery businesses into the "core local business" sector. It is reported that the upgraded God Member membership will support 13 food, drink and entertainment services, including takeaway services, food group purchases, hotel accommodation, leisure and entertainment, beauty and health, and family services.。

Wei Wei, general manager of Meituan's in-store catering business department, said that they will work with cooperating chain brands to explore membership operations on the platform and help brands improve user stickiness from more levels. It is revealed that in the current Shen membership system, catering users have the highest redemption rate. Since the pilot began in May, the group purchase order volume and in-store user scale of many pilot brands have increased by about 20%.

Editor: Peng Bo

Proofreading: Li Lingfeng