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laiyifen, as the "no. 1 snack stock in china", insisted on not engaging in a "price war" and has submitted another loss-making "answer sheet" since its revenue and net profit both declined in 2023.

recently, laiyifen released its performance report, with operating income of about 1.792 billion yuan in the first half of 2024, a year-on-year decrease of 15.05%; net profit attributable to the parent company was about 14.92 million yuan, a year-on-year drop of 72.56%. as for the reasons for the performance changes, the financial report stated that it was mainly due to the decline in sales performance.

public information shows that laiyifen was founded by shi yonglei and yu ruifen in shanghai in 2001. in 2016, laiyifen was officially listed on the main board of the shanghai stock exchange and was called "china's no. 1 snack stock."

however, as a snack company that mainly sells products through offline stores, laiyifen’s number of directly-operated and franchised stores decreased in the first half of the year.the financial report shows that as of the first half of this year, the total number of laiyifen stores nationwide was 3,472, including 1,775 directly-operated stores and 1,697 franchise stores, accounting for 48.87%.compared with the end of 2023, laiyifen has reduced its total number of stores by 213, including 135 directly-operated stores and 78 franchise stores.

it is worth noting that what really makes laiyifen profitable is not its main snack business, but its financial management income.in the first half of the year, laiyifen's main products, including nuts, roasted nuts, bean products, meat products, aquatic products, and other food products, all experienced varying degrees of decline in revenue. the financial report shows that the company's net profit attributable to the parent company after deducting non-recurring items was -8.889 million yuan, a year-on-year decrease of 125.7%. among the non-recurring profit and loss items, the investment income of financial products reached 17.99 million yuan, and the government subsidies included in the current profit and loss were 10.57 million yuan.

the gap between this unsatisfactory "report card" and its competitors is becoming increasingly significant. horizontally, in the first half of 2024, three squirrels achieved operating income of 5.075 billion yuan, a year-on-year increase of 75.39%, and net profit of 290 million yuan, a year-on-year increase of 88.57%; despite the performance pressure of bestore, it still achieved operating income of 3.886 billion yuan; wanchen group's operating income in the first half of 2024 was about 10.915 billion yuan, a significant year-on-year increase of 392.45%.

as the "pioneer" in the snack industry, laiyifen's performance once surpassed that of three squirrels and bestore. in 2015, laiyifen's operating income was 3.13 billion yuan, comparable to bestore and nearly 1.1 billion yuan higher than three squirrels. its net profit of 132 million yuan left the two peers far behind.

how did laiyifen fall behind?

in fact, shortly after its listing, laiyifen’s revenue fell into a period of slow single-digit growth, and its net profit was no longer as glorious as before.

from 2016 to 2022, laiyifen's revenue showed an overall growth, but only in 2017 did the growth rate exceed 10%, reaching 12.35%, while other years saw single-digit growth.by 2023, it faced a revenue decline for the first time.the net profit attributable to the parent company was rmb 57 million, a year-on-year decrease of 44.09%; the net profit after deducting non-recurring items was rmb 12 million, a year-on-year plunge of 80.43%.。

"not engaging in price wars" and disadvantages in online channels may be the important reasons why laiyifen "falls behind".

for a long time, laiyifen's offline channels have been significantly stronger than its online channels. among them, direct-operated stores are the bulk of its revenue, and in 2023, the revenue from this business accounted for more than 60% of the total revenue. when entering the internet track, laiyifen invested too much resources in its own app, and missed the opportunity again.

in the past two years, the mass-market snack market has emerged, using new channels and lower prices to attract consumers and become an important engine for performance growth for various snack brands.

for example, qia qia foods disclosed in its first half financial report that "in addition to maintaining the original advantages of ka and ab supermarkets, it focuses on developing e-commerce, snack hypermarkets, cvs, campus stores, etc., and deeply cooperates with popular snack hypermarket brands such as snacks are busy, zhao yiming, and snacks have ming. it also sows seeds and attracts traffic with anchors on the douyin platform, and its brand influence and channel potential continue to increase."

for example,wanchen group, the only listed company in the mass-market snack industry2024the semi-annual report shows that in the first half of the year, wanchen group's revenue reached 10.915 billion yuan, a year-on-year increase of 392.45%., of which the mass-market snack business accounts for more than 90%.

according to the "2024 snack market trend insight report", the online snack market has shown a recovery trend in the past year, with sales reaching 136.51 billion yuan, a year-on-year increase of 8.6%, and sales growth of 26.8% year-on-year. the lower average price has had a significant boost to sales, thereby boosting the overall sales scale of the snack market.

the former "competitors" have also long since changed their strategic direction. in 2022, three squirrels implemented a "high-end cost-effective" strategy, and then its 19.9 yuan 10-pack "macadamia nuts" product was hot-selling on douyin; at the end of 2023, yang yinfen, chairman and general manager of bestore, issued an open letter to all employees, also announcing a price cut, saying that its 300 products would be reduced by an average of 22%, with the highest reduction reaching 45%.

althoughcome to yifenzeng admitted"the sales channels of snack foods are undergoing a new round of changes. new sales formats such as mass-market snack foods and content e-commerce will continue to seize market share from traditional supermarkets.", but it still insists on "not engaging in price wars"."we reject low-level price competition and are instead committed to enhancing product value and providing consumers with products with higher cost-effectiveness and quality-price ratio," said shi yonglei, chairman of laiyifen.

facing fierce competition in the snack industry, laiyifen chose to focus on "healthy snacks" and announced that it would upgrade its brand slogan to "fresh snacks laiyifen, the leader of healthy snacks". at the same time, it also tried diversified categories including alcoholic beverages, dairy products, freshly brewed coffee, and fresh-keeping stewed food. in addition, recently,laiyifen’s first warehouse membership store in the country officially opened in shanghai. this is also the first warehouse membership store opened by a snack brand.however, from the current perspective, there has not been much splash.

in the view of zhu danpeng, a chinese food industry analyst, the "fresh snacks" strategy will take at least two years from the entire layout to implementation and realization. to a certain extent, it can drive employment and poverty alleviation. from a long-term perspective, this strategy has certain differentiation and is still good. laiyifen's advantage is its offline channels, and it is only a matter of time to make up for its online shortcomings. therefore, in the long run, laiyifen has more development potential than snack companies such as three squirrels that use online channels as their main channel.

xiaoxiang morning news reporter li xuanzi reported comprehensively