In May 2021, Weilong officially launched its plan to list in Hong Kong. Before that, the company conducted the only RMB 3.56 billion financing in its history, which was favored by Gao Tiling, Sequoia, Tencent, Yunfeng Fund and other institutions. The post-investment valuation reached 70 billion yuan, exceeding the combined market value (as of May 14) of Qiajia Foods (26.8 billion yuan) + Three Squirrels (19.809 billion yuan) + Liangpin Shop (19.986 billion yuan).
A brief introduction, Weilong Food is an old Chinese casual food brand, founded 22 years ago. Mainly engaged in spicy strips, dried bean skins and beans, seafood and vegetarian dishes, meat marinade, puffed instant food and other multi-series casual food. Its signature gluten and spicy strips, known as the national level "leisure snacks" single product.
According to Frost & Sullivan, Weilong is China's largest spicy snack food company in terms of retail sales in 2020, with a market share of 5.7%, which is 3.8 times that of the second place, and more than the total of the two to five. Meanwhile, it ranked No. 1 in market share in both seasoned noodle products and spicy casual vegetable products segments.
In the late 1970s, Liu Weiping (founder of Weilong) was born into a poor family in Pingjiang County, Yueyang. This small county in Hunan, located on the Miluo River, has a long history of making dried soybean products. 98 years, the local flooding, as the raw material price of soybeans soared, from 70 cents a catty to 1.5 yuan, dried soybean production was therefore blocked. Teachers can only "find another way", try to use wheat flour instead of soybeans, to make the flavor and sauce dry similar to the price of gluten small food, which is the prototype of the spice bar.
Most of the dried sauce workshops have turned to the production of spicy noodles, from Guangdong back to his hometown to develop Liu Weiping is also involved. However, Pingjiang is not a major wheat-producing region, and the local wheat flour is not enough. In order to find more development opportunities, he and his younger brother Liu Fuping brought artificial bean skins, seasonings and other raw materials and production technology, in the wheat-producing Luohe, Henan Province, opened a small workshop.
Because the threshold of production is extremely low, a large number of latecomers flocked to it. At the turn of the millennium, there were more than 4,000 chorizo companies in Henan, and the industry was in a state of barbaric growth. Unlike most chili manufacturers, Liu Weiping had a "brand awareness", registered "Weilong Weilong" trademark in 2003, Weilong chili was officially born. Then invested millions of dollars to purchase production lines from abroad.
In order to improve brand awareness, Liu Wei-Ping on the spicy noodles packaging has changed from transparent plastic packaging to aluminum foil and aluminum film packaging. In order to cater to students as a consumer group, it also adjusted the packaging from large bags to small bags to make it easier to carry. In addition, Weilong began to crazy offline push, posters, this quickly open Luohe market.
But when the business is booming, a lot of hot pepperoni workshops were exposed due to hygiene problems, and for a while hot pepperoni became the representative of "junk food". The whole industry has entered a period of reshuffle, Weilong has also been affected. To this end, Liu Weiping on the one hand, the introduction of standard aseptic production line, the establishment of quality control system, and specializing in the establishment of quality management institutions, from the source to solve the problem of product safety.
On the other hand, through marketing means to build to establish a hygienic, safe brand image. A video of the company's assembly line and production plant spread on social media, so that consumers have a much better impression of Weilong, but also opened the curtain of the brand's online marketing.
They first invited netizen Zhang Quan egg into the production workshop live, just 18 hours reading volume broke one million. Subsequently, "touch porcelain" iPhone 7, store style design into the Apple style, imitation millet slogan (for spicy snacks enthusiasts born). Once "dirt to the dregs" of the spicy noodles business, a time to become a Netflix, and fire to overseas, and Lao Ganma to rival.
Last year, Weilong realized revenue of 4.12 billion yuan. As a comparison, the revenue of three squirrels, Qiaqia Foods and Liangpin Puzi was 9.79 billion yuan, 5.29 billion yuan and 7.89 billion yuan respectively. Net profit was 819 million yuan, more than Three Squirrels (301 million yuan) + Liangpin Puzi (344 million yuan). Net profit margin of 19.19%, much higher than the industry average net profit margin of about 10%.
Weilong is not without its worries, and over-reliance on a single product is the number one problem. Although actively expanding the egg products, vegetable products (seaweed), beans and other categories, but failed to create a new hit. On the other hand, Bacchus, Three Squirrels, Liangpinpuzi, Yanjinpuzi, and Jinshi Monkey have made layouts, and the pressure of competition has increased steeply. A research report predicts that the market size of spicy noodles will reach 94.9 billion yuan in 2026. Weilong market share is only 5% only, the industry will not appear new leader, is not yet known.