Our intern reporter Lai Zhu reporter Liu Wang Beijing

Recently, there are reports that the well-known pastry brand - Bao Shi's valuation has been pushed up to 10 billion yuan, # Bao Shi valuation of 10 billion # of microblogging topic on July 16 rushed to the hot search. But on that day, Bao Master denied the news of financing in the first half of the year, and said, "the next period of time will be buried in the business, not to consider financing for the time being".

July 20, "China Business News" reporter contacted Bao master said interview needs, as of press time did not get a response. China's food industry analyst Zhu Danpeng believes that "with the urban users living a faster and faster pace of life, casual food meals, meals food casualization is a major trend in the new consumption. With the continuous upgrading of consumption, afternoon tea has gradually become a new scene of the entire baking industry, new functions and new development direction, and the demand on the consumer side is also forcing the market to expand, the baking industry is currently in the retail industry's wind mouth, the capital to enter is inevitable."

In addition, the Chinese baking track has received unprecedented attention from the capital industry. Sequoia Capital and Challenger Capital invested in the new Chinese dim sum trend brand Tiger's Head Bureau Standard Chartered Biscuit line, the egg yolk pastry brand Xuan Ma completed the Golden Tripod Capital and Maixing Investment over 100 million yuan of B round of investment, Mo Mal Dim Sum Bureau this year won four rounds of financing.

Bao master valuation of 10 billion attracted heated debate

As of press time, "# Bao master valuation of 10 billion #" topic more than 160 million readers. Bao master official microblogging response, said the valuation is how much is not important, the important thing is to be able to do a good job of the product, can not open the store to everyone.

According to media reports, as early as July 14, in response to rumors that Bao Master launched a new financing, valuation of up to 10 billion yuan, Bao Master board secretary Dong Wenda said: "Bao Master now need to bury their heads in the business, do the product, the future of a relatively long period of time, temporarily will not consider financing."

The much-anticipated Bao Shi was founded in 2004, when the founder of Bao Cai Sheng in the Communication University of China opened the first "Bao Chai bakery"; in 2005, renamed "Bao Shi". All along, Bao chef body has a "net red" label, its stores queuing phenomenon is more common. The reporter examined a store in Beijing, which is located in the subway station exit within 200 meters of the street stalls, after investigation of the stores in Beijing are also mostly concentrated in the shopping district and near the subway entrance. There is no dine-in seat in the store, the products are mainly take-away, there is only a cashier window and a cashier, and the phenomenon of queuing often occurs.

The last time Bao Shi triggered public discussion was in 2014, a company called Beijing Yishang Catering Management Company Limited fast recruiting company began to use the name of "Bao Shi" investment in franchising, a period of time more than 1,000 Bao Shi appeared around the country.

The reporter investigated, regardless of stores, official website or official hotline and other various publicity channels, has been emphasizing the "Bao master pastry by Mr. Bao Cai Sheng original", its distribution model for the national direct, not any franchise cooperation.

Industry insiders Wu Guihong told reporters, Bao master after more than a decade of adjustment, chose to avoid the line of Arome, Holliday and other boutique bread, positioned in the traditional Chinese cake snacking and retailing.

In addition, Wu Guihong pointed out that the form of on-site production through a transparent kitchen is a feature of Bao Master. "Bao master positioning on the low-end, similar chain stores do not have this condition in such a location, such a large store can be done in the open kitchen now." Reporters from the scene found that from the outside can see the inside of the operation process, the whole process is more transparent, with the camera can observe the detailed production scene.

The reporter investigated the Chaoyangmen store area of 80 square meters, a Bao master of the former employees told reporters that its stores are expanded, the original only 40 50 meters. According to the industry review, the rent is estimated at 120,000 yuan, labor costs of about 100,000 yuan. Based on a gross profit margin of 75% and a loss of 10% to 15%, this store is profitable. According to the official website, as of July 2021, Bao Master has nearly 90 stores in the country, of which 12 are pending, mainly in Beijing, Jiangsu, Shanghai, Zhejiang and Guangdong.

Eye of the sky shows that in 2017, Bao master got Tian Tu capital over 100 million yuan of A round of investment, the brand valuation reached 1 billion yuan, the relevant personage revealed that the financing is mainly used for the "fight against counterfeiting", and want to accelerate the opening of stores with the help of the power of capital in order to realize the impact on the cottage store. At the end of last year, Bao Master also obtained equity financing from Kunlun Capital, the amount of financing was not disclosed.

According to the release of Bao master to start a new round of financing message of the investment community said that there has been contact with Bao master of consumer investors in the beginning of this year to talk about the Bao master, but due to the high valuation of the stop, in addition to the other side disclosed that at that time there were about 5 VC institutions at the same time contact Bao master.

In addition to Bao master, the reporter noticed that the new Chinese baking track has become hot, a large amount of financing was born one after another, but also triggered the baking industry has been silent for a long time. July 14, the new Chinese baking brand tiger bureau announced the completion of the A round of financing, GGV Jiyuan Capital and Tiger Global Fund co-lead the investment, the old shareholders of Sequoia China, IDG, the angel investor Sung Huanping followed the investment. Tiger's Head said that after the financing, it will further improve its store layout and enhance its product development capability. Inkmart Dim Sum Bureau has received four consecutive rounds of financing, including Qingliu Capital, Yuan Capital, Rizhu Capital, Tomato Capital, and Yuanlai Capital, totaling hundreds of millions of RMB. As of the end of June 2021, MoMo Dim Sum Bureau*** has 14 stores.

Single product driven, the scale is difficult to expand

In recent years, the baking industry's boundaries are becoming increasingly blurred, there are Taoxiangcun, Guangzhou Restaurant, Apricot House, such as the old bakery, but also Goodwill, Arome, Dole Day, Paris Beetroth, the original McMichael Hill, the bread of the new language of the bread such as the bread brand, and even new tea drinks such as Hi-Tea, Naixue's tea Brands have launched bakery products, Bao Master, Tiger's Head Bureau, MoMo Dim Sum Bureau of this type of point of the newcomers can capitalize on, to achieve the scale of development is still unknown.

Zhu Danpeng said, after-dinner dessert has become a new generation of Chinese consumers just need, regardless of Chinese or Western-style pastry will be high-speed development. But whether it's a new offline bakery chain, or pre-packaged bakery products, there is no absolute head brand that occupies users' minds and market share.

Industry insider Wang Chen said, "baking chain of small stores optimized for the old bakery chain stores of the single-store model, low input costs, ping efficiency, fewer categories, high degree of product standardization, front-end easy to operate, conducive to the realization of the scale of the replication of the small store is more likely to run out of big chain brands."

Explosive single product can get a momentary attention, but how to be able to do a sustained long-term development, improve the rate of consumer repurchase, rather than just a moment of taste is the key to brand competition.

An investor close to the MoMo Dim Sum Bureau believes that the MoMo Dim Sum Bureau through the CP with the tea color group to open the awareness, attract consumers. Since its inception, MoMo Dim Sum Bureau insisted on new products every month, the product iteration rhythm is similar to the new tea drinks, more youthful and consumer goods logic, rather than the traditional confectionery and catering logic.

The above people pointed out that the current baking track is hot shows that China's baked goods still have a lot of space, but the concentration of the baking industry is not high, any brand has the opportunity, we all hope to invest in a head brand. As the valuation is pushed up, the new round of financing for Bao Master will become a tug-of-war.

According to Sanwan Capital estimates, China's baking industry retail side of the potential market space of about 470 billion yuan, the current retail sales of China's baked goods about 230 billion yuan. It can be seen that there is a lot of room for development, both for companies in the industry and for new startups.

Baking technology expert Du Jian told reporters that due to the complexity of the process, the ingredients and accessories of a wide range of categories, artificial formula process variable, most non-professionals can not eat out of the raw materials good and bad. Wu Guihong agrees with this point of view, and pointed out that the brand is indeed the key, Bao master's brand advantage is outstanding. According to sources, Bao master is currently beginning to try diversification, segmentation of the development route, hoping to grade products, stores, scenes.

Wang Chen pointed out that "the advantages of each brand are not the same, but the baking industry in the process of expansion are faced with the problem of scale. For example, Holliday, there is today's market scale, the initial chain franchise model is not to blame, but then there is also a differentiated business situation."

In this regard, Luo Hong, chairman and president of Holliday, released an open letter, saying that the founding team negotiated and reached the principle of "contraction of scale, adhere to the standard" in 2018, and will selectively retain stores according to the actual situation of different markets, and at the same time lifted the co-founder of the internal system of franchising that has been implemented for 19 years, the founders can independently establish a completely independent franchise system, and the founders can independently set up their own franchise system. The founders can independently establish new brands that are completely independent of Holliday's, and these new brands are created, invested and operated by them independently.

Known as the A-share "baking first share" of Yuanzu Foods listed in 2016, has its own independent stores and e-commerce platform flagship store, takeaway and other channels. Yuanzu's 2016 prospectus shows that of the 509 directly-managed stores, 159 have not been profitable since opening, accounting for 31.24% of the total number of directly-managed stores.

Its financial report states that it hopes to gain a larger market through continued store expansion. How to improve the effectiveness of stores in marketing and customer acquisition is an issue that Yuanzu Foods needs to synchronize its attention. And its annual reports since its listing show that Yuanzu Food's selling expenses have risen year after year. Among them, the increase in labor costs due to store expansion and the addition of sales staff is higher than the increase in advertising costs in 2018 and 2019.

In addition, the rapid expansion of Christine's, known as the Hong Kong stock market's "No. 1 bakery stock", was once regarded by the market as an important reason for dragging down its operating results. At its peak, the company has more than 1,000 stores in mainland China, the 2019 annual report shows that the number of Christine's stores from the end of 2018 586 reduced to 476, a net reduction of 110 stores. The market's attitude towards its performance is also visualized in Christine's share price. Since 2014, Christine's share price has been below HK$1/share, and as of press time, the share price is shown as HK$0.172/share.