Recently, "Kuafu Fried String" announced the completion of round B financing. This round was jointly led by Joy Capital and Juebi Fund, followed by Bubi Capital and Huaying Capital, the old shareholder, and Weilan Capital served as the exclusive financing consultant. So far, Kuafu Fried String has accumulated financing of nearly 500 million yuan, making it one of the brands with the highest total financing amount in recent years.
Now it is the capital winter, and the arrival of this financing has aroused a lot of attention and discussion in the industry. Among the employers in this round, Joy Capital is the investor of Ruixing, and has invested in Kuafu Fried String for three consecutive rounds. The unique fund focuses on food and restaurant chains and has great influence in the industry. Before this round of financing, they have been cooperating in industries such as logistics supply chain for a long time.
High growth may be the key to impress investors. Since its establishment five years ago, the total number of stores in Kuafu has exceeded 2,000, and at the same time, more than 25 overseas stores have been opened in the United States, Canada, Australia, Singapore, Malaysia, Italy and other regions, which have not only conquered the stomachs of local Chinese, but also conquered the stomachs of local people.
Foreign diners who love fried skewers are located in Kuafu fried skewers store in Milan.
Behind this round of financing, Kuafu Fried String also plans to speed up its expansion this year. At the 2024 strategy conference held today, Yuan Zelu, the founder of Kuafu Fried String, announced that 3,000 new stores will be opened in Kuafu Fried String this year, which also means that they will increase the total number of stores to 5,000 at an average rate of 8 stores per day.
Whether it is capitalization or expansion path, the script that Kuafu got in his hand is very much like the once hot tea and coffee.
Snack skewers, tea around 2020?
There are enough categories in the catering market of more than 5 trillion yuan. However, due to the different maturity of categories, the process of chaining and branding of each track is different, and there are only a handful of Wandian catering tracks, with only three tracks: western-style fast food, milk tea and coffee.
Different from western-style fast food, milk tea and coffee are typical emerging racetracks, all of which have benefited significantly from capitalization, and a large number of quasi-Wandian brands with thousands of scales have been born one after another. Since last year, several head brands have been in the IPO process, and the development path of branding, chaining and products is very clear.
However, the development track of each head brand is not linear growth. From the perspective of tea track, around 2020 is a common key watershed. Although the pattern of tea industry was still relatively scattered at that time, according to Huajing Industrial Research Institute, in 2020, the CR3 of China’s existing tea industry was only 29.5%, but the brand pattern had begun to differentiate. In that year, Mi Xue Bing City crossed the Wandian mark, and a number of head brands such as Guming, Chabaidao and Xicha expanded at a faster speed.
In other words, the head pattern that can be seen in 2023 has been basically clear in 2020, especially in the cost-effective route. Honey Snow Ice City has established a leading position. For those who want to get a slice of it, 2020 may be the last golden window.
Similar to the historical trajectory of the tea track, there are lo mei and coffee. At that time, the brand patterns of the two tracks began to appear. Among them, the delicious food increased the number of stores to nearly 10,000 in 2018. The situation of coffee track is similar. In 2021, Ruixun’s performance bottomed out, and the number of stores increased to more than 6,000 during the year.
After that, whether it is tea, pot-stewed or coffee track, the market concentration and brand saturation are gradually accelerating, and the opportunity space left for new brands and franchisees is gradually shrinking. Small and medium-sized brands and franchisees are facing the survival test.
The market of snack fried skewers in 2024 is very similar to milk tea in 2020, pot-stewed flavor in 2018 and coffee in 2021.
After a long evolution from roadside stalls to branding, the category of fried skewers has been developed and the head brand has initially appeared; At the same time, the gradual saturation of the milk tea industry has led to the overflow of a large number of high-quality franchisees, which has caused the popularity of snacks with similar models to soar.
In fact, Kuafu’s high growth expectations this year are not blindly optimistic.
It is understood that in 2023, the same store in Kuafu increased by 20% compared with 2022. From the external environment, although consumption is generally more cautious, it does not seem to be a bad thing for fried skewers. The unit price of 30 yuan makes Kuafu have a lipstick effect in the big environment. The complexity of the consumer market is that the decline and rise of consumption power occur at the same time, but in any case, consumers’ pursuit for better food is unchanged.
Fried skewers, the new "signboard" of snacks
The status of fried skewers in snacks was not established in one day, but gradually became clear in the past three years.
According to the market classification of catering, snacks are one of the 17 first-class classifications, but before 2021, Meituan defined snacks as "fried chicken snacks". After 2021, this category was changed to "fried chicken and fried string", and fried string became synonymous with snacks. The survey results of Kuafu fried skewers also prove this situation. Fried skewers are not only fried skewers, but also a collection of fried snacks.
Yuan Zelu told 36Kr that the 1.0 version is the fried string of string incense, positioning the original Leshan fried string, similar to the string incense, regardless of the price, and signing for silver; Version 2.0 is a series of barbecues, the price ranges from 50 cents to 5 yuan, and the products are gradually expanded to popular barbecue categories such as squid and chicken wings, which will last from 2020 to 2023.
Since last year, Kuafu Fried String began to explore the product 3.0 upgrade, and focused on the category of fried chicken, combining fried chicken with fried string. It is very important to consider this, so as to widen the track, and fried chicken is undoubtedly the existence of a larger track. At the same time, Kuafu is also broadening its demand coverage for the whole time, offering more "satiety" options, which can not only satisfy the craving, but also solve the urgent need. It is more like a "fast food".
Although the product continues to iterate, for Kuafu, cost performance is an unchangeable principle.
"We didn’t start doing cost performance last year, but we started doing it from the beginning," Yuan Zelu told 36Kr. The logic behind it is the ultimate cost advantage. In Kuafu’s fried string, this is defined as "total cost leading", that is, corresponding to two major commodity strategies, one is large supply, and the cost performance is continuously improved through cost advantage; The second is a big brand to enhance the sense of brand value.
Aiming at China’s stomach which needs nutrition and delicacy, Kuafu’s fried string products believe in "everything can be fried" and focus on "frying protein", while the fried chicken category in version 3.0 is more clearly defined as "fried chicken protein", that is, chicken is the most cost-effective high-quality protein.
As a big item in 2024, the "raw fried chicken leg" newly promoted by Kuafu Chuankebab adopts Chinese style, which is different from the western-style fried chicken wrapping method. This product is inspired by raw roast chicken, and combines the raw frying process with the fried kebab form. At the same time, it solves the problem of standardized operation because it does not need to be processed in stores.
Due to the accurate capture of users and market demand, this large single product quickly became popular as soon as it was launched. According to Yuan Zelu, this raw fried chicken leg sold 6.71 million pieces in two months, and the explosive products also boosted the sales of stores. Before and after the product went online, the store efficiency increased by an average of 27%.
Yuan Zelu, the founder, is a post-90 s catering person who once participated in the creation of the Western Young Master Chinese hamburger. As a young man, he wants to do a good job in this young man’s business. "We have been trying to string the fried chicken categories with bamboo sticks." Yuan Zelu said that in theory, bamboo sticks can be strung with everything, and whatever is popular and needed at present, Kuafu can fry them to make whatever.
Digitalization, all for business process reengineering
It is no accident that raw fried chicken legs are out of the circle, which is also the epitome of the digital transformation effect of Kuafu in the past three years.
As early as 2021, Kuafu Fried String started the digital transformation, which is not a simple online business in the usual sense. In Yuan Zelu’s view, "tools and systems are only results, and the core is business process reengineering."
Yuan Zelu said that catering and e-commerce are both combinations of human freight yards. There is actually only one difference between them. E-commerce is an infinite shelf, catering is a limited shelf, and the common core is commodity operation, which is the combination of commodity pool and flow pool.
It is reported that the product structure of Kuafu fried skewers can be divided into three categories: basic style, structural style and popular style. Among them, the new principle of popular style products is "high-speed innovation and rapid iteration", such as the previous slap chicken chops, fried skin and so on. In the past, there were 30-50 long-term new product pools, and next, they hope to expand this number to 80.
Although the new speed has been greatly improved, the new cycle of each new product still strictly follows the feedback of store sales data. At the beginning, they will test new products with a relatively small flow, and only do manual intervention when they perform well, and match the corresponding marketing resources. From the store side, the new is also gradient.
In the catering industry, the development of site selection system is also one of the key points of Kuafu’s digital investment in fried string.
Yuan Zelu told 36Kr that location is still established now, but the order source structure of catering stores is changing. In the past, location only referred to physical LBS, but now it is necessary to consider take-away heat and new channels such as Tik Tok. For Kuafu, the proportion of these three traffic sources is about 6:3:1. In the future, this ratio will reach 4:4:2 through the efforts of the marketing side, and the total traffic will be even greater.
In the past, the thermal evaluation of most restaurants’ takeout was done by manpower, but now the location of Kuafu can be presented automatically. Taking a shopping mall as an example, based on big data analysis, the location of shopping malls in Kuafu is divided into four levels: S, A, B and C. Combined with tens of thousands of data labels, the location system can be refined into recommended floors, estimated take-away orders, competing products and complementary products nearby, investment return cycle prediction, and operating effects of surrounding old stores. It is reported that the accuracy of the above prediction can reach over 90%.
One thing that catering is often criticized is that the industry is relatively backward. Yuan Zelu said that the original intention of Kuafu’s digital investment was to transform this relatively backward industry with more advanced working methods. And all this work is only done by a small team of more than 20 people.
In Kuafu, R&D has made it clear that "there is absolutely no big move". They will compress each iteration to less than two weeks, and if a function development cycle is long, it will be further split into multiple versions. Teams can get feedback at an early stage and quickly adjust iterations.
In Yuan Zelu’s view, digitalization does not necessarily correspond to a high-cost structure. In the past, many enterprises easily made a mistake, that is, they hired a CTO when they came up, and the digitalization planning was particularly complicated. On the one hand, the biggest problem was that when they were online, the business side had undergone great changes, and many "unfinished projects" were prone to occur. For Kuafu Fried String, no matter whether it is self-developed or imported software, they don’t need the system whose implementation process lasts for several months.
Business process reengineering is the precondition of digital transformation in Kuafu, that is, from the first principle, why each process of chain operation should do this and whether the efficiency is enough. After that, it is for more far-reaching organizational changes.
In January, 2023, the "Kuafu Merchants" APP launched a feedback channel for franchisees to go directly to the headquarters. At that time, the background of this function development was that they found that the problems of many franchisees in the industry in the past were passed on step by step through supervision, but the problems may be ignored or even covered up.
After this feedback channel in Kuafu was opened, it also had a new impact on the business side. For example, for some old shops that have been in business for more than three years, the equipment will be aging. In addition, Kuafu Fried String has been doing equipment iteration all these years, and the after-sales maintenance workflow of suppliers corresponding to the original equipment is not perfect, especially in cities with dense stores such as Beijing and Shanghai, and the maintenance response time of supplier service team alone is not enough. After realizing the problem, Kuafu Fried String quickly made localized spare parts for its core products, which shortened the response time by one time.
Similar business changes continue to occur at all levels.
The bigger the fish, the bigger the pool.
"Focus on development" is the expansion key word of Kuafu Fried Tandem.
According to Yuan Zelu, the increase of 3,000 stores this year is divided into two parts: one is encryption in high-speed cities; The second is to explore the sinking market and develop high potential energy points according to the network rules.
First-tier and new first-tier cities are the core bases of Kuafu’s string bombing, among which Beijing and Shanghai have exceeded 200, Wuhan has exceeded 100, and the second-tier cities such as Guangzhou, Xi ‘an, Hangzhou and Tianjin are gradually entering the "hundred stores". However, the capacity of this city is far from saturation. According to the Kuafu bombing network regulations, more than 400 shops can be opened in Beijing and Shanghai.
When it comes to encryption, some people will think of "grabbing business", but Kuafu’s practice of bombing strings has found that this is not the case, and franchisees are very happy to do encryption. Yuan Zelu told 36Kr that there are two reasons for this. First, they will do staggered encryption, such as the dislocation of street shops and shopping malls; Second, through the multi-store layout, it can be seen everywhere and easily available.
It is also necessary to save money. In view of the sinking market, Kuafu Fried String products are priced at A, B and C levels to adapt to different market and price consumption preferences. In addition, in 2023, Kuafu Zhachuan also made a project to reduce the cost of building a store, which comprehensively reduced the cost of building a store from the aspects of decoration, area, optimization and adjustment of moving lines and soft-fitting equipment.
It is reported that this project will reduce the cost of the whole store by about 30%. On the one hand, it will have a wider choice space, and at the same time lower the entry threshold for franchisees.
The scale bonus of Kuafu Fried String is also being released to franchisees. It is reported that in the past five years, with the scale expansion and bidding negotiation, Kuafu Fried String has taken the initiative to reduce the cost of franchisees for three rounds, helping to establish a very low cost advantage and giving franchisees a higher cost performance under the same quality.
At the press conference, Kuafu Zhachuan also officially released seven brand stores, including shopping malls, street shops, community shops, school shops, office shops, scenic shops and canteen shops, adapting to different scenes and making product and line adjustments.
"From a broad product perspective, joining the company is essentially selling our store types," Yuan Zelu admitted to 36Kr. More extreme, they are essentially a return on investment model, which is suitable for different people, goods, time and space.
Strong digital genes and multi-store models have helped Kuafu broaden its franchise channels. "Our franchisees have two most important portraits, one is younger, and the other is higher education," Yuan Zelu told 36Kr. According to statistics, among the franchisees in Kuafu, the proportion of former milk tea franchisees is getting higher and higher, which is close to 30%, followed by large catering transformation and small business, as well as catering whites including college students and white-collar workers.
At the same time of the official financing, Kuafu Fried String also launched the "300 million League Homesick Plan". It is reported that Kuafu Fried String will invest over 100 million yuan to subsidize franchisees and over 200 million yuan for brand marketing.
"In the part of brand investment, we will make efforts in three directions, explosive products, explosive stores and explosive cities." Yuan Zelu told 36Kr that explosive products are similar to the continuation of raw fried chicken legs, and continuous and sufficient single products are launched to help stores generate income; Explosive stores focus on polishing city landmark stores and establishing brand image; On the basis of the previous 20 core cities, the explosion city has further expanded to become an explosion city. And the three power points will all be invested in the whole network-level marketing resources.
In the process of rapid growth, Kuafu Fried String continues to expand its business "circle of friends". They are not obsessed with self-sustaining factories, but do upstream business by means of investment and partnership.
"This is mainly due to two factors. First, the total cost is leading. Second, we believe that there is huge room for improving efficiency upstream." Yuan Zelu told 36Kr that efficiency improvement is not only the part of Kuafu bombing, but also the great consumer brands, all of which have great ability to promote the transformation of the upstream.
"From the perspective of the United States and Japan, great catering enterprises all appear at the time of economic transformation and speed change. When the team becomes more and more professional, the organization and infrastructure are getting better and better, you can actually run out." Yuan Zelu said. (Photo courtesy of the enterprise)
