Evergrande diversified Xu Jiayin's hardships and flaws

Evergrande’s immense discounts and promotions have attracted public interest in the success or failure of Evergrande Bottled Water. Then, Hawker Xu Jiayin has invaded agriculture in large numbers and laid out three industries: dairy industry, animal husbandry, and grain and oil. Some fans wrote to Xu Jiayin to ask Hengda Grain and Oil. The Evergrande Group can be described as an endless wave of waves. This time, Xu Jiayin's money-rolling "local tyrants" can make Chinese branded agriculture "move up" like football?

Evergrande, a company known for its savage growth, has traveled through typhoons. Now, Evergrande typhoon has reached the most traditional agricultural territory. Recently, Evergrande Group has established three new business companies, namely Evergrande Dairy Group, Evergrande Animal Husbandry Group and Evergrande Oil Group, and currently the chairman of the three companies. The candidate has been finalized.

Evergrande also established Evergrande Ginseng Group and Health Industry Group. According to official information, Evergrande will invest 10 billion yuan in Yanbian to build a ginseng industrial park integrating ginseng planting, production, processing, research and development and sales.

Xu Jiayin is attaching great importance to the agriculture and FMCG industries. At this year's internal meeting, he proposed that FMCG and Finance will be the two directions for Evergrande's diversified expansion in the future. The controversy over Evergrande's ice springs has not diminished. Now it has announced a high-profile announcement that it has entered the three major agricultural industries at the same time. Xu Jiayin’s pride has surprised both the agriculture and FMCG industries.

In the face of surprise, speculation and questioning, Xu Jiayin has his hard truth.

High investment in high execution mode

No matter whether it is investing in large agriculture or other diversified industries such as football, Evergrande’s self-confidence not only comes from its long-standing success, but also from the high-investment, high-return model and militarized management it has built up over many years of operation. Execution power, as well as accumulation of resources in terms of visibility, capital, networks, and human resources.

Xu Jiayin, a personal expert, deeply understood the needs and fanaticism of this era. He used his utmost efforts to create a luxurious scene that best meets the public's psychological needs, and was therefore highly sought after. The high-return, high-return profit model allowed Evergrande. Constantly breaking industry restrictions and achieving amazing breakthroughs.

In 4 years, he throws more than 2 billion yuan, making Evergrande Football become the first Chinese team to win the Asian Cup championship. After a weak state of Chinese football, not only the football industry achieves profitability, Evergrande real estate sales also It has soared and the brand value has been doubled several times. The return on investment has been astounding.

Evergrande not only has the courage to spend big sums of money, but also has more efficient and strict enforcement capabilities. “I dare to say that no real estate company can exceed Evergrande's ability to execute.” Yi Qiang, an executive at Beijing, China, once said. Evergrande established many high-incentive policies and extremely strict management systems that many companies could not imagine. There are tens of thousands of rules and regulations in the “Education Materials for Evergrande” with one manual, covering all aspects of food, clothing, shelter, and living.

Evergrande’s popularity and influence are unquestionable. The success of football has allowed Evergrande to become a “China Evergrande” from a real estate developer in Guangzhou, and Xu Jiayin has even been sought after by fans as the “Chinese Football Redeemer”.

Funds are not a problem. Evergrande has always been a company that has done a valiant work. Evergrande has just left a huge amount of mineral water ads worth 1.3 billion. This time involved in large-scale agriculture, it also entered the dairy industry, animal husbandry, and grain and oil industries.

With the vision and courage of the Chinese-style strategic opportunity, the development prospects of the Chaoyang industry can be realized.

Regardless of whether it is a financing listing or a large-scale football industry, Xu Jiayin has shown high sensitivity to the development opportunities of the industry and extraordinary courage and vision for the choice of strategic direction. This is also the case when it comes to big agriculture. In the era of potential food safety and consumption upgrades that have become the focus of the entire nation, it is the period of the best strategic opportunity for investing in agriculture and health.

Fuklai has been advocating that China has entered the age of brand agriculture. From the field to the table, a vast market is brewing a revolutionary food brand revolution that will happen once in millennia.

This is a stunning Chinese-style market. Any product multiplied by 1.3 billion, multiplied by 365 days, and multiplied by three meals is an astronomical number. At the same time, this is another extremely immature market, with long-term low market access, low market concentration, and no “two lows and one no” status with strong leading brands.

And every category that lacks a strong brand is a huge market opportunity and an opportunity to make a strong brand. The agricultural-based kitchen table food market is the birthplace of the next big brand, which contains strategic opportunities to create great companies and entrepreneurs!

At the same time, Chinese consumers have generally changed from eating and eating to eating well and eating healthily. The agriculture and health industries are bound to be sought after by entrepreneurs who are not bad and pursue the value of life. This is our country’s economy. The inevitable development and consumption upgrade.

Nowadays, the non-agricultural capital represented by Lenovo has been optimistic about the big agricultural industry. They come from industries such as real estate, mineral energy, finance, IT, building materials, and foreign trade. A large number of laymen's strong entry has set off an upsurge in large-scale agricultural investment.

Big agriculture will surely concentrate on decentralization, from brandlessness to branding, and from crudeness to standardization. This is a critical period for the emergence of large companies and a stage for occupying positions in enterprises.

Even Rogers, the world's investment guru, could not help but appeal: Want to get rich and hurry to be a farmer!

Evergrande chose to invest in big agriculture at this time and it is only now. The insight and grasp of the nature of the Chinese market and the Chinese-style strategic opportunities are exactly what Xu Jiayin’s “excessive place” is, and it is also the groundwork for Evergrande to continue to write legends and change the industrial structure again.

However, the very smooth real estate and football played by Big Agriculture and Evergrande have very different industrial properties. When Xu Jiayin breaks into big agriculture with the image of “barbarians”, the hardships must not be ignored.

Slow return on investment, high investment, high debt, difficult to control the risk of funds

Large-scale agriculture is not only a big dish, but also has a large body. Compared with real estate and football, its profitability is also much slower.

In 2010, Legend Holdings announced the establishment of the Agricultural Investment Division, which is still in the investment phase. Liu Chuanzhi stated that “to develop agriculture is to stabilize, we are not in a hurry to make money” precisely because “the cycle of planting fruits is very long and cannot be earned. There is no quick profit, but it is an everlasting sunrise industry” (Chen Shaopeng).

However, Evergrande is a highly indebted company. The financial report shows that Evergrande’s trade payments to third parties have continued to climb, reaching RMB 13.459 billion, RMB 32.29 billion, and RMB 53.964 billion during 2010-2012, which has increased by more than four times in three years, and its size has only increased by a factor of two.

Take the dairy industry as an example. According to industry estimates, the price of building a 10,000 ranch is about 300 million yuan. A one-time investment in the support and construction of milk sources will cost about RMB 700-900 million, and a milk powder processing plant with an annual output of 50,000 tons will need to invest RMB 1.5 billion. This does not include personnel, management costs and rising operating costs, it will need at least 2.5 billion.

Intensive access to the large agricultural industry, and once entered the dairy industry, animal husbandry and grain and oil three major industries, which not only need enough money, rich industry experience, but also need to have enough patience and focus, which will surely be a comprehensive test.

This year, the real estate industry has shown a downward trend. The policy has not been substantially loosened yet. Evergrande’s massive diversification of investments can have enough funds to operate. It is not yet known whether this new gamble will be as perfect as football.

Interlaced, such as every other mountain, lack of FMCG marketing rules, accurate positioning and value creation to become a short board Evergrande marketing bombardment can quickly set off a market boom, so that products and brands in a short period of time to get a high degree of market attention, Evergrande ice fountain ordering The club claimed to have reached 5.7 billion yuan in orders on site.

However, the repeated consumption of fast-moving consumer goods and the initial fanaticism cannot be called success. FMCG marketing not only requires marketing efforts, but also requires precise positioning, in-depth value support, and long-lasting intensive cultivation, as well as the support of real product forces. These are what Evergrande currently lacks.

Take the market of Evergrande Ice Spring as an example, the retail price of ordinary bottled water terminals is between 1 and 2 yuan. This price region has concentrated many brands such as Wahaha, Nongfu Spring, Master Kong, and so on. The high-end water price is between 5 and 10 yuan, 5100 yuan. Clouds and so on gathered here, the profits looked higher, but the market share was small. The mid-range price of 3 to 8 yuan basically has no precedent for success.

At the same time, apart from the Changbai Mountain, Evergrande Bingquan did not come up with more value propositions and support than the “Changbai Mountain Water Source,” and how competitive is Nongfu Springs?

In fact, as a high-end water, in addition to the value of origin, we must also have unique spiritual values ​​and propositions, as well as product images, channels, terminals, dissemination and promotion, as well as teams that match it. In this regard, Evergrande Ice Spring is extremely short-lived. .

A few days ago, Evergrande Ice Spring broke the news of price cuts. There were direct price cuts, and there was a “buy one get one free”, a 3.8 yuan bottle of “high-end water” went down to a bottle of ordinary water price of 1.9 yuan. Promotions can have, However, promotion to this kind of effort will directly lower the position of its high-end water and lower the brand value.

Evergrande entered the dairy industry, allegedly mainly in the dairy industry, and milk powder is a very special industry. Wahaha which has been immersed in fast-moving consumer goods for decades has smashed infant milk powder industry. We do not know if Xu Jiayin is better than Zong Qinghou understands the Chinese milk powder market better.

The management of FMCG is by no means a vigorous advertising campaign. FMCG marketing requires a combination of strategy, precision, standardization, and permanence. Advertising bombing can only solve the problem of consumers buying for the first time. To move up and realize the repeated purchase of products, Evergrande has a long way to go.

Fast-moving consumer goods giants gather, competition is not so simple

Although Evergrande has brand awareness, its influence in the fast moving consumer goods industry is insufficient, and there is still a big gap between Wahaha, Master Kong, Uni-President, COFCO, and Yili brands.

Evergrande is good at surprises, disrupts the industry and quickly integrates strengths. When entering the football industry, Evergrande’s private contact with players and high-paying behavior was criticized by peers. However, as a result, Evergrande used its financial advantages to rapidly integrate a highly capable team.

However, the fast moving consumer goods industry is not suitable for this type of gameplay. The giants of the FMCG industry have been operating for many years. Brands, channels, products, value output, etc. are fully integrated. Wahaha, Kangshifu, Nongfushanquan and other giants have formed a complete Product lines, brands are household names; Lenovo Jiawo enters agriculture, adheres to the Sanquan strategy (full industry chain, globalization, traceability throughout), and intensively cultivates, has begun to take advantages; COFCO has ensured product quality and has been integrating the industrial chain for many years. The whole industry chain concept has been deeply recognized by consumers...

Xu Jiayin cannot face one by one consumer and play a price war. Wahaha and other old brands are veterans for many years. It is difficult to dig these big brothers' corners.

Crazy expansion of the company's genes, security and stability of the country to become a constant agriculture, Hengda unbearable heavy Hengda has been known as the "soldiers assault" type of blitzkrieg, which has been integrated into its blood, becoming the company's corporate gene. This highly centralized management model and rigid management system are in perfect harmony with the characteristics of the real estate industry and the football industry, resulting in Evergrande's condensed and explosive development.

And agriculture is an industry that needs to immerse itself in deep-seated cultivation. There is an essential contradiction between the characteristics of the industry and Evergrande's business model. Now, the problems faced by the Evergrande Ice Spring are essentially the manifestations of this contradiction. Evergrande's management of big agriculture is like letting a person who has gone all the way go all out to suddenly slow down. This is a fatal problem for Evergrande.

The Evergrande Ice Spring released by Xu Jiayin has reached 30 billion magnanimous words in 3 years, but the FMCG industry does not agree. Because currently, the master chef of low-end water has only more than 10 billion in sales, if Evergrande's annual sales reach 30 billion, it is almost equal to the entire bottled water industry. Going beyond the sales target does not make any sense.

Fast-moving consumer goods are difficult to get into the sky in one step, and it is impossible to operate agriculture quickly. In particular, agriculture is currently in a critical period of transition from traditional agriculture to modern agriculture. The mode of breeding and products is not equal to the demand for products, and logistics distribution and market are not equal. Problems such as packaging, depletion, land integration, and farmer management have come one after another. These problems cannot be solved without money.

At the same time, agricultural professionals who have genuine experience and vision and want to do a good job will also be far away because of Evergrande's impetuousness.

When money can't be solved, people need to sink to find new solutions. Lenovo is doing such exploration. Is Evergrande ready?

Brand extension disorder, mixed use of one brand and multiple industries

To be a brand, from the brand name, brand core value, brand image, brand story, etc., all need to integrate planning, in-depth excavation, meticulous creativity. These intangible things will become intangible as the product goes to the market and in the process of product sales. The market reputation will gather on the brand and the brand will become stronger. After that, the brand will help the product to open up the market and stabilize the market. In the agricultural product market where consumption upgrades and homogeneity are serious, branding must be a necessary hard work.

Evergrande has set foot in drinking water and its product is called Hengda Bingquan. Now it has entered three new agricultural business companies, namely Evergrande Dairy Group, Evergrande Animal Husbandry Group and Evergrande Grain & Oil Group. It does not know what its final product name is. Evergrande's style is estimated to be the "Evergrande XX" model.

This approach seems to have borrowed Evergrande's brand awareness, but there is no brand value at all.

Nestlé, the world's largest food company, sticks to "select quality and select Nestlé" and has always regarded quality as the brand's soul. Under the high support of quality value, the extension can also be a matter of course.

The key now is that the value of the Evergrande mother brand is empty and ambiguous, and even if it is affixed with a lot of negative labels, such brand extensions are empty and weak, and are likely to become cumbersome and burdensome.

When it comes to COFCO, consumers will immediately think of high-quality agricultural products in the entire industry chain. When they talk about Nongfu Springs, consumers will think of “natural porters.” To mention them, Jiaduobao naturally associates itself with the label of “original herbal tea”.

Now that Evergrande has been involved in big agriculture, what is the brand value? What can Evergrande export in the agricultural sector?

In that year, Bawang was optimistic about the herbal tea industry. It was an endorsement of Bawang, a well-known brand of shampoo, and launched the Overlord Herbal Tea. Consumers knew this brand, but they did not buy it because the Overlord already had an in-depth shampoo value. It will feel like a shampoo.

Some commentaries said that between win and respect, Xu Jiayin seems to have only acquired the former in the industry. He is in a utilitarian era.

Nowadays, Xu Jiayin’s large-scale participation in the big agricultural industry is a strategic choice to achieve "winning respect." However, the big agricultural industry in the golden opportunity period is far from the utilitarian vanity field but the business field of the entrepreneurs who have the responsibility to take on the responsibility. Whether Xu Jiayin can overcome the hardships and continue to write success myths and achieve Nirvana from “local tyrants” to “everyone” can earn real respect not only depends on his current hard power, but also on his future soft kung fu.