Very sudden! Well-known brands have withdrawn their cabinets and closed stores in many places, and dealers have been terminated without warning, "Please be kind"! Official response
"Small body, big taste", the chocolate brand that was once known for this advertising slogan seems to be difficult to find.
According to Beijing Business Daily, the hershey (China) Investment Management Co., Ltd. (hereinafter referred to as "Hershey") online Tmall flagship store has recently been terminated, and a number of goods in Hershey Jingdong's self-operated stores are out of stock. The internal staff of the Hershey dessert shop revealed that Hershey has withdrawn the cabinet and closed the store in various parts of the Chinese market line, leaving a channel dispute with the dealer...
According to Beijing Youth Daily, on February 9, Hershey China replied that it would not withdraw from the Chinese market, and that offline and some online channels were still selling normally.
At present, the latest update of Hershey Chocolate's official Weibo is still on January 28 of the previous year.
The performance of China is not good, the market positioning is not up and down, and when it comes to China for 27 years, the days are a little sad.
Hershey withdrew from the Chinese market?
Chinese distributor: Terminated without warning
In January this year, the "Hershey Dessert Concept Store" WeChat subscription account posted that Hershey Company had withdrawn from its office in Pudong, Shanghai, due to the adjustment of the Chinese mainland development strategy, planned to reduce the number of companies and adjust the scale of the Chinese market, and had withdrawn from its office in Pudong, Shanghai, and closed its stores in many offline places, and hershey legal representatives had left China.
Among the trends of withdrawing cabinets and closing stores, there is market news that it will withdraw from the Chinese market in the future.
In an interview with a reporter from Beijing Business Daily, an employee inside the Hershey dessert shop said that since 2020, Hershey has begun to lay off employees at companies in Shanghai, China, and to reduce business in the Chinese market. In May 2021, Hershey suddenly sent a letter informing Hershey Dessert Shop that it was requesting to terminate the contract.
At the same time, in the handling of the remaining problems of the channel, Hershey has disputes with a number of agent dealers.
"Suddenly notifying us to end the contract has caused a lot of losses to the investment and operation of offline stores in various places, and the liquidated damages of commercial supermarkets." The above-mentioned employee mentioned that at present, the Chinese agent dealer is communicating with Hershey through lawyers.
Hershey's Dessert Shop also posted "Hershey's Good Times!" Please be kind to your distributors and workers in China.
Both online and offline (45.090, -0.34, -0.75%) are closed
In January this year, the Hershey Tmall flagship store terminated operations. According to Beijing Youth Daily, searching for the keyword "Hershey" on the Tmall platform, except for related products in some personal stores, did not find a store with a relevant name.
On the Jingdong platform, the goods of the Hershey official flagship store can still be purchased normally, but the Beijing Youth Daily reporter also noted that at present, about 1/3 of the store's products show that they are "sold out". The reporter then visited Beijing's offline supermarkets and convenience stores, and some supermarkets can still find Hershey's products.
According to the Qianjiang Evening News, some consumers said that CR Vanguard, Renrenle (5.890, -0.20, -3.28%), and Yonghui were not sold (Hershey).
Beijing Youth Daily reporter consulted Hershey China customer service as a consumer, and the operator said that the Tmall store is undergoing operational adjustments and will resume operations later, but the specific time is undecided, but the goods on the Jingdong platform are normally sold. In addition, many offline supermarkets are also selling the brand's products. The person said that Hershey has no intention of withdrawing from the domestic market, but the company is adjusting, and the current products are imported from Malaysia, "Before the sale of products in Shanghai, now there is none." ”
In addition, some consumers asked on the official Weibo of Hershey Chocolate: "Is the Taobao flagship store gone?" In response, Hershey replied: "The Taobao flagship store is under renovation. ”
At present, the most recent update of Hershey Chocolate's official Weibo was on January 28 a year ago, and the Weibo can no longer be commented on. At the same time, the official website link provided on Hershey Chocolate's official Weibo can no longer be opened, and the flagship store link click shows "No corresponding store information was found".
Shows the bankruptcy liquidation
Litigation disputes with dealers are constant
According to the information, Hershey (China) Investment Management Co., Ltd. has been liquidated in November 2021.
The company was founded in April 2001 with ROHIT GROVER as its legal representative, with a registered capital of approximately US$840 million, and is wholly owned by Hershey International LLC. According to the risk information, the company is related to more than ten litigation cases, involving disputes over sales contracts and disputes over sales agency contracts.
In addition, ROHIT GROVER is also associated with two other companies, namely Hershey (Shanghai) Food R&D Co., Ltd. and Hershey Commercial (Shanghai) Co., Ltd. It is worth mentioning that Hershey (Shanghai) Food R&D Co., Ltd. has been liquidated in March 2021, and Hershey Commercial (Shanghai) Co., Ltd. has been deregistered in December 2021.
Hershey (China) Investment Management Co., Ltd. has generated liquidation information on November 20, 2021, the head of the liquidation team ROHIT GROVER, and the members of the liquidation team WILLIAM CHRISTOPHER PRITCHETT and Zhao Zhihua.
Hershey's handling of the remaining problems of the channel has also caused dealers to have great dissatisfaction. The investigation showed that Hershey involved 37 pieces of information involving legal proceedings, and a closer look mainly involved disputes over the sale and purchase contracts between the original distributor and Hershey. Numerous trading companies of former Hershey dealers have filed lawsuits against them.
Performance has been declining year after year
Shrink your business in China
Since 2016, Hershey's performance in China has been declining.
At the beginning of 2016, Hershey focused on the chocolate category and streamlined SKUs, and transferred production capacity in China to Malaysia, according to Hershey data, the decline in chocolate sales in China has shrunk from 13% in 2015 to 4% in 2016.
From FY2015 to FY2017, Hershey China was in a loss-making position, especially in FY2017, when Hershey was the most loss-making market in the world.
In 2018, Hershey's net sales of $7.791 billion increased by 3.7% year-on-year, but the Chinese market fell by 20.5%, and this decline was attributed to Hershey's divestiture of the Shanghai Golden Monkey business.
In 2019, Hershey's revenue was $7.986 billion, up 2.5% year-on-year, and the Chinese market fell 13.4% year-on-year. Entering 2020, sales in the Chinese market fell by 46%, of which the decline in the fourth quarter reached 82.2%.
At the 2020 annual results meeting held in February last year, Hershey Chief Financial Officer Steven Voskuil said that the China business accounted for about 0.6% of the company's sales, compared with about 1% in early 2020. Until November last year, Hershey revealed that it would adjust its business model in China, announcing that it would cooperate with a large local distributor in the future in terms of channel authorization and supply chain system.
According to Beijing Youth Daily, Hershey China recently revealed in a telephone response that it will make large-scale adjustments to the Chinese region, and Hershey's management and executive level will face large-scale layoffs.
The market positioning is awkward
Zhu Danpeng, an analyst in the Chinese food industry, believes that in addition to the impact of the epidemic, hershey's sales business in the Chinese market has declined, and the more important reason is its embarrassing market positioning.
Different from Hershey's "bumpy" operation, confectionery brands such as Ferrero, Mars Wrigley and Mondelëz have developed strongly in the Chinese market, and new chocolate brands such as Daily Black Qiao have frequently received financing, and hershey's market is facing a squeeze. Market data shows that in the Chinese chocolate market in 2020, Hershey's market share is only 3.2%, far lower than Mars' 32.8% and Ferrero's 22.3%.
The industry generally believes that under the influence of fierce enemies, the market positioning of Hershey is not clear compared to it. In the high-end field, Godiva showed the obvious positioning of "Hermès in chocolate", and Ferrero is also well known to consumers as "Italian master craftsmanship"; among the affordable chocolate brands, Brands such as Dove under Mars occupy the terminal market, and the marketing dynamics are continuous, and have long entered the third- and fourth-line retail channels. And Hershey up and down are awkward.
"Hershey's overall positioning of the Chinese market has made a big mistake. The previous acquisition of the Golden Snub-nosed Monkey did not get too many extra points, and now Hershey has neither high-end Ferrero to sell, nor does it have a strong market foundation such as Dove. Zhu Danpeng analyzed this.
Perhaps to win over Chinese consumers again, at the end of 2020, Hershey revealed that it would adjust its Business Model in China and introduce a strategic distributor. At the time, it was reported that Hershey CEO Michele Buck believed that "this transformation means that we no longer rely on our own large number of retail salespeople, but are more focused on arranging through total distributors."
"In the era of healthy eating, chocolate, a high-sugar and high-calorie food, should seize market trends and adapt to changes in consumer demand." Zhu Danpeng suggested that Hershey should differentiate itself from its current positioning in the future and establish its own product pyramid in terms of categories.
Original title: Very sudden! Well-known brands have withdrawn their cabinets and closed stores in many places, and dealers have been terminated without warning, "Please be kind"! Official response
Source: Beijing Business Daily, Beijing Youth Daily, Qianjiang Evening News, Enterprise Investigation, Public Information