Wen | AI Finance and Economics Cheng Liang
Editor| Yang Jie
"Adopt a Cow", which has just completed series A financing, is going public.
On October 14, according to the Zhejiang Securities Regulatory Bureau, Adopt a Cow Holding Group Co., Ltd. signed a listing counseling agreement with CITIC Securities at the end of September to propose A-share listing, and the counseling time is expected to be from September 2021 to April 2022.
In April 2021, "Adopt a Cow" announced the completion of a series A financing, and the investment institutions are Dehong Capital, KKR, Haibang Fenghua, Guanghe Investment, etc. It is reported that the financing is mainly used to expand the scale of upstream dairy cattle breeding, accelerate the upgrading of enterprise digital intelligence and the refined operation of the industrial chain.
As a cutting-edge dairy brand, "Adopt a Cow" quickly came out of the circle with the "adoption mode", and after the establishment of the company 7 years later, it began the listing process. However, behind fancy marketing, the public is more concerned about whether the users who pay for it really "adopt" a cow and drink milk from the ranch?
From real estate "across" to dairy
(Photo: Screenshot of the official flagship store of the adopted cow Tmall Mall)
In 2012, Xu Xiaobo, a real estate businessman, returned to the mainland with eight cans of imported milk powder from Hong Kong and was questioned by Hong Kong Customs for four hours because he did not understand the purchase restriction order. In the end, the milk powder was not brought back to his son, but he wrote a long letter of guarantee.
Frustrated, Xu Xiaobo began to think about "making milk". Two years later, Xu Xiaobo transformed into a dairy business and became a rancher. In 2014, Xu Xiaobo imported 6,000 Holstein cows from Australia and spent 460 million yuan to establish Kanghong Ranch in the ancient city of Hebei. It was also the company's first modern ranch.
According to the filing public documents, adopting a cow holding group was established in 2014, Xu Xiaobo served as the company's legal representative, chairman and general manager, directly held 45.61% of the company's shares, and indirectly held 0.28% and 0.04% of the shares through the employee shareholding platform Ningbo Flying Bull and Ningbo Calf respectively, and the final shareholding ratio was 45.93%.
In 2016, the "Adopt a Cow" brand was officially established. At the beginning, the company took a fancy to the dividends of content self-media and social e-commerce, and through in-depth cooperation with well-known self-media such as Wu Xiaobo Channel, Doctor Lilac, and Dad Evaluation, it gained the first batch of seed users with the help of private domain traffic. Wu Xiaobo channel once launched the "adopt a cow" community interaction plan, as soon as it was launched, it quickly gained 10W+ reading, and the business model of "adopting a cow" began to enter the eyes of consumers.
In addition to the ingenious "adoption" marketing, Xu Xiaobo will also mention from time to time on new media channels that he "gave up" the profiteering real estate industry and aspired to do "assured milk" in order to tell the new story of the dairy industry.
However, it is worth noting that some media have reported that Xu Xiaobo was the chairman of Zhejiang Zhongsheng Industrial Co., Ltd. before cross-border dairy. The company actually belongs to the building materials manufacturing enterprises, and its business scope includes the manufacture and sales of bamboo rubber formwork, chemical raw materials, building materials, etc. Moreover, in the year of investing in the establishment of the ranch, the company was saddled with a debt ratio of up to 66.67%.
The "adoption concept" is out of the loop
According to Euromonitor data, the dairy market space will grow to 590.98 billion yuan in 2020, and the average annual compound growth rate of dairy products as a whole (excluding milk powder) in the past 5 years will be 3.6%. In May this year, at the Global Food and Beverage Innovation Conference, dairy analyst Song Liang said that "in 2021, 2023 at the latest, China's dairy industry will usher in the second peak of development, that is, the second golden decade."
As one of the new dairy brands that catch up with the "outlet", "Adopt a Cow" decided to start from the milk source to make consumers fall in love with "visible" milk.
High-quality milk sources have always been the key to dairy competition, but unlike most traditional dairy companies, which mainly present the transparency and traceability of the milk production process through brand promotion, "adopt a cow" cleverly avoids the words of its own pasture, high-tech equipment and organic feeding, and enters the user's vision with "a company that raises cattle for users".
"Adopt a cow" has played the advertising slogan of "if the cow is well raised, the milk will be good", and its operating model can be seen from its brand name - let consumers who want to choose good milk adopt a cow.
As early as 2017, in order to pull new ones, "Adopt a Cow" was recruiting "cattle partners" and launched two forms of adoption. One is to pay 2,999 yuan to adopt a cow and obtain the right to adopt a dairy cow on the pasture; the other is to spend 10,000 yuan to become a joint rancher and obtain all the rights and interests of adopting a cow. At the same time, depending on the promotion effect, cattle partners can receive a commission of 5% to 10%.
It wasn't until May 2020 that adopting a cow was officially announced to the public about its "adoption model," which includes three levels.
The first level is "cloud adoption", users can "cloud cattle" on the official Taobao and WeChat Mini Program game, while you can watch the farm dynamics and live broadcast; the second level is the company's joint Wu Xiaobo channel, Dunhuang IP, etc. to launch a co-brand card, users can buy a season card or annual card, regularly enjoy product delivery and parenting guide and other services; the third level is real-name adoption, become a cattle partner, which can be counted as the highest level of membership, can book milk a year in advance, but also give the cow a name, Get its photos and growth data, etc.
From the current official introduction of the three levels of "adoption model", according to ai finance and economics observation, in the "adoption of a cow" level of rights and interests, from cattle newcomers to cattle reds, to cattle masters, and finally cattle partners, each level corresponds to the threshold of cumulative consumption amount.
(Picture: Screenshot of the official WeChat Mini Program member center of adopting a cow)
However, some insiders said that the adoption model is actually just a "concept", and the company's so-called "adoption" marketing is more like a "member" marketing game that has changed its clothes.
Through the "co-brand" model, the user actually just buys a membership card to purchase the product. The final "cattle partner" model is based on the user's belief that he has "adopted" the cow, binding it to become a long-term member and making continuous consumption investment.
With the "adoption concept" out of the circle, the online sales of "adopt a cow" soared. Xu Xiaobo, founder of "Adopt a Cow", once said that online sales accounted for 70% of the company's channel revenue.
According to counseling data, during the "Double 11" period in 2020, the sales volume of the Tmall flagship store of the "Adopt a Cow" brand exceeded 100 million, ranking first in the sales volume of the brand flagship store in the dairy industry; during the "618" period in 2021, the company's dairy sales ranking on the Tmall platform followed the two major brands of Yili and Mengniu, and the sales ranking of the brand flagship store ranked first in the industry. According to magic mirror market intelligence data, as of June this year, "adopt a cow" has achieved a single monthly revenue of 130 million yuan, ranking third in the national dairy TOP brand sales.
Dairy analyst Song Liang told AI Finance and Economics, "On the one hand, 'adopt a cow' hitched a ride on the hot shuttle of new retail online sales, on the other hand, in the case of people's numbness to the traditional dairy brand story, the concept of 'adopting a cow' meets the personalized needs after consumption upgrades, and also caters to the capital market that is optimistic about the development prospects of the dairy industry in recent years. ”
However, users are more concerned about the fact that the money is spent, and the "cow" is adopted, but will they be able to drink the milk provided by the adopted cow?
Is it an IQ tax to raise cattle for milk?
With the concept of "adoption", it is naturally accompanied by the discussion of emerging business models by consumers and the market. At first, many consumers thought that the brand concept conveyed the meaning of "really adopting a cow of their own and having it produce milk exclusively." ”
However, whether each adoptee can drink the milk of his adopted cow may be marked with a question mark. Zhu Danpeng, a Chinese food industry analyst, once said in an interview, "From the perspective of large-scale production, it is not realistic for individuals to entrust the ranch to 'adopt a cow' and specify to obtain milk source products from this cow." ”
In March this year, dairy company Mutong Technology disclosed in the 2020 annual report that "adopting a cow" is its largest customer, and the annual purchase amount last year reached 45.3989 million yuan, accounting for 18% of the annual sales of Mutong Technology.
In response, "Adopt a Cow" responded that the company has no longer cooperated with Mutong Technology since this year; and admitted that not all of the company's products are from its own milk source, and some of them are from well-known partner farms in the industry.
At the end of last year, the Tongliao Municipal Government, the Kezuohouqi Government and the "Adopt a Cow" held a signing ceremony for the strategic cooperation agreement for the dairy industrial park project. It is reported that the project plans a total investment of 5 billion yuan, including the construction of 60,000 dairy cattle farms and milk powder processing plants.
Behind the highly questioned "adoption" marketing, how the company's real product quality has become the most concerned issue for users. At present, the products of adopting a cow mainly include pure milk, kefir, cheese sticks, milk powder and other categories of the "Adopt a cow" brand. According to the data of the official flagship store of "Adopt a Cow" Tmall Mall, its main products are high-end milk "A2β Casein Pure Milk" and "Juanshan Cow Pure Milk", and the original price of 1 carton of 10 boxes of 250ml milk is 149.5 yuan and 199 yuan respectively, which is 2-3 times the price of 1 carton of ordinary pure milk of other brands.
In this regard, Song Liang believes that "'A2β casein pure milk' and ordinary milk still have a certain difference, but this product has a good concept education and popularization in the domestic market, and the business performance in ambient milk is also very good, so it is very appropriate to launch this product." However, the rare breed of 'Juanshan Cow Pure Milk' has yet to be accepted by consumers. ”
"Listing can further achieve online and offline mutual integration and alleviate the financial pressure of layout development for 'adopting a cow'." But it is worth noting that its sustainable development logic is still not enough, and it is difficult to make it bigger from the perspective of product scale effect. For it, if it transforms into a traditional dairy enterprise in the future, it will be very difficult for peer competition. Song Liang said.
This article is originally produced by AI Finance and Economics, an account of Caijing Tianxia Weekly, without permission, please do not reprint it on any channel or platform. Violators will be prosecuted.