Recently, news spread like wildfire that Weilong, the “biggest leader in the spicy food industry”, will go public in Hong Kong. According to media reports, Weilong is currently cooperating with CICC, Morgan Stanley and UBS to plan an IPO in Hong Kong in 2021 and plans to raise US$1 billion.

Although Weilong has not officially responded yet, this has increased the outside world’s speculation and curiosity about it. How did the once humble 50-cent street snack counterattack and become an Internet celebrity food, with revenue of 4.9 billion yuan, and will start its capital expansion road.

Big business in a small workshop

Speaking of spicy noodles, we have to mention the "hometown of spicy noodles in China" - Pingjiang, Hunan.

According to statistics, there are currently nearly 1,000 spicy tiao companies in the country, with an industry annual output value of approximately 58 billion yuan. Pingjiang County accounts for half of this, with an annual output value of 20 billion yuan. There are rumors in the world that more than 90 hot potato operators across the country are from Pingjiang.

Pingjiang is also the hometown of Liu Weiping, the founder of Weilong.

In 1999, Liu Weiping, who graduated from high school, took his younger brother Liu Fuping from Pingjiang, Hunan to Luohe, Henan, a wheat production place, and opened a small gluten workshop.

But he was not satisfied with the profits brought by the small workshop. He found inspiration from the traditional snack beef tendon noodles and developed China's first spicy spicy strips. Then the equipment was improved and mass production was realized. In 2003, the "Weilong" trademark was registered, becoming the first brand in China's spicy bar industry.

In 2005, Weilong ushered in a period of growth. Weilong small gluten and large gluten were launched one after another, becoming a fond memory for those born in the 80s and 90s.

Weilong’s solution to the problem

In order to ensure quality, Liu Weiping spent millions to change the packaging machine to fully automatic, set up a quality management organization, and also A fully automated sterile production workshop has been built.

In terms of distribution channels, while many spicy strip companies are still wholesale to township supermarkets, Weilong has chosen to enter large supermarkets and chain convenience stores to establish a nationwide dealer network.

In 2015, Weilong officially laid out e-commerce channels and entered major e-commerce platforms such as JD.com and Tmall. According to Xiaopai’s statistics, Weilong currently has 3.09 million fans in the Tmall flagship store*** and has more than 20 categories, among which monthly sales of large gluten, konjac, Qisuishao, small gluten, and flavored kelp are all over 50,000.

After nearly 20 years of development, Weilong has firmly secured the top spot in the domestic spicy bar industry, and was once on the American luxury food list. The price is about 11 US dollars, equivalent to RMB About 80 yuan.

On the Tmall overseas platform, the export of spicy strips has increased by more than 120% in the past six months. Weilong spicy strips are sold to more than 160 countries and regions around the world. Japan has become the largest importer of spicy strips, followed by Singapore, South Korea, the United States.

According to the "Snack Industry Development Report under the Background of Consumption Upgrading" released by the Circulation Industry Promotion Center of the Ministry of Commerce, the total output value of the snack industry will be close to 3 trillion yuan by 2020. Among them, the annual output value of the spicy strips category alone is nearly 60 billion yuan. Weilong’s market share ranks first at about 8.1.

According to Weilong’s financial report data, Weilong’s revenue in 2019 was 4.909 billion yuan, a year-on-year increase of 43%. Brand founder Liu Weiping stated at the Weilong Food 2020 Partner Conference that Weilong’s goal this year is 7.2 billion yuan. At the same time, according to the 2018 plan, Weilong will sell 10 billion in 2021.

It is reported that Weilong Food produces 30 to 40 million packs of spicy strips every day, accounting for 10% of the country's spicy strips industry. The annual sales revenue of Weilong's konjac products alone reached 83.06 million yuan, a year-on-year increase of 170.03.

Rely on marketing

In addition to successful channel construction, another highlight of Weilong is its genius marketing.

1) Taking advantage of the opportunity for marketing

In September 2016, on the day Apple launched its new product iPhone7, Weilong took advantage of the opportunity to get out of the industry. Launched a wave of "Apple-style" marketing and produced a series of Apple-style advertisements for its spicy strips, which positively displayed the "high-end" image of spicy strips and also analyzed the ingredients of spicy strips.

2) Invite celebrity endorsements

In 2010, we teamed up with the popular star Zhao Wei to launch the "Weilong" classic series. In 2012, Weilong invited the popular actress Yang Mi to join the company and endorse a series of products such as "Kisui Shao" and "Kisui Dried Tofu".

The high popularity and influence brought by endorsements by well-known artists have raised Weilong's brand competition to a new level.

3) Brand image upgrade

In order to improve the brand image, Weilong invited a professional photography team to take pictures of the company's assembly lines and workshops. It also launched a simple spicy strip packaging with an all-white base and funny sentences. The non-transparent packaging abandoned the concept of the old packaging to directly display the product to consumers.

The clean and refreshing appearance of the new packaging embodies a high-end feel, changing the low-end and cheap feel of spicy strips in the past.

Weilong’s Crisis and Opportunity

On August 17, 2018, Weilong’s “kiss-and-mouth burning” was on the blacklist of the Ningbo Zhenhai District Market Supervision and Administration Bureau. The reason for failure is also that the sorbic acid content was detected at 0.219g/kg and the dehydroacetic acid content was 0.0989g/kg, which the standards stipulate must not be used.

In the early morning of September 4, 2018, Weilong Food responded on its official Weibo, saying that Weilong products are completely legal and compliant.

Weilong said that since 2007, seasoned noodle products (spicy strips) have been subject to various local standards (including the "Local Standard for Seasoned Noodle Foods" (DB41/T515-2007) implemented by Henan Province. And the "Local Standard for Extruded Pastry" (DBS43/002-2017) implemented by Hunan Province is represented).

In 2019, dangerous spicy strips were exposed at the CCTV March 15 party. The production conditions were extremely unhygienic and there were no health protection measures. Affected by this, Wei Long fell into a crisis of trust.

Since spicy strips are relatively cheap, mostly priced at 5 cents or 1 yuan, in order to ensure profits in all aspects of the process, it is difficult for these low-cost snacks to meet national requirements in terms of production environment and worker requirements. It is inevitable that there will be some safety hazards.

Although spicy strips are delicious, how to get rid of the label of "junk food" will be a test for Wei Long.

Generally speaking, Weilong's development path is relatively stable, but news about food safety issues still appears from time to time in recent years.

In addition, the single production variety is also one of the bottlenecks for Weilong's growth. At present, Weilong is constantly enriching its product chain, but category expansion cannot be achieved overnight. As snack giants compete for layout in spicy strips, competition in the spicy strip market will become increasingly fierce in the future.