Qatar World Cup this year,Yili can be described as “strike hard”, sponsoring four national teams and signing five stars in one go.
However, Benzema retired from the game before, and Ronaldo was out later. The continuous “bad news” seems to have made Yili’s marketing plan come to nothing. Fortunately, Argentina finally won the championship, saving Yili’s “blood loss” situation.
A marketing expert who has participated in the marketing of Olympic events told Sina Finance that there is no middle ground in sports event marketing, “either go to heaven or go to hell.”
While spending money in the World Cup, Yili’s performance has also begun to suffer from Waterloo: this year’s Q3 financial report shows that since 2016, Yili’s third-quarter net profit fell for the first time.
An industry insider who has been focusing on dairy products for many years told Sina Finance that Yili’s decline is mainly due to the trend of the general environment. But what is even worse is that in the past five years, China’s dairy market has no growth point, and the market is quite weak. Compared with foreign countries, China’s dairy market is obviously inclined to be the leader.
Yili’s “World Cup Journey”,
Win or lose?
“The charm of sports is unknowability. In the fields of entertainment and sports, the target will gather traffic instantly at the most brilliant moment of his career, which is reflected in the two worlds of ice and fire in marketing. There is no middle ground. Either go to heaven or go to hell ” said Zhang Kaiyu, Managing Director of Soyoung Management Consulting.
World-class sports events have always been an excellent opportunity for major brands to emerge, increase brand exposure, and stimulate weak business. The Qatar World Cup is the first World Cup held after the 2020 epidemic, and it is also the first time the Middle East holds the World Cup. Compared with previous , This year’s Qatar World Cup has a higher degree of attention.
Yili can be said to have a huge momentum in the launch of this World Cup. On October 28, Yili stated on the investor platform that it will carry out various marketing methods around the World Cup to bring high-quality nutrition experience and services from Chinese brands to consumers around the world, and let Chinese brands shine in the global sports industry.
At the World Cup in Qatar,Yili has successively reached cooperation with the national football teams of Argentina, Portugal, Spain and Germany, becoming the sponsor of the four teams in China;
It also signed three “No. 7” players, Ronaldo, Beckham, and Wu Lei, and used “love to be named after 7” as a slogan to promote; in October, Yili officially announced that the Brazilian football national team star Neymar Benzema became its official spokesperson.
However, Argentina lost to Saudi Arabia in the first game, Germany lost to Japan again, and Brazil, the favorite to win the championship, also lost to Croatia due to a penalty shootout. Neymar was out again.
In terms of spokesperson, before the game, Benzema specially registered on Weibo, announced that he would become the spokesperson of Yili, and said that he would see him at the stadium in November. But before the start of the game, Benzema suffered a thigh injury and directly withdrew from the World Cup.
Ronaldo had a dispute with his “owner” Manchester United due to inappropriate remarks in an interview. Manchester United believed that it had violated the rules and decided to use legal channels to terminate the cooperative relationship with Ronaldo.
Fortunately, Argentina finally saved the situation and won the championship, and Yili did not become a “Yi Kui”.
Zhang Kaiyu told Sina Finance that virtually every brand is betting on world-class sports marketing like the World Cup.
“The marketing team’s signing of the spokesperson depends on the vision and luck. The spokesperson must sign in advance, and it is too late to wait for the player to score a goal. One is that they have already been signed, and the other is that the price is different. Everyone is betting on themselves in advance. The signed spokesperson will be popular, and if you lose, you can only admit it.”
He said that nowadays, intelligence gathering capabilities are becoming more and more developed. Players’ physical data, public opinion data, clothing, food, housing, transportation, health conditions, and training conditions can all be given to the brand side, but this is just a reference and a plan. On the executive level, winning or losing has never been determined. When a brand signs a spokesperson, there is almost no one plan that assumes that the athlete will win, and there will be two or even three sets of plans. Fang’s different rhetoric.
“Not only the strong and winners can do marketing. Ronaldo can also do marketing after returning home, but it needs to start with recognition, not cognition.”
Zhang Kaiyu further explained that in the world of public opinion, the strong can gain recognition through their status as the number one. But the weak can gain recognition and sympathy.
“At this time, both the marketing team and the athletes need to position themselves and quickly change their direction. In fact, many classic cases have proved it. For example, when Liu Xiang retired in 2008, Nike, as its brand, followed up with a series of advertisements about sportsmanship. Very successful.” Zhang Kaiyu said.
However, whether the marketing effects of “heaven” and “hell” can be directly linked to their operations still depends on their marketing plans. Brands can choose brand traffic and effect traffic.
“If marketing and sales are bundled, and is done while scanning codes to place orders and give away related peripherals, etc., it will directly affect sales. However, marketing programs such as interviewing spokespersons, shooting commercials, and participating in public welfare activities are mainly to establish brand image, while It is not converted into revenue figures in a timely manner.” Zhang Kaiyu said.
Q3 net profit fell for the first time in 6 years,
Experts say serious involution
In fact, Yili, which has been spending money like crazy in the World Cup, has recently seen its first decline in net profit since 2016.
Its third-quarter report shows that in the past quarter, Yili’s operating income recorded approximately 30.287 billion yuan, a year-on-year increase of 6.72%, but the net profit attributable to shareholders of listed companies recorded a significant year-on-year decrease of 26.46% As a result, the net profit dropped to approximately 1.929 billion yuan.
On the second day after the results were released, Yili’s stock price fell by the limit, hitting a new low in the past two years. On the second day, it fell again and closed at 25.24 yuan per share. The stock price fell by more than 40% from last year’s peak price of 50.06 yuan per share.
Similar situations are extremely rare in Yili’s past performance. After the report card was released, a number of securities institutions issued research reports, bluntly saying that Yili’s performance in the third quarter fell short of expectations.
In this regard, Yili explained in its financial report that due to fierce market competition, the increase in sales expenses in the third quarter compared with the same period resulted in a decrease in net profit, and the increase in gains from changes in the fair value of trading financial assets led to an increase in non-recurring gains and losses compared with the same period.
However, the SPDB International Research Report pointed out bluntly and sharply that, apart from the impact of the epidemic, Yili’s weak performance in the third quarter of this year was mainly the result of its own operations and short-term strategy adjustments, and could not be attributed to intensified industry competition and industry terminals. Changes in market demand.
In this regard, dairy industry analyst Song Liang gave the opposite view. It believes that Yili is the absolute leader in the domestic dairy industry, and leading companies have the strongest ability to resist risks. According to Euromonitor International data, in 2021, the market shares of Yili and Mengniu will be 25.8% and 22.0% respectively, for a total of 47.8%. The industry CR5 is 57.7%, and the third, fourth and fifth only account for 10% of the market share.
Song Liang believes that other companies, including Guangming, have experienced a substantial decline in net profit after the painting, which is more difficult than leading companies.
The financial report shows that in the first three quarters, the year-on-year changes in the liquid milk revenue of Bright Dairy were 2.03%, -13.76%, and -4.98%, respectively. The total liquid milk revenue in the first three quarters was 12.098 billion yuan, a year-on-year decrease of 5.79%.
In addition, it also stated that Yili can partially represent the performance of the entire market. “This financial report reflects the decline in purchasing power caused by the epidemic and the restriction of consumption caused by the reduction of personnel movement, which has caused the weakness of the entire market.
After the US dollar interest rate hike, the global economy has gone from inflation to stagflation, and commodity companies are facing pressure from rising costs of packaging, raw materials, and milk sources. “
Song Liang also pointed out other problems in the domestic dairy industry apart from the impact of the epidemic. “In the past five years, a very strange phenomenon is that the double-digit growth rate of Yili’s revenue and profit is higher than the average growth rate of the industry, which shows that the Chinese market is accelerating the concentration of top companies. And the European and Japanese dairy companies The industry is just the opposite, and its industry growth rate is generally faster than that of leading companies. In comparison, China’s leading companies account for a very large proportion of the industry’s volume.”
It is also worth mentioning that even when the epidemic did not occur, the entire industry had reached a stage of slowing down in consumption growth. “Products in the dairy industry are homogeneous and involuntary, and the epidemic has only exacerbated this situation. In fact, all categories of the entire dairy industry are facing a sharp slowdown.”
In this context, enterprises need new growth points to ensure the growth of enterprise performance. But in recent years, no new growth point has emerged.
“Everyone puts the growth point on cheese, but the volume of cheese is too small to support. In the past five years, a very important reason for the rapid growth of Mengniu and Yili is the expansion of new categories of room temperature yogurt. The highest moment room temperature yogurt The entire volume of the company has reached more than 30 billion, which has contributed a lot to the revenue and profits of leading companies.”
But now, the overall consumption of room temperature yogurt has also significantly slowed down or even declined. “In this context, the entire industry will face a slowdown until there are no new categories, and the epidemic has further exacerbated the slowdown.”
According to the data of Toubao Research Institute, the market share of liquid milk will reach 60% in 2020, which is the highest proportion. Among them, the compound growth rates of normal temperature white milk, low temperature milk and yogurt in the past five years are 4.1%, 9.80% and 7.70%, respectively.
More importantly, Yili’s products are also aging. The three major products of Yili Pure Milk, Jindian Pure Milk and Anmuxi have been launched for more than 10 years. In addition, 80% of Yili’s sales are distributed in low-tier cities. Young consumers in second-tier cities seldom drink Yili’s milk, not to mention the continuous emergence of niche milk, which is also impacting Yili’s market.
It seems that Yili is also trying to find new growth points. In March this year, Yili launched its first national trendy tea brand “Cha Yu Cha Xun”, which covers two flavors of peach-flavored oolong and green mandarin Pu’er. The unit price per customer is 6 yuan/ Bottle, officially entered the sugar-free tea market. In May, Yili launched the “one on one” brand to enter the pet food market. According to the individual conditions of each pet, through the analysis of health data and daily life details, it customizes pet food for each pet to reduce health risks.
However, today’s tea brands and pet food tracks have both become red seas, and Yili’s multiple dabbles have failed to stir up splashes. At present, only more than 600 people pay for “Tea and Tea Search” on Yili Taobao’s official flagship store. “One on one” has yet to appear on platforms such as Taobao and JD.com.