Yuanji Yunjiao Zheng Boqi: Adhering to sincerity, adapting to the market, and bringing Chinese dumpling culture to the world | WISE2024 Future Consumption Conference

On November 29th, the WISE2024 Future Consumption Conference was officially held in Beijing. This conference is hosted by 36Kr Future Consumption, with the theme of "Always with You", focusing on hot topics in the consumer industry. It invites more than 20 executives from investment institutions, platform providers, brand owners, and service providers to jointly explore new trends and opportunities in the consumer industry. 

Yuanji Dumpling is a star brand in the catering industry in recent years. In 2023, their national store count exceeded 3,500, with a total revenue of over 4.7 billion yuan. Up to now, the number of its stores has exceeded 4,000, making it the well-deserved "number one" in the same industry.

In September this year, 36Kr had a long conversation with Zheng Boqi, the co-founder of Yuanji Dumpling. A viewpoint he repeatedly emphasized is that "The future is unpredictable. Yuanji's current achievements are not the result of making a correct key prediction, but the accumulation of many small attempts." At this conference, Zheng Boqi once again shared his views on the future: "The future is unpredictable. What we can do is to continuously maintain a better state in the process of change."

Coming back to the present, as words like store closures and declines appear more and more frequently, the development of the catering industry is also facing greater challenges. But Zheng Boqi mentioned, "We still have an optimistic attitude towards the future." He summarized the ways Yuanji Dumpling has explored market demand and strengthened its "core" in the past few years in five aspects: the iteration of products and services, the innovation of business models and consumption scenarios, promoting brand chain operation and the standardization of fresh dumplings, food safety guarantee, and social responsibility.

Regarding the topic that catering enterprises are competing to go overseas, Zheng Boqi calmly stated, "Yuanji must first consolidate the domestic market, and conduct in-depth understanding of the overseas market and culture to explore a suitable expansion strategy."

In Zheng Boqi's view, the Chinese market itself is large enough and full of challenges. If a brand blindly seeks overseas expansion without being good enough in the domestic market, it is likely to encounter more difficulties. This is indeed the case with Yuanji Dumpling. It was not until recently that they opened their first store in Singapore, and the store design in the North American market is still in progress.

The co-founder of Yuanji Dumpling, Zheng Boqi

The following is the speech record of Zheng Boqi, the co-founder of Yuanji Dumpling:

Good morning everyone! I'm Zheng Boqi from Yuanji Dumpling. A few months ago, I had a communication with 36Kr. At that time, they were very concerned about what decisions Yuanji made in the past development process or what predictions it made for the future to achieve today's achievements. Now, my view remains the same: The future is unpredictable. What we can do is to continuously maintain a better state in the process of change.

This conference is called the "Future Consumption Conference". I think those who dare to make trends and judgments about the future and put them into practice are very courageous. As a brand in the catering industry, Yuanji has been constantly exploring market change trends in the past ten years, taking meeting diversified consumer demands as the development direction, and building an overall industrial chain system for fresh dumplings.

In 2024, the catering industry has entered a slow growth cycle. Many catering stores have closed in the first eight months of this year. This phenomenon not only occurs in the catering industry, but also in other real economies that are experiencing such a cycle. Although the industry is in a low-speed development cycle, we still have an optimistic attitude towards the future.

First, the economic cycle is volatile; second, after the epidemic, many catering stores have turned takeout from an optional choice to a necessary one. Coupled with the rapid development of local life on new media content platforms, the boundary between online and offline catering has gradually become blurred, and digital catering services have become the second growth curve. Finally, from the perspective of brand development, the chain model is undoubtedly the preferred strategy to achieve expansion and growth, and a complete supply chain system can help the franchise model run more steadily and further. In the past few years, the catering industry has produced many excellent and large-scale categories, among which snacks and fast food have performed very well in the overall segmented track. Yuanji Dumpling belongs to the fresh dumpling track under snacks and fast food.

In the past few years, Yuanji has made a lot of efforts in exploring consumer demands and strengthening the "core" of the enterprise:

First, in terms of product and service iteration, Yuanji Dumpling launched a new beef series in November with tender meat and a rich beef flavor; last year, it also collaborated with the "Haohuanluo" brand to launch a new way of eating dumplings.

At the same time, Yuanji Dumpling has always kept the number of SKUs sold in stores streamlined, but the differences in products sold between different regions and stores are quite obvious. This is because Yuanji has been exploring how to make products better integrate into local tastes. For example, in East China, fish and crab roe fillings are more popular, while in Northwest China, beef and scallion fillings are more favored.

In order to improve the quality of the consumption experience and the ability to control public opinion, Yuanji Dumpling periodically updates the user interaction design and builds a brand membership system, and also formed a professional team within the company to be responsible for media relations and user relationship management. These two measures have achieved remarkable results. Currently, the number of brand members has exceeded 18 million, and the level of after-sales service is also gradually improving.

Therefore, building a more dynamic, differentiated and competitive product matrix and service system to meet diversified consumer demands has become Yuanji's development direction.

Second, in the past more than ten years, the business model of Yuanji Dumpling has also undergone a transformation. In the first five years, we mainly focused on the new retail model next to the market. But with the transformation of the catering industry, Yuanji Dumpling has basically formed a a new model of "fresh food retail + in-store dining + online transactions" operating simultaneously.

Regarding some discussions about Yuanji Dumpling's transformation in the market, in fact, on the basis of doing a good job in the original business, Yuanji attempts to innovate the "dumpling +" store model, launching "Dumplings and Wine", "Yuan Coffee" and "Black Pork Shop" to expand the product matrix and innovate consumption scenarios, and find the second growth curve. Innovation is inevitably accompanied by risks, but enterprises must not stop moving forward just because they are afraid of failure.

Third, Promoting the standardization of fresh dumplings, transforming products that could only be standardized in the frozen food field into hand-made and quality-stable products in stores, is also the key to the success of Yuanji Dumpling's chain operation. Moreover, we have always adhered to the concept of "win-win cooperation" with franchisee partners, and actively sought digital and intelligent transformation to empower the organization and franchisees.

For example, we have used digital and intelligent technology to provide franchisees with a set of scientific model measurement systems. This system can predict the store opening success rate, transaction attributes, and the approximate payback period, providing strong decision support for franchisees in store location selection and improving the overall store opening efficiency.

This year, I found that the composition of franchisees is changing. More and more professional franchisees, who have rich experience and a keen market insight, have higher requirements for the brand. Professional franchisees force the brand to improve its organizational ability, product strength, and efficiency to meet the high standards of franchisees. In the past, novice entrepreneurs were often deceived by bad brands due to lack of experience, but now they have learned to distinguish the quality of brands and choose the ones that are really worth joining.

Fourth, Food safety is always the top priority that cannot be ignored in the food industry. In order to make consumers eat with peace of mind and confidence, Yuanji not only strengthens publicity and guidance in the internal culture, but also continuously invests and innovates in the food safety monitoring system. In the future, we plan to use AI technology to empower store supervision, improve supervision efficiency through advanced technologies such as visual recognition, and ensure that every store can meet strict food safety standards.

At the same time, we are also building an overall industrial chain system for fresh dumplings, from stores to the supply chain, to factories, and even to the comprehensive penetration of agriculture. We not only have layout breeding farms and planting bases, but also involve in soy sauce brewing and other fields. This is based on the expansion and extension of core capabilities. Only by closely connecting the upstream and downstream of the industrial chain can the product quality and supply chain efficiency be improved, providing consumers with better and safer products and services, winning wider trust, and laying a solid foundation for the long-term development of Yuanji.

Fifth, As a chain catering brand, Yuanji Dumpling also undertakes the social responsibility of providing employment and entrepreneurship opportunities for the society and inheriting and promoting Chinese food culture, which is also one of the important driving forces for Yuanji's continuous development and growth.

In the context of globalization, many brands are seeking opportunities for overseas expansion, while Yuanji is particularly cautious in this regard. It was not until recently that they opened their first store in Singapore, and the store design in the North American market is still in progress. The Chinese market itself is large enough and full of challenges. If a brand blindly seeks overseas expansion without being good enough in the domestic market, it is likely to encounter more difficulties. Therefore, Yuanji must first consolidate the domestic market, and conduct in-depth understanding of the overseas market and culture to explore a suitable expansion strategy.

To sum up, even though future consumption is difficult to predict, what we will always do is to continuously iterate internally, accelerate efficiency, and increase the space for change. Yuanji Dumpling, Always with You, thank you all!