The Hidden Champion in the Egg Industry: How Chengcheng Group Reshapes the Egg Supply Chain with Digitalization
Eggs, the most common fresh and small-sized food category, hold huge business opportunities.
Statistics indicate that China is the world's largest egg producer and consumer, with an average daily consumption of 1 billion eggs. In 2024, the output value of China's layer chicken industry exceeded 320 billion yuan, the market size exceeded 640 billion yuan, and the industrial chain volume exceeded 2.3 trillion yuan.
However, in such a large-scale and highly demanded egg industry, there has never been an absolute leading enterprise - many problems in the supply chain and trading market are affecting the efficiency and cost lifeline of the entire industrial chain.
What exactly are the stages that an egg goes through from production to processing, from transportation to consumption? How can the egg industry move towards a more intelligent stage?
The Market Gap Behind "An Egg"
A market with a broad capacity and a high degree of dispersion itself presents an opportunity for a high degree of industrial integration.
Wang Qiang, a partner of Xuancheng Green Food Fund under "China Venture Capital Fund", believes that the supply side of the egg industry is extremely fragmented, but the complexity of the demand side is very high. The market credit system of this industry has basically not been effectively established, and it is a typical track where an "industrial hidden champion" has the opportunity to emerge.
On the one hand, for farms, excessive regionalization of "one place, one price" has led to problems of multiple profit losses. Due to the pricing and settlement only based on the local quotation in the production area, the settlement method is single, and there are also widespread problems of triangular debts and having profits but no cash. Moreover, as the layer chickens grow, the eggs they produce have different specifications, resulting in the inability to meet the fixed needs of a single customer; a single sales channel also makes the farms more dependent on egg traders and wholesalers.
On the other hand, for sales channels, behind eggs as a high-frequency trading standard product, not only are there problems with the settlement method, but the lack of product quality and after-sales guarantee also makes the integrity and supporting services of the industry as a whole absent. Coupled with the inconsistency of contracts, invoices, logistics information, and cash flow, disputes are more likely to occur. If the seller lacks a stable supply of goods from the production area, it may not be able to obtain goods during the upward cycle, resulting in capital loss, customer loss, and their own loss.
Facing these pain points and difficulties, enabling each egg to reflect greater industrial value has become the mission of an egg operator that has quietly emerged, "Chengcheng Group".
Chengcheng Xuancheng Industrial Park in Anhui
Chengcheng Group, established in 2019, achieved a revenue of 3.5 billion yuan in 2023, and recently announced the completion of a more than 100 million yuan Series A financing exclusively invested by a fund under Zhongfengtou. In terms of scale, Chengcheng Group has a daily average shipment volume of more than 50,000 pieces in 2023, a cooperative farm scale of more than 30 million birds, and an achieved revenue scale of 3.5 billion yuan; in terms of industrial layout, it has 197 cloud warehouses throughout the country, including direct access warehouses, front-end warehouses, and processing warehouses.
How did Chengcheng Group seize the opportunities behind the pain points of the egg industry and become the leading enterprise in the egg supply chain in just five years? What exactly did Chengcheng Group do right to secure a core ecological position in the egg industry chain?
Chengcheng Group: Being the Most Professional Egg Operator
Positioned as an egg industry platform operator, Chengcheng Group's solution is not limited to a specific place or thing, but to organize the relevant resources inside and outside the industry to truly realize the industrial value realization in coordination.
To this end, Chengcheng Group adopts the "S2B2C" business model - S refers to continuously building and improving the egg industry supply chain capability based on digital capabilities; B refers to the business transaction and integrated service of a core farm in the egg industry and five major channel B-end customers; C refers to the end customers who need to use eggs for products, services, and marketing.
How can different links in the industrial chain benefit from the benefits brought by industrial integration?
First, helping farms enjoy the dividends of industrial development.
In response to the single settlement of egg products, Chengcheng Group first proposed "not owing a penny to the farms". Among the farms with a total scale of more than 30 million birds in stable cooperation, Chengcheng Group enters the egg supply chain by solving the problem of triangular debts, and replaces the traditional offline egg trading market in various links such as business, logistics, finance, and operation through its own digital online egg trading method.
Specifically, Chengcheng provides services such as egg quotations (daily egg price system in hundreds of cities), transaction matching (Chengcheng AI business opportunity matching platform), and logistics networking. With professional operation capabilities, it quickly accumulates regional brand reputation, and breaks the price blind area across regions and provinces based on egg trading data and pricing models, helping farms truly seize the profits in egg price fluctuations.
Second, enabling B-end customers to obtain a more guaranteed, sufficient, and stable matching supply of goods, and also greatly improving the supply efficiency.
How to strictly control the quality of an egg from production to consumption not only poses higher requirements for producers, but the circulation link is also crucial. The shelf life of an egg is usually 14 - 30 days, and the traditional egg supply reaches consumers through layers of distribution, and the circulation period has already been as long as 14 days. More importantly, the long-distance transportation loss caused by the "transporting eggs from the north to the south" phenomenon in the national market also poses a severe challenge to the freshness and quality of egg products.
Chengcheng Group relies on extensive cooperative resources and an efficient supply chain to continuously improve the circulation efficiency of egg products.
Some industry insiders who have cooperated said that the advantages of Chengcheng Group are rich product resources, matching specifications, and high delivery efficiency, "It can be delivered tomorrow if ordered today, and the after-sales service is also up to standard".
A Xi'an channel merchant who has been cooperating with Chengcheng since 2021 revealed that the local contracted chicken farm has a scale of less than 1 million, and supplies 1,000 - 2,000 pieces of egg products every day, which cannot meet his needs. Before cooperating with Chengcheng, he had cooperated with stations in Guantao and Hubei, where the supply of goods was unstable, and often out of stock when the price rose. However, Chengcheng can ensure a stable supply, and there is no situation where goods cannot be found, providing great convenience. Now, 50 - 60% of his business volume of egg products comes from Chengcheng. In his opinion, Chengcheng's integrity, reliability, and service are the cornerstone of his choice to cooperate with it, and only by effectively adjusting the information gap caused by regional differences can the efficiency and revenue be truly improved.
Chengcheng Group's founder Hehe told 36Kr that during the Shanghai epidemic, there were 60,000 pieces of egg products in stock, and through Chengcheng's national customer advantage and dispatch system, efficient sales were successfully achieved within 15 minutes, replenishing the timely egg market supply in Shanghai.
Third, the consumer experience will also be comprehensively enhanced.
Based on professional operation services, an efficient supply chain can ensure the quantity and quality of the supply of goods, allowing customers with different needs such as supermarkets, fresh food platforms, restaurants, food processing factories, and household retail to accurately find egg products of the most matching types and processing methods to truly meet different needs.
Through the integration of the three ends, the liquidity of eggs has been improved. No matter whether the egg price rises or falls, the multiple demands of the supply end such as "what goods, how many goods, and payment issues", and the "more, faster, better, and more economical" demands of the client end can be solved here.
Digital Reconstruction of Layer Chicken Supply Chain, Sharing Value Dividends with All Parties in the Industry
In the egg product industry, to "string beads into a chain" in each circulation link, the production and sales coordination brought by digitization is indispensable. Using digital thinking to promote enterprise development in the early stage of establishment and building a digital capability framework model centered around the three elements of "connection, data, and intelligence" is an important reason for Chengcheng Group to achieve business leadership.
The first step of digitization is undoubtedly data.
In order to have more extensive and reliable data resources, Chengcheng Group has established a sound data source strategy. Firstly, through public data capture, the daily egg price data across the country, and even the historical price data of the past 14 years, are uniformly collected and analyzed to discover price opportunities in the source transaction, and then business models are established through these opportunities and implemented and realized.
Secondly, the derivative data after industrial knowledgeization, the order transaction data of different warehouses and logistics, and the data of partners are unified into the system to form key elements such as customers, business opportunities, products, prices, channels, orders, logistics, and funds. These data elements run through the production, supply, and sales ends on the platform and are closely related to the unique business processes of the industry. Combined with artificial intelligence algorithms, the overall efficiency of production, supply, and sales has been greatly improved. Hehe mentioned that through the digital system, the utilization efficiency of customer resources can be increased by more than 3 times, and the matching efficiency of supply and demand business opportunities has been increased by more than 10 times.
With data as a key production factor and digital technology as the core driving force, a smart "digital platform with characteristics of the egg industry" has emerged.
Chengcheng Group's digital platform is mainly divided into four modules: the intelligent transaction matching system, the supply chain delivery system, the industrial finance support system, and the new media information system. It can achieve mobile and all-weather business processing through multiple intelligent terminals, making the information of the upstream and downstream of the industrial chain more transparent and the communication and collaboration more efficient.
Among them, the "AI Business Opportunity Library" is the core. Taking orders as the starting point, through digital technology, the system can provide different types of data service products for the upstream and downstream of the industrial chain. For example, Chengcheng EGG (a small program) provides timely egg price market reports for industrial users, and the Chengcheng AI Business Opportunity Library can provide real-time market supply and demand information for internal traders.
In terms of supply chain digitization, the AI system plays an important role in intelligent distribution, goods allocation, etc., which can significantly improve the efficiency and safety of the supply chain. In 2024, Chengcheng Group established the "first digital intelligent central warehouse for the layer chicken industry in the country" in Anhui. This large warehouse has a standing inventory of 500,000 pieces of eggs and can achieve flexible allocation of national egg product supply.
The professionalism of the digital system ultimately depends on talents.
The digital technology leader of Chengcheng Group has more than 20 years of experience in the fintech field, is good at information system planning and construction, and has profound technical research and development and management experience; other core business leaders also have senior positions in relevant listed companies in the industry and large central enterprises, and have a high degree of consensus and execution ability on digitization.
After a large number of investigations and practices, and in-depth analysis and repeated iterations of the egg product industry, Chengcheng's industrial digital platform has gradually been applied and implemented. Only by being open, professional, and efficient can the cooperative parties truly benefit and promote the digitalization process of the entire industrial chain.
Building the Intelligent Future of the Egg Industry
Having laid a solid digital foundation, Chengcheng Group's industrial ecological path has just begun.
On December 7, the Chengcheng Egg Industry Digital Science and Technology Park was officially put into operation in Xuancheng City, Anhui Province. As the first layer chicken industry cluster in the country, the Chengcheng Industrial Park plans to invest a total of 540 million yuan, to be constructed in three phases, covering an area of approximately 143.7 mu, with a construction area of 160,967 square meters. It will provide one-stop egg product solutions for the upstream and downstream of the industry by linking core industrial resources, and provide more professional services for customers and farms in the "warehousing and distribution integration" model.
The planning map of Chengcheng Anhui Xuancheng Industrial Park
The completion of the industrial park also represents Chengcheng Group's further layout in the layer chicken industry supply chain. Hehe told 36Kr that Chengcheng Group's goal this year is to break through 10 billion yuan, and hopes to achieve a revenue of 100 billion yuan in 2029.
To achieve this goal, supply chain, digitization, and biotech will be the core business segments that Chengcheng Group will focus on building after the completion of this round of financing.
In terms of the supply chain, Chengcheng Group will provide more professional and efficient logistics solutions.
"Chengcheng Intelligent Logistics Management Platform" is an important link. Logistics personnel management, the national dispatch center, the intelligent logistics system, and intelligent route planning have been put into use, gradually solving problems such as asynchronous information, unreasonable scheduling, and low transportation efficiency. In the future, it will also provide customers with efficient, reliable, and professional layer chicken transportation, and continuously optimize the logistics network through technical means such as big data analysis, providing strong support for the sustainable development of the layer chicken industry.
In terms of digital technology, after two years of system construction, Chengcheng's goal for next year is to better implement this digital system and find more practical business scenarios, expanding from 7 models to 14 models, or perhaps taking the lead in building an industrial large model to enable resource integration and development.
Investor Wang Qiang also mentioned that Chengcheng Group uses the industrial Internet platform to provide services such as standard quotations, third-party logistics, and credit certification, improving the efficiency of the egg trading market. The price, transaction, and supply chain data accumulated in the platform will further highlight its value and have a very strong possibility of industrial ecological extension.
In terms of biotech, Chengcheng