Another prefabricated vegetable enterprise has recently received news of its listing.
The Red Star Capital Bureau has noted that DayDayCook submitted its Red Herring prospectus to the US Securities and Exchange Commission (SEC) on November 8th Eastern time, and plans to officially list on the New York Stock Exchange under the symbol "DDC" in mid November.
On November 3rd, the International Department of the China Securities Regulatory Commission (CSRC) disclosed a notice on the registration of DDC Enterprise Limited's overseas issuance and listing.
According to public information, the Ri Ri Cooking brand was established in 2012 as a gourmet lifestyle brand that focuses on fast food, fast cooking food, and healthy lifestyles.
Can daily cooking take capital to the next level? From the prospectus information disclosed by the company, it can be seen that the company is currently facing various problems such as declining revenue, sustained losses, and traffic loss, which may bring a lot of uncertainty to the daily listing in the United States.
(1)
Continuous losses of the enterprise
According to public sources, Ri Ri Pao was established in 2012 as a platform for publishing short cooking videos and recipes; Similar to a food self media, it focuses on video recipe teaching and recipe exchange.
In 2015, RiRiRi Cooking joined platforms such as Youku and iQiyi to launch content simultaneously.
In 2016, Ri Ri Pao began to enter the online e-commerce business and launched the characteristic e-commerce "Xiao Pao Market". The products mentioned in the video were put on the shelves for sale, covering fresh fruits and vegetables, selected delicacies, beverage preparation, quality kitchens, and more.
In 2017, RiRiRi Cuisine was launched as an offline channel and three offline food and life experience centers were opened in Shanghai, Guangzhou, and Wuhan.
Subsequently, in 2019, Ri Ri Pao began to focus on shaping the "brand" and launching multiple products in the fields of fast food and fast cooking, establishing its own brand business.
At present, Nippon Cooking has three major brands under its umbrella: Nippon Cooking, Yujiaweng, and Mengwei.
Source: Prospectus
Among them, as the flagship brand, RiRi Ri Kuo mainly produces self-heating, instant cooking, and trendy health series. It has developed over 100 SKUs, and Fisherman's Wong specializes in flavored aquatic products such as scallops and deep-sea fish, as well as instant flavored fish mince snacks. Mengwei mainly focuses on self heating and fast food products such as hot pot, self heating rice, and fast food rice.
In terms of channels, online daily cooking mainly relies on the official website and mainstream e-commerce platforms such as Taobao, JD, Tiktok e-commerce, Pinduoduo, and offline channels such as 7-11, Rosen, Carrefour, Hema, etc.
In summary, the business model of daily cooking is that enterprises want to attract traffic with high-quality food content, establish brand awareness, and then sell their products through offline experience stores, e-commerce platforms, and retail channels, ultimately forming a content driven ecological loop.
However, reality is not moving in the direction envisioned.
From the prospectus data, it can be seen that in recent years, the company has not fully opened up in multiple dimensions such as traffic acquisition, channel layout, and product monetization, resulting in continuous losses and a relatively passive situation.
(2)
Multiple business lights up red
From a revenue perspective, the prospectus shows that from 2020 to 2022 and the first half of 2023, the daily cooking revenue was 169 million yuan, 205 million yuan, 180 million yuan, and 89.425 million yuan, respectively; The company's revenue declined in 2022 and its performance hit a bottleneck.
Under the business model of Ri Ri Cooking, from the perspective of revenue structure, Ri Ri Cooking divides revenue into five major sectors: online sales, offline sales, cooperative arrangement revenue, advertising, and experience stores. However, many businesses are now shrinking.
Firstly, there has been a significant decline in advertising revenue.
According to the prospectus, this revenue decreased from 11076600 yuan in 2020 to 870600 yuan in 2022. In the first half of 2023, advertising revenue was only 298700 yuan.
Advertising revenue is essentially the realization of traffic economy. Therefore, the sharp decrease in advertising revenue of enterprises may indicate that their traffic is facing significant challenges.
In fact, Red Star Capital Bureau has noticed that daily cooking on major social media platforms does not have many followers on the account, and the playback volume of the content is not high; Taking Bilibili as a column, the current number of followers is 88000, and the content reading volume is only a few hundred to a few thousand. Therefore, the lack of traffic naturally makes it difficult to drive the advertising business of enterprises.
Source: Station B
Secondly, the experience store has declared failure.
According to the prospectus, the revenue of the offline experience store of RiRiRi Cook has sharply decreased from 3.2345 million yuan in 2020 to 428100 yuan in 2022. In the 2023 semi annual report, this business has been directly cleared to zero.
According to public reports, in 2017, Japanese cuisine spent nearly one million yuan to open its first food experience hall in K11, Shanghai, and quickly entered cities such as Wuhan and Guangzhou. In 2022, the company announced the permanent closure of all experience stores.
In addition, the "cooperation arrangement income" of RiRiRi Zhu has been directly cleared to zero in the 2023 semi annual report.
Therefore, at present, the main source of revenue for RiRizhao Cooking comes from online and offline product sales, which is almost the only source of revenue for Rizhao Cooking.
The prospectus shows that from 2020 to 2022, the combined sales revenue of online and offline products accounted for over 90% of the total revenue. In the first half of 2023, the sales revenue of online and offline products accounted for 99.67% of the total revenue.
However, the current operating situation of this business is still difficult.
For example, in terms of channels, the online channel revenue of RiRiRi Cooking has significantly decreased. In 2021, the online revenue was 149 million yuan, and in 2022, it directly halved to 67016600 yuan. In the first half of this year, the online revenue was 16.4167 million yuan; Corporate online revenue continues to stall.
Source: Corporate Prospectus
From the perspective of net profit of the enterprise, the company is still at a loss.
According to the prospectus, from 2019 to 2022 and the first half of 2023, the daily net losses were 114 million yuan, 459 million yuan, 122 million yuan, and 8.953 million yuan, respectively.
The continuous losses of daily cooking are related to the high costs of the enterprise.
According to the prospectus, the company's marketing expenses, general and administrative expenses in 2021 were 59.2398 million yuan and 66.6364 million yuan respectively, while its gross profit in 2021 was only 36.4576 million yuan.
Afterwards, perhaps for cost control reasons, daily marketing expenses and general and administrative expenses decreased in 2022 and the first half of 2023, while the company's R&D investment directly decreased to zero in 2022 and the first half of 2023.
In addition, there is also a high debt situation in daily cooking. According to the prospectus, in 2022, the total assets and liabilities of Ri Ri Boil were 250 million yuan and 374 million yuan, with an asset liability ratio of 146.59%. The high asset liability ratio indicates that the enterprise is also facing significant financial risks.
Overall, the current business situation of RiRiRi Cooking is not optimistic, with difficulty in obtaining traffic, lack of advantages in channels, lack of connectivity in content ecology, and sharp decline in revenue. At the same time, the company is still in a continuous loss.
(III)
Industry competition is becoming increasingly fierce
From the perspective of the overall environment, the competition in the industry where Ri Ri Cooking is located is very fierce.
In the field of prefabricated dishes, according to Frost Sullivan data, from 2021 to 2026, the scale of ready to eat food in China will increase from 254.8 billion to 564.5 billion, with a compound annual growth rate of 17.24%.
Although the market size of the entire industry is relatively large, the competition in the domestic prefabricated vegetable industry is also very fierce, and the industry is very scattered.
Nowadays, among the players who enter the pre made dishes market, there are not only veteran players with strong supply chains and food research and development capabilities such as Anjing and Zhengda, but also well-known catering brands such as Haidilao and Xibei.
In this context, Nippon and Japanese cuisine do not have advantages in terms of supply chain, channels, user base, etc., making it difficult to stand out in competition.
In terms of content, there are currently a large number of food related content creators emerging on domestic short or medium video platforms; From the data of various platforms, it can be seen that the influence of Nippon Cooking's content is constantly declining, and more and more new KOLs in the food category have emerged as competitors for Nippon Cooking.
Losing its traffic advantage, RiRiRi Cooking finds it more difficult to retain and transform consumers through content. Ultimately, RiRiRi Cooking still lags behind its competitors in terms of content innovation, brand influence, and other aspects.
Overall, whether it is in the field of pre made dishes or continuing to attack content, Ri Ri Pao has not yet gained an advantage in the fierce market competition.
Can RiRi Ri Zhu use capital to reach a higher level this time? How to clarify the current business model may have become a top priority every day.
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