---
title: "After Being Acquired by Haoxiangni, Snack E-commerce Brand 'Baicaowei' Firmly Returns Offline"
description: "Baicaowei, a leading snack e-commerce brand, is returning to offline retail after seven years, with plans to expand in supermarkets and launch a 'one city, one store' initiative. The move follows its acquisition by Haoxiangni, which provided financial relief and channel integration, while the company also faces pressure from a profit guarantee agreement."
author: "乔芊"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2017-05-08"
language: "en"
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# After Being Acquired by Haoxiangni, Snack E-commerce Brand 'Baicaowei' Firmly Returns Offline

> Baicaowei, a leading snack e-commerce brand, is returning to offline retail after seven years, with plans to expand in supermarkets and launch a 'one city, one store' initiative. The move follows its acquisition by Haoxiangni, which provided financial relief and channel integration, while the company also faces pressure from a profit guarantee agreement.

The next big product is also about to be launched.
Remember Baicaowei, the "Top Food Director of the Four Seas and Eight Deserts" from the drama "Eternal Love"? If you think it's just a random e-commerce brand, you're underestimating it.
Not long ago, Baicaowei announced that after closing its physical stores seven years ago, it would return to offline retail. In addition to continuing to expand in supermarket channels, it will officially launch the "One City, One Store" plan.
For a long time, Baicaowei, Liangpin Shop, and Three Squirrels have been regarded as the top three brands in the leisure snack e-commerce sector. However, in fact, except for Three Squirrels, which is a genuine Taobao brand, the other two started offline. Baicaowei was founded by Cai Hongliang in Hangzhou in 2002, and by 2006 it had developed more than 140 stores with sales reaching 150 million yuan. Located in the e-commerce capital and witnessing the rise of Taobao, Cai Hongliang decided in 2010 to close a large number of stores and move the brand online.
Relevant data shows that Baicaowei's operating revenue in 2013, 2014, and the first three quarters of 2015 was 229 million yuan, 612 million yuan, and 815 million yuan respectively, with the fastest growth rate reaching 167%; however, net profit was only -104,700 yuan, -6.4579 million yuan, and 14.2353 million yuan. The tight capital chain and performance barely above the loss line led it to sell itself—in August 2016, Haoxiangni Jujube Co., Ltd. (stock code 002582) announced the acquisition of 100% equity of Hangzhou Haomus Food Co., Ltd., the parent company of "Baicaowei."
The acquisition resolved Baicaowei's financial difficulties, and for Haoxiangni, whose net profit in the first half of 2016 was only 14.56 million yuan, this transaction worth as much as 960 million yuan was also seen by the outside world as a "strategically significant" merger—Haoxiangni's advantages lie in channels and supply chain, while Baicaowei has obvious online advantages, so the two can complement each other.
According to previous media reports, after the acquisition, in terms of resources and supply chain, Baicaowei would place 35% of its nut and preserved fruit products for production at Haoxiangni and share warehouses with it; some of Baicaowei's products would gradually enter Haoxiangni's offline specialty store channels and gradually use Haoxiangni to enter supermarkets. At the same time, Haoxiangni products such as jujube-walnut, jujube-cashew, dried jujube, and jujube slices were also launched on Baicaowei's Tmall flagship store.
Haoxiangni's 2016 annual report shows that Baicaowei achieved approximately 2.3 billion yuan in revenue for the year, up 90% year-on-year, with the "Hug Fruit" (jujube-walnut) becoming a hit product. Haoxiangni achieved revenue of 946 million yuan, down 15.01% year-on-year—this is related to the aging image and declining sales of its original jujube products.
The leisure snack industry has long been plagued by low profits, with the gross margin of nut foods lower than other categories, and online companies generally have lower gross margins than offline ones. The main reason for the latter is that relatively late-starting online brands hope to expand market share and quickly grow their brands through low prices. Now that the online traffic dividend is gone, it has brought great pressure on their continued growth.
Even though physical store rents, decoration, and labor costs remain high, Baicaowei is still preparing to return offline in a big way, which somewhat shows that the channel integration, supply chain reconstruction, and brand effect brought by the acquisition have given it confidence.
A more realistic driving force may come from the profit guarantee agreement signed when Haoxiangni acquired Baicaowei. The agreement stipulates that Hangzhou Haomus Food Co., Ltd., to which Baicaowei belongs, promises net profits of 55 million yuan, 85 million yuan, and 110 million yuan for 2016, 2017, and 2018 respectively. If the agreed profit is not achieved, Haoxiangni will receive compensation.
**In fact, expanding scale and achieving synergy through "omni-channel" is becoming a common choice for several leisure snack brands.**
Three Squirrels hopes to expand channels through listing—its prospectus submitted not long ago disclosed that Three Squirrels plans to raise 1.44 billion yuan on the ChiNext, mainly to "expand sales channels, achieve coordinated online and offline development, and enhance logistics and distribution capabilities." As early as September 2016, Three Squirrels launched its first offline "Tou Shi Dian" (snack store) in Wuhu, Anhui, and plans to replicate this model, opening 500 offline stores within five years.
Liangpin Shop, which also started offline, has always attached importance to building online platforms. As early as the end of 2014, it invested 250 million yuan to build an information technology system. By 2015, Liangpin Shop's omni-channel sales reached 4.5 billion yuan, with online channels contributing 1.2 billion yuan. Liangpin Shop stated that the proportion of online sales will continue to rise in the future.
Statistics show that due to the trend of snack meal replacement, the market size of snacks will be 2 trillion yuan in the next 10 years, while the internet snack market size can reach 800 billion yuan. Whether online or offline, competition in the leisure snack market has become more intense.
**Source: http://36kr.com/p/5073731.html**


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