Investing 45 million yuan and earning 60 million yuan in half a year—Bestore chose a quick in-and-out for its investment in bulk snack brand Zhao Yiming. Such a short time and such generous returns also indirectly show that the bulk snack track remains hot. Exiting Zhao Yiming does not mean Bestore is abandoning the bulk snack sector; its incubated brand 'Snack Wanjia' has already taken shape, currently focusing on its home market in Hubei, with plans to expand to 500 stores within the year. In just two or three years, major bulk snack brands, backed by capital, have raised the banner of affordability and, relying on franchising, have been rapidly expanding across the country, with leading players' store counts surpassing 1,000. Even so, no truly national bulk snack brand has been established, and the war over affordable snacks is far from a ceasefire. Clearing Out Zhao Yiming The bulk snack industry is full of grassroots entrepreneurial stories, and Zhao Yiming's founder Zhao Ding is no exception. Before entering the bulk snack sector, Zhao Ding had been running a roasted nuts and snack store business for over a decade. In 2015, Zhao Ding returned to his hometown Yichun, Jiangxi, and opened a 120-square-meter snack store, putting his son's name 'Zhao Yiming' on the storefront, kickstarting Jiangxi's bulk snack market. At that time, the main channel for users to buy snacks was still supermarkets, and the bulk snack format had not yet taken shape. It wasn't until the last two or three years that this business model, emphasizing value for money, suddenly caught the wind. In 2020, Zhao Yiming fully opened franchising, and by December 2022, the total number of stores nationwide exceeded 700. Capital from all sides flocked in, pushing major bulk snack brands to expand rapidly. In April this year, Zhao Yiming completed a 150 million yuan Series A financing round, led by Hei Ant Capital, with Bestore following the investment. Among them, Bestore invested 45 million yuan through its wholly-owned subsidiary Guangyuan Juyi, obtaining a 3% stake in Zhao Yiming. Bestore's logic for investing in Zhao Yiming was simple: both companies are in the snack industry, one focusing on high-end and the other on affordability, with certain synergies in the industrial chain. At the same time, the bulk snack industry is in a period of rapid development, and early entry was also expected to yield high investment returns. Yesterday, Bestore (603719.SH) suddenly announced that its subsidiary Guangyuan Juyi planned to transfer its 3% stake in Zhao Yiming to Shanghai Yihai and Xiamen Heiyi for a total consideration of 105 million yuan, exiting the investment in Zhao Yiming. The counterparties are backed by Hei Ant Capital. With only half a year between entry and exit, Bestore gained approximately 60 million yuan in investment returns. The main reason for Zhao Yiming's rapid valuation increase in such a short time is that its store count grew about two-fold during this period (disclosed as 2300+ on the company's official website), directly driving the company's performance growth. In 2022, Zhao Yiming's revenue and net profit were 1.215 billion yuan and 38.44 million yuan respectively; in the first half of this year, these figures had increased to 2.786 billion yuan and 76.31 million yuan. Supporting Snack Wanjia Clearing out Zhao Yiming's equity does not mean Bestore is giving up on the bulk snack track; instead, it will continue to increase its layout in the bulk snack industry through the return of investment funds. Before investing in Zhao Yiming, Bestore had already invested in Hubei Qianbaiwei Food Co., Ltd. through its wholly-owned subsidiary Guangyuan Juyi, and is currently the single largest shareholder holding 27.7464% of the company. Qianbaiwei was established at the end of 2022, with its main business being the operation of the bulk snack brand 'Snack Wanjia', and has invested in dozens of subsidiaries in Hubei Province. Because it entered the bulk snack sector a bit later, Snack Wanjia currently focuses mainly on the Hubei regional market, with a goal of reaching 500 stores within the year. As a veteran player with over a decade of deep cultivation in the snack industry, Bestore has built a strong supply chain system, possesses rich brand operation and offline store expansion experience, and has the financing advantages of a listed company, all of which can strongly empower Snack Wanjia. Bestore started offline and is currently the only company in the leisure snack industry with balanced development both online and offline. As of the end of June this year, the company had over 3,200 offline stores across 23 provinces (autonomous regions/municipalities), with more than 2,000 being franchise stores. Once Snack Wanjia's model proves successful, it can leverage the franchisee resources accumulated by the main brand to achieve large-scale store replication. The Battlefield Is Smoke-Filled The snack industry hasn't been this lively in a long time. In the previous decade, leisure snack brands like Bestore and Three Squirrels attracted users away from supermarkets. The rise of bulk snacks has hit the scattered mom-and-pop stores on street corners the hardest. Without exception, bulk snack brands emphasize affordability and low prices, bringing down the prices of well-known beverage and milk brands to attract customers. The many unpackaged, lesser-known and white-label products in stores are the source of profit. To lower product prices, bulk snack companies bypass traditional distributors and deal directly with manufacturers, leveraging bulk purchasing and zero payment terms to secure the greatest bargaining power. The rapid expansion of bulk snack brands in a short time relies entirely on the franchising model. Changsha is a trendy city, and in recent years, many new consumer brands have emerged here, making it the most crowded area in the bulk snack track. In 2017, Snack Busy started in Changsha. According to its official website, in March 2022, its store count exceeded 1,000; eight months later, it surpassed 2,000 stores. By October this year, it had doubled to 4,000 stores, firmly holding the industry's leading position. Besides Snack Busy, other bulk snack brands headquartered in Changsha include Snack Youxuan and Qiahuo Puzi, with store counts reaching 1000+ and 500+ respectively. Ai Snacks, established in Changsha in 2020, is coming on strong, with a slogan of 3,000 stores in three years. Bulk snack brands are fighting on the front lines, backed by capital supplying ammunition. In May 2021, major capital like Sequoia and Gaorong invested 240 million yuan in Snack Busy's Series A round; Snack Youming, which started in Chengdu in 2021, has the fastest financing pace. In just a year and a half, it completed five rounds, totaling hundreds of millions of yuan in investment. The brand's official website discloses that it currently has 2000+ stores, with a long-term goal of 16,000+ stores nationwide by 2026. Bulk snacks are still in a stage of barbaric expansion, and no national leading brand has been formally established. The market cannot accommodate so many brands competing on the same stage, and elimination and consolidation are inevitable. In fact, horizontal integration in the industry has already begun. In August this year, Changsha's Ai Snacks announced it would take control of Chengdu peers Dinosaur and Taidi, making a major push into the southwest market; on the same day, Qiahuo Puzi chose to accept a strategic investment of tens of millions of yuan from the city's leader, Snack Busy.