During the pandemic, while the market was saturated with consumption stagnation and gift box overstock, few noticed that the convenience food market was reignited. According to data from China Business Industry Research Institute, the market size of convenience food in China exceeded 450 billion yuan in 2019. With the popularity of self-heating hot pot, Luosifen, and hot and sour noodles, it is expected to reach 481.2 billion yuan in 2020. In the past two years, a new wave has emerged in the convenience food sector—self-heating food. Although the self-heating food market started late in China and has limited scale, it has shown strong growth. Since 2015, it has entered a high-speed development stage with an annual growth rate of over 20%. Among them, self-heating hot pot is a typical representative. According to Taobao data, self-heating hot pot sold 18 million orders on Taobao last year, with a growth rate of over 200%. As a startup brand in self-heating hot pot, Mo Xiaoxian has achieved revenue of over 400 million yuan in just three years, ranking second in the industry. During the pandemic, Mo Xiaoxian seized the opportunity of the "rigid demand" for self-heating hot pot, with sales growing nearly 400% year-on-year, and is expected to reach 800 million yuan in sales this year. Recently, despite the "cooling period" in the capital market, Mo Xiaoxian completed a Series A financing of tens of millions of yuan. New Distribution took this opportunity to interview Mr. Wang Zhengqi, founder of Mo Xiaoxian, for an in-depth exchange. As a startup, neither the first to enter the track, nor with the heritage of offline hot pot restaurant brands, nor with the large scale of traditional enterprises, how did Mo Xiaoxian carve out a place in a highly competitive landscape? -01-****"Fish" and "Bear's Paw" Both Achieved Conventional startup brands typically enter the market by segmenting, cutting out a small category from an existing large one, transitioning from meeting needs to creating needs, and creating new consumption scenarios if none exist. However, Mo Xiaoxian is different. Self-heating food originated 15 years ago or even earlier, and in 2017, the rise of self-heating hot pot drove the entire self-heating food market. Mo Xiaoxian also entered the market that year along with hundreds of other brands. With such fierce competition, how did Mo Xiaoxian quickly establish a foothold after entering? Here we must mention Mo Xiaoxian's extreme cost-performance ratio. Its strength lies in finding a balance between high product quality and low price, achieving both "fish" and "bear's paw." Mo Xiaoxian successfully entered the track with low prices and captured market share. When the mainstream price range for self-heating small hot pots was 30-50 yuan, it kept prices within 10-20 yuan. Being able to control the price range so low without reducing product quality is due to Mo Xiaoxian's cost control in the following four aspects: First, in terms of packaging materials, Mo Xiaoxian carefully designed the box size to be precise, making the packaging simpler and smaller while ensuring the content is not reduced, thereby saving packaging costs, logistics costs, and warehousing costs. Wang Zhengqi told New Distribution, the total cost savings behind one such box of packaging is 2.5 yuan lower than a well-known leading brand on the market. Don't underestimate this 2.5 yuan; when the base is large, it will be infinitely amplified. At the same time, in business logic, there is a fixed multiplier, which is how many times the retail price is of the cost. For example, the fixed multiplier in the cosmetics industry is generally 20-50 times, in the footwear and apparel industry about 5-10 times, and in the food industry generally 3-5 times. That is, the manufacturer's cost passes through distributors or wholesalers, and the retail terminal price roughly triples or quadruples. So Mo Xiaoxian's cost control on packaging directly reduces the retail price by about 10 yuan. Second, Mo Xiaoxian focuses on brand concentration, with few categories, big single products, fast turnover, and quick capital recovery. Based on this, Mo Xiaoxian has an extremely short payment cycle for suppliers, paying within 7 days of delivery, far exceeding the conventional 45 days or even two months. The substantive advantage transformation: directly reducing suppliers' account period interest, return risk, and bad debt risk. Finally, this is used directly in negotiations, leading to substantive price reductions. Third, for online sales, after the factory ships, the goods are sent directly by express, without transfer or storage, minimizing manpower, material resources, and financial resources. For offline sales, the supply chain is concentrated in Chengdu, without nationwide dispersion. First, centralized warehouse storage, then shipping, reducing intermediate links as much as possible and reducing losses. Fourth, forming an industrial circle with a radius of no more than 50 kilometers, with deep cooperation with suppliers. Increase the frequency of picking up goods and reduce the quantity per pickup. Through this form, capital turnover is fast, goods are fresh with less loss, and warehousing costs are low. Of course, if the price is compressed to the extreme, but product quality control is not good, consumers will still not be moved. After reducing costs, more funds can be used for product research and development. It is understood that Mo Xiaoxian has put great effort into both the flavor of the hot pot base and the pursuit of crispy texture of ingredients. **-02-**Special Times, Special Measures A good product does not mean it sells well. In this era of abundant products, sometimes even good wine fears a deep alley! To sell well, the most direct link is choosing the right channel. Mo Xiaoxian gave up the idea of deep operation of its flagship store in the early stage. Instead of spending a lot of cost and heavy assets to operate a flagship store to bring limited traffic, it is better to distribute to enough e-commerce stores to bring unlimited traffic. While others were taking small steps, it ran ahead and became a dark horse. In addition to choosing e-commerce distribution, it also "heavily invested" in brand communication, typically placing ads in 8 TV dramas and 2 variety shows on traditional media; and cooperating with KOLs on mainstream social media such as Weibo, Douyin, Kuaishou, Bilibili, Toutiao, Xiaohongshu, and WeChat official accounts, with matrix-style seeding and sharing. This high-profile marketing approach can easily "hurt" startups. Conventional startups focus more on the unity of brand and effect, and large-scale placement in traditional media is rare. However, Wang Zhengqi told New Distribution, "The current market is at a stage of 'positioning'." When the entire industry is developing rapidly and hundreds of brands are emerging like mushrooms, everyone is still at the stage of crossing the river by feeling the stones. At this time, what needs to be done is to amplify the voice, build brand momentum, and position as a leading brand. A mature market will eventually see a tripartite situation, where the top three major brands eat most of the market share, and the remaining small brands share the remaining 10-20%. So, special times call for special measures. **-03-**After the Pandemic, Can Self-Heating Food Still Be "Hot"? Regarding the current market situation, many people believe that the popularity of the self-heating track is mainly due to the catalyst of the pandemic, and worry whether self-heating food can still be "hot" after the pandemic ends. Judging from current sales of self-heating food, there has indeed been a decline compared to February. But what needs to be seen is that compared to the same period last year, sales have grown significantly. Mo Xiaoxian's revenue last year exceeded 400 million yuan, and this year's sales are expected to reach 800 million yuan. According to industry insiders, the market size of self-heating food in 2020 is expected to double and exceed 10 billion yuan. In my view, the future market size of self-heating food, represented by self-heating hot pot, will still have a large capacity. The reason why there is still space in the self-heating track is mainly determined by two factors: First, internal factors. Hot pot itself accounts for 18% of offline dining, usually playing the role of being addictive and missed after a while. However, hot pot is a complex product, and the cost of dining in and consumption for consumers is relatively high. But self-heating hot pot can solve these pain points, simplifying complex operations and lowering the threshold for eating hot pot. At the same time, the attributes of hot pot give self-heating hot pot consumption scenarios such as meal replacement, late-night snacks, and satisfying cravings, and the convenience of self-heating food also removes the limitations of indoor and outdoor scenes. Moreover, during the heating process of self-heating food, whether enjoying the light cooking process or the appetizing effect, it is easy to trigger social sharing and produce fission effects. In addition, there are external factors supporting it, because self-heating hot pot can actually be seen as an upgrade of convenience food, and consumers are no longer the group that can be satisfied with a bucket of instant noodles and a sausage. After people's consumption levels have improved, aside from pursuing a little sophistication in life, at least they will hope to eat a "proper meal" rather than making do as in the past. So, in fact, the self-heating track is more of a reverse push from consumers, and in the future, the category of self-heating food will definitely have significant development. And because of the pandemic, it almost helped self-heating food do a nearly universal user education. Before this, even many young people may not have had specific contact with self-heating food. After this "epidemic," both consumer mindsets and consumption habits will change. Self-heating food, whether as a meal replacement inside or outside the venue, or as a leisure snack, or to satisfy hot pot cravings, has a very large imagination space, and self-heating food is just beginning! To help brand development and accelerate market construction and channel docking for FMCG brand enterprises, New Distribution has launched a brand growth plan , leveraging years of accumulated channel and network resources to help brand owners efficiently connect with innovative channel resources such as B2B, community group buying, home delivery e-commerce, and MCN platforms, helping brand owners accelerate full-channel coverage and full-scenario marketing, seize channel dividends, and thus win in the channel. If interested, click the link at the end of the article to learn more! 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