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Smart Investors (ID: Capital-nature) "In the minds of Chinese consumers, there is no leading brand in cheese. This is a blue ocean with huge business opportunities." "One of our viral products sold out in February, and our cheese sticks hit a new historical high for 2019 with a major community influencer. Our offline business is also gradually recovering." "During the '618' shopping festival, we achieved double champion in sales on JD.com and Tmall, with sales growth exceeding 300%. In 2019, we expanded from 50,000 points of sale at the beginning of the year to 200,000, and entered large international chains like FamilyMart and Burger King as their cheese supplier." "Currently, our Shanghai and Tianjin factories are operating at full capacity, and we have launched plans for capacity expansion and equipment upgrades in 2020." "Advocating a healthy lifestyle may be a huge business opportunity after the pandemic." The above are views shared by Chai Xiu, Chairman of Miao Ke Lan Duo, in a recent livestream. In the livestream, she detailed how Miao Ke Lan Duo entered the vast blue ocean market in three steps, achieving explosive growth in 2019, and how they responded to the pandemic in 2020, finding opportunities in the crisis. The following is the full text of the speech compiled by Smart Investors for your reference: Good evening, everyone. I am Chai Xiu, Chairman of Miao Ke Lan Duo. I am very honored to be today's sharing guest. My topic is "Turning Crisis into Opportunity, Sustaining High-Speed Growth." For Miao Ke Lan Duo, 2019 was a year of rapid growth and harvest. In 2019, Miao Ke Lan Duo's brand awareness rapidly increased. During the "618" shopping festival, we achieved double champion in sales on JD.com and Tmall, with sales growth exceeding 300%. In 2019, we expanded from 50,000 points of sale at the beginning of the year to 200,000, and entered large international chains like FamilyMart and Burger King as their cheese supplier. -01- Three Focuses to Launch a New Takeoff Why did we achieve such great growth and harvest in 2019? I say it stems from focus. We focused on the cheese industry. When we chose to focus on the cheese industry, our research found that cheese is a product high in calcium and protein, easy to absorb, and in Western countries, cheese is known as the king of milk or milk gold. Through two market consumer surveys, we also found that in the minds of Chinese consumers, there is no leading brand in cheese. This is a blue ocean with huge business opportunities. Therefore, we resolutely decided to enter the cheese category, aiming to become a hidden champion in the niche market, and set this goal. The second focus is on the children's market. There are thousands of cheese varieties in China. Why haven't so many foreign brands made cheese big in China? Because of China's 5,000-year culture, directly introducing foreign cheese to Chinese consumers is hard for them to accept. This is why the cheese market share is so small. We say children's cheese education starts from childhood. This group is a high-energy group. Mothers of children born in the 80s and 90s have some awareness of cheese, so we focus on children. The third focus is to allocate limited resources to Focus Media's elevator advertising. When we invested in Focus Media advertising, we did a lot of homework and found that in this era of media fragmentation, Focus Media is a media platform with the ability to ignite. It should be said that when we invested in Focus Media, we went through three stages. When we first started, we thought the four characters "Miao Ke Lan Duo" were hard to remember. How could we make it memorable? We decided to use a song to spread the word. We found the French nursery rhyme "Frère Jacques" and adapted it to "Miao Ke Lan Duo, Miao Ke Lan Duo, cheese sticks, cheese sticks..." which is catchy. So in the first stage, we aimed to make people remember Miao Ke Lan Duo. Within one month of advertising, we achieved this effect. Our WeChat and Baidu indices rose rapidly, and over the year, the melody "Miao Ke Lan Duo Cheese Sticks" became an earworm. The second stage is that Focus Media's platform has the value of news dissemination. When building brand trust, we immediately changed our ads to "Miao Ke Lan Duo won double champion on JD.com and Tmall, with sales growth of 300%" after winning the double crown during 618. In the third stage, after completing brand positioning, we began category education. "In Europe and America, cheese is known as milk gold. Miao Ke Lan Duo cheese sticks concentrate the essence of milk," and so on. After these three stages, when we conducted brand evaluation in the first three months, we found that our awareness had increased, but the sales growth brought by advertising was not very obvious. Various departments said the higher distribution rate was due to using promoters, etc. But by the sixth month, the sales growth from advertising became very significant. 2019 was a year that attracted a lot of attention, and we received many evaluations from all walks of life. Some said, "Miao Ke Lan Duo is a dark horse in cheese, emerging suddenly, with the prototype of a future leader." Others said Miao Ke Lan Duo is a leader in a niche market. There were also doubts. Some people said to my face, "You have built so many factories, invested in so much cheese equipment, and spent so much on advertising, but the cheese market share is not that big. If you can't achieve results, isn't there a big risk?" By the end of 2019, I am pleased to share with you that our Shanghai and Tianjin factories are operating at full capacity, and we have launched plans for capacity expansion and equipment upgrades in 2020. -02- Creating "Flawless" Products After 2019, can Miao Ke Lan Duo rest easy? To be honest, over the past year, I have been very anxious and conflicted. How long can this blue ocean last? What should Miao Ke Lan Duo's core competitiveness be? We talk about brand power, channel power, product power, etc. I constantly study successful companies like Feihe and Langjiu. I also read "The Art of War," "Positioning," and "The Philosophy of Kazuo Inamori." When I read "The Philosophy of Kazuo Inamori" countless times, I came across his 74th business principle: "Manufacture flawless products." This phrase gave me a sudden enlightenment. I found a core competitive strategy suitable for Miao Ke Lan Duo. When I shared this discovery and insight with my senior management team, we all agreed. That is to use the spirit of craftsmanship to create perfect products. Whether in institutional construction, cultural construction, product initiation, R&D, production, logistics, or terminals, we all focus on creating perfect products. By continuously improving product quality from the consumer's perspective, our path will become faster, and we will always swim in our own blue ocean. This is the biggest gain from all my harvests in 2019, and it is also the reason we can face 2020 with composure. -03- Finding Opportunities in Crisis Now 2020 has arrived. With the pandemic, our first step is to think about how to prevent the epidemic and ensure that Miao Ke Lan Duo's family members are not infected or spread the virus. The second step is to think about how to overcome the impact of the epidemic. Because we also have 80% offline sales and 20% online sales, like many companies, we have been greatly impacted. How do we respond to the impact? During the Spring Festival, we had constant phone calls and conference calls to discuss. Each business unit gave me answers: "Boss, we have ways to solve it." I felt very gratified. We also discussed whether there are opportunities in such a crisis. Is there a way to turn crisis into opportunity? It's easy to say, but not so easy to do. However, when we seriously studied the opportunities, we indeed found them. From this pandemic, it was caused by humans hunting and eating wild animals. This is an unhealthy lifestyle. For a cheese company, we produce healthy food. Advocating a healthy lifestyle may be a huge business opportunity after the pandemic. People's awareness of enhancing immunity has increased, and cheese happens to be a delicious food suitable for human consumption. The reason why many Chinese people don't know about cheese is insufficient promotion. If we can promote the nutrition and deliciousness of cheese and let people taste it, then I think we will have done a good job in advocating this healthy lifestyle, which will definitely help improve the physical fitness of the Chinese people. This is a huge business opportunity we found. -04- When Crisis Comes, Opportunities Are Only for the Prepared At the same time, we found a second opportunity: there should be no "epidemic" in our thinking. When others pressed the pause or slow button, is Miao Ke Lan Duo still growing rapidly? We are taking action. Can we make efforts no less than anyone else to win opportunities? During the pandemic, are we starting training and basic management work? Are we using this period to improve unfinished work? So we took action. We just launched the mobilization meeting for "Fighting the Epidemic, Ensuring a Good Start in Q1." At this meeting, I was delighted to hear news from e-commerce and communities. One of our viral products sold out in February, and our cheese sticks hit a new historical high for 2019 with a major community influencer. Our offline business is also gradually recovering. So when crisis comes, opportunities are for those who are prepared. When the country first proposed delaying work resumption, we discussed internally and felt that employees should return to their work locations as soon as possible and wait for government notice to resume work. When the country proposed a 14-day quarantine before resuming work, many of our managers and frontline workers had already been in quarantine for nearly 14 days. We officially resumed work on February 11. Although not all production lines were running at full capacity, more and more employees passed the quarantine period because we prepared in advance. So we have the ability to turn crisis into opportunity before the pandemic and continue the rapid development of 2019. Here, I also want to say to everyone: I firmly believe that the Chinese people have the ability to quickly overcome everything. I also firmly believe that Chinese entrepreneurs can pass this test of the pandemic. I even more firmly believe that the people of Miao Ke Lan Duo, guided by the core competitiveness of creating perfect products with craftsmanship, can answer the question "Why choose Miao Ke Lan Duo for cheese?" That concludes my sharing. Thank you all. Tips will be paid 400-2000 yuan once the tip is adopted.