Recently, Weilong Delicious Global Holdings Co., Ltd. has passed the listing hearing. According to HKEX documents, Weilong plans to raise US$1 billion, with Morgan Stanley, CICC, and UBS as joint sponsors. The prospectus shows that in the first half of 2021, Weilong achieved total revenue of RMB 2.303 billion, a year-on-year increase of 22.06%; net profit was RMB 358 million, a year-on-year decrease of 2.53%. As early as May 12 this year, Weilong had submitted a prospectus to the HKEX. According to the HKEX Main Board listing rules, if an applicant's filing exceeds six months without approval, the prospectus automatically lapses and new financial information must be resubmitted. On the last day before the lapse on November 12, Weilong resubmitted an application to update its financial information. A week before submitting the prospectus, Weilong completed a Pre-IPO funding round with investors including CPE Yuanfeng, Hillhouse Capital, Sequoia Capital China, Tencent Investment, and Yunfeng Capital. This was Weilong's first introduction of external capital in over 20 years since its establishment, and also its only financing before the IPO. Behind the rapidly growing revenue and gross profit figures lies Weilong's very strong offline channel layout; wherever there is a retail store, Weilong products are present. In Weilong's revenue from 2018 to 2020, offline channels accounted for over 90%, while online channel revenue did not exceed 10%. Weilong currently relies mainly on a distributor model, and its online channel development has not been smooth. With 'Persistence to the End' as the core to navigate economic cycles Since its founding in 1999, Weilong seems to have done only one thing: producing latiao (spicy gluten sticks). This impression is not accurate, because although Weilong still focuses on spicy snacks today, its product coverage has long since changed. Public information shows that Weilong Food is a modern leisure food brand integrating R&D, production, processing, and sales. Its products include latiao, konjac powder, potato chips, rice crackers, beef, chicken feet, marinated eggs, and latiao hot pot. In fact, Weilong is one of the few survivors in the domestic snack industry that has navigated through cycles. The core reason they can traverse changing economic cycles is just four words: persistence to the end. What exactly has Weilong persisted in? 1. Persisting in the main business track Although Weilong's product coverage has changed, spicy wheat products have remained its flagship products for years. Last year's financial report showed that spicy wheat products still accounted for the majority of revenue. Persisting for a short time is easy; persisting for decades is not. 2. Persisting in product quality In the early days of the business, the snack track represented by latiao was characterized by having categories but no brands, and latiao became synonymous with 'junk food' due to food safety issues. Most practitioners were small workshops or small factories with uneven product quality. Weilong Group managed to break through the homogeneous competition by adhering to product quality requirements. As early as 2004, Weilong invested millions of yuan to purchase production lines from abroad. After CCTV exposed the latiao incident, Weilong continuously upgraded its supply chain, introducing automated latiao production lines to avoid human contamination during production. In addition, Weilong established a systematic and standardized product production technology system to manage and control product quality, ensuring production quality meets relevant standards and solving product safety issues from its own production lines. Besides heavy investment in the supply chain, Weilong also used marketing to build a clean and safe brand image for latiao. Through years of deep cultivation in product quality and food safety, it has built a product safety and quality control system covering supply, production, transportation, and sales. 3. Persisting in resonating with consumers Even though Weilong is now famous, it has not become aloof or considered itself a big enterprise. This is the fundamental reason consumers like Weilong. Weilong Group is indeed down-to-earth and has maintained this corporate image for many years. Whatever consumers like, Weilong Group can quickly produce. For example, previously launched Weilong peripheral products such as latiao phone cases, latiao toothpaste, and latiao T-shirts. It is hard to explain why a company founded over 20 years ago can still play like a child with endless creativity. The only explanation is that this is a consumer-oriented enterprise. The consumer group for latiao is young people, so Weilong always has a young heart. Weilong - Marketing Genius in the Latiao World With the formation of users' online consumption habits, consumers shop online more frequently. In the new consumption era, how to expand online channels, convert public traffic into private users, build a brand's private user pool, use effective digital tools and data analysis to guide, cultivate C-end loyalty, and achieve refined operations are problems Weilong needs to solve now. To sell latiao to a larger market, Weilong must change its 'low-end' and 'junk food' image. In 2012, Weilong invited Zhao Wei, Yang Mi, and Wen Zhang to endorse the 'Qinzui' series, but it met with resistance from fans. Learning from this experience, in 2014 Weilong invested heavily to build a third production base, adopting fully automated sterile production workshops. It also specially invited a professional team to take photos in the workshops. After the photos went viral online, Liu Weiping invited internet celebrity Zhang Quandan to livestream 'How Latiao Is Made' from the production workshop. As the number of viewers increased, Weilong's popularity quickly rose across all age groups and regions. Weilong was no longer a low-end snack. Later, with the improvement of latiao's image and the boom of e-commerce platforms, Weilong expanded its sales channels on e-commerce platforms, successively entering Tmall, JD.com, Suning.com, and overseas Amazon, establishing a comprehensive, multi-level, and precise Weilong online sales ecosystem. Furthermore, through methods like mass marketing, it built emotional connections with users, successfully bridging the gap between the brand and users. In brand marketing, a well-known brand itself is a hotspot. Other brands follow and imitate famous brands in marketing; as long as the method is appropriate, it can produce good results. On June 18, 2016, when the Tmall flagship store could not be opened, the screen was full of slogans like 'Why haven't you shipped my order?' and 'I'll show you some color.' Such self-deprecating operations immediately shot up to the top of Weibo's real-time hot search list. Then, with the iPhone 7 release, Weilong launched 'hotstrip7', upgrading the product packaging with a 'steady' black, white, and gray tone, making Weilong's packaging stand out. Besides packaging, the promotional copy was also creative: '250g super large capacity, chewy and tasty, Qinzui style. On sale from September 13, limited to 500 copies.' Even Weilong's offline stores were decorated to the extreme, displaying different flavors of latiao as exhibits in glass display cabinets, enhancing the product image. In addition, Weilong further segmented its consumer groups, shifting from e-sports to the two-dimensional (anime) market. Because the two-dimensional community forms small circles with common interests and topics, it has strong communication power and is easy to form word-of-mouth. Targeting such audiences, Weilong labeled itself as funny, silly, and cheap. While playing with online marketing, it comprehensively drove user consumption upgrades through brand transformation. It also used its own channel control to eliminate differences between online and offline purchases, integrating the virtual economy and real economy to form an integrated retail format. Weilong's First Prospectus 'Lapsed' - Latiao Competition Enters the Second Half In the view of industry insiders, Weilong's listing path has not been smooth, possibly due to its own issues. In terms of products, Weilong differs from other leisure food companies. In comparison, Weilong's product range is more singular, which also means a single source of revenue. When consumer preferences change, it is weaker in resisting risks compared to multi-product companies. According to the prospectus, Weilong mainly operates seasoned flour products, soy products, and vegetable products. Among them, Weilong series latiao, Qinzui Shao, and Moshui Shuang are more popular. Although Weilong's product attributes are relatively singular, it is undeniable that after 20 years of development, Weilong has a certain position in the industry. For the consumer goods track, diversification of sales channels is also crucial. In terms of sales channels, Weilong shows excessive reliance on offline and distributors. According to the prospectus, from 2018 to 2020, revenue from offline distributors accounted for 91.6%, 92.6%, and 90.7% of total revenue, respectively. Online distributor sales accounted for 4.5%, 4.2%, and 5.6%, respectively. Excessive reliance on offline channels has also hindered the development of online operations. Although Weilong's revenue is improving, the single product structure, the 'junk food' label, and the new national standard requiring 'less oil, less salt, less sugar' for latiao are all internal issues that Weilong urgently needs to break through. Externally, many brands are vying for latiao market share, such as Three Squirrels and Bestore, which have launched their own latiao products and achieved good sales. Under internal and external pressure, Weilong's IPO can help accelerate transformation or change, so this IPO is also very important for it. Are you 'watching' me?