Frustration because of fear of loss
On the morning of September 29, according to VietNamNet reporters, representatives of dozens of franchise store owners of the Mixue brand gathered in front of the headquarters of this unit on Trieu Khuc Street (Hanoi) to protest the newly applied pricing policy.
The reason the shop owners gathered to protest was because Mixue decided to reduce the selling price of many products by 25%, but only reduce the price of input materials for the shop owners by 8-10%.
Specifically, according to Mixue's announcement, many fruit tea products have been deeply discounted. Tu Ky Xuan peach tea has been reduced from 25,000 VND to 20,000 VND/cup, lemon black tea has been reduced from 20,000-22,000 VND to 15,000-17,000 VND/cup; honey black tea has been reduced from 20,000 VND to 15,000 VND/cup...
Present at Mixue's headquarters, Ms. Le Thi Dung, owner of Mixue store in Bac Giang, said that today Mixue officially requested stores to reduce the price of fruit tea products, making them very upset. Because, the price of raw materials only decreased by 8% while the retail price of products for customers had to be reduced by 10-25%.
This is unacceptable to shop owners. The rent increases by 15-20% every year, the salary of employees increases, and the electricity and water bills do not decrease. Therefore, Mixue makes policies without considering the interests of shop owners.
“Everyone invests more than 1 billion VND/store, some people own 5-10 stores, they have to spend tens of billions of VND. Reducing the price of products like this will definitely make us lose money. We hope the company will listen to us to cooperate with Mixue and accompany us for a longer time,” Ms. Dung shared.
Looking at the reality in Bac Giang, Ms. Dung lamented that the revenue of a store is very low. The company opens stores very densely, with a radius of only 3km in Bac Giang city but there are 6 stores, while the number of customers is limited. In the summer, the business makes enough money to pay for the premises, employees and a little extra, but in the winter, she works for the company, with no profit.
Therefore, it is very difficult to recover capital in 3 years. There are stores in the district that only sell more than 1 million VND/day, so it is almost impossible to recover capital, not to mention the machinery wears out a lot every year, she said.
Ms. Nguyen Thi Lung, owner of 5 Mixue stores in Hanoi, said that Mixue must respect the opinions of the franchisee. Because the store owners invest more than 1 billion VND in each store, but Mixue has a policy of forcing a reduction in selling prices while not reducing the corresponding raw material prices.
“Investing in a store costs 1.2-1.3 billion VND, but reducing the price of a glass of water to 15,000 VND is no different from a glass of water on the sidewalk. Meanwhile, the investment cost is too high, customers get air conditioning, and clean toilets 24/7. If the price of raw materials is reduced to the same level as the selling price, then the franchisee can accept it,” said Ms. Lung.
Flying to Hanoi last night to be present this morning to protest Mixue's policy, Ms. Nguyen Thi Duyen, a store in District 9 (HCMC) commented that the company's selling price was too low. She hopes Mixue will reduce the price of raw materials sold to stores accordingly.
“The initial investment cost for the store was 1.3 billion VND. I have been open for more than a month now. When I opened, they said I would get my capital back in 2 years, but with this situation, we still won’t be able to get our capital back by the end of the contract,” Ms. Duyen said indignantly.
Just imported raw materials at high prices, must reduce selling prices
Many shop owners also expressed their frustration at having to import raw materials at high prices and then having to accept additional price reductions.
A shop owner shared that he had just imported goods, some places imported up to hundreds of millions of dong worth of raw materials. The next day, they sent a notice to reduce the price of raw materials, and at the same time, they also reduced the selling price of products by up to 25%. As a result, he had to accept high prices for raw materials and sell products at low prices.
Ms. Nguyen Minh Ha, owner of 5 Mixue stores in Ho Chi Minh City, shared with PV. VietNamNet that she opened her first store last March. At first, revenue was quite stable, but from May onwards, revenue dropped because Mixue opened stores too close together. Her first store was surrounded by stores of the same brand on all 4 corners.
Talking about the “shock” of high-priced raw materials and low product prices, Ms. Ha said that she recently imported 200 million VND worth of raw materials for 5 stores. From the time of ordering, payment to receiving the goods took 3 days. After receiving the goods at noon, in the afternoon she heard the announcement of an 8% reduction in raw material prices.
"With 200 million but 8% discount, we suddenly lost 16 million in 3 days. How can we sell 16 million in 3 days to make up for it, because there is a store with 25 days and revenue of only 48 million.
Mixue requested a very sudden discount on fruit tea products. And a discount of 15-25% is impossible for the shop owner to make a profit.
Mixue needs to reduce the price of raw materials at the same rate as the product price because the price of this drink is already very low. Without a discount, we would have to make up for the loss, now we have no way out, we can't bear it," said Ms. Ha.
To get multi-dimensional information about the incident, VietNamNet reporters contacted by phone the person who is the market development contact of Mixue - who worked directly with the franchised shop owners. However, after many attempts by reporters to contact, this person has not responded.
Mixue brand, full name is Mixue Bingcheng, founded in 1997 by Zhang Hongchao. This is a chain of stores specializing in selling fresh cream products and tea drinks. In 2018, Mixue officially entered the Vietnamese market under the legal entity Snow King Global Co., Ltd. In September 2018, this brand launched its first store in Hanoi. In mid-April 2023, Mixue announced that it had reached 1,000 franchise stores in Vietnam.
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