In a public announcement, Shanghai Laobaixing Snack Co., Ltd. (Laobaixing), once known as the “number one snack stock,” projected a net loss of approximately 86 million yuan in the fiscal year of 2024, down 251% year-on-year, with a net profit decline of 750%.
The company attributed the 2024 losses to challenges in its main sales areas due to market conditions, leading to a decline in sales in the eastern region of China. Additionally, strategic adjustments in certain sales channels and operational model optimizations contributed to underperformance during the company’s transition period.
Laobaixing, a long-established snack enterprise with a history of over 20 years, used to be a leader in the industry. However, in recent years, the company has faced continuous decline in performance, a shrinking market share, and diminishing brand influence.
According to a report by “Finance Industry” on January 23, Laobaixing’s declining performance can be attributed to major strategic mistakes. Since 2012, the company has adhered to traditional offline store models, missing out on the golden opportunity for e-commerce development.
From 2016 to 2020, Laobaixing aggressively promoted the “Thousands of Families” plan, increasing the number of stores from 2,260 to 3,004. However, this expansion did not result in the expected revenue growth, instead causing the company’s net profit to drop from 134 million yuan to a loss of 65 million yuan.
Facing performance pressure, Laobaixing attempted to seek new growth points through diversification. The company ventured into various sectors such as liquor, coffee, cosmetics, dairy products, and pre-packaged food, but with minimal success.