{"id":1649,"date":"2023-01-05T04:21:18","date_gmt":"2023-01-05T04:21:18","guid":{"rendered":"http:\/\/wanginnovation.com\/?post_type=portfolio&p=1649"},"modified":"2023-03-14T02:18:48","modified_gmt":"2023-03-14T02:18:48","slug":"%e6%b5%b7%e4%bc%a6%e5%8f%b8%e5%b0%8f%e9%85%92%e9%a6%86","status":"publish","type":"portfolio","link":"https:\/\/wanginnovation.com\/en\/portfolio\/%e6%b5%b7%e4%bc%a6%e5%8f%b8%e5%b0%8f%e9%85%92%e9%a6%86\/","title":{"rendered":"Helen\u2019s Bar"},"content":{"rendered":"
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Five<\/h1>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Innovate<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t
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Helen\u2019s Bar<\/h4>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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reconstructing the Chinese bar chain with disruptive innovation<\/h4>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\u00a0\u201cDisruptive innovation is typical competition against non-consumption.\u201d<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u2e3aClayton Christensen.<\/b><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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<\/div>In 1997, Clayton Christensen, a professor at Harvard Business School, published a \nbook The Innovator's Dilemma, in which he coined the concept of \u201cdisruptive \ninnovation\u201d. He believed that \u201cthe design of resource allocation processes is always \noriented towards sustainable innovation and maximizing profit\u201d and \u201cthe most \nimportant thing is focusing on existing customers and proven markets\u201d. Disruptive \ninnovation is a \u201ccheaper and more convenient alternative to existing products in the \nmarket\u201d which should directly target \u201clow-end markets or create completely new \nmarkets\u201d. Christensen once gave an example in an interview that many small and \nsimple electric cars on the streets of Beijing are a form of disruptive innovation. This \ninnovation creates new growth rather than overlapping. The low-cost innovation makes \nit affordable for people who cannot afford regular cars. \u201cThe product doesn't need to \nbe very good enough, but it needs to be cheap enough. This is a typical competition \nagainst non-consumption\u201d. In 2019, Christensen further developed his innovation \ntheory and came up with the \u201cmarket-creating innovation\u201d, which not only brings new \ngrowth to the company but also creating new industries. Christensen believes that \n\u201cmarket-creating innovation\u201d has the ability to unveil less obvious opportunities to \ncreate a disruptive business model.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The Disruptive Innovation of Starbucks<\/strong><\/h3>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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<\/div>In the 1970s, the US economy was booming. Consumers began to pursue high-quality \nfood. In 1971, Starbucks was founded in Seattle, specializing in selling high-quality \ncoffee beans from different countries around the world.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Illustration 5.1 In 1971, the First Starbucks was Founded in Seattle Selling Coffee \nBeans<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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<\/div>In 1982, Howard joined in Starbucks. In 1983, Howard tasted the espresso from a \ncoffeehouse in Milan during his business trip in Italy. The elegant moves of the baristas, \nthe charming process of making handcrafted coffee, the creamy texture of cappuccino, \nand the relaxing and joyful feelings of customers, all made Howard realize that \ncoffeehouse could be a bond for people to exchange rather than just a store selling \ncoffee beans. The future of Starbucks should be the Italian style coffeehouse \u2013 \nproviding hot coffee and having a strong social function, rather than the American style \nof selling high quality coffee beans and letting customers brew on their own at home. \nAfter returning from Italy to the United States, Howard was desperate to sell \nhandcrafted coffee to customers at Starbucks following the Italian way. However, it \ndidn\u2019t match the mission of Starbucks back then, which was selling only high-quality \ncoffee beans. Howard reluctantly left Starbucks. In 1987, Howard acquired Starbucks \nand started to transform and run Starbucks following his dreams. As Howard put it: \nStarbucks is not just a simple coffeehouse, but a Third Place bonding people with \ncoffee and providing social gathering space.<\/p>

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<\/div>The concept of the Third Place was putting forward by the American sociologist \nOldenburg. He refers the home living space as the First Place, the workplace as the \nSecond Place, and public urban spaces such as bars, coffeehouses, museums,libraries and parks as the Third Place. The main attribute of the Third Place is freedom \nof expressing ourselves in a comfortable and convenient environment. Starbucks was \nthe first to introduce the concept of the Third Place into a coffeehouse. The customer \nexperience of combining culture, spirit and environment is the core of Starbucks' \ndefinition of the Third Place, which appeals to customers with this blurring state neither \nhome nor office. Many people take coffeehouse as the best place for leisure beyond \nhome and work, or as a spot for chatting with friends. In October 1987, Starbucks \nexpanded beyond Seattle and opened new store in Chicago. In June 1992, Starbucks \nwent public on NASDAQ. As of today, Starbucks has realized Howard's dream and \nbecome the world's largest coffeehouse chain.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The Disruptive Innovation of Helen\u2019s<\/strong><\/h3>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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<\/div>Helen's Bar, called \u201cNighttime Starbucks\u201d by its fans, also has a legendary start.<\/p>

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<\/div>Behind Helen's Bar is a veteran of the 70s called Xu Bingzhong. Xu served as a scout \nand owned a bar in Laos. In 2009, Xu opened the first Helen's Bar in Wudaokou, \nBeijing with the money earned from his bar business in Laos. The Wudaokou Helen's \nBar is located in the remote Dongshengyuan residence area with an annual rental fee of \nonly 200,000 yuan, compared to the cost 2 million yuan for the store 500 meters away \nclosing to the main street. Due to its remote location, Helen's Bar didn\u2019t go well at the \nbeginning. Until one day, watching a few customers leaving, Xu asked himself \u201cWe're \nquite isolated and we don't even have streetlights. Yet they're still willing to come here \ndespite of the strong wind and low temperate. What can we do to show our gratitude?\u201d \nHence, taking the advantage of the Halloween, Helen's Bar significantly reduced the \nprice of its drinks and launched an unprecedented massive \u201cGratitude Giveback\u201d \npromotion campaign without considering cost. The campaign brought high level of \nawareness to Helen's Bar and attracted more and more young customers. Although \nthe selling price of drinks remained low, it led to high level of traffic and velocity. The \nbar started to earn some profits. A watched flower never blooms, but an untended \nwillow grows. Inspired by the success of the campaign, Xu realized that a bar in a \nremote location with low price drinks can appeal to young people who has a tight \nbudget, which is a huge white space in the Chinese bar industry.<\/p>

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<\/div>Starting from the Wudaokou Helen's Bar, Xu continuously optimized his business \nstrategy during his planning and opening for the following stores, and gradually \nsharpened the strategic direction into \u201cbuilding Helen's bar into an offline social \nplatform for young people\u201d. In terms of store location, Helen\u2019s Bar didn\u2019t consider any \nareas close to the main street whose rents were expensive; instead, it chose stores on \nthe back street or upstairs whose rents were significantly cheaper. In terms of product \npricing, Helen\u2019s only sold at 10 yuan per bottle for the same beer that was sold at 20 \nyuan in other bars. In terms of promotion, Helen\u2019s leveraged free drinking, lottery and \nmany other activities to get more traffic. Helen\u2019s even encouraged customers to bring \ntheir own food. With the combination of best-value-for-money products and \ncomfortable and relaxing social environment, namely the model \u201cgood value for money \n+ customer experience\u201d brought huge success for Helen\u2019s. Helen\u2019s Bar swiftly turned into the Third Place for urban young people during the night. Thousands of Seaweeds \n(the nickname of Helen\u2019s Bar fans) take Helen\u2019s Bar as the Nighttime Starbucks.<\/p>

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<\/div>In 2016, we assisted the management team of Helen\u2019s Bar in summarizing the \nlearnings and experiences of its fast growth over the past few years. We realized that \nHelen's bar had quietly taken a completely different and disruptive path from the \ntraditional bar industry in China. The traditional bar industry relies on densely \npopulated center locations at expensive rent costs, selling high-priced drinks or \nincluding other additional services, and better-off middle-aged men. On the contrary, \nHelen's Bar has relatively remote locations (customers brought by word of mouth are \noften unable to locate the stores), low-priced drinks but with high volume (Helen's Bar \nwas once the largest foodservice customer of Budweiser beer in China), extremely \nsimple service (only providing snacks without hot meals with self-service ordering), and \nyoung customers (fresh university graduates or career-starters). All those different \ntypes of innovations made Helen\u2019s Bar become the Third Place for young people with \nthe alcoholic drinks as the medium. The classic definition of bar is far from accurate to \nsummarize the uniqueness of Helen\u2019s Bar. Although born in China, in terms of style, \nHelen\u2019s Bar is closer to the countryside pub (public house) in the United Kingdom. \nCountryside villagers need to a gathering place to kill the time during the long night, \nwhich leads to the transformation of liquor stores to pub. Nowadays, pub is the second \nmost important place after church for countryside villagers. Referring to the British \ndefinition of pub, we formally put Helen\u2019s under the bar category to match the \npositioning of \u201cnighttime social platform for young people\u201d. In 2017, Helen\u2019s Bar \nstarted to prepare for the IPO. On September 10th 2021, Helen\u2019s Bar official was listed \nin the Stock Exchange of Hong Kong, becoming the first listed company in China\u2019s bar \nindustry.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Illustration 5.2 Helen\u2019s Bar<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The Second Growth Curve of Helen\u2019s<\/strong><\/h3>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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<\/div>In 1994, Starbucks partnered with PepsiCo to launch canned coffee drinks selling in \nstores, which officially embarked the second growth curve of Starbucks. Canned \ncoffee drinks were well received by customers, which made Howard realized that there \nwas a much broader market in the more than 26,000 grocery stores than in Starbucks\u2019 \nown retail chains and specialty channels. By tapping into grocery stores could bring \nmillions of customers to Starbucks. In 2018, Nestl\u00e9 closed the deal for the perpetual \nglobal license of Starbucks consumer packaged goods and foodservice products at \n7.15 billion dollars.<\/p>

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<\/div>Similar to Starbucks, another Third Place provider Helen's Bar, also offers customers a \nrange of alcoholic and non-alcoholic beverages and peripheral products.<\/p>

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<\/div>In 2021, Helen's officially launched its own branded craft beer \u2013 Helen's Craft Beer. \nBesides, Helen's has developed flavored alcoholic drinks such as fruit beer and milk \nbeer based on the preferences of young people. Beyond selling in its own bars, Helen's branded craft beer, fruit beer, milk beer and other products have also entered the retail \nchannel, receiving positive feedback from customers both online and offline. While \nrapidly expanding its small bars, we look forward to the success of Helen's second \ngrowth curve \u2013 its own branded products.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Illustration 5.3 Helen\u2019s own Branded Alcoholic Drinks<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Bar +, the Experiment and Exploration of Helen\u2019s<\/strong><\/h3>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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<\/div>In May 2022, the first \u201cHelen's Yue\u201d store opened in Lichuan, Hubei Province. Unlike all \nof its previous stores, \u201cHelen's Yue\u201d combines various nighttime foodservice such as \nstreet vendors, bars and barbecue stalls, with exquisite and fashionable indoor design \nand decorations, offering a wide range of barbecues and better-value-for-money \ndrinks, which caters perfectly to the needs of nighttime foodservice of the low-tier \ncities. Compared to traditional stores, \u201cHelen's Yue\u201d has a higher proportion of family \ncustomers. Overall, the \u201cHelen's Yue\u201d with the new model of bar + street vendor further \nbroadens customer reservoir and is expected to help to tap into the low-tier cities in \nthe future.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Piciture 5.4 Helen\u2019s Yue Store<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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INNOVATION CASES<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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