Since the beginning of the year, the tea market has been in a wave of rising prices, and the price of xicha has begun to drop. The reporter recently found that the order page of the Xicha Mini Program has added two new labels of "to be affordable" and "to be simple", and the price of some products has been reduced. Among them, the price of "pure green tea queen" has dropped from 13 yuan to 9 yuan, and the price of a single product has dropped to single digits.
In this regard, Xicha said that the brand advantage and scale advantage have provided support for the price reduction, and the quality will remain unchanged after the price reduction. In the view of industry experts, the squeeze of Heytea on other brands after the price reduction will indeed increase, but whether it can maintain the original profitability under the pressure of gradually increasing costs will also become a major test that the brand will face in the future.
15 products up to 7 yuan down
The reporter's statistics found that a total of 15 tea drinks of Heytea this time had a price reduction ranging from 1 to 7 yuan. Among them, pure milk tea was reduced from 22 yuan to 15 yuan, pure succulent grapes were reduced from 29 yuan to 25 yuan, the price of popular products Zhizhi Mangmang was reduced from 32 yuan to 29 yuan, and small cheese was also reduced from 6 yuan to 5 yuan. The price of "pure green Yan tea" has dropped from 13 yuan to 9 yuan, which also makes many consumers sigh: "You can drink Xi tea at a single-digit price."
Not long ago, many milk tea brands such as Xiangpiaopiao and Tea Beauty Yueshi announced price increases. On January 4, Xiangpiaopiao, the "first share of China's milk tea", announced that the price of the main products will be raised by 2% to 8%. On January 5, the new tea brand Tea Yan Yue also said that the price of most products will be raised by 1 yuan on January 7.
Coffee brands have not been spared. After the New Year's Day holiday, Tims Coffee announced that due to the consideration of market operation, the price of 9 products will be raised by 1 to 2 yuan. At the end of last year, Luckin Coffee adjusted the price of products in more than 800 stores in 11 cities, and the takeaway price of all drinks was raised by 3 yuan.
Judging from the voice and action of the head brand, the rising cost pressure of raw materials, labor, transportation and energy has become a common problem facing the entire industry. At this time, the price was quietly reduced, and the Heytea brand quickly attracted market attention.
"Hi tea is not a high-priced tea"
Since its birth, the Xicha brand has been in the first echelon of the tea market with its high market reputation and product quality, and the per capita price of more than 30 yuan has also become the "ceiling" of the tea industry. At the time node when the entire industry is facing a wave of price increases, why did Heytea decide to reduce prices in another way?
In this regard, Heytea said that thanks to the brand potential and scale advantages of Heytea, as well as the continuous accumulation in the supply chain and the deep cultivation in the upstream, Heytea has the ability to adjust the selling price of some products under the premise that the product formula, materials and quality do not change, and keep the quality unchanged after the price reduction.
"It should be clear that our mainstream product price band has been maintained between 19 and 29 yuan for a long time, and Heytea is not a so-called high-priced tea drink, and this price adjustment is also the normal adjustment action of Heytea in its own mainstream price band." The relevant person in charge of Xicha said. According to the latest data on the official website, Heytea has entered 20 new cities in 2021, and the total number of stores in the country is currently close to 900.
However, many consumers have also noticed that after the price reduction, the "pure green yan tea queen" and "zhizhi green yan tea queen" products need to pay an additional 4 yuan if the tea base is changed from default pure tea to light milk tea, and this service does not need to be paid separately before the price reduction. In addition, the starting price of takeaway in the Mini Program has not decreased with the price of the product, and it still remains at 20 yuan. Some netizens complained about this: "Now I have to buy a cup to make up for the delivery fee, but it invisibly increases consumption." ”
Is it possible to balance quality and profitability?
In the eyes of the industry, Xicha lowered the price of some products at this time, on the one hand, in the continuous "inner volume" of the tea market competition, with brand advantages superimposed "cost performance" to retain consumers, and expand the customer base, and the increasingly popular low-end brands such as Mi xue ice city to compete for the sinking market; at the same time, in the case of the entire industry generally facing cost pressure, this is also a "show muscle" initiative of the head brand to show its advantages in the supply chain and cost control.
"Now all walks of life are increasing prices, and the price reduction of Xicha itself can be a hot search point." Zhu Danpeng, an analyst in the Chinese food industry, said that heytea relies on its own brand effect and scale effect to make tea drinking more accessible to the people after digesting costs, and the consumer group will be more extensive.
Will the downward price of the head brand have an impact on the mid-market? Zhu Danpeng believes that under the premise of ensuring quality, the squeeze of Heytea on other brands will indeed increase after price reduction. "The Matthew effect of the strong being stronger and the weaker being weaker will be further highlighted."
With the expansion of the milk tea market and the reduction of industry barriers, the competition in the tea market is becoming increasingly fierce, and the cost of raw materials and supply chain channels also makes enterprises face increasing pressure. Heytea hopes to "reduce prices while maintaining the same quality", and the price reduction measures will soon increase consumers' goodwill for the brand, but whether it can maintain its original profitability under the gradually increasing cost pressure will also become a major test that the Heytea brand will face in the future.
Image source: Hi Tea, Screenshot of Mini Program
Source Beijing Daily Client | Reporter Yang Tianyue
Edited by Yang Tianyue
Process Editor Wu Yue