Text | Moment Business, author | Yun Mengze, Editor | Zhou Ye
The "polarization" of the milk tea industry is intensifying.
On January 5, Cha Yan Yueshi announced the price increase news in the WeChat public account, and the price of most of its milk tea products was generally adjusted by 1 yuan, of which Yan Xiao increased the price by 2 yuan. Tea Yan Yue said in the official micro that the raw materials and other costs on the market are rising year by year, and the dividends accumulated before cannot withstand a series of superimposed costs, so the price increases.
Tea Face Delight Shop, Photo/Tea Face Delight Official Weibo
However, recently, the first echelon of the milk tea track xicha chose to operate against the wind, lowered the price of some products, and the price reduction categories covered many single products such as fruit tea, milk tea, pure tea, etc., and the downward adjustment range was about 3-7 yuan.
Now when you open the Mini Program Hi Tea Go Order, you will see that Heytea has launched two categories of products such as "affordable" and "simple", and even single-digit price products.
Compared with the "big hand" price reduction of xi tea, the "price increase" of tea is generally up 1 yuan, and some single products are 2 yuan, which is particularly cautious, but between this drop and a rise, it also reflects the white-hot competition in the milk tea industry.
According to iResearch data, the market share of high-end brands (that is, unit prices higher than 20 yuan) in mainland new tea drinks in 2021 is only 14.7%. More than 85% of the market share is controlled by low-end brands with a unit price of less than 20 yuan.
Heytea Shop, Photo/Heytea Official Weibo
The first echelon of Xi tea through price reduction, expand the customer group, try to compete for the low-end market, and in the mid-end market to work hard tea beauty, not only to remedy the economic losses caused by successive large-scale store closures, but also to reserve funds out of Changsha, price increase is a helpless move.
In fact, due to the continuous rise in the cost of raw materials and other raw materials, the general rise in the price of consumer goods has become inevitable, and the price increase of tea is only the epitome of the "price increase tide" in the milk tea industry.
2022 is still on the way, and the knockout rounds in the milk tea industry continue.
On the one hand, the market competition brought about by the continuous rise in raw material costs has intensified, while on the other hand, the head player Xicha has hit the mid-end market against the trend of price reduction, accelerating the industry reshuffle, and the second half of the war in the milk tea industry will only be more tragic.
01 Tea color has to increase in price
Once known as the "light of Changsha", the price of tea has risen after five years.
On January 5, Tea Yan Yueshi announced on the official WeChat public account that since January 7, 2022, most milk tea products have risen by 1 to 2 yuan.
As the core ace products of tea beauty, "Youlan Latte" and "Sound Oolong", the price increased by 1 yuan respectively, from the original 16 yuan and 15 yuan to 17 yuan and 16 yuan, while the price of leisurely leisurely, floating life half day, and kite paper kites did not increase in price this time.
Tea face color price increase on Weibo hot search, picture / Weibo
The price increase of tea face and pleasant color shows a "haggard" face that urgently needs funds.
Cha Yan Yue also mentioned in the WeChat public account that it has been more than five years since the last overall price adjustment. The price has not been raised before, which is supported by the purchase dividend brought about by the brand dividend and the expansion of the scale.
Regarding the reasons for the price increase, the official of tea beauty and color said that the raw materials and other costs on the market are rising year by year, and the dividends accumulated before cannot bear a series of superimposed costs.
In the official tweet, The reason for the price increase was explained in detail, and it is not difficult to see the dilemma of "lack of money" of the tea color.
Just past 2021, Cha Yan Yue has experienced a wave of "store closures" in turmoil, of which the first temporary closure was during the "local New Year" at the beginning of the year, and the second time was during the repeated epidemic at the end of July.
On November 10 last year, Cha Yan Yue announced the third store closure through the official Weibo, and about 80 stores in Changsha were temporarily closed, and the follow-up will be gradually reopened according to the situation, and emphasized that the temporary closure of some areas with too high density will become the norm.
Frequent and large-scale closures three times a year have also led to Waterloo in the income of tea and beauty. In the third wave of store closures alone, although 480 stores are operating normally, most of the 87 stores that have been temporarily closed are located in Changsha, which is equivalent to directly reducing the source of income by nearly 15%.
In addition to the heavy impact on the source of income, the regional dividend of tea beauty is also slowly fading.
Before the "closed store tide", in Changsha alone, there are nearly 500 stores in Chayan Yueshi, and the number of stores opened in Changsha's net red pedestrian street has even reached more than a dozen, opening the same brand store in the same area is bound to divide the traffic of the store location, the market can be expanded The share is limited, and in the long run, it will naturally lose regional dividends.
The repeated epidemics, the disorderly expansion, the fading of regional dividends, and the economic losses caused by the "wave of store closures" have made the tea face full of decline. Under the frequent "closed shop tide", tea beauty must have more funds to support, so the price increase of products is also understandable, it wants to go out of Changsha, but also needs more income.
Tea face color products, picture / tea face color official Weibo
In fact, the tea color of the sticking side has been exploring out of Changsha, and the density of local stores is difficult to support the further penetration of the tea color, and the new growth curve needs to blossom in many places to break through to the outside to obtain new vitality.
However, it is not easy to get out of Changsha, and it is not easy to go to the first- and second-tier cities, and the tea face is to face the tea that has been entrenched for a long time, and it is necessary to make a plan for long-term combat "burning money".
To expand the sinking market to the county towns and towns, and to connect with the Honey Snow Ice City and a little bit of waist brand short soldiers, it is difficult to win the favor of the young people in the town in terms of cost performance.
In April last year, the wind and fire of tea color had briefly landed in Shenzhen, a moment of empty alleys, Shenzhen Wenheyou opened on the first floor and the third floor of each tea color "pop-up shop", once triggered 50,000 people queuing landscape, and thus spawned the scalper to buy up to 200 yuan a cup.
However, the good times are not long, only five months after entering, Cha Yan Yue Se announced its withdrawal from Shenzhen, And Cha Yan Yue Se wants to reproduce the success of the "Changsha Model", and the road is obstructive and long.
"Out of Changsha" and "closed shop tide" have become a pleasant dilemma for tea, and product price increases, as a means of directly increasing income, are expected to alleviate the dilemma caused by the two.
For the tea beauty, the unstoppable wave of store closures and changsha that cannot go out all leak out of the signal of "lack of money", but the price increase may also allow consumers to choose other brands, which is undoubtedly a dangerous move in the competition white-hot tea market.
02 Hi tea prices cut, harvest more markets
In the wave of price increases in the color of tea, Xi tea has begun to reduce prices "in the opposite way".
On January 10, many netizens found that some products of Heytea had a price reduction. Specifically, pure tea products are the cheapest after price reduction, such as pure green tea from 13 yuan to 9 yuan, pure young buds from 16 yuan to 11 yuan, Zhizhi green tea from 19 yuan to 14 yuan; milk tea categories have the largest price reduction, such as pure cow milk tea from 22 yuan to 15 yuan, a direct drop of 7 yuan; pure berry in fruit tea has also dropped by 7 yuan, the current price is 25 yuan, in addition, the succulent grape without cheese version from 29 yuan to 25 yuan, Zhizhi berry / Mangmang is reduced from 32 yuan to 29 yuan; in small materials, cheese has also dropped by 1 yuan.
Heytea product price, figure / Heytea Go order mini program
However, compared with other mid-price milk tea brands with an average price of about 15 yuan, xi tea after the price reduction is still not out of the range of high-price unit price.
The behavior of Xicha's price reduction against the trend is in stark contrast to the helpless price increase of tea.
At this time, Heytea lowered the price of some products, is to in the fierce competition in the tea market, with high-end brand advantages superimposed "cost-effective" to retain consumers, and expand the customer base, and a little bit of the increasingly popular low-end brands to compete for the sinking market, which is also a weapon to quickly seize market share.
Behind this is revealed that Heytea is a test of the mid-range market, trying to exchange the price for a larger consumer market and compete for more users who were originally hesitant about the price.
For the question of high-end quality brought about by the price reduction, Heytea officially mentioned that this round of price reduction benefits from the brand potential, scale advantage and continuous accumulation in the supply chain and deep cultivation in the upstream, and 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.
For Xicha, the initiative to reduce prices is not really to give consumers welfare, upward can compete with the same head track of Nai Xue's tea, and downward can compete with coCo Duke, a little bit, Chabaidao and other mid-range brands.
The "price war" fought by Xicha, whether up or down, can compete for some of the previous "swing consumers".
Heytea grape cheese products, photo/Heytea official Weibo
Judging from the main signature products, Lele Tea's strawberry peach cheese, cherry cheese and grape cheese are priced at 31 yuan, 35 yuan and 29 yuan respectively, and Neixue's domineering cheese mango, domineering cheese strawberry and domineering jade oil citrus are priced at 30 yuan, 32 yuan and 29 yuan respectively. After the price reduction of the same type of products of Xicha, succulent grapes, succulent mango manna, and Zhizhi berry did not exceed 30 yuan.
Hey tea and Naixue tea, which have a unit price of about 30 yuan, are advertised as the "first echelon" of freshly made tea drinks. After the price reduction of Xicha, although there is only a difference of a few yuan, it may affect the decision-making of many consumers, which is undoubtedly a strategic means of grabbing customers and can harvest more markets.
The market that goes down after the price reduction of Xicha has a wider audience.
According to the "2020-2021 Chinese New Tea Industry Development Report" released by NCBD (Meal Treasure Book), in the acceptable price range of single cup milk tea, 10-15 yuan corresponds to the widest consumer group, accounting for 57%, followed by 15-20 yuan, accounting for 27%.
Products in the price range of 10-20 yuan gather the most extensive consumer groups. Previously, Xi Tea had launched a sub-brand Xi Xiao Tea, which was to launch tea drinks for this price range, but the expansion progress of Xi Xiao Tea was not fast, and there was no sense of existence in the market outside Guangdong.
Therefore, Xicha, which has always been "high-end", has personally gone down, and through this price reduction, many products have also explored this territory.
This will further increase the degree of "inner volume" of the milk tea industry.
03 Costs are rising, but the competition is more intense
Under the epidemic, the consumer goods industry has "risen", and many companies in the fields of milk drinks have raised product prices, and the milk tea track is also in hot water.
On January 4, as the main dairy supplier in the upstream of the milk tea industry, Shanghai Hairong Food Technology Co., Ltd., the "first share of cream", issued an announcement that in view of the continuous rise in the cost of major raw materials and accessories, the factory price of some products was raised by 5%-8%.
Panda Dairy Group Co., Ltd. also recently announced that it will raise the ex-factory price of the company's main condensed milk-related products by 3%-10%.
As the main raw material of milk tea products, the price of white sugar is also soaring.
According to public data, its price has also been rising since the second half of 2020. At the beginning of 2021, the average price of primary white sugar was 5630 yuan / ton, and the average price of primary white sugar at the end of the year was 5718 yuan / ton, and the price increased by 1.56%, compared with the same period last year, an increase of 5.82%. The associated increase in maritime costs during the same period, as well as the reduction in sugarcane production due to successive droughts and frosts in Brazil, have also led to an increase in global sugar prices.
In the cost of fresh tea, raw materials are the most important cost expenditure, accounting for about 40%. In addition, the price of packaging consumables and machine metal parts has also increased by a certain extent.
The increase in raw materials is serious, and the implementation of the "plastic restriction order" has increased the operating costs of the milk tea industry, paper straws, fully degradable plastic straws, which makes the daily operating costs of the store increase sharply.
The milk tea industry is experiencing a wave of supply chain price increases, and in the environment of rising raw materials, Xi tea has cut prices for the first time, which has made the track competition more inward.
The active price reduction of Xi tea, the most affected is bound to be the mid-range brand, and the milk tea brand with lower gross profit will directly face the test of life and death.
After the price reduction of Xi tea, many customer unit prices have been lower than 30 yuan, "to be affordable" and "to be simple" two major tea series of the price range, is precisely the second echelon of tea drinking in the world, such as shuyi roast immortal herbs, tea hundred ways, Shanghai aunt, COCO, etc., most of the tea brand products are concentrated in this price range.
Milk tea industry echelon chart, picture / meal treasure book
Obviously, the price reduction of Heytea has directly accelerated the reshuffle of the industry, and most brands in the mid-range tea market do not have sufficient moats to carry out price wars with them.
Under the soaring raw materials, high rents, and rising labor costs, many brands in the mid-range tea market are mired in the competition between gross profit margin and single-store ping efficiency.
According to the high-end tea industry special research report released by Guosen Securities, the gross profit of Heytea is about 65-70%, and the ping effect of Heytea single store is as high as 120,000 / year / square meter. In a research report by Soochow Securities, it is estimated that the same standard store ping effect, Mi Xue Ice City only has 50,000-67,000, and brands such as Tea Hundred Dao and Little Bit occupy the low-end market are also incomparable.
Xicha grabs the market by grabbing users by reducing prices, which will further compress the living space of competitors, and even some low-end brands will be difficult to sustain. The industry reshuffle in the second half of tea drinking may accelerate, and the number of users, the number of stores and the scale of final revenue will be a weapon to compete for the market.
The cost is rising, and the war in the milk tea industry will only become more fierce, and tea brands that do not have the strength to obtain lower raw material prices will walk to the crossroads of life and death, and surviving is a problem.
In 2022, the tea industry will also stage a new round of "battle royale".