Image source @ Visual China
Text | Xinyan, author | Ye Jing, editor| Sang Mingqiang
If you count from 2015, the new tea has been in China for 7 years.
Taking 2018 as a watershed, the potential market size of the first half of the new tea drink is approaching 50 billion yuan, nominally surpassing the coffee industry, "drinking a cup of milk tea" has become a daily social way, compared with the gushing development of previous years, the current high, medium and low-end market competition of new tea drinks tends to be close to 1:2:1, forming a situation of "high-end Xicha Naixue, waist brand distinction, low-end Honey Snow Ice City".
The threshold is low, the model is easily copied, and the homogenization phenomenon has become the "hardest hit area" for new tea drinks. According to the first financial survey, in 2021, only 18.8% of the milk tea shops in the country have survived for more than 1 year, and nearly 80% of the new brand tea shops have closed. Recently listed Naixue's tea, a prospectus unveiled the embarrassment of the new tea market to make money: three years of cumulative loss of more than 100 million yuan, as of now, The market value of Naixue has shrunk by nearly 60% compared with before, and it is still in a state of loss.
On the one hand, the rapid scale expansion under the maturity of capital, the lack of supply chain, the intensification of competition make new consumer players in a dilemma, tea yan, tea Baidao and other choices to increase prices to solve the high cost, "big brother" Xicha seems to have reached the platform period, the sales growth rate in 2020 is lower, the net interest rate is also lower than 8.97% in the C round; on the other hand, waist and downstream brands have also begun to seek transformation and change of lanes, the new tea market began to fall into "new brands are difficult to take root, low-end brands are not easy to explore, and the high-end market loses money to make money" awkward situation. To this end, in this article we will focus on:
After 7 years of new tea drinking, what exactly are players competing for?
Standing in 2022, how to look at the new tea drinks of the future?
Hundreds of schools of thought
2015 is a special year for new tea drinks.
Nai Xue's tea and xi tea appeared one after another, and homemade fresh fruit tea and cheese milk cover tea were introduced respectively, which was also the early prototype of new tea drinking. In the integrated marketing communication of the mobile Internet, Heytea and Naixue have become the first batch of Net Red shops with their own traffic: Taking the seasonal limited "succulent grapes" launched by Heytea as an example, the daily sales volume reached 100,000 cups, accounting for 17% of the orders.
Many traditional chain milk tea shops have chosen to transform, and a number of new brands have risen with the trend: Lele Tea, Chunyang Tea, Tribute Tea, Ancient Tea, CoCo, Little Point, etc. New and old players are piling up, the new tea drink this fire is burning bigger and bigger, according to the incomplete statistics of the new eyes, there are currently nearly 500,000 milk tea shops in China, more than 160 new tea brands, and the fierce competition can be imagined. If according to the unit price, the new tea can be roughly divided into 3 echelons:
Picture: New Tea Player Structure Diagram (drawn by New Eyes)
At first, the brands were more regional, mostly in the founding place and surrounding provinces and cities, occupying regional characteristics and advantages, such as Changsha's tea beauty, Jiangsu, Zhejiang and Shanghai's Shanghai aunt, Beijing's boiled leaves, Nanjing's Fu Xiao peach and shisan tea, etc.; there are also a number of "small and beautiful" brands that rely on single-point breakthroughs and are deeply cultivated in vertical subdivision tracks, such as the seven-point sweetness of Yangzhigan exposed to the circle, the half-cup of books and roasted immortal grass, the half-immortal bean husband who mainly plays soybean milk and milk cover, etc.
Later, on the basis of products, the hierarchical consumption pattern of low-end (cost-effective), mid-end (face-price ratio + taste), and high-end (high-quality experience + social attributes) was gradually differentiated.
From the perspective of business methods, the stores of the first echelon are mainly directly operated, and are directly invested and operated by the headquarters of tea brands. Compared with the traditional franchise chain method, direct stores are easier to manage in integrating internal resources and brands, but the weakness is that they need the "three high investments" in the early stage, that is, high assets, high capital and high manpower, and the development is completely dependent on their own resources, which is theoretically not conducive to quickly seizing the market.
Xicha is a bit different, according to CEO Nie Yunchen's idea, the store as the only output window of the brand, directly cut into the high-end market, first use the tonal design sense of the store to attract the attention of young people, and then use imaginative collocation to make catering to seize the stomach of young people, after accumulating a certain brand heat, the bargaining power is also rising ("burning money shop store" strategy). Corresponding to it, Nai Xue's tea, a single store area of more than 200 square meters, the store to create a focus on providing urban women with leisure social life scenes, "soft European bag + drink" popcorn effect is also tried and tested.
This expansion strategy is competitively optimistic about capital, and since 2016, the two companies have repeatedly obtained hundreds of millions of financing, and the expansion speed is getting faster and faster. Up to now, the number of stores in Neixue and Xicha has exceeded 800, but from the perspective of market feedback, food safety problems have occurred frequently while expanding rapidly, and the problems of quality internal control system have begun to be exposed.
Starbucks' third space has inspired new tea drinking players to a certain extent: on the basis of standard stores, Heytea has opened theme stores such as black gold, PINK, and DP, using stores as a medium to spread brand culture; CoCo, Tour Tea and other low-end stores have also upgraded some stores, and the overall decoration has improved the sense of design; small stores have become larger stores, more leisure areas have been added, and the sale of goods has also changed from "take-away + FMCG" to sell "leisure experience space".
In this regard, Xicha, which runs faster, still uses "sales tension" as a marketing strategy. Weekly release of new products, such as berry peach, mangsuckle berry, in order to retain old fans, create a sense of anticipation; with the help of online media to refresh the heat, essentially the drink as a "social currency" to spread, so that users who buy new products have a sense of ostentatious satisfaction.
Peng Xin's idea is that the future should be a state where classics and new products coexist, so we can see that Neixue's tea products are not concentrated in soft European bags, and desserts such as strawberry magic wands and cheese taro mountains have been added. Relying on the advantages of the data supply chain, Naixue's tea uses niche seasonal fruits, and after small batch test iterations, it has created a popular "domineering jade oil orange". On the other hand, Xicha is good at using user creation to create explosive models, carrying out refined marketing management of private domain traffic pools, tracking data on user mixing and matching materials, accumulating the most repetitive collocations, and developing into standard products, such as the explosive "Zhizhi Berry Peach".
Where is the itch?
The launch of Nesher's tea is a highlight of the new tea drink.
At the same time, it also makes us understand that the original beautiful appearance of the first share of tea drinking, in fact, did not really "make money". According to the prospectus, Neisher's revenue has exceeded 2 billion yuan since 2019, but profit has always been a problem. Nevertheless, Nesher still plans to open about 300 and 350 standard stores in first-tier cities and new first-tier cities in 2021 and 2022, respectively, of which about 70% will plan to focus on high-end coffee business "Nesher PRO" stores.
Behind the rapid expansion of stores, there is actually a hidden crisis: food safety, product quality control, internal management, high expansion costs, low net profits and other issues, are all hanging over the head of the new tea enterprises Damocles sword. In this regard, Nesher's plan was a bit hasty.
The problems exposed by Nesher are not unique, in a sense, the expansion of tea brands is not an independent decision-making of enterprises, but also a strong drive behind investors. After multiple rounds of financing, the valuation of the enterprise continues to rise before it has the opportunity to go public, and the profit logic of the investor is not consistent with the enterprise.
The former pays more attention to valuation, the key indicators are the number of stores, urban layout network and revenue level, as to whether the company itself is profitable is not the most important. Some time ago, the price of tea rose in a pleasant way, and the official explanation was that the accumulated brand dividend and the procurement dividend brought by relying on scale expansion were no longer enough to support the superposition of raw materials and other costs year by year. The implication is that the traffic dividend of the brand is gradually dissipating.
The attenuation of the flow effect also lies in the serious homogenization of tea products, and the short-term advantages formed by pure drink play alone are not enough to make the market position of new tea brands stable. Although xi tea, tea color, etc. have been innovating, the most accepted on the market is still the classic model, "innovative" but not bought, which is also the root of the low customer acquisition rate and repurchase rate.
May be aware of these problems, the price reduction of Heytea stood out in a recent price increase, covering fruit tea, milk tea, pure tea and many other products, the downward adjustment range ranged from 3-7 yuan; now when opening the Small Program Hi Tea GO order, you will also see that Heytea has been online "to be cheap" and "to be simple" two categories of products, the price is about 20 yuan.
Although Heytea said that "it is not a high-priced drink", the reason is worth playing: first of all, thanks to its brand potential and scale effect; secondly, the company's upstream supply chain is relatively complete, and the bargaining power is also strong, so that it has the ability to reduce prices under the premise that the product formula, materials and quality do not change; finally, It is Heytea that tries to harvest a larger consumer market with the means of high-end brand potential superimposed on "cost performance" to harvest a larger consumer market and compete for the customer groups of low-end brands such as QifenTian.
Price reduction is not the first sinking operation of Xicha, in 2020, Xicha launched a low-priced sub-brand "Xixiaocha", in contrast, the former focuses on low-consumption users in the high-end market, and the latter directly penetrates into the sinking market. Looking at the Mi xue ice city, the launch of "M+" in the high-end market means that different echelon brands have also fallen into a scuffle, and in the red sea of the sinking market, the smoke of gunfire is still filled.
Not passing, not itching
The new tea drink has the characteristics of both the "fast" of FMCG and the "explosive logic" of clothing.
On the one hand, the distribution of new tea stores is wide enough to be convenient, the user consumption frequency is high, the number is large, and the purchase decision time is short; on the other hand, the homogenization of the industry is common, requiring that whether it is from the price, or the formula or appearance, the product must be cut into at least one of them in order to make a blockbuster victory.
The new tea drink is like a combination of "event marketing, topic marketing, building IP, hunger marketing, and emotional marketing". Generation Z young people and white-collar workers are the main force of new tea consumption, they pursue individual fashion trends, high acceptance of new things and new concepts, and dare to try. Based on this status quo, most of the new tea drinking players have adopted the mainstream media platform of "two micro and one shake to speed up the hand".
For example, the early "answer tea", in the vibrato released a small video integrating the horoscope divination culture, successfully cut into the new tea drink "fun + delicious" market segment; Heytea is to play the traffic clearly, widely advertise commercials, with the help of the seven-hour queuing effect, has become a "must punch" internet celebrity in the hearts of consumers, but this also exposes the new tea market high iteration, inseparable from the plight of Internet celebrity genes.
It is the same as the prosperity and decline of some new tea brands: the meaning of "net red shop" is often separated from the product itself, preferring to tell stories and feelings, and emphasize marketing routines. Most people feel that if going to an internet celebrity restaurant is not to take photos and send circles of friends, it will be meaningless. After following the trend, it is also common to change a new internet celebrity shop to punch the card.
Zhang Lei once mentioned a point of view in the book "Value", "Keeping the right and using odds".
The "positive" of the new tea drink originates from the product itself. At the beginning of the establishment of the brand, it often follows the "product is king" rule, develops products according to consumer preferences, seeks feedback and updates iterations, and builds a supply chain. "Use odd" is the way around the product, whether it is expansion, or the formula and materials, marketing methods, business model innovation, in today's consumption upgrade, entrepreneurs are easy to ignore that the public's high expectations for consumption and service innovation, often under the premise of good product quality.