On February 9, the news that "Heytea will lay off 30%" swept the screen.
From the long queues, running errands to buy fragrant food, to today's new tea drinking rivers and lakes "mountains lined up", xi tea in this crowded track is scorched, and the capital behind it has also pinched the sweat for the hot money they once invested.
Xicha laid off employees, and Nai Xue's stock price fell sharply
On February 9, Sina Financial reported that Heytea is implementing layoffs internally, and after confirming with a number of Heytea employees, the main information includes: the internal has started layoffs years ago, and some more will be laid off after the year, involving 30% of employees overall.
The information security department is fully cut, the store development department is cut by 50%; the laid-off employees will receive normal N+1 compensation, and they can also choose to transfer internally to other departments, such as technical posts to business posts.
In response to these voices, Xicha responded: There is no so-called large layoff situation in the company, and a small number of personnel have been adjusted to normal personnel adjustment and optimization based on year-end assessment. At the same time, the year-end bonuses of employees have also been issued to employees normally before the Spring Festival according to their performance.
In response to the reasons for this round of layoffs, a more common view is that Heytea has performed poorly in the past year, although it has made money but has negative growth in net profit, "may be forced by financial pressure to prepare for listing, streamline human resources, and make the financial report look better."
The data shows that in October 2021, the average revenue and sales of Heytea stores fell by 19% and 18% compared with July of the same year, and fell by 35% and 32% compared with the same period of the previous year.
Just one day before Heytea was exposed to layoffs, Nai Xue, known as the "first share of milk tea", issued a profit warning, although the revenue increased by more than 40% year-on-year, but it is expected that the adjusted net loss in 2021 will be 135 million yuan to 165 million yuan, which will also be its loss for 4 consecutive years.
On June 30, 2021, Nesher's tea was officially listed on the Hong Kong Stock Exchange and broke on the first day of listing. As of the close of trading on February 9, Nai Xue's tea report closed at HK$7.27 per share, which has fallen more than 60% from the issue price, and the stock price has been cut.
There is constantly hot money coming in
According to the 2021 New Tea Beverage Research Report, the growth rate of the new tea market in 2021 will slow down from 26.1% in 2020 to 19%. Under the impact of the epidemic, more than 70% of new tea brands cannot support for more than 20 months. Previously, the same hot tea color was also exposed to the news of layoffs.
But at the same time, the outbreak of the milk tea market still attracts countless entrepreneurs and capital influx. According to the data, as of November 25, 2021, there were 32 financings in the new tea industry in 2021, with a total disclosed amount of more than 14 billion yuan, reaching the peak of nearly 10 years.
Among them, in June 2021, Heytea completed a $500 million Series D financing, investors including Sequoia China, Hillhouse, Tencent Investment, etc., with a post-investment valuation of 60 billion yuan, refreshing the financing valuation record of China's new tea companies.
Source: Sky Eye Check APP
In addition, Mixue Bingcheng, which takes the route of "rural encirclement of the city", completed the first round of financing of more than 2 billion yuan in January last year, led by Meituan Dragon Ball and Hillhouse, and followed by CPE Yuanfeng and other institutions. After the investment, the valuation of Michelle Ice City reached 20 billion yuan. In September 2021, the Henan Securities Regulatory Bureau disclosed that Mi Xue Bingcheng was receiving counseling from GF Securities.
In addition, like Lele Tea has also been rumored to be listed in Hong Kong as soon as 2022, planning to raise US$300-500 million, and Chabaidao is also considering a US$500 million Hong Kong IPO.
Other waist brands, such as Gu Ming, Shanghai Auntie, Shuyi Xiancao, etc., are also gradually absorbing financing, and there are many institutions such as Sequoia China, Meituan Dragon Ball, Hillhouse Capital, and Jiayu Capital. In the vertical lemon tea field, uncle Qiu obtained equity investment from Guangfa Xinde and Gaorong Capital in January last year, and completed a Pre-A round of financing of more than 100 million yuan in September.
Is the industry still rolling?
Although it is hot, but in the industry leader Xi tea was exposed to layoffs, Nai Xue's tea losses and other news in an endless stream, will the new tea drink still be a long-term good business?
Milk tea itself is not healthy. Milk tea sugar content is not low, plus the traditional oats, pearls, taro balls and other ingredients, now there are other Oreo, mochi, soy milk and other endless small materials piled up, most of these ingredients are made of cream, sugar and starch processing, even if the merchant gives "no sugar" "no additional sugar" and other choices, but the calories of the whole cup of drink can not be underestimated, these ingredients have been piled up sugar content and calories.
High sugar is extremely addictive to modern people, and under this attraction, the track is hot and the bubble is generated.
Wu Shichun, founding partner of Meihua Venture Capital, believes that there is a lot of overheating and bubble track in new consumption. The essence of the overheating of the track is that many categories are difficult to form differentiation and difficult to have user loyalty, so without a repurchase rate, you have to constantly pay for new traffic and pull new.
This has been proven in the field of new tea drinks.
The first is homogenization. In the new tea drink, fresh fruit is the highlight. From ordinary fruits such as strawberries, grapes and mangoes, to imported fruits such as avocados and cherries, to niche and regional fruits such as perfume lemons, oranges and yellow peels, the new tea drinks have racked their brains to highlight the difference.
But as netizens said: In fact, it is a cup of milk tea, there are not so many doorways in it, and it is difficult to do those things, it is difficult to be different from the quality. One street, three steps a milk tea shop. There are so many people who drink, and there are more shops, so naturally they are rolled up.
So we see that when Luckin launched the raw coconut series, NaiXue launched the oil citrus series, and Heytea launched the yellow skin series, as long as the sales were considerable, they immediately attracted the imitation of various brands.
However, the new tea drink has worked hard in terms of function and color. In addition to the concept of "health maintenance", adding ingredients such as peach gum, white fungus, blood glutinous rice, jujube jelly and other ingredients, major brands are also competing to "make some color" in drinks. For example, the new Disney limited products on Xicha - blue-hued glacier travel, Luckin on the new Walden blue series and so on. Before the blue, the brand sought after green, such as Nesher's raw coconut latte and so on.
It can be seen that once a direction is selected, the new tea drink still cannot avoid the inner volume in homogenization.
Homogenization is difficult to increase user loyalty, so new tea drinks have to choose to rely on traffic. Behind almost every popular milk tea product, there is always a group of post-90s and post-00s who will play, playing flowers on douyin, micro-vision, and little red books. In order to attract more traffic, brands work traffic promotion as much as they rack their brains in product design.
Many milk tea merchants lament that the tea market is seriously homogenized, and it is better to do well than to sell well.
In the future, with more and more competitors, the track is becoming more and more crowded, the risk of new tea brands wanting to break through is not low, and the capital behind it will also face greater uncertainty.
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Author 丨95
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