Before this year, the valuation of Xicha may be 60 billion yuan, or it may have risen to the level of 100 billion. But now, no one knows how much Heytea is worth.
Along with the New Year, it is the dilemma of Xicha, the problem of layoffs, the storm of year-end awards, and the price reduction against the trend, and repeated explanations cannot stop the questions that come to the table.
Not surprisingly, starting in 2015, it has been seven years since the explosion of new tea drinks. Seven years of itch, itch in the "kill the red eye" track, itch in the homogenization of internet red ideas, but also itch in food safety, more itch in cost and management. Hi tea is a bit "itchy", tea is pleasant, Nai Xue's tea, Lele tea is not.
60 billion
60 billion, from last July, when Heytea completed a Series D financing for $500 million. For Heytea after financing, in many reports, its valuation reached 60 billion yuan.
At that time, Naixue's tea had just been listed, and on the first day of listing on June 30, the opening was broken, and the stock price finally closed at 17.12 Hong Kong dollars per share, down 13.54% in a single day, with a market value of 29.363 billion Hong Kong dollars, about 24.4 billion yuan.
For the valuation of 60 billion yuan of Xicha, the outside world is also divided. Some investors believe that the "brand value of Heytea is huge".
The birth of Heytea is a textbook entrepreneurial story. Founder Nie Yunchen's idol is Jobs, a "godfather of entrepreneurship" who ushered in a new era of smart machines.
In 2010, Nie Yunchen was 19 years old, and he threw himself into the first wave of smart phones, testing the waters of mobile phone stores and ending with the "first bucket of gold" of 200,000 yuan.
Two years later, in May, in the alleys of Jiangmen City, Guangdong Province, Nie Yunchen began his second venture, a 30-square-meter tea shop Royal Tea (Imperial Tea, the predecessor of Xicha).
As a layman in the tea industry, Nie Yunchen decided to take a different path. He feels that he can make a different, better, and more popular tea drink for users, and maybe change the industry.
Unlike most milk teas on the market at that time, Nie Yunchen's cup of tea focused on fresh milk and tea leaves. In the widely circulated version, he modified the recipe of the tea at least six times a day for a unique ingredient ratio, while collecting customer feedback on the taste to make improvements.
Intentions are rewarded, and after the first bucket of gold is invested, cheese milk cover tea is widely acclaimed, and more and more people are queuing up. A year later, in Jiangmen City, Nie Yunchen opened three branches. By 2016, the number of Imperial Tea stores had grown to more than 40. In the official introduction, it is "synonymous with queuing".
In the spotlight
Although it has become a little famous in the Pearl River Delta region, Nie Yunchen still has troubles - trademarks. The flood of cottage brands is surrounded, true and false are difficult to distinguish, and when the main owner returns to God, he finds that "Royal Tea ROYALTEA" has long been registered. So in 2016, Nie Yunchen gritted his teeth and spent 700,000 yuan to buy the successfully registered trademark Xicha and change his name and surname.
It was also in that year that the renamed Xicha was targeted by capital. In August of that year, more than 100 million yuan of financing was thrown into Xicha, from IDG Capital and investor He Boquan, which was about equal to a small goal of Wang Jianlin.
Anecdotally, the financing originated from a forum, He Boquan only had half an hour, and there were more than twenty CEOs waiting. After the formal briefing, Nie Yunchen invited He Boquan to a nearby store after the break, and personally made all the products for He Boquan to taste. That night, the financing was finalized, and it was also used to catch up with IDG Capital.
With the blessing of funds, since 2017, Heytea has gone from the Pearl River Delta to the whole country.
In early February 2017, Xicha entered Shanghai, and at the Raffles City Mall in Shanghai's People's Square, hundreds of people were divided into 6 snake-shaped passages, waiting for as little as half an hour and as much as 6 hours. Nearly 4,000 cups per day, the daily turnover of 80,000 yuan, this is the data of Heytea Shanghai's first store.
In August of the same year, Xicha opened in Beijing, and the two stores opened together, whether it was Sanlitun or Chaoyang Joy City, there was an endless stream of customers queuing for 4 hours in the rain.
Cheese milk cover, fresh fruit fresh milk fresh tea, "ins style" store, simple and unique IP image, even if the unit price is high, but the hi tea holding the net red password, it is still logical to sit on the top seat of the new tea industry.
Capital favor and store expansion fly together. There is also a passage circulating on the Internet about Meituan's investment in Xicha, and Meituan CEO Wang Xing said to his assistant: "Go buy me Xicha." After a while, the assistant came back: "Boss, buy it, 400 million."
According to Tianyan, in April 2018, Heytea received a 400 million yuan B round of financing invested by Black Ant Capital and Dragon Ball Capital, an industrial investment fund owned by Meituan, and in July 2019, Heytea received B+ round financing from Tencent and Sequoia Capital, with a post-investment valuation of 9 billion yuan. In March 2020, Heytea received another Series C financing jointly led by Hillhouse Capital and Coatue Management, with a post-investment valuation of RMB16 billion.
After that, there was the 400 million yuan financing and 60 billion yuan valuation in July last year.
In The 2021 annual report of Xicha, the number of stores worldwide is more than 800. However, Heytea opened 304 new stores in 2020, reaching 695, compared with this figure, the growth rate of the number of stores in 2021 seems to have declined.
In the midst of a bubble
The slowdown began last year, not just store growth.
At the end of June 2021, Nesher's tea was listed, one step faster than Xicha, becoming the first stock of new tea drinking. Behind the highlight of the bell ringing, the other side of the new tea drink is also made public. From 2018 to 2020, under non-IFRS, Nesher's net profit for tea was about -56.6 million yuan, -11.7 million yuan and 16.6 million yuan, respectively.
Although in the same period, the valuation of Heytea far exceeded that of Nesher's tea, according to the data released by both parties, as of the end of 2020, Heytea had a total of 695 stores, and the total number of Nesher's tea stores was about 500. In 2020, the average daily sales of Nesher's tea shops were about 20,200 yuan, while Xicha was about 26,200 yuan in the same period.
Based on this calculation, the gap between 24.4 billion yuan and 60 billion yuan seems to be somewhat insufficient.
After half a year of doubt, it broke out again. At the beginning of this year, a number of people who were certified as Employees of Heytea on the Pulse Platform broke the news that Heytea laid off employees at the end of last year, with a range of 30%, of which the information security department was all laid off, the store development department was laid off by 50%, and all employees did not have year-end bonuses.
In this regard, Xicha said that the relevant rumors are false information.
Shortly before that, Xicha just officially announced a round of price reduction, just when other tea brands announced price increases due to raw materials, their pure tea prices were reduced by 3-5 yuan, 5 fruits were reduced by 2-3 yuan, and cheese was reduced by 1 yuan.
As for the reasons for the price reduction, Heytea said, "The price reduction of some products of Heytea is due to the brand potential of Heytea, the advantages of scale, the continuous accumulation in the supply chain and the deep cultivation in the upstream, so that 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."
But beyond the official explanation, there is more speculation in the industry. Such as product homogenization, as well as competition in the industry and even outside the industry. It is not surprising that the high-priced Xi tea chooses to reduce the price, after all, the previous Xi Xiao tea has released a signal to grab the parity market.
According to incomplete statistics, the number of new tea brands in the new tea industry is 163, and the low-end chain tea brands represented by Mi Xue Ice City occupy nearly 50% of the market share, while high-end tea brands such as Xi Tea, Nai Xue's Tea, and Lele Tea account for about 7.7% of the market share.
Cheng is also high-end, bitter is also high-end; Cheng is also directly operated, and bitter is also directly operated. High-end tea brands and direct sales models allow Heytea to control product quality and maintain brand tone, but at the same time, the asset-heavy operation model also means that the cost is not a small test, whether it is capital or manpower.
Two sides of the coin
On the same day as the rumors of Xicha's layoffs, on February 8, Nesher's Tea disclosed its 2021 performance forecast, with an estimated net loss of about 135 million to 165 million yuan.
Naixue's tea and Xi tea have many common attributes, new tea drinking, direct sales model, Net red image, are born in Guangdong, but Xi Tea was established three years earlier.
Nowadays, the two major head brands have become difficult brothers. This is very different from the milk tea business that exploded less than a year ago, and it is also far from the boom in The IPO period of Nai Xue. At that time, due to the hot subscription, Nai Xue's tea closed the book one day earlier than the original plan.
But on June 30, 2021, the first day of its listing, Nesher's tea broke at the opening. In August, Nai Xue's tea suffered another basin of cold water: the media exposed Nai Xue's tea Xidan Joy City store fruit rot, rags not washed, labels and other food safety problems. Since then, Neixue's tea stock price has fluctuated all the way down until it is almost waist-cutting.
Like the front and back of a coin, 2021 of Heytea and Nesher is also the 2021 of the new tea drink.
Positively, what reflects is the good news that financing has been soft, marketing has been out of the circle several times, explosive models have been brushing the screen continuously, and it has begun to impact the capital market. Once, the incense of "selling more than 300 million cups a year" fluttered, and the cups could be connected to circle the earth. Nowadays, there are not only milk teacups that circle the earth, but also milk tea shops.
Unveiling the back, it is the frequent food safety problems, expansion stalls, salary infighting and other industry concerns.
All along, people who expect tea to be able to open to the doorstep of their homes have repeatedly brushed the screen. But at the end of last year, the tea was pleasantly colored and "the backyard caught fire". Some employees complained in the work group: the average working hour is 11 hours, the hourly wage is 6-9 yuan, and the monthly salary is less than 3,000 yuan. Later, the war burned to social media, and the tea color was pushed to the cusp of the storm.
Although the incident was sudden, it was not without warning. Afterwards, Lu Liang, the founder of Chayan Yueshi, admitted that he had emo, and he admitted frankly in the work group that "the company lost 20 million yuan per month.". More than a month ago, Cha Yan Yue just closed 87 stores in Changsha.
In addition, Lele Tea, which also belongs to high-end fresh tea drinks, has focused its main energy on the East China market and temporarily closed some regional stores.
On the one hand, there is a long queue at the door, on the other hand, there is the dilemma of profit difficulties, and the seemingly hot business only "earns a lonely".
According to the "2021 New Tea Beverage Research Report" released by the China Chain Store & Franchise Association, in the next 2-3 years, the growth rate of new tea drinks will slow down in stages and adjust to 10%-15%. For the reasons, the report analyzes that from the perspective of enterprises, in the face of the superposition of factors such as intensified competition, high rents, limited talent reserves, food safety management to be further strengthened, and high proportion of takeaway and low profits, rapid growth will have great management risks; from the perspective of external competition, the consolidation of the sinking market and the development of the northern western market need market verification.
Looking back at the new tea drinking fire, most of them are young people, continuing the traditional "tea friends" culture of Chinese, and young people have taken tea as an important social currency.
But new tea drinks may also be lost to young people. Consumers with increasingly high requirements for the taste, safety and even appearance of drinks have limited freshness brought by standardized taste and categories, but cost quality control, marketing traffic, etc. are factors that have to be considered.
The "2021 New Tea Drink Research Report" also pointed out that the slowdown in industry growth is staged, and moderate adjustment will achieve thick accumulation. If enterprises solve important problems such as brand, operational capabilities, and food safety management in the next 2-3 years, the growth rate of the new tea industry will quickly return to more than 15%.
Beijing Business Daily reporter Tang Yitian Zhao Tianshu