New tea drinks are approaching the "brand curing period": to expand or self-protection?

Image source @ Visual China

Text | Morgan Channel

In 2022, the new tea drink enters the "hand-to-hand era"?

The new tea drink has experienced the inner volume of 2021 and has gone to the outlet of "three points of the world": the high-end market, the tea of Xicha and Naixue is equally divided into autumn colors; the mid-end market, CoCo, Shuyi Burnt Immortal Grass, a little bit, Ancient Tea, Shanghai Auntie, Tea Face Pleasant Color and other hundreds of controversies; low-end market, Mi Xue Ice City is the only one.

It seems that due to the preconceived idea plus the brand effect, consumers in different regions, different consumer classes, and different tastes already have the most favorite "Mr.right", and the market has gradually approached the "brand solidification period". From the "2021 Mine Clearance Inventory" inventoried by Idle Fish, the milk tea shop ranked first in the list of "Top Ten Entrepreneurial Minefields", which is enough to see the glue of the current situation of the industry.

So as the "outlet" of new tea drinks gradually shrinks, how should these new tea brands in 2022 "attack the city strategically", or can they "defend the city"?

New tea drink "up and down", open a new round of "position" battle?

Just entering 2022, a number of new tea brands have "can't sit still" and are frantically exploring outside their "boundary line".

The internet celebrity brand, known as the "light of Changsha", announced price increases after three rounds of store closures last year and the scolding of employees and senior executives, keeping up with the rising price of many low-end tea brands such as Tea Baidao, Little Point, Yihetang, CoCo and so on since the second half of last year.

This side just announced the price increase shortly after, on the other side of the two high-end overlords Xi Tea and Nai Xue's tea in the "price increase in the volume" "reverse stealing": Xi Tea first began to reduce the price of some products, the price of pure Yan green is even lower to single digits; Nai Xue's tea followed closely behind, from January 17, opened a limited time of one month "easy purchase", but also pulled the price point to 9 yuan, indicating that to provide users with a richer product choice in a wider price.

The move of XiCha and Naixue's tea is undoubtedly a round of "dimensionality reduction" for the current brands that have increased their prices due to rising raw materials and other costs, with a higher-end brand degree and the same latitude price, directly approaching the "city gate" of mid-range tea drinks, and at the beginning of a year, the "hand-to-hand combat era" of new tea drinks has been opened.

However, whether it is the price increase of the mid-end price brand with the epitome of tea beauty and pleasant color, or the downward trend of tea and Naixue tea as a high-end market player, the most fundamental background color may be the helplessness of "survival".

"It is difficult to get out of Changsha" the tea color is pleasant

Just like the tea color price increase announcement wrote: "In fact, doing business, can not encounter difficulties on the price increase, can squeeze out a little toothpaste on the side is certainly not hard to rise, especially for our small profits and high sales of brands, this price increase is really unbearable the last step." ”

Perhaps, the words and lines are indispensable to the suspicion of playing the emotional card, but what Cha Yan Yue said is not false.

In 2021, Tea Beauty is definitely one of the new tea brands on the most popular hot search list. From the popularity of pop-up stores in Shenzhen and the high price of scalpers, to the three temporary centralized closures, to the scolding of employees and executives due to wage problems. Before and after, the same high online hot search, in contrast, has a different kind of bitterness, but also become a microcosm of regional and Internet celebrity brands.

As the most popular regional new tea brand in China, Tea Beauty relies on Changsha's passenger flow as a "tourist city" and becomes a representative of the "intensive" and "traffic-oriented" new tea drinking business.

However, success or failure is the case, with the epidemic raging in the past two years, the large consumption environment is not good, the passenger flow has dropped significantly, making the brand store "ping effect" insufficient; what is more, some stores " ping effect" tends to zero, which is undoubtedly a fatal blow to the tea beauty that relies on the "intensive traffic" business.

Of course, the lack of "ping effect" is also a common problem of new tea brands in the current large consumption environment. At present, relying on the heavy assets of offline-intensive stores to drive brand turnover itself, under the "black swan" event of the epidemic, it is easy to cause financial tension and rupture, resulting in a series of problems affecting brand image such as large-scale store closures and employee salary cuts.

Secondly, the most important point of the tea color to go out of Changsha is the supply chain system, how to ensure the stability of its own supply chain, how to reduce the cost of the supply chain, whether to build its own warehousing and logistics are all problems that need to be built in Changsha, otherwise the tea color can only stay in Changsha and Zhuzhou, Changde, Wuhan and other surrounding areas.

"Cold in the heights" of hi tea and Nai Xue's tea

As the most influential and only high-end new tea brand in China, the situation of Heytea and Naixue's tea is not as optimistic as consumers think. For these two companies, although the unit price is high, the cost of "big store type" in first-tier cities and new first-tier cities will be higher than the procurement, storage and loss costs of high-quality raw materials.

Moreover, for domestic consumers, in today's era of consumption downgrade, the price sensitivity to such high-frequency consumer goods is not low. According to iResearch data, in 2021, the market share of high-end brands in mainland new tea drinks (that is, the unit price is higher than 20 yuan) is only 14.7, more than 85% of the market share, which is dominated by low-end brands with a unit price of less than 20 yuan.

Therefore, at the beginning of the year when mid-range players have reduced prices, the teas of Xicha and Naixue "reverse" down to the mid-range market. On the one hand, it is necessary to carry out a "dimensionality reduction attack" on mid-range players and harvest user groups; on the other hand, it stands out in a number of price increase news and drives a new round of marketing heat, which can be described as killing two birds with one stone.

In addition to these reasons, the tea of Heytea and Naixue has probed the margin of the high-end market, which is not unrelated to the capital market.

Since June 30 last year, Nesher's tea has been officially listed on the Hong Kong Stock Exchange, becoming the "world's first tea drinking stock". Then, Nai Xue's tea greeted the decline and fall of the secondary market, from the issue price of 19.8 Hong Kong dollars / share, to the era of about 7 yuan, the market value fell nearly two-thirds from the highest point, and the market value was only about 12 billion Hong Kong dollars.

According to the Tianyancha APP, xicha has soared to 60 billion yuan since it obtained a new round of financing of up to $500 million in July last year. Under the lessons of Nai Xue's past, how should Xicha tell the story of the new tea market to capital, which is undoubtedly a big problem.

According to the "China Catering Category and Brand Development Report 2021" data, the growth rate of new tea drinks has slowed down in stages, adjusted to 10% to 15%. In the case that the overall tea market tends to be weak, using price reductions to break the city gate of the "mid-end game" may bring more possibilities to the tea of Xi Tea and Nai Xue, and tell the story of the capital market.

However, relying on the "high-end" brand image to drive the mid-range market is not a long-term time. On the one hand, there is no shortage of players in the low-end market, and there are also local overlords such as Honey Snow Ice City, and brands that have been recognized by consumers, such as books and burning fairy grass, a little bit, and ancient tea.

On the other hand, the long-term low-price activity is enough to affect the brand image of Heytea and Naixue's tea, making consumers think that the superimposed value of their "product + brand" is no different from other low-end brands, and it is completely more than worth the loss.

However, the price decline of "temporary" and "small-scale" is enough to open a new round of inner volume in the new tea market, drive the market wind direction, and accelerate another round of cleaning of market brands.

Approaching the "brand curing period", new tea drinks do not need to "take a big risk"?

According to meituan's "2021 Tea Consumption Insights" data, in the search terms of beverage stores, 65% of the 200 search terms with the largest number of searchers are brand words; and in June 2021, the chain rate of new tea drinks has reached 50%, that is, one in every two new tea drinks is a chain store.

These data show that not only new tea consumers have entered the "brand recognition" stage, the players who have entered the game have tended to be stable, and the chasers on the new tea drinking track in the future are likely to retain these well-known brands, and the entire industry has gradually entered the "brand solidification period".

Then, for the new tea brand side, it is more important to pay attention to brand image building and brand concept dissemination, there is no need to cling to the price for "big risk".

Once the "price involution" is opened, it is likely that the phenomenon of bad money expelling good money from the entire industry will occur. After all, in the case of not being able to compress the cost of the store, the cost of staff and the cost of existing quality raw materials, it can only reduce the cost of raw materials and reduce the quality of raw materials. Perhaps the increase in passenger flow in the short term is undoubtedly a self-destruct practice for a long-term chain brand, and it is even more devastating for the innovation and development of the entire new tea industry.

So what will be the direction of the new tea market?

Small shops replace big shops

In the past few years, we will find many new tea stores on the street and in shopping malls, opening bigger and bigger, gradually tending to "coffee shop" and "dessert shop" style, such as Naixue's tea, hey tea, Michelle Ice City, etc. are exploring the third space, and various styles of third space stores are conceived and born, and want to take the road of Starbucks.

But for the low-end new tea drink, there may be some painting snakes. After all, the new tea drinking place is more leisure and social, most of them rely on the traffic of the commercial golden zone, consumers are often shopping malls, shopping, dinner for the purpose, basically in the buy and go, and Starbucks business needs are different.

Moreover, with the popularity of takeaway, the popularity of small program orders, and the gradual disappearance of restaurant ordering tables, consumers have also been prompted to pay more attention to the use of waiting time, and the process of some consumers has become a state of "online ordering - order completion - picking up goods in the store", and the demand for third space is declining.

From large stores to small stores, speaking with products, ignoring the value of additional services, and focusing on cost performance are not without precedents for success. For example, the local coffee brand Manner Coffee, under the premise that the average selling price is much lower than Starbucks, relying on the small shop style, the profit margin of a single store can reach 17%, more than 15% of Starbucks, and the valuation has exceeded 10 billion.

However, for low-end players, small shops instead of large stores can indeed exert the ping effect to the extreme and drive a new round of growth; but for players who take the high-end route, the small shop model undoubtedly breaks its own "high-end" brand image, if you go to small stores, it is more likely that it is a last resort in the consumption downgrade environment and the failure to challenge the influence of Starbucks's "third space".

Brands need "super symbols"

If you ask consumers which new tea brand you are most impressed with, most people may say that it is Honey Snow Ice City, after all, last year, a song "I love you, you love me, Honey Snow Ice City Sweet Honey" was all over the streets, and snow king's ghost animal video was filled with short video platforms and B stations.

When you ask Michelle Ice City what products there are, even if you haven't drunk it, many people can answer it, ice cream, tea, lemonade. Perhaps, this is why Michelle Ice City can have 20,000+ stores nationwide in addition to low prices - to create a unique "super symbol".

This "super symbol" can preferably be a cartoon character image, which is conducive to the dissemination of peripheral and secondary creations; it can also be a product, so that users have a further understanding of the brand, just like seeing the Snow King will think of Michelle Ice City, mentioning that the crispy pistol leg cannot avoid The Dirks.

However, for the players in the current new tea market, in addition to the Honey Snow Ice City and the pleasant color of tea, there is a lack of a "super symbol" for consumers or prospective consumers to have a further understanding of the brand, or to remember the brand through the "super symbol".

Membership

The membership system of supermarkets such as Sam's, METRO, and Hema X store is not indispensable in the new tea industry.

Due to the low cost of innovation in the new tea industry, the explosive products of a store will randomly come from the imitation of multiple stores, so that the product will move from "differentiation" to "homogenization"; the next stage can only drive the tea similar to Heytea and Naixue in the price of the inner volume, while reducing profits, may also damage the brand value.

Like a membership-based annual pass, it's just a good way to avoid this problem. Just like dicos' collective card, the coupons, membership discounts and multi-point rules in it are enough to make users ignore the threshold of annual fees and feel that they are worth the money. Once consumers break through this threshold, they are more inclined to the one with members in the same category, improving the frequency of consumption and user stickiness.

In the new tea drinking industry, in Shanghai, the birthplace of Manner Coffee, such a brand has emerged, called Xiaoxian Rabbit. It uses the membership system of the supermarket in the tea shop, pays a membership fee of 9.9 yuan a year, and can enjoy the price of pure tea 5.9 yuan, milk tea 6.9 yuan, and fruit tea 9.9 yuan. And due to the help of the membership system, the comprehensive gross profit margin is still nearly 50%, less than a year, has obtained tens of millions of angel round investment.

However, the fundamental of the membership system is still the cost performance, but this cost performance is not the lowest price, but let the user feel worthwhile from the comprehensive factors of emotion, taste, psychology and so on. For many new tea brands that are tired of inner volume, how to balance the brand value ecology and product cost performance still has a long way to go.