With the help of new tea drinks that are lining up to burst out of the circle, they are stalling collectively, and the problem may be precisely that the queues are regarded as a problem rather than an advantage in new tea drinks. Using scale to solve the "problem" of queuing is not only dissipating the momentum of new tea drinks, but also potentially dragging them into the abyss.
Naixue's tea issued a profit warning, on the basis of the adjusted turnaround in 2020, 2021 once again fell into a net loss quagmire, the amount of loss of about 135 million yuan - 165 million yuan. After the Spring Festival of 2022, Xicha was exposed by the media to report large-scale layoffs to reduce manpower expenditure to improve financial statements and pave the way for the next IPO. In December last year, it was also exposed that there were widespread store closures and disguised salary cuts...
The reasons for the current predicament of new tea drinks, in addition to the impact of the epidemic, are inseparable from the more important one - the expansion of stores has led to the dilution of customer flow, resulting in a decline in the efficiency ratio of stores. According to the data of Jiuqian Consulting Middle Office, from July 2021, the average revenue of Heytea and stores nationwide began to decline. Taking the data of October 2021 as an example, the average revenue and sales efficiency of Heytea shops fell by 19% and 18% compared with July; compared with the same period last year, it fell by 35% and 32%.
Driven by the motivation of capital to seek greater commercial returns, new tea drinks have told the story of "China's version of Starbucks" and shouted the slogan of "promoting Chinese tea culture like Starbucks promotes coffee culture".
Radicals such as Naixue's tea founder Peng Xin directly emphasized that "space is The second product of Naixue" and created a "third space" for Starbucks. Based on the current market capitalization of the two companies, as of the close of trading on February 21, the total market value of Nesher's tea was HK$12 billion, and the total market value of Starbucks was US$107.3 billion (about HK$837.1 billion), which was nearly 70 times that of the former.
But in addition to being infinitely close to Starbucks in terms of location, new tea drinks are quite far from becoming the next Starbucks, and the biggest obstacle is the difference in cultural attributes. In contrast to the queuing culture of new teas, Starbucks relies on spatial culture to achieve scale expansion, and its sense of cultural identity in the "third space" has long been popularized around the world.
Around the space culture, Starbucks used the store space in various cities to gather considerable crowds, which eventually became the core elements that pushed up the income of Starbucks stores.
If Starbucks is compared to WeChat, New Tea is more like an Internet tool product, which lacks user stickiness, has not yet found a landing path to maximize the value of traffic brought by user time, and also faces the risk of reducing user time.
For a consumer company, the way to maintain continuous profit growth is nothing more than two: to increase sales and increase the unit price of customers, the former corresponding to expansion, and the latter needs to continuously empower brand value. From the perspective of the Internet, the intuitive manifestation of the brand premium is to enhance user stickiness and strive to increase the ARPU (average revenue per user) value.
Starbucks is one of the best examples of success in capturing users' time. Haidilao has the conditions to become the next Starbucks: to create an offline traffic entrance, to create a large number of user time, which is why the market to Haidilao 470 billion Hong Kong dollars of super high market value, but Haidilao did not achieve business model innovation, or like a traditional hot pot shop, by selling hot pot to make money, rather than using the 3+ hours contributed by users in Haidilao to provide services and monetize. In this way, its stock price plummeted by more than 70%, and the current market value fell back to HK$104.2 billion, which is not surprising, the market value of HK$470 billion is only the starting point for an Internet company whose business model is based on manufacturing and consuming user time, and for a traditional hot pot restaurant, its business model is obviously difficult to become such a high market value "load-bearing wall."
The same is true for new tea drinks, if you restrain your ambitions and be content to be a catering company with a low market value, if you want to sprint to a market value of 100 billion, you must work user time, at least transform yourself from thinking into a technology company. Looking at the hot new energy vehicles in the past two years, we know that the era of software-driven cars, Tesla, Weilai, Xiaopeng, Ideal and other new car-making forces, although the sales volume is less than a fraction of the traditional car companies, and even most of them are still losing money in consecutive years, they can still achieve a fantastic market value of 100 billion and 10 billion US dollars in the stock market, catching up with a number of old car companies.
It is difficult to replicate the new tea of Starbucks miracles in a short period of time, you may wish to take Haidilao as a lesson, put down the strategy of blindly expanding and seeking speed, re-embrace the queuing culture, and regain the lost user time.
A
Queuing culture has never been the enemy of new tea drinks.
From the popularity of Heytea in Beijing in 2017 to the emergence of Tea Beauty from Changsha in 2018, with the help of the queuing culture spread by social media, it has become a common password for the rapid rise of various new tea brands.
In order to solve the situation of short supply, new tea drinks began to focus on improving efficiency and expanding stores. But in the face of rapid expansion, new tea drinks will inevitably face two major problems:
The first is the paradox between scale effect and queuing culture. The size of the store went up, the production capacity problem was solved, but the snowball marketing effect brought about by the queuing culture began to fade.
Second, the scale effect is not proportional to the network effect. After the increase in the size of the store, the user purchase efficiency has been improved, and the overall revenue has increased, but the profit contributed by a single user has not increased.
Taking the public data of the listed Naixue tea as an example, the average daily order volume of Naixue's tea in the three years from 2018 to 2020 fell from 716 to 642, and continued to decline to 470 in 2020, one of the reasons behind this is that the supply began to exceed the demand, and consumers were diverted by the new stores.
In the face of increasing revenue and not increasing profits, there is also the beginning of the article Nai Xue's tea once again fell into the quagmire of losses, large-scale layoffs of Xi Tea, and the phenomenon of large-scale closure of tea and pleasant color.
In addition to the expansion of stores, the emergence of online takeaway orders, although helping new tea drinks improve efficiency and increase overall income, but also to a certain extent, exacerbate the queuing culture that dissolves new tea drinks.
According to the "2021 New Tea Beverage Research Report", the annual takeaway order volume of new tea drinks is increasing at a rate of 50%, and the GMV (total commodity transaction volume) will exceed 30 billion yuan in 2021. The excessive proportion of online single volume is not a good thing for new tea drinks, in addition to dissolving the queuing culture, the cost of performance and the new online marketing cost are also issues that need to be considered.
As the queuing culture fades, new tea drinks, which were once shrouded in marketing miracles, are bound to become mediocre people like most consumer enterprises. This is also a problem that all Chinese catering companies have not solved.
Queuing culture is not the first of the new tea drinking, from sipping and nursing, grandma's house, to Haidilao, queuing has long been a common marketing method used by Chinese catering practitioners.
Through queuing, catering enterprises not only solve the production and supply problems that users are waiting for in restaurants, but also gather popularity and create marketing tools.
However, if catering companies do not realize that queuing is an advantage, not a problem, but are committed to saving time for users, solving the shortage of supply, and self-dissipating scarcity, most catering companies will be pulled into the abyss of losses by expansion. A typical example of recent years is Haidilao.
According to Haidilao's profit warning issued on February 21, the net loss in 2021 is about 3.8 billion yuan to 4.5 billion yuan; operating income is expected to exceed 40 billion yuan, an increase of more than 40%.
One of the reasons for the 2021 performance loss given by Haidilao, which does not increase revenue and does not increase profits, is the rapid expansion of the store network.
Benefiting from the benefits brought by the previous store expansion, Haidilao has set a rapid expansion goal since 2019, coupled with Haidilao's founder Daniel Zhang overly optimistic about the end of the epidemic, Haidilao will open 544 new stores and 299 stores from 2020 to the first half of 2021, expanding 843 stores against the trend.
Blind expansion has brought Haidilao to the bitter fruit of its first loss-making fiscal year since its listing. Daniel Zhang, the founder of Haidilao, has also begun to reflect on the boundaries of the catering industry and have begun to become rational and restrained.
B
Unlike Chinese restaurant companies that pursue a queuing culture and fall into expansion in the elimination of queuing culture – starbucks has embarked on a path of expansion and profitability.
Starbucks' fiscal first quarter 2022 financial report showed that Starbucks revenue rose 19% to $8.05 billion in the quarter, and net profit was $815.9 million, up from $622.2 million in the same period last year. During this period, Starbucks China experienced the wildest wave of store openings, adding 197 stores in a single quarter. Starbucks also plans to reach 6,000 stores in China in fiscal year 2022 and enter 230 cities. As of January, Starbucks had a total of 5,557 stores in China, meaning Starbucks will open 443 new stores during the year.
Behind Starbucks' ability to increase revenue and profits, it is inseparable from its "space culture" to build a life. In contrast to the queuing culture of Chinese catering enterprises, the vast majority of Starbucks stores rarely queue up. The core factor underpinning its $100 billion market capitalization is not how delicious the coffee products are, but the concept of a "third space" built entirely by Starbucks founder Schultz.
Before 2008, Starbucks was also in an expansion crisis. By 2007, the number of Starbucks stores worldwide reached 15,011, with a compound annual growth rate of 35.1%, far exceeding the steady growth rate of "15%-20%" planned by Starbucks. Food safety problems and negative public opinion caused by rapid expansion occur from time to time.
Schultz had to return to the front lines of operations, becoming Starbucks CEO again in January 2008, pointing out that in addition to the explosive expansion of Starbucks, the deeper problem was that the company had deviated from the soul of its former business.
Schultz adopted an aggressive "slimming program" that closed nearly 1,000 stores, laid off more than 10,000 employees, and rebuilt relationships with customers and communities in two years, reminding employees that "the cornerstone of the business we value most is our culture and behavior." ”
The concept of "third space" has since taken root in Starbucks. With this spatial culture, Starbucks has attracted a steady stream of user groups, converted these potential users into in-store user hours, and finally obtained high income by mining and developing user time.
From the perspective of Internet thinking, Starbucks has not only created an offline traffic entrance, but also successfully digested the user time through the innovation of business model. It is based on the strong brand premium ability, Starbucks often enjoys the bargaining power of shopping center store rent, not only to sign the best position on the first floor of the shopping center, but also to obtain rent concessions that other catering companies cannot enjoy.
In 2018, Luckin, who is in the midst of crazy expansion, wrote an open letter to Starbucks, counting Starbucks' monopoly charges, one of which is that Starbucks signed an exclusive lease contract with the property.
Spatial culture determines that Starbucks' ceiling ceiling is bound to be much higher than that of new tea drinks. This sense of cultural identity, in turn, feeds Starbucks' periphery, making it eligible for a premium in its class.
From these aspects, it is not difficult to understand why the new tea drink is vying to become the next Starbucks. In order to strengthen the mentality of consumers "Starbucks in the tea industry", all kinds of new tea brands have been as close as possible to Starbucks in terms of site selection, and even imitated Starbucks to engage in peripheral development.
But the mental cultivation of cultural attributes is not an overnight achievement. The brand's new tea is not as effective as Starbucks', and it first has to bear a much higher capital expenditure than Starbucks in terms of rent and advertising costs. Only the marketing function, lack of spatial cultural story support around all kinds of new tea drinks, how to sell out is a problem, not to mention like Starbucks has a product premium ability.
New tea drinks, which are difficult to promote in terms of cultural genetic modification, are beginning to give up learning Starbucks. According to the operating data of Nesher Tea in the fourth quarter of 2021, most of the 149 stores in the quarter were lightweight Nesher Pro tea shops, and another 23 standard stores were converted into Nesher Pro tea shops. Heytea also launched Heytea GO, which allows consumers to order on their mobile phones and pick up meals in stores.
C
Since Starbucks will not learn for a while and a half, the new tea drink may wish to learn from Haidilao.
Before the new tea drink, the catering enterprise that is most likely to become the Chinese version of Starbucks is None other than Haidilao: it has created an equal space, gathered a large wave of people, and has a user time.
Haidilao, which was almost successful, was once praised by the secondary market as "hot pot Mao", and its market value peaked at HK$470 billion. However, although Haidilao occupies the user time, it has not been digested, and the utilization and commercial development of the user time are far from enough.
As an advanced version of Xicha Haidilao, standing in the current reality of sharp losses due to expansion, its primary improvement should not be efficiency, but try to transform the created space, the user time brought by space into commercial services, and explore new business models from the huge user time gathered around Haidilao.
Especially at the moment when the mobile Internet dividend is exhausted, a number of Internet companies are trying to circle users in super APPS to achieve the internal circulation of traffic. In contrast, Haidilao can easily occupy two or three hours of user time per single business. Whether it is from the long-term development of Haidilao or the return to the peak of market value, what Daniel Zhang should do now is to tap the gold mine of user time, rather than sticking to the existing thousand stores and thinking about how to expand.
But this may be a challenge for Daniel Zhang who lack Internet sensitivity. At the height of Internet thinking in 2014, Daniel Zhang was once frightened and couldn't sleep: "You have a meeting with the big guy of the Internet, and you become a neurotic after a few times!" Don't ask for anything anymore! I was afraid that they would open a hot pot restaurant and eat without money, and if I encountered this matter, I would be 'blind'. ”
For the new tea drinking founders who have grown up from the Internet thinking, the obstacles in this regard will be much smaller.
Like Haidilao, the new tea also accounts for nearly half an hour of user waiting time. In the face of the rising costs of rent, raw materials, labor and other costs, the direction of expanding the valuation of new tea drinks is nothing more than two: either to become an industry leader like Starbucks and completely control the upstream and downstream pricing power. But this pair of new tea drinks in the middle of the melee is obviously a road that does not work. The other way is to embrace the Internet, become a technology company, and find new business models from user time.
In this way to examine the current new tea drink, the first thing to do is not to dissolve the queuing culture, but to try to maintain the scarcity of product supply. Taking diamonds as an example, De Beers successfully bound diamonds to love relics with the classic slogan of "A diamond is forever" (diamond is forever), although in today's explosion of diamond reserves, De Beers still deliberately maintains the supply of the market to ensure that diamond prices go all the way up.
Dissolving the queuing culture is tantamount to abandoning the core competitiveness of new tea drinks. Before obtaining the advantage of offline traffic entrance that Comes with the strong brands of Starbucks and Haidilao, the queuing culture will greatly enhance the rent bargaining power of new tea drinks when facing shopping malls.
After the new tea circle has a sufficient traffic scale, it can use the traffic as a tool to empower collaborators. New tea drinks dominated by young people, when the traffic entrance of selling lifestyles to young people is mastered, this traffic can be diverted to its own sub-brands, IP peripherals, and can also be retailed to other brands, such as tide play, board games, etc., earning commissions, not only carrying the drink demand of young people, but also trying to become a new place for young people's Kill Time.
Hi Tea Mall, or Haidilao Mall, why not?
Resources:
"Can't understand, why don't consumer investors change careers?" Financial Qiguan
"Hi Tea, Nesher, Can't Avoid the Anxiety of Becoming a "Starbucks"" Internet Colosseum
"New Consumption Leaps Over the Internet" alphabet list
"Closing 300 stores, Haidilao executives respond to how to save themselves" financial eleven people
"Haidilao Daniel Zhang needs to become a "time management master"" alphabet list
"Who gave Starbucks the confidence to raise prices?" "Tokawa Research Institute"