On March 17, Nesher's Tea announced that the price of a number of products will be reduced, with a maximum reduction of 10 yuan, and promised to add at least one product of less than 20 yuan per month. The reporter noted that there are no more than 30 yuan of products on the current menu, and nearly 60% of the products are priced between 14 and 25 yuan.
Industry reports show that in 2021, the market share of new tea drinks in mainland China with a unit price of less than 20 yuan will account for more than 80%. According to industry analysts, Heytea and Naixue products bid farewell to the "30 yuan era", and the "inner volume" of the new tea drink head brand has intensified, and the head enterprises may cause a "dimensionality reduction blow" to the mid-end market.
Popular items up to 10 yuan drop
The reporter noted that after the price reduction, the product price of Naixue's "easy series" is concentrated between 9 and 19 yuan, covering three categories of fresh fruit tea, milk tea and pure tea, which is 5 to 10 yuan cheaper than the previous "domineering series".
Taking grapes and mango products with high order rate as an example, the current price of "Easy Grapes" and "Easy Mangoes" is 19 yuan per cup, and the price is 10 yuan lower than that of "Domineering Grapes" and "Domineering Mangoes". As the first brand in the fresh fruit tea category, this is the first time that Nesher has launched a "1-word head" fresh fruit tea. In addition, "Easy Golden Peony" is priced at only 9 yuan, which is also the brand's first ready-made drink to be priced in "single digits".
At the same time as the new product series was launched, the popular products such as "domineering cheese rose strawberry raspberry", "domineering rose strawberry raspberry", "domineering ice cream strawberry", "domineering ice cream mango" and other popular products with higher prices were lowered to 29 yuan, and there are no more than 30 yuan products on the Naixue menu.
Nai Xue said that the price adjustment does not affect the quality of products and materials. "Price adjustment is based on its strong supply chain, digitalization and quality control capabilities." After the price reduction, the price band will move down as a whole, 14 to 25 yuan become its main price range, and the future will be at least one new product below 20 yuan per month, which will also become a signal of its long-term price reduction.
Head brand tries to "eat up and down"
Industry analysis believes that "up and down all-you-can- or can explain the pricing strategy of the head brand this time. According to the "2020-2021 Chinese New Tea Industry Development Report" released by the new catering big data research and evaluation agency NCBD, the market share of new tea in mainland China with a unit price of less than 20 yuan in 2021 is 80% higher. In the eyes of industry insiders, Nesher's move may be in line with changes in market demand, with the steady expansion of stores into new cities, for the brand to expand more customer groups.
"Under the influence of the epidemic, social consumption habits have changed, not simply consumption downgrading, but 'upgrading in downgrading'. Consumers' demand for cost performance is not simply the pursuit of 'easy series', and quality is still just needed. Han Yi, secretary general of the Tea and Coffee Special Committee of the China Tea Circulation Association, said that Naixue's price adjustment action is to follow the trend rather than go against the trend, catering to the change of consumer demand, and also providing more space for the market to sink.
"As the head brand of the new tea industry, Nesher already has advantages in the quality of raw materials and brand impression, on this basis, it is very wise to optimize the pricing mechanism, improve the cost performance of products, and make the coexistence of the two labels of 'parity' and 'quality'." Han Yi said.
As of March, Nesher had opened nearly 900 stores in more than 80 cities across the country. The price reduction is likely to be in line with the pace of its store expansion, which will enter more new cities and expand more customer groups in the future. "Digital construction has begun to bear fruit, self-developed digital systems and equipment have been put into use, and the cost reduction and efficiency increase of operations have gradually emerged." Nesher said.
The "inner volume" of the new tea beverage market has accelerated
With the successive price reductions of Xicha and Naixue, the price war of the new tea industry has also quietly opened. Last month, Heytea announced the full completion of product price adjustment, the price adjustment range is between 1 and 10 yuan, the mainstream store product price will be lower than 30 yuan, and promised that the existing products will not increase prices this year. At present, the two mainstream brands control the product price within 30 yuan.
In the view of Zhu Danpeng, an analyst in the Chinese food industry, the price reductions of Xicha and Naixue are the "dimensionality reduction blows" of head enterprises. The overheated new tea market may cool down, and the new tea market will also usher in a new round of reshuffle. "For mid-range tea brands, if the integrity, quality, brand, scene, and customer stickiness of the supply chain are not improved, the living space may be more strongly oppressed."
The mid-range tea market has more brands and more fierce competition, but the brand potential is relatively weak. With the intensification of the "inner volume" of the industry, new tea brands will also pay more attention to supply chain construction, brand building and diversified retail model construction to reduce business risks and strengthen competitiveness.
Image source: Mini Program screenshot, report screenshot