New tea drinks have also begun to fight a price war?
On March 17, Nesher's Tea announced a comprehensive price reduction, with its classic products dropping by up to 10 yuan and promising a new "easy series" of 9-19 yuan per month, which is seen as a signal of its long-term price reduction. At present, the menu on the "Naixue Order" Mini Program shows that there are no more than 30 yuan of products, and 14-25 yuan has become the main price range.
It is understood that Nesher's tea has always been a high-end ready-made tea chain brand, and it was disclosed in the prospectus that the average price of its products is 27 yuan, and the customer base is mainly a wealthy urban population with a larger age span and an increasing number of people.
Although it has also launched a brand called "Taigai" for the low-price market, with an average list price of 16 yuan, Naixue has never wavered in its determination to take the high-end route, and from 2018 to 2020, the proportion of Taigai revenue has dropped from 14.3% to 5%, and from 2018 to 2019, Naixue has strategically decided not to use resources to promote the growth of Taigai in the short term.
However, this comprehensive price cut is not without warning. As early as the middle of January, Naixue launched the "Limited Time Easy To Buy" series, and several fruit teas were priced between 18-21 yuan, which was 5-7 yuan lower than the previous products. However, accordingly, the capacity of the series has also been slightly reduced, at 550ml, and cheese and cream are omitted, while the regular fruit tea capacity is 650ml.
However, the official customer service of Nesher said at the time that the above is not a price reduction, but a limited time activity, only 1 month. Nai Xue's Tea also responded in a post on Weibo on January 17 that the "Limited Time Easy Purchase" series is a limited time one month flash mob event. However, according to an industry insider close to Nai Xue quoted by the Daily Economic News, the sales performance of the "Easy Series" was "particularly good", and it was not ruled out that the follow-up would become a "fixed program".
As for the real reason for this adjustment, Naixue's tea publicly stated that it is the brand's in-depth insight into consumer needs, and based on its strong supply chain capabilities, digital capabilities and quality control capabilities, it does not affect product quality and materials, hoping to provide consumers with easier and richer choices in a wider price band.
In fact, not only Nai Xue, but also the news of price reductions has been reported before, including Xi Tea and Lele Tea.
On February 24, Heytea announced the completion of the comprehensive product price adjustment carried out since January this year, and will not launch new beverage products of more than 29 yuan during the year, and promised that existing products will never increase in price during the year. At present, in addition to a few products, the product price of heytea mainstream stores has been comprehensively lower than 30 yuan, and the price of products at 15-25 yuan has accounted for more than 60% of all products of heytea.
On March 3, Lele Tea announced that it will launch products below 20 yuan, and the lowest price products are as low as 8 yuan. Lele Tea said that the price of the Largemouth series of products is due to the sharp reduction in the cost of raw materials due to the non-use of cheese.
In contrast, since 2021, a number of tea brands, including a little bit, Coco Duke, Yihetang, Tea Baidao, and Tea Yan Yue, have successively raised product prices, most of which are generally adjusted to 1 yuan, and very few are raised by 3 yuan.
The analysis believes that the reason for the previous price increase of small and medium-sized brand tea is nothing more than the soaring cost of raw materials and other materials, and the fading of traffic dividends. The tea head chose to reverse the price reduction, because the high-end market has a ceiling, and has to go to the low-end track to seek growth - relevant data show that in 2021, the proportion of the mainland new tea unit price below 20 yuan is 80% higher.
So, as far as Nesher is concerned, how much can it benefit from the price reduction?
At the strategic level, Han Yi, secretary general of the Tea and Coffee Committee of the China Tea Circulation Association, said, "As the head of the industry, Nesher has formed advantages in the quality of raw materials and brand impressions, and 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'." ”
From the perspective of revenue, the unit price of Nesher's tea will definitely come down, but the price reduction is not certain for the stimulation of the market, if it can attract more consumers to buy, the scale of revenue may not be able to achieve growth, and vice versa, it will definitely decline. Everything has yet to be verified by the market.
It is foreseeable that the competition in the mid-end market of new tea drinks will become more and more intense.
(Titanium Media App editor Liu Mengmeng synthesis, part of the content refers to the Red Star Capital Bureau, Bullet Finance, etc.)