Entering 2022, when the costs of major raw materials, labor, transportation, energy and other costs continue to rise, even the old milk tea enterprises and the "first share of A-share milk tea" Xiangpiaopiao cannot bear the pressure to choose to raise prices, but a number of new tea brands choose to go against the market and have played the "price reduction" card.
Human grass and trees are "tea", grass and trees have withered glory, and the tea industry naturally rises and falls.
After several years of industry "liveliness" such as frequent Internet celebrities, resident hot searches, Divine Comedy brainwashing, and long queues, at present, the new tea industry has slowed down its growth rate in stages, and has entered a "calm" period.
However, the heat is still there, and the dividend is still attractive. Today, the wings of the new tea head brand are getting fuller and fuller, and the competition between brands has escalated. Entering 2022, when the costs of major raw materials, labor, transportation, energy and other costs continue to rise, even the old milk tea enterprises and the "first share of A-share milk tea" Xiangpiaopiao cannot bear the pressure to choose to raise prices, but a number of new tea brands choose to go against the market and have played the "price reduction" card.
Xi Tea and Nai Xue's tea "bid farewell to the 30 yuan era in an all-round way", pressing a new round of traffic warfare, what is the truth of the commercial war behind the civilian route?
The three giants of new tea drinking bid farewell to the 3 yuan era
It is rare to have a weekend without overtime, and Xia Nan (pseudonym) plans to make an appointment with murong Xi (pseudonym), a close friend of the same window who has not been seen for a long time, for afternoon tea and name milk tea.
Nesher's tea rings the bell on the Hong Kong Stock Exchange, behind which the new tea brand carries the banner of "changing lifestyle", quietly occupies the minds of consumers, and has countless fans - the team celebrates by ordering a table of Happy Tea to deliver, and when going shopping at Hopson Hui, consumers do not forget to pack a Lele tea before leaving...
The wings of the new tea drink head brand are becoming more and more plump, and the competition between brands has also escalated. Entering 2022, when the costs of major raw materials, labor, transportation, energy and other costs continue to rise, the "price reduction" brand has been launched by China's high-end new tea drinks.
Xicha took the lead in breaking the window paper in February, and NaiXue's tea then invariably chose to "bid farewell to the 30 yuan era in all respects". The Beijing News shell financial reporter noted that 15 yuan to 25 yuan has become the mainstream price band of Xi tea, and Nai Xue's tea has launched an "easy to buy" series, and promised to put on a new "1 word" product every month.
By March, Lele Tea seemed to have taken a bigger step of "price reduction", announcing in a quality non-discount statement that the price of some drinks was finally controlled below 20 yuan, and the minimum 8 yuan could drink a cup of fresh jasmine green.
For this change, Guo Sihan, CMO of Lele Tea, told the Beijing News Shell Financial Reporter that some time ago, Lele Tea made adjustments to the product line. The addition of this product line is not only a price adjustment, but also a commitment to adhere to the use of fresh fruits and good tea. "Lele Tea's menu products are rich and new every week, and there are products for users to choose from in each price band."
Price cuts and new product lines are just a matter of the story, and the three giants of new tea drinks have set their sights on "affordable products" in an attempt to provide consumers with a wider price band and a lower consumption threshold.
Product price reduction, "burst order" hit.
Chen Xiaolei, the person in charge of Naixue's tea, told the Beijing News Shell Financial Reporter that since the launch of the Easy Series, for more than 1 month, the number of takeaway and store orders has increased significantly, especially during peak order hours such as noon and holidays, in order to ensure a good customer experience, sometimes have to temporarily close the online ordering business.
"Within a few days after the news of the price adjustment was issued, Heytea stores in many parts of the country have continued to explode. Many stores in Beijing, Chengdu, Jinan, Shenzhen, Guangzhou, Shanghai and most other cities across the country have to choose to temporarily close online orders because of too many orders. Therefore, we have also made a reasonable allocation of the number of employees in some stores. Cheng Hao, senior director of Xicha, told the Beijing News Shell financial reporter.
"Affordable product" into a traffic password
Over the years, in order to win this traffic war, the marketing tricks of new tea brands have been frequent, celebrity endorsements, creating IP, cross-border joint names, helping niche fruits out of the circle, and building a "milk tea social" scene... Strive to close the distance with Generation Z and capture the stomach and heart of young people.
Around this price reduction, there are many doubts and worries in the market. "The cost increase is visible to the naked eye, will the price reduction reduce the quality?" "Is it that no one pays for high-priced products, so they are forced to reduce prices?"
In this regard, Xicha, Lele Tea, and Naixue's tea gave an almost unanimous answer, "This price adjustment is based on the accumulation of brand, digitalization and supply chain, and does not affect product quality and materials."
On the surface, this is the new tea beverage head brand after years of exploration and accumulation, the establishment of a set of cost-effective supply chain system, so as to choose and share dividends with consumers, so as to launch "high quality and price" products.
From a business perspective, the logic is not so simple.
"For Heytea and Nesher, adjusting the cup type and launching products with smaller capacity will not affect the cost, but only affect the unit price of customers." This is worth it, one is that the volume of the two brands is large, the number of stores is large, the economy affected by the epidemic is not very optimistic, and the tea industry will also have cyclical fluctuations, and the overall store is difficult to obtain customers, so the threshold for customer acquisition has been reduced. Some insiders analyzed the shell financial reporter.
Customer acquisition has become the key to the tea giant's "lower stature". Wu Daiqi, CEO of Shenzhen Siqisheng Company, told Shell Financial Reporter that brands such as Xicha have successively reduced prices in order to expand the customer base. When some low-end brands have to raise prices due to rising costs, these original high-end brands have reduced prices, further narrowing the price gap with medium-priced brands, which is expected to attract new customers to try.
As for the cost pressure of enterprises, Wu Daiqi said that whether the price reduction of products will aggravate the cost pressure of enterprises depends on the original profit situation of enterprises. If the original enterprise operation efficiency is relatively high, the profit margin is larger, through a certain profit to increase the store customers, revenue increase, you can cover the reduction in revenue brought about by price reduction. On the other hand, the company has actually made certain improvements in the product, so it is possible that the cost of the formula has decreased.
Financial commentator Zhang Xuefeng and chain industry expert Wen Zhihong believe that small profits and high sales itself is a classic marketing strategy, and it is actually a wise move for Xicha and others to become more pro-people and popular by reducing prices.
In fact, for the new tea brand, "the high place is not cold" is increasingly apparent. The customer base behind affordable products is a new battlefield for traffic.
According to the "2020-2021 Chinese New Tea Industry Development Report" released by NCBD (Food Treasure Book), nearly 60% of consumers can most accept milk tea of 10 yuan to 15 yuan in 2020, and the market accounted for more than 80% of the market below 20 yuan.
"The user stickiness of the tea industry is not high, which requires brands to constantly do new things." At this stage, the new tea drink head brand has realized that this is a traffic competition, so it is a very good way to do event marketing through the very eye-catching and easy to attract public attention through price reduction. Some insiders analyzed the shell financial reporter.
Expansion and pressure behind "fever reduction"
After Nai Xue's tea was listed, the capital action of Xi Tea and Lele Tea was still stuck in last year.
In June 2021, it was reported that the latest round of financing of Heytea was about to be settled, and the valuation reached an unprecedented 60 billion yuan, once again refreshing the financing record of New Tea Drinks in China. In September of that year, LeleCha was in discussions with banks to list in Hong Kong as soon as next year, with plans to raise $300 million to $500 million through an IPO. However, both companies denied the news.
Under the new crown pneumonia epidemic, the life of new tea companies is not good, Naixue's tea last year's net profit loss of about 145 million yuan, Lele Tea recently withdrew from the Guangzhou market, Xicha was also exposed at the beginning of the year a large number of layoffs news. At that time, Xicha responded that "there is no so-called large layoff in the company, and a small number of personnel have been adjusted to normal personnel adjustment and optimization based on year-end assessment."
The B side of the phased slowdown in the growth rate of new tea drinks is a more intense research and development race and market expansion.
The Beijing News shell financial reporter learned from the company insiders that Nai Xue's tea has begun to reduce prices in January before the year (lunar year), and after the year (lunar year), Xi Tea took the lead in officially announcing the price reduction, and Nai Xue's tea was not willing to show weakness to follow up.
From the speed of new product replacement, the number and scale of stores, the location of stores to product marketing means, the construction of supply chains, the improvement of digital capabilities, etc., the "competition" between new tea brands is everywhere.
For the head brand, even if it is in the cooling off period of the industry, the race cannot be stopped, and the market share is related to the life and death of the brand.
In terms of the number of stores, at present, Heytea has opened nearly 900 stores in more than 70 cities around the world; as of the end of last year, Nesher's Tea has 817 stores in 80 cities, and plans to open 350 new stores in 2022.
Lele Tea has 100 fully directly operated stores, and has laid out 14 first-tier and new first-tier cities such as Shanghai, Beijing, Hangzhou, Suzhou, Nanjing and Chengdu. In 2022, Lele Tea will further improve the speed of store opening, focusing on the first- and second-tier markets in East China, opening 250 stores.
In recent years, the new tea industry has become one of the hottest tracks in the venture capital circle. According to the statistics of the Red Food Brand Research Institute, as of November 25, 2021, there were 32 financings in the new tea industry in 2021, with a total amount of more than 14 billion yuan, and the number of financing events and the amount of financing disclosed were higher than in 2020, reaching the peak of nearly 10 years.
The track is crowded and the competition is brutal. The wave of price cuts set off by Xicha and others has also triggered new thinking in the industry, "Has the competition for the new tea drinking track entered a white-hot stage?" "And how much impact will it have on the tea face and honey snow ice city that are already in the affordable product area?"
Bai Wenxi, chief economist of IPG China, believes that the price reduction of brands such as Xicha can be described as a dimensionality reduction blow to cheap tea companies such as Tea Beauty and Honey Snow Ice City, which will erode and squeeze the corresponding market share of these affordable tea companies on the one hand, and on the other hand, it will also bring great pressure on the market expansion of these affordable tea enterprise brands.
"The potential energy of brands such as Heytea is very strong, and according to my observation, the traffic of many of their stores has increased a lot after the price adjustment. If the market is likened to a cake, some people will inevitably divide more and some people will inevitably share less, so for brands that are already in the affordable product area, it is bound to bring pressure and challenges. Wen Zhihong said.
However, Wu Daiqi has a different view, which believes that in a strict sense, brands such as Xicha and brands with a price range of 10 yuan to 16 yuan still have a large price gap, and they are not necessarily the same consumer group. Consumers who pay attention to price may not repeat the purchase many times even if they have tasted high-end milk tea. Therefore, it is difficult to say that the price reduction of hi tea will have a great impact on the color of tea.
In the face of the price reduction card thrown by the head brand, The tea face Yuese, who just raised the price at the beginning of the year, said that he would face the market competition with a "normal mentality" and "do things that match his own reality and ability", and pointed out that "although the price is relatively close, the situation of each brand itself is not the same, including business philosophy, development direction, etc." ”
Four or two thousand pounds of replies lead the question in another direction, how should milk tea companies build their own moat? After all, competition will not disappear, and its own strength is strong enough to develop in the long run.
"The milk tea shop brand belongs to the chain enterprise, in order to establish its own competitive advantage, in addition to the chain scale advantage, the single store success model is still very important, including a series of contents such as store image, business circle location, products, and operational efficiency." Wu Daiqi pointed out.
Brand fancy competition, still looking at this golden land. According to the "2021 New Tea Beverage Research Report" released by the China Chain Store & Franchise Association, from 2017 to 2020, the size of the mainland's new tea market revenue will increase from 42.2 billion yuan to 83.1 billion yuan, and it is expected to reach 142.8 billion yuan in 2023.
However, in the next 2 to 3 years, the growth rate of new tea drinks will slow down in stages, adjusting to 10% to 15%. According to the analysis of the report, 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 market in the west need market verification.
"If enterprises solve important issues such as brand, operational capabilities, and food safety management in the next 2 to 3 years, the growth rate of the new tea industry will quickly return to more than 15%." The report said.
Beijing News shell financial reporter Yan Xia Editor Wang Jinyu Proofreader Liu Baoqing
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