Image source @ Visual China
Giants are still keen to sell milk tea across borders, but today, new tea drinking is really not a good business to make money.
The new tea drinking track is crazy inner roll, in addition to the internet red tea brand we are familiar with, the movie giant has also entered the scene to share a piece of the pie.
On April 19, Aiqicha showed that Dalian Wanda Group Co., Ltd. (hereinafter referred to as "Wanda Group") applied for the registration of a number of "Wancha" trademarks, and the international classification included beer and beverages, convenience foods, catering and accommodation.
At present, on the website of the State Intellectual Property Office, the above trademarks are awaiting acceptance.
△ Image source: Qi Cha Cha
In fact, as early as a few years ago, "Wancha" has been stationed in a number of Wanda's cinemas, quietly laying out new tea drinks.
However, at this time, when entering the new tea drinking track, can you really make money?
A battlefield for herds
Wanda's cross-border new tea drinking, in fact, has traces to follow.
In 2017, Wanda Film signed a strategic agreement with costa, a veteran British coffee, to establish a co-brand for in-depth cooperation.
In August 2019, Wanda launched its milk tea shop "Wan Xiao Tea", testing new tea for the first time. By 2020, wanda's cooperation with COSTA has been further deepened, and a new model of Wancha and COSTA quick selection fusion store has been launched. As of September 28 of that year, after the Wanda Costa Quick Selection Fusion Store entered the Wanda Cinema in Lhasa, Tibet, Wanda had more than 70 Wancha stores in the country.
After the epidemic, the cold winter of the film and television industry is coming, and the impact of "film giant" Wanda cannot be underestimated.
△Image source: Wanda Cinemas official website
According to the financial report, in 2019 and 2020, the net profit of Wanda Film was -4.722 billion yuan and -6.841 billion yuan, respectively, with two consecutive losses. Entering 2021, although the net profit of 0.9 billion to 130 million is expected to have turned into a profit, it is urgent to find a new growth curve for Wanda, which has a huge film business. The new tea drink is a big change in combination with its own advantages.
Also hoping to get an increase with the help of new tea drinks is the veteran beverage merchant Wahaha.
As a former "beverage king", Wahaha pure water, AD calcium milk, nutrition express, cool crooked, accompanied by consumers through childhood. In particular, nutrition express, in 2013, once exceeded 20 billion yuan in sales, becoming wahaha's most popular single product.
But since its revenue peaked at 78.2 billion yuan in 2013, Wahaha has ushered in its own mid-life crisis, and its revenue has fallen from 72 billion yuan in 14 years to 44 billion yuan in 2020, setting a new low for Wahaha in the past decade.
In order to make herself younger, Wahaha also began to dabble in the new tea field.
In May 2019, Wahaha began to prepare for offline tea shops, prepared in November, and began to attract investment nationwide in December. In just one year, in July 2020, Wahaha Milk Tea opened its first direct-operated store in Guangzhou Wushan Business District, and launched a variety of milk teas based on AD calcium milk as raw materials, focusing on national tide, nostalgia and nutrition. On the opening day, the 75-year-old Zong Qinghou also flew from Hangzhou to Guangzhou and personally stood for him.
△ Wahaha Milk Tea Guangzhou Kecun Store, Source: Red Food Network
In fact, in the past two years, it is not uncommon for brands to sell milk tea across borders. Tongrentang and China Post are all rushing to this battlefield in an attempt to occupy a place.
A business that doesn't make money
But today, new tea drinking is really not a good business to make money. "Opening a store for two months and losing 200,000 yuan" is the experience of most new tea entrepreneurs.
From the analysis of profit model, new tea drinks are the same as traditional retail, and the profitability mainly depends on product sales and selling prices.
Among them, product sales test not only the number of stores, but also the publicity ability of various brands. The more stores and the better the marketing, the higher the sales volume. Therefore, the new tea drink is either opening a store or on the way to opening a store. In the case of Xicha, the total number of stores in early 2017 was about 50, which increased to 180 two years later, and has expanded to 835 by the end of the third quarter of 2021.
△Image source: Heytea
In order to increase sales, the new tea brand has also rolled up a new height in product promotion. In the barbaric era of new tea drinking, a blockbuster can hit the invincible hand all over the world. Nai Xue's domineering oranges, domineering cherry seeds, succulent grapes of Xicha, and Shuyi's burning fairy grass have created various forces. Taking Naixue's domineering jade oil citrus as an example, according to the research report, its tea sales account for more than 25% of Naixue's tea sales, and even exceed the perennial sales of domineering cheese strawberries.
But under the increasingly heavi inner volume, the explosive model can not save the life of the new tea drink. Low barriers and large competition are the most deadly drawbacks of new tea drinking.
According to the official information given by Michelle Ice City, the franchise investment including decoration, equipment, raw materials, management and other expenses is estimated to be 370,000 yuan, while the mid-range milk tea brands such as a little bit, book and burned fairy grass, etc., the total cost is not more than 500,000 yuan. Compared with other catering categories, this starting threshold is relatively low.
On the other hand, the new tea drink itself does not have much competitive advantage. Because the new tea drinking raw materials are mostly fresh fruits, dairy products and various types of small ingredients, the introduction of the new is nothing more than the arrangement and combination of various raw materials, in the milk tea shop everywhere today, leaving the brand play space is getting smaller and smaller. Products that tend to be homogenized make new tea drinks more and more alternative.
Xiao Yao, China partner of Rees Strategic Positioning Consulting, once said: "Nesher's tea, Xicha, Lele tea brands have not yet established a real differentiated advantage, although each one believes that there are more preferred consumers, but the actual brand between the very strong fungibility." ”
As a result, brands are trying to differentiate themselves through marketing. According to media statistics, in the four years from 2017 to 2021, Xicha carried out a total of 74 cross-border joint signatures, and Nesher was more keen to co-sign with artists in addition to the early joint signature with the British Museum.
From the perspective of customer unit price, according to the Ai Media Consulting Report, the new tea market has obvious divisions of high, medium and low grades, and the unit price of high-end tea market customers is more than 20 yuan, mainly covering the first- and second-tier markets; the price of mid-end tea products is concentrated in 10 yuan-20 yuan, and there are many market brands, usually focusing on subdivision categories or regional intensive operations; the low-end tea price is generally less than 10 yuan, distributed in the third-tier and sinking markets.
It is worth mentioning that high customer unit price does not mean high profit margins. In the high-end tea single store model, labor costs, store rent and other fixed costs account for a high proportion, and in order to maintain continuous operation, relative flexibility is low, in the terminal demand weakened and sales decline period, single store profitability is easily affected.
According to a survey by China Merchants Securities, a head milk tea shop has to sell 800 cups a day to start making a profit. A milk tea shop earns 10 million yuan per year, and finally reaches about 1 million yuan in terms of rent, water and electricity, employee salaries and other costs, with a net profit margin of about 10%. Under the large-scale network marketing, the profits of new tea drinks that are not huge enough are further diluted.
From the perspective of the industrial chain, new tea drinks include the supply of raw materials such as upstream tea, fruits, dairy products and other ingredients, the design and production and packaging of tea drinks such as midstream fruit tea, milk cover tea, and creative tea, as well as the production and sales of tea drinks delivered by downstream stores, third-party distribution and mini programs, and finally reach the hands of consumers. The 20% commission of the takeaway platform, as well as the advertising and marketing activities paid on the platform, are also compressing the profit space of milk tea shops.
Siege inside and outside the city
The new tea drinking track is booming, but making money seems to have always been just a "castle in the sky".
As a result, the tentacles of the giants continue to extend outward, focusing on the opening of stores, laying out omni-channels, and trying to occupy the minds of consumers.
Since 2021, Heytea has successively invested in chain coffee brand Seesaw, plant-based meal replacement brand Wild Plant YePlant, as well as peach tea and peach peach, and also tried to enter the field of fast moving consumer goods, launching 6 sparkling water, 3 fruit juice teas, 1 light milk tea and 2 kinds of lime tea.
Michelle Ice City applied for the registration of the "Snow King Love Drinking Water" trademark, the international classification is beer beverages, the current trademark status is in the application, intends to enter the bottled pure water market. In addition, Chongqing Xuewang Agricultural Co., Ltd. was also established, a venture capital company was registered, and it invested in the Guangdong tea brand "HuiCha".
Tea Yan Yue Se established Hunan Xiangming Biotechnology Co., Ltd., which is mainly engaged in the production and processing of tea.
Open stores, new products, do investment, new tea players continue to test the water in an attempt to jump out of the comfort zone, and cross-border players have piled into the game, new tea has now become a new "siege", people in the city squeezed their heads to go out, but people outside the city desperately want to come in.
As for how to stay competitive in the long run and build an effective profit model, all players seem to be still exploring.