Source | Operations Research Institute (ID: U_quan)
Author | Yu Liyan
Edit | Yang Peiwen
Design | Talk about Mengjie
How many volumes are there in the domestic new tea market?
Not only is there a lot of volume, but it's also growing fast.
According to the "2021 New Tea Beverage Research Report", at the end of 2019, the total number of mainland beverage stores was about 427,000, and the number of stores at the end of 2020 was about 596,000. Among them, new tea stores accounted for the highest proportion, reaching 65.5%, and the number of stores was about 378,000.
According to statistics from the Red Food Brand Research Institute, as of November 25 last year, the number of "new tea financing" incidents and the amount of financing disclosed have been higher than in the whole of 2020, reaching a peak in nearly 10 years.
It is reported that in 2021, the number of new stores in Chabaidao and Guming exceeded 2,000, and the number of stores in Mixue Ice City has doubled in the past year, while Aunt Shanghai has expanded with a growth rate of 1,000 per year for three consecutive years.
Obviously, for the current "new tea industry", the domestic cake has basically been divided, and the upgrade space of the product has reached the peak.
In this situation, there are a large number of enterprises and capital to enter, there will be a large number of brands and stores closed, in the limited market and white-hot competition, no one will become a winner.
However, the operating company found that most of the new tea brands that had a good life seemed to anticipate this situation and had already quietly made second-hand preparations - to sail out to sea.
Today we will talk about the new tea drinks that have come out to sea...
Domestic new tea drinks piled up to go to sea
Looking back in the past, the road to the sea of Chinese tea can be roughly divided into two stages:
In the first stage, that is, from 2012 to 2017, the "bubble teas" represented by coco and Tiger Hall entered the North American continent, and quickly conquered the hearts of American users with the advantages of high quality and low price and sweet taste.
Celebrities such as Hillary clinton were photographed drinking bubble tea in public
Milk tea has become the "second drink" in the United States.
Data from Foursquare shows that in just four years, the number of establishments labeled bubble tea has tripled, from 884 in September 2015 to 2,980 in September 2019.
The "U.S. Milk Tea Market Report" pointed out that the number of milk tea in the United States reached more than 10,000 before the epidemic, and the most densely populated areas were in Los Angeles, San Francisco and New York and other Chinese concentrations.
Source: Menusifu U.S. Milk Tea Market Report
However, under the strict chain expansion system in the United States, the time cost of every new store opened by brands such as coco and a little bit is very high, which also prevents the expansion of domestic tea brands.
Therefore, the milk tea shops that increased during this period in the United States were still dominated by local brands and some self-employed businesses in the United States.
Since 2018, it is the second stage of new tea drinking.
At this stage, the chain of tea drinks with Xicha and Mixue Ice City as the main chain of tea began to shift the battlefield and began a huge "journey to the South China Sea".
1) Hi Tea entered Singapore
As a representative of the new expensive tea in China, Heytea entered Singapore in 2018.
Many media reported that on the first day that Xicha opened its doors on Wujie Road, it recreated the crazy scene of "queuing for two hours and picking up goods for ten seconds" in China.
Orchard Road is Home to Singapore's top retail and high-end residential destinations, and ION Ochard Mall, where Hi Tea is located, is located on Orchard Road and features nearly 30 tea restaurants and the largest food court on Orchard Road.
Xicha opened a shop here, and while the voice of the people was boiling, the competitive pressure was also extraordinary.
According to official data, in the first week of opening, Heytea sold an average of 2,000 to 3,000 cups per day, and more than 200 cups per hour during peak periods.
Under this heat, even many local celebrities have joined the punching queue, such as the famous host Li Guohuang and actor Fan Wenfang...
In order to maintain the popularity, Heytea also continues to launch new products, firmly grasping the love of young users, whenever Heytea is new, KOL will update the "debut" and "review" on Instagram and burpple (Singapore version of Dianping) to attract users to experience.
Until now, Heytea is still one of the few tea brands in the top 100 of burpple's hot list.
Burpple shows that on the most prosperous Orchard Road, the popularity of heytea is much higher than that of Starbucks, and its discussion is more than 2 times that of Starbucks.
Up to now, Heytea has opened 4 stores in Singapore, and continues to expand overseas markets with Singapore as a springboard.
2) Sink into the Honey Snow Ice City in Vietnam
If Singapore has become the first stop for Xicha to go to sea because of its more developed network and economy, then Vietnam has attracted the king of affordable tea drinking with its own "sinking attributes" - Michelle Ice City.
How cheap can Mi Xue Ice City in Vietnam be?
At present, the price of the domestic Honey Snow Ice City is between 5-13 yuan, according to the exchange rate conversion, the price of Vietnam is about 20% off in China.
For example, the same cup of sugar-sweetened sundae, the domestic offline price is 6-7 yuan, in Vietnam is 16K VND, equivalent to about 5 yuan.
In addition, many netizens said that Michelle Ice City also often does promotional activities - cone free, bubble tea to send small materials, and even buy two get one free...
In the face of the extreme price, the grounded Vietnamese users are also crazy.
Official data shows that from the end of 2018 to 2021, but in just 3 years, Michelle Ice City has opened more than 200 stores in Vietnam, with an average of 5 Michelle Ice City opening every month.
In addition, with Vietnam as a springboard, Michelle Ice City has also been stationed in Thailand, Malaysia and Indonesia, and has opened more than 100 stores in Indonesia...
3) The overlord Cha-hee who broke the order in Malaysia
Perhaps in order to avoid hand-to-hand combat with Michelle Ice City, The Overlord Cha ji, who also sells low-priced tea, set his sights on Malaysia.
Bawang Chaji is a new type of tea drink from Yunnan, focusing on Chinese style and tea taste, known as Yunnan's "tea color".
Overseas Bawang Cha-hime store
This tea brand that does not show the mountains and dew in China is not as early as Xicha, and the price is not as cheap as Mixue Ice City, but it is very popular in Malaysia with its high recognition of Chinese style.
According to "Kamen", in Malaysia, where there are Starbucks and McDonald's, there is a high probability that there will be a Bawang Chaji, 70% of their stores are opened next door to the big brand, unlike the general tea shop, the shop area of Bawang Chaji can reach 60-100 square meters.
In more than two years, Bawang Chaji has opened nearly 40 stores, and its CEO Zhang Junjie said in an interview that it has achieved profitability for all stores, with an average monthly turnover of 300,000, and at this rate, the annual turnover is nearly 4 million.
This number is twice that of domestic stores.
"On The day of Singles' Day last year, there was no discount, relying on takeaway alone, 28 stores sold 30,000 cups, with an average daily turnover of 25,000, and the highest store sold 38,000."
In this way, in the two years of going to sea, the overlord Cha ji has made more than 300 million yuan in Southeast Asia.
New tea drinks sail to sea, relying on more than just "freshness"
Since pearl milk tea entered the United States in 2012, in the past decade so far, there have been countless new tea drinks that have expanded to the sea.
However, after the big wave of sand, there are very few brands that can survive.
The operating company believes that the tea brands represented by Xicha, Michelle Ice City and Bawang Chaji have been able to spread their branches overseas and continue to expand because they have done a good job of "localization" and "differentiation" at the same time.
1) Localization
As a high-frequency fast-selling product, tea is often closely related to the lives of local users, so in the process of going to sea, those "tea brands" that are "localized" and do well are often more vital.
Localization means that in the process of going to sea, in order to improve market competitiveness, the production, sales and other links will be organized according to the needs of specific countries and characteristic markets, including products, operations and manpower.
"Product localization" refers to products that are highly compatible with local users based on local user research.
For example, Heytea found that Singaporeans especially like durian and salted egg yolks in their diets, so with the opening of the new store, Heytea launched a variety of durian and salted egg yolk flavor drinks and ice cream;
In order to gain a larger market for adult users, Heytea will also open a new store in Clarke Quay, a well-known bar street, to launch a "limited drink" for user experience.
For example, Michelle Ice City found that compared with domestic users, Vietnamese users have higher requirements for sugar and prefer milk tea drinks, so they make multiple improvements according to the habits of local users - on the one hand, increase the sugar content of drinks, remove three sugars and sugar-free options; on the other hand, adjust menu, and downline lemon aloe vera fruit tea and other bitter teas.
"Operational localization" refers to the efficient reach of operational users in a local manner on the basis of understanding local mainstream media, language habits and trends.
For example, in the media, on the one hand, Singaporeans rely heavily on Facebook and Instagram to socialize and keep up to date; on the other hand, there are many Chinese in Singapore, and public accounts such as "Singapore Eye" and "Singapore Lion City Forum" have a very large influence in the local area.
Therefore, after understanding the habits of target users, Heytea began to promote marketing on these platforms, and cooperated with local KOLs to use the appeal of local influencers to create momentum for themselves.
In addition, Heytea will also carry out fan communication activities on Facebook and Instagram, improve products based on fan reviews, and localize to the end.
For example, in Malaysia, motorcycles are the mainstream means of transportation in the city, so the number of motorcycles in front of the restaurant shop can often represent the hot sales of the store, so on the big promotion day, bawang tea and other tea drinks often gather thirty or fifty motorcycles, indicating the popularity of the store.
"Talent localization" refers to the establishment of a local team that is more familiar with the market and the humanities through overseas recruitment.
Take Bawang Chaji, for example, when recruiting Bawang Chaji, requires employees to speak at least three languages: Chinese, English and Malay. In this way, although the labor cost is greatly improved, it also ensures the quality of service and work efficiency.
In addition, in order to attract Vietnamese local users to join the store, Michelle Ice City has also continuously increased its support efforts, and in June last year, Michelle Ice City even announced that it would waive the franchise fee for Vietnamese local franchisees.
2) Differentiation
If overseas brands can only do a good job of localization, the result is often to be overwhelmed by local brands that are more familiar with the market.
Only brands that create differentiated development paths for their own characteristics can take advantage of the momentum and combine "differentiation" and "localization" to create an effect of one plus one is greater than two.
If the ultimate "cost performance" and the ultra-high frequency "new model" are the "difference points" of Michelle Ice City and Xicha, then the difference points of Bawang Chaji are reflected in more aspects:
For example, in terms of design, Bawang Chaji specially designed a "super high paper cup" for herself, the bottom layer of the paper cup is a hollow design, and after the user drinks the tea, he can tear off the bottom of the paper cup, and he can randomly get coins, mini lipsticks, silk scarves and even watches...
For another example, in terms of tonality, Bawang Chaji has always adhered to the obvious Chinese style, from the brand name to the store decoration to the brand logo (composed of Yu Ji, Teapot and Momei), which greatly enhances the user's memory point.
The road to sea is difficult to go smoothly
First of all, the biggest problem that new tea drinks face when expanding overseas is whether the model can run through enough – whether it can make money.
Taking Michelle Ice City as an example, there are two parts of the revenue source of Honey Snow Ice City: one part is the franchise fee, and the other part is the raw material fee that franchisees must purchase from the headquarters.
Only the better the franchisee's business and the greater the consumption of raw materials, Michelle Ice City can make more money.
However, after The Honey Snow Ice City mainly focused on the low-price hot market in Vietnam, there were also many cheap teas with the same low price, and under the pressure of "extreme price", the income of franchisees decreased.
According to Vietnam News, in the second year of Michelle Ice City in Vietnam, that is, in 2019, there were more than 100 milk tea brands in Vietnam, and new brands continued to pour in.
Therefore, it is not difficult to understand why Michelle Ice City announced on Facebook last year that it provided Vietnam with a preferential strategy of free franchise fees, design and management fees, which attracted many Vietnamese franchisees to leave messages.
But apparently, until a second growth track is found, these measures can only quench their thirst.
Secondly, the unstable overseas environment has created great challenges for the development of new tea brands.
If the question of Michelle Ice City is whether it can continue to expand in the future, then Naixue's tea is already facing the mire of closing stores and stopping operations.
In 2020, Nesher's tea went to Japan, and according to 36Kr, the first store was located on the first floor of The Panda Dotonbori in Osaka, covering an area of nearly 200 square meters to create a sense of space.
Nesher set up three sections in the store, bakery, tea and retail, and in order to provide the ultimate experience, the Japanese team conducted months of online and offline technical training, which was a huge investment.
In addition, Japan's expensive supply of fruit has greatly increased the cost of raw materials for Naisher, which specializes in fruit tea.
At the same time, under the pressure of the epidemic, Japan's strict epidemic prevention policy has caused the commercial activities of all brands to shrink suddenly, and Nai Xue, who relies on media marketing to create momentum, did not set off too many topics at the beginning.
A few months after a bad start, the store quickly ran out of money and closed after only one year of opening.
Finally, for new tea drinkers, Southeast Asia has become the first springboard to go to sea with similar regional and cultural attributes, but if there is no strong brand power to support, it is difficult to break into the Japanese, Korean, European and American markets and copy Starbucks' global sea path.
This is also why Xicha set up an official account for the Japanese station on Twitter in October 2019 and recruited in 2020, but it has now disappeared silently...
The first shop in Tokyo, where heytea, exists only in the legend of the Little Red Book.
epilogue
For domestic tea drinkers, under heavy pressure, they choose to go to sea to open up a second market, which is not unavoidable.
But to tell the truth, the risk of going to sea is real, and the volume of Starbucks has been losing money in the years after entering China in 1999...
For tea brands, losses are not terrible, as long as they can open up the brand volume and penetrate the user's mind, many brands even expand the loss.
However, under the fierce competition, if you can't be like Starbucks, build a coffee-drinking mind for users at the same time, create a unique third-space concept, and become a unique existence -
New tea drinkers just move to overseas markets to continue to roll in, and at the same time, in addition to facing strong competition from compatriots, they also have to face competition from local companies.
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