Honey Snow Bingcheng and Hey Tea: Accelerate the opening of stores and roll overseas?

The new tea beverage track is still the focus of the new consumer market. This year, there is a lot of news around the new tea drink, with price cuts, open ingredient lists, Heytea Naxue opening up franchises one after another, and head brands collectively aiming at overseas markets, and competition is ushering in new variables.

"In fact, the current new tea players have come to a fork in the road. The key to this fork in the road is how to tap new increments and improve the efficiency of a single store. The new tea drink track tends to mature, and both players and investors should pay more attention to its stamina, and now it has entered the stage of competition and operation. A partner of an investment institution who has been focusing on the new consumption field for a long time told us.

The involuted new tea drink track is facing the competitive pressure of convergence of consumer circles, model convergence and product convergence, and it is a big test for brands at present.

The new tea drink franchise model PK, accelerate the opening of stores, and seize the overseas

From the point of view of opening a store, it is also two days of ice and fire. On the one hand, some old brands have begun to fall behind, and on the other hand, brands are open to franchise and vigorously open stores.

Taking the old tea brand as an example, the number of stores has indeed decreased in the past three years. As of November 10, 2023, the number of its stores has dropped to 3,019.

On the other hand, other brands are increasing their efforts to open stores. According to incomplete statistics from the media, as of the end of October, there were 2,513, 2,770, 7,598, 7,311, 8,435, and 25,489 stores in Bawang Chaji, Hey Tea, Tea Baidao, Shanghai Auntie, Gu Ming, and Mixue Bingcheng, and the growth rate of stores was very strong. You must know that among the more than 20,000 stores in China, 99.8% are franchised stores.

The franchise model can indeed quickly seize the market, especially after the price range begins to blur, and the advantages of mid-to-high-end new tea drinks are also highlighted.

Heytea and Naixue are also open to joining this year, from direct sales to joining, which is also a key move to increase market competition.

After Heytea officially announced its full efforts to the mass market at the beginning of the year, in July this year, Heytea revealed that after more than half a year of development, the total number of Heytea stores has exceeded 2,000 stores, entered more than 240 cities, and has opened more than 1,000 business partnership stores.

In terms of Naixue, the directly operated stores are still the majority. As of September 30, 2023, Nai Xue's tea operated a total of 1,360 directly-operated stores, with a net increase of 166 directly-operated stores in the third quarter. This means an average of 1.8 new stores per day.

But although Nai Xue's tea is open to joining, the speed is very slow, and it is estimated that the interior is still polishing. According to its introduction, since the opening of the franchise in July, the first batch of 4 franchised stores of Naixue's tea has been opened, and there are currently nearly 1,000 groups of intent partners (franchisees who have paid the intention fee) through screening, and then will enter a new round of review and preparation such as store site selection, and it is expected that by the end of this year, the scale of franchise stores may reach 100.

There is also a very important trend from domestic to overseas. The domestic market is seriously involuted, and tea brands are aiming at overseas markets to tap new increments. Especially for the Southeast Asian market.

Throughout the past two years, Mixue Bingcheng, Heytea, Nai Xue, etc. have begun to bet heavily in overseas markets.

Take Mixue Ice City as an example. The number of stores in Vietnam and Indonesia has reached 1,300 and 2,300 respectively. According to its announced plan, it will open 1,000 stores in Japan by 2028.

In terms of the number of stores, Mixue Bingcheng is already the fifth largest chain in the world, and belongs to the same echelon as McDonald's, Subway, Starbucks and KFC. It is reported that its annual turnover in overseas markets in 2022 will exceed 1 billion yuan.

Mixue Bingcheng can be said to have tasted the sweetness of opening stores overseas. Of course, other brands are also following suit, blowing a wave of wind to the sea. With the recent opening of Heytea's stores in London and Melbourne, Australia, Heytea's overseas business has entered a stage of accelerated development; Tianlala has opened 6 stores in Indonesia at the same time, and plans to open 60 stores in Indonesia by the end of this year, which is a fast layout.

"Retail Business Review" believes that the rapid deployment of new tea brands overseas is a replication of the mature model and strategy of domestic polishing overseas, and from the performance of several major brand stores in the early stage, the market acceptance is still very high, especially in the consumer market in Southeast Asia. Joining and going overseas are the strategic keywords of brands in the next 3-5 years.

New tea drinks, what will the next round of competition "volume"?

Previously, some people questioned how long the track of new tea drinks could be popular, and even began to sing about new tea drinks.

We believe that the new tea drink will gradually enter a stage of slowing growth. But it will continue to be bullish for at least the next 3-5 years.

According to the "2023 New Tea Beverage Research Report" released by CCFA, the annual new tea beverage consumption market is expected to reach 149.8 billion yuan, recovering to a three-year compound growth rate of nearly 20%. By 2025, the scale of the domestic consumer market is expected to further expand to 201.5 billion yuan.

However, one problem that needs to be faced is that the new tea drink has been seriously involuted, as mentioned above, players at all levels have spent more efforts to expand, and new competition points have emerged in the domestic market.

The first point is that the consumption circle is close, the boundary between the middle and high-end is not so clear, and there is a large increase in the sinking market.

At present, the competition in the new tea beverage market is fierce in the first and second-tier cities, and the sinking market still has great potential.

The sinking market ran out of the Honey Snow Ice City. is also based on the franchise model, and there is a dark horse in the sinking market, sweet lala. As of September 2023, the number of contracted stores has reached 7,000, and the official revealed that the total number of stores is expected to exceed 8,000 this year, with sales of more than 2.5 billion yuan.

With the expansion of the consumption circle after the price reduction of mid-to-high-end brands such as Heytea and Naixue, they can also hit the sinking market. But it's not easy for Heytea and Nayuki.

Previously, Naixue made it clear that she had no intention of sinking the market. Instead, the goal is to increase density in first- and second-tier cities. Founder Peng Xin believes that as long as crypto can reach a better state of the city, the performance of a single store will be good.

And Heytea obviously has the ambition to conquer the sinking market. Including Xi Xiaocha, which tested the water before, but it was unsuccessful. And through the opening of the franchise, whether it can ensure that it can run out in the sinking market, Heytea will have more time to test.

The second is that technology brings about efficiency changes, and it is necessary to improve the efficiency and profitability of a single store.

The franchise model is running fast, and the support of science and technology is needed behind it. For example, the smart equipment that Heytea has put into use in stores, the accuracy and efficiency of Heytea stores have been improved simultaneously, and the efficiency of fresh fruit preparation has been increased by up to 15 times.

"After the application of smart devices in stores, it not only greatly improves the accuracy of tea making in stores, ensures the stability and uniformity of product flavors, but also improves the efficiency of stores and reduces the waiting time of consumers. The person in charge of Heytea said. For example, in the process of raw material preparation, it takes 15 minutes to manually peel a basket of green grapes, and only 1 minute to the automatic peeling machine, and the intelligent weigher has improved the intelligence and efficiency of product raw material management, and the sell-out rate of the TOP20 products in the store has been reduced by 50%.

And Nai Xue is also constantly iterating on its own model. Peng Xin revealed that in 2023, Naixue will not only focus on "digitalization", but also on "digital intelligence". Its "smart tea machine" has been fully put into use in more than 1,000 stores, and the fastest can complete the production of a cup of tea in less than 6 seconds, increasing the store production capacity by about 40%.

In addition, the advantages of the supply chain will become the core competitiveness to seize the market. The innovation ability of the product can continue to create explosive products and meet the freshness of consumption.

Previously, Heytea announced that it would take the lead in the industry to take the initiative to disclose the traceability information of formula raw materials, nutritional ingredients and true quality raw materials of all products on sale. At present, Heytea has disclosed the formula raw materials of more than 40 products through the "Heytea GO" WeChat mini-program, involving more than 40 kinds of raw materials such as real original tea, real fruits, real milk, and real sucrose.

By disclosing the ingredient list, products and raw materials can be traced, which is actually an absolute grasp of the advantages of their own supply chain. Of course, it will also accelerate the industry's competition in the supply chain.

On the other hand, new tea brands are building their own supply chains. Heytea has built its own tea garden, as well as its own logistics and warehousing. Nai Xue contracted a strawberry farm in Yunnan. The intelligent production, processing and export base in Chengdu has also been officially opened.

"Retail Business Review" believes that the current new tea drink track is also a stage of real competition for internal strength. Whether it is direct sales or franchise, while running fast, it is necessary to achieve a balance between products, supply chains, franchisee management and other parties, so that the running posture can be stable. In the future, the concentration of the new tea beverage market will become higher and higher. One thing can be predicted that a group of new tea beverage companies may be listed in the past two years.

But from the perspective of the consumer market, the new tea drink has been rolled up to fly.