If you see a cup of raw leaf fresh milk tea for more than 6 yuan in a street store, will you want to try it?
After founding Cudi Coffee and setting off a price war, Lu Zhengyao, the founder of Luckin Coffee, began to sell milk tea, still focusing on low prices.
The first test store of Chamao opened in Pingnan County, Ningde, Fujian Province, which is also Lu Zhengyao's hometown, at the end of November, while the first store in Hangzhou is currently being renovated.
From Shenzhou Car Rental, to Luckin, Xiaolu Tea, to Qu Xiao Mian (later renamed "Qu Bayu"), the pre-made food brand "Tongue Hero", and Cudi, this serial entrepreneur born in 65 has relied on money-burning marketing, low-price subsidies, and rapid expansion for many years. In the new tea industry that has been rolled to the extreme, does this set of "land-style play" still work?
More than 6 yuan after the full ticket
This tea cat in Hangzhou is located in Qianjiang International Times Square, accompanied by a number of restaurants and office buildings. The renovation inspection form posted on the green fence shows that the renovation period is before January 31, 2024.
On social platforms, some local netizens in Pingnan, Fujian Province have been sharing their feelings in photos. This shop is located next to the "big brother" Cudi, next to Mixue Ice City, and there are also Ruixing, Gu Ming, Shanghai Auntie, Shuyi Burning Fairy Grass, Tea Baidao, etc. According to the information of multiple online investment accounts of Cudi, the first store is mainly used to test the acceptance of brand vision, products, prices and other aspects on the consumer side.
The store is green and white in a simple style, some netizens feel that it is earthy, and they can't see the national style elements mentioned in the publicity, and some netizens say that it looks refreshing. As for the taste of milk tea, some people say that it tastes very light, and some people think that it is okay for this price.
On the Ele.me takeaway platform, you can see that the tea drinks that the store is testing and selling, which are divided into six categories: raw leaf fresh milk tea, Wuchang rice milk tea, pure coconut series, classic milk tea, colorful fruit tea and real fresh pure tea, Wuchang rice milk is also a series of Cudi. Regardless of the cup type, the discounted price is more than 6 yuan. The three best-selling models on the platform are Taro Mochi Fresh Milk Tea, Brown Sugar Bobo Milk and Golden Coconut Durian Mangman.
Original leaf tea + fresh milk/fresh fruit, the original leaf fresh milk tea featured by Tea Cat, is also a popular trend in the current new tea industry. Most of the investment promotion personnel who have been busy promoting on the Internet have played the banners of "0 non-dairy creamer", "product benchmarking Bawang Chaji and Hey Tea, and price benchmarking Mixue Bingcheng". Some netizens said that at this price, if it is a genuine value of raw leaf fresh milk tea, she is willing to patronize it more.
A remake of Cudi coffee?
A investment promotion staff of Cudi Coffee told the reporter of Orange Persimmon Interactive that as the second brand of Cudi, Chamao will be officially listed in January next year, and adopt a risk-sharing joint operation model, the price of the drink will be subsidized by the company, the settlement price is less than 8.8 yuan, all settled at 8.8 yuan, and the subsidy policy will continue until 2025.
According to the official investment brochure, the cost of a joint operation of a tea cat brand store is 350,000 yuan, including 100,000 yuan for equipment, 50,000 yuan for cabinet store recruitment and 200,000 yuan for basic decoration and guest area furniture, and 200,000 yuan for standard stores, with a reduction of 150,000 yuan for basic decoration and furniture.
Before the end of December, Tea Cat will only attract investment from Cudi associates, and each store can be exempted from 100,000 yuan of service fees (after the associates' monthly revenue reaches a certain scale, Cudi will take a certain percentage of the profits);
This series of investment policies is almost the same as Cudi. It's just that the competition of new tea drinks is far more fierce than that of the coffee industry, such as Hey Tea, Nai Xue's Tea, Bawang Tea Ji, Tea Baidao, Ancient Tea, 1 Point, Honey Snow Ice City...... Brands are already packed across price ranges.
Previously, the Orange Persimmon Interactive reporter interviewed 3 milk tea shop owners, and they expressed the unanimous view that the milk tea market is saturated, and it is not easy to make money. One of the owners who joined a well-known milk tea brand invested more than 500,000 yuan in the early stage of rent, decoration, equipment and other expenses. This means that the store has an annual turnover of at least 1.2 million yuan, and "in the summer, it has to sell more than 1,000 cups a day to pay off." ”
However, the tea cat that is soliciting investment everywhere may not be selling milk tea for profit from the beginning.
The number of stores has reached 25,000 (99.8% are franchised stores), and its annual income of 10 billion yuan does not come from 4 yuan of lemonade and 5 yuan of freshly ground coffee. The prospectus unveiled the business experience of Mixue Bingcheng: selling ingredients, packaging materials, equipment and facilities and operating materials and other products to franchisees, and providing management services.
From January to March 2022, the sale of ingredients to franchisees alone earned 1.756 billion yuan, contributing 72% of the revenue.
The composition of the main business income of Mixue Bingcheng
The same franchise-based tea Baidao, from the perspective of income composition, also mainly relies on "selling things": the prospectus shows that from 2020 to 2022, and as of the end of March this year, the sales revenue of goods and equipment accounted for 94.5%-95.1%.
Tea Baidao income composition
Relying on the real money of the associates, Cudi opened more than 6,000 stores in one year (it took more than 4 years for Luckin to reach the same number of stores), and Tea Cat probably wants to follow the same path.
"It's best to bring down the price of fresh milk tea in the market"
"Have you started harvesting new leeks again?" "Lao Lu's project must follow!" Lu Zhengyao, who was born in 1969, has long been accompanied by two completely different public opinion attitudes.
He has a group of brothers who support him, and they follow one project after another "regardless of previous suspicions", and many of them are still "old men" in the era of Shenzhou Car Rental and Luckin Coffee. In the eyes of these people, Lu Zhengyao has the image of a tragic hero: he has screwed up and paid the price, but he has the ability and vision, and he is still starting a business in his 50s......
At the same time, because of the Luckin financial fraud incident, many people have felt that he is unreliable over the years and is always harvesting "leeks". On the Internet, under the relevant content of Tea Cat, some comments advised people to consider the project carefully and learn more about the background of the founder.
Lu Zhengyao was admitted to the Department of Computer Science and Technology of Beijing as the top student in the county college entrance examination in his early years, and soon after graduation, he gave up his position as a civil servant and began his entrepreneurial career.
In 2007, he founded CAR. Three years later, with a $1.2 billion capital injection from Lenovo, CAR quickly began its expansion.
In 2017, Luckin Coffee was launched. Lu Zhengyao opened more than 1,000 stores in a year, frantically fighting a price war. In May 2019, Luckin was listed in the United States, and in April 2020, it was forced to delist due to financial fraud, and Lu Zhengyao was also "swept away".
In the same year, he invested in the creation of Tongue Technology, and a year later launched the noodle restaurant brand "Qu Xiao Noodles". In just half a year, it experienced a name change and financing difficulties, and closed stores in many places. In January 2022, Lu Zhengyao took a fancy to prefabricated dishes again and launched "Tongue Hero". The first store was announced to be closed less than a year after it was launched. At present, in Hangzhou, "Fun Noodles" and "Tongue Heroes" have disappeared.
Hangzhou's "Fun Noodles" (data map)
It wasn't until October 2022 that Lu Zhengyao returned to his old profession, founded Cudi, and "hand-to-hand combat" with Luckin that he made some improvements. However, there have also been recent reports of a long-term price war in Cudi that have caused margin pressure, exacerbating friction between affiliates and headquarters.
The low-price war for coffee has not ended, and a new battlefield of milk tea has been opened.
At least on the consumer side, there are still people on the Internet who hope that the tea cat will soon open to their own city, "it is best to bring down the price of fresh milk tea in the market".