Produced by One View Commercial
Author/Li Yan
Editor/Xue Xiang
Throughout February, not only coffee, but also new tea stores slowed down.
In February, the number of new stores opened in the 26 new tea beverage chain brand stores tracked by One View Commercial decreased by 954 compared with the previous month.
In terms of the overall number of stores, in February 2024, 26 domestic chain tea brands will open a total of 1,189 new stores, and there will be a total of 114804 existing stores.
From the perspective of brands: February coincided with the Spring Festival holiday, and the new stores of many brands fell. For example, One View Commercial learned from Gu Ming that the renovation work of some newly opened stores has been suspended since January because the renovation workers will return to their hometowns early for the holidays.
In February, the only stores with more than 200 new stores were Mixue Bingcheng and Bawang Chaji, with 263 and 214 stores respectively.
In terms of the number of stores in the new tea drink brand, Nai Xue's tea opened its first store in 25 cities, and Bawang Tea Ji opened its first store in 7 cities. As the latest brand to open to join "Xinale" and adhere to the principle of large stores, Nai Xue's tea is catching up in terms of the number of stores covering cities.
Judging from the existing stores of the brand: the first existing store is Mixue Bingcheng, and the public data shows that there are more than 36,000. In second place is Gu Ming, which has 9,000+ stores, and it should exceed 10,000 stores in the near future. In addition, Bawang Chaji is expected to exceed 4,000 stores next month.
Listed
In February 2024, after Mixue Bingcheng and Gu Ming, the "champions and runners-up" of the new tea beverage industry, submitted their prospectuses on the same day, Tea Baidao and Shanghai Auntie also disclosed the latest prospectus, of which Shanghai Auntie submitted the form on the Hong Kong Stock Exchange for the first time.
On January 2, information from the Hong Kong Stock Exchange showed that after Tea Baidao, the new tea drink brands Mixue Bingcheng and Gu Ming submitted applications for listing on the main board of the Hong Kong Stock Exchange on the same day.
According to the prospectus:
The annual revenue of Tea Baidao in 2023 will be 5.704 billion yuan, a year-on-year increase of 34.78%. Profit for the year increased by 19.3% year-on-year to RMB1,151 million. As of February 23, 2024, the number of Chabaidao stores has reached 7,927, of which more than 99.8% are franchised stores and the rest are self-operated stores.
In terms of store regional distribution, by the end of 2023, the proportion of stores in first-tier cities, new first-tier cities, second-tier cities, third-tier cities, fourth-tier cities and below will be 10.6%, 26.9%, 20.9%, 19.4%, and 22.2% respectively.
In 2022, Shanghai Auntie achieved revenue of 2.199 billion yuan, a year-on-year increase of 34.0%, and a net profit of 149 million yuan, a year-on-year increase of 79.2%. In the first three quarters of 2023, Shanghai Auntie achieved revenue of 2.535 billion yuan, a year-on-year increase of 54.1%, and a net profit of 324 million yuan, a year-on-year increase of 188.7%. As of September 30, 2023, the number of Shanghai Auntie stores has reached 7,297, of which more than 99.3% are franchised stores and the rest are self-operated stores.
In terms of store regional distribution, as of September 30, 2023, Shanghai Auntie's stores in first-tier cities, new first-tier cities, second-tier cities, third-tier cities and below accounted for 7.6%, 22.6%, 20.8%, and 49% respectively.
In contrast, Chabaidao is stronger than Shanghai Auntie in terms of revenue scale and profitability, and Shanghai Auntie is more sinking in store distribution.
Overall, the two new tea brands show the characteristics of emphasizing marketing and ignoring research and development.
In 2021, 2022 and 2023, the expenses spent on marketing and promotion of Tea Baidao were 12.945 million, 39.869 million and 88.568 million yuan. It accounts for 1.4%, 0.5% and 2.3% of its revenue.
In the first three quarters of 2021, 2022 and 2023, Shanghai Auntie spent 62.749 million yuan, 96.702 million yuan and 92.014 million yuan on marketing and promotion. It accounted for 3.84%, 3.6% and 4.41% of its revenue.
In 2022 and 2023, Chabaidao will invest 3.58 million and 16.417 million in the R&D segment, respectively. According to the prospectus, Chabaidao will develop about 300 products in 2022, and R&D investment will account for only 0.1%.
In 2021, 2022 and the first three quarters of 2023, the company's R&D investment was 5.867 million yuan, 13.260 million yuan and 19.215 million yuan respectively. The proportion of revenue is only 0.4%, 0.6% and 0.8%.
Emphasizing marketing over R&D is not only the characteristic of Tea Baidao and Shanghai Auntie, but also reflected in the previous financial report data of Mixue Bingcheng. From 2021 to the first three quarters of 2023, the R&D investment of Mixue Bingcheng, which claims to be "self-developed and self-produced", will be 17.151 million yuan, 32.304 million yuan, and 51.343 million yuan respectively, accounting for only 0.2%, 0.2%, and 0.3% of revenue.
Many brands have lowered the threshold for franchise stores
A number of new tea brands have recently lowered the threshold for franchise stores and accelerated store expansion.
On February 28, Nai Xue's tea announced a new franchise policy in 2024, and Nai Xue's tea will be open to franchise for the first time in 2023.
According to the new terms, Naixue's investment in a single tea franchise will drop from 980,000 yuan in 2023 to 580,000 yuan. The area requirement for franchised stores has also been reduced from 90~170 square meters to 40 square meters. When opening for franchise for the first time, Naixue requires franchisees in the single-store cooperation model to provide working capital verification certificates of 1.5 million yuan or more or other asset certificates, and regional cooperative franchisees need to provide funds and asset certificates of 4.5 million yuan or more. In the latest franchise terms, the amount of funds and asset certificates for single-store cooperation and multi-store cooperation is reduced to 800,000 yuan and above and 2 million yuan and above respectively.
Since February, Tea Baidao has also begun to implement preferential measures such as contract reduction, point reduction, and material rebates. From February to May, according to the signing situation, the new franchise partners of Chabaidao can be reduced by 4~270,000 yuan in total, and the old franchise partners can be reduced by 9~180,000 yuan; The GMV contribution of the store can apply for a rebate ranging from 2% to 5% of the total annual purchase of materials.
Shuyi Burning Fairy Grass has also recently launched a new franchise policy, focusing on 0 brand fees, 0 cooperation fees and 0 service fees, and the total budget for the early stage of joining and opening city stores has been reduced from 190,000 yuan to 137,000 yuan.
In the view of One View Business, the new tea beverage brand lowers the threshold for joining, on the one hand, it is to grab more professional franchisees, and screen the "old rivers and lakes" who have more entrepreneurial experience in the new tea beverage industry by lowering the threshold. On the one hand, it is necessary to quickly occupy the high-quality points in the sinking market through these more experienced franchisees.
After all, the business model of most chain new tea brands, including Mixue Bingcheng, Gu Ming, and Tea Baidao, is still to make money from franchisees. For enterprises, the more products sold by the franchise store, the greater the demand for raw materials, and the more profitable the enterprise is.
For franchisees, the most important thing is naturally "how long to return to the cost by selling milk tea". Ms. Xiong, a franchisee of a new tea brand, told One View Business that there are many experienced new tea store operators around her, and this part of the population is very sensitive to which new tea brands are favored by consumers, and will only choose the "most profitable" brand to join. In Ms. Xiong's view, the brands with high popularity of local stores, long queuing times for mini program orders, and relatively low threshold for joining are the most cost-effective brands to join.
Behind lowering the threshold for joining, the new tea drink track has come to the stage of stock competition. If you lose the "cost performance" and are not favored by franchisees, it will be difficult to gain a dominant position in large-scale competition.