With three IPOs in half a year, can you jump out of the "comfort zone" and overtake in corners?

Text: Ning Chengqian

Source: Bowang Finance

It is not a new thing for the "top stream" in the tea industry to compete for listing, but what the outside world did not expect is that the tea face and pleasant color of the milk tea industry will also be IPO.

According to a report by 36Kr, Chayan Yuese has selected CICC and Morgan Stanley to be responsible for the Hong Kong IPO, which may be carried out as early as 2024, and is expected to raise hundreds of millions of dollars.

In fact, this is the third time that Chayan Yuese has been rumored to go to Hong Kong for IPO in half a year. In October last year, it was reported that Chayan Yuese was in contact with investment banks to discuss a Hong Kong listing, and in February this year, Hunan Chayue Cultural Industry Development Group Co., Ltd., a company owned by Chayan Yuese, underwent a number of industrial and commercial information changes, which also caused market speculation that it was preparing for a Hong Kong listing.

Regarding the repeated rumors in the market, the official caliber of Chayan Yuese remains unchanged, "there is no clear IPO plan". However, compared with the previous two times, this IPO has a specific time plan, which is obviously more credible.

As the "top stream" in the field of new tea drinks, there is a lot of anxiety about the joy of tea, although it is out of the circle with its unique national style culture and Haidilao-style service, it is also an indisputable fact that it insists on direct sales and slow expansion.

Nowadays, Chayan Yuese will also IPO, compared with Wandian tea, does Chayan Yuese have a good chance of winning?

01

A new Chinese tea drink that relies on "personalization" to get out of the circle

In the winter of 2013, Chayan Yuese was founded in Changsha, where young people gather, from stores, to products, to the periphery, Chayan Yuese has a strong traditional cultural atmosphere, leading the trend of "new Chinese milk tea" for a while.

Different from other milk tea brands, Chayan Yuese has always adhered to direct sales, relying on "freshly drunk quality" and "Haidilao-style service" to get out of the circle.

Tea Yan Yuese places great emphasis on the quality of the product, and even repeatedly reminds consumers to drink it now in the promotion, so that they can experience the best taste. Compared with the behavior of peers using expired ingredients or tampering with the expiration date of ingredients, Chayan Yuese wins in terms of quality.

And the service full of ritual is also one of the characteristics that Chayan Yuese is proud of. The founder, Lu Liang, has said many times that service is the core of Chayan Yuese.

Chayan's special services include, but are not limited to, free tasting, permanent claim (if you are not satisfied, you can feel free to go to a store to redo it), smile at every customer who passes by and even ask if you need to drink water, stare at the customer's eyes after the customer places an order, and turn on the store light sign as soon as it is dark.

What consumers love more is that the service and quality of the tea and color rolls are not the price.

At present, the price of tea and color products is basically between 13-18 yuan, and it is positioned as a low-end market. But the quality is not low, such as the store's popular products Youlan latte are made of fresh milk and pure tea raw materials, and nuts and milk caps will be added, but the price is only 17-18 yuan / cup, but peers have to sell nearly 30 cups.

At the same time, Chayan Yuese "opened stores intensively" in Changsha, and some people called Changsha "ten steps and one tea". In Changsha's landmark Wuyi Square business district, you can see a tea face every 50 meters, and in Changsha high-speed rail station, there are at least four tea and beauty stores open at the same time. To a certain extent, the tea and pleasant color have become the "landmark" of the Internet celebrity Changsha.

"Unique new Chinese culture + Haidilao service + quality of freshly drunk + character design not out of Changsha" made the tea face and pleasant color famous for a while, even if it is only gathered in Changsha, but it has the influence of radiating the whole country. Consumers queued up in front of various stores in Changsha, and even increased prices to buy and broadcast live......

Some netizens jokingly called tea "a cup is hard to find", and some consumers took the high-speed rail to Changsha just to ask for a cup of milk tea, which can be called the contemporary version of "a ride on the red dust concubine laughs", and there are scalpers who buy a cup of fried milk for 200 yuan.

At present, although the prospectus has not been disclosed, according to the data published on the official website, during the epidemic, Chayan Yuese can also grow against the trend, with a turnover of 202.9 billion yuan in 2022, with a compound annual growth rate of about 24.9%. In addition, during the Spring Festival in 2024, the turnover of Chayan Yuese also increased by about 83%.

Such a heat has also attracted the attention of capital. According to Qichacha data, up to now, Chayan Yuese has received a total of 4 rounds of financing, with investors including Tiantu Capital, Shunwei Capital, Yuansheng Capital and other well-known investment banking institutions, and the last financing will be in December 2021. But since then, there has been no money to enter.

Compared with the "ambitious" peers, Chayan Yuese is a very "self-oriented" company, and is also regarded as a "conservative" in the industry, but in today's world where the volume is not good, Chayan Yuese cannot escape the fierce struggle of its peers.

02

It is difficult to get out of Changsha, and it is also difficult to stay in Changsha

Living in Changsha has made the tea and beautiful but also limited the development of the tea and beauty.

In December 2021, after getting the last financing so far, Chayan Yuese began to expand to Wuhan, Nanjing, and Chongqing cities, and at the same time caused a frenzy of queuing in various places.

However, it is obvious that the tea and beauty that rely heavily on the "Changsha base camp" have not yet polished their ability to compete with foreign brands. After the coat of freshness is removed, it is difficult to continue the popularity of the opening.

"Bowang Finance" searched for the scoring area of Wuhan City on a certain group, and many consumers gave long waiting times, poor service attitude, food safety questions, noisy service, and production problems......

In addition to the unpleasant service, the tea face and pleasant color have also fallen into a lot of negative public opinion, gradually consuming the love of consumers.

During the 315 period this year, some netizens reported that there were too many bubbles in the tea and pleasant products, and only half a cup was left after half an hour, which resonated with many netizens, and this matter also appeared on Weibo hot search in one fell swoop.

Secondly, there is the problem of queuing for "penalty stand-type meals". According to media reports, Chayan Yuese exposed news such as hiring people to queue up and asking for purchasing hype in the new store in Nanjing, sacrificing the time cost of customers to maintain false foot traffic, causing consumer dissatisfaction.

For another example, Chayan Yuese was also accused of disrespecting women because of the inappropriate expression of "picking up baskets", and there was also a "scolding war" between the founder and employees over "a monthly salary of less than 3,000 yuan......

In terms of price, the advantages of tea and beauty are gradually disappearing with the price reduction of Hey Tea and Nai Xue; in terms of scarcity, the barriers to tea and beauty are low, and the packaging and style have been imitated by many peers, so consumer stickiness and reputation have naturally decreased a lot.

The long board is also a short board, once out of the warm Changsha homeland, the vitality of the tea face has also been greatly tested. Today, the Shenzhen pop-up store has long been withdrawn from Shenzhen, and the Wuhan store has also entered the normalization, and the queue scene is no longer there.

But what is worse than the difficulty of getting out of Changsha is that the Changsha base camp is also gradually being captured. On the one hand, Changsha's 'third cup of tea' such as hawthorn pile and lemon season is rising, seizing the local market in Changsha. On the other hand, the overlord tea girl, which is extremely similar to the pleasant color of the tea, also drove into Changsha.

On December 23, 2023, the third store of Bawang Tea Ji in Changsha opened for trial operation, officially filling the gap in the Hunan market, and also starting to fight against tea and beauty.

In the context of the general downturn in the milk tea industry, Bawang Chaji, known as the "Yunnan version of tea and pleasant color", has become the only tea brand in the industry in 2023. From August to December last year, Bawang Chaji opened an average of 8 stores a day.

Genuine materials, moderate price, national style packaging, people-friendly people...... A series of characteristics have arched the tea face and joy to the throne of the new tea drink of Internet celebrities, but it has also made the tea face and joy gradually have the burden of idols. Refusing to step out of your comfort zone.

Judging from the actual situation, the tea market has approached saturation and began to sink, emerging brands are coming forward one after another, and the scale war is about to break out.

03

Selling lemons and coffee, tea and beauty are also engaged in sub-cards

At present, the new tea drink has changed from the incremental market to the stock market.

According to iResearch's forecast, from 2023 to 2025, the market size growth rate of the new tea beverage industry will be 13.4%, 6.4%, and 5.7% respectively. The growth rate of the industry will gradually decline, but the competition on the track is becoming more and more crowded.

In addition, the growth of users in first- and second-tier cities has peaked, and the average store revenue and ping efficiency of leading new tea brands are declining. When the industry increment comes to the ceiling, the new tea brands can hardly hide their anxiety. In 2024, new tea drinks line up for IPO. Tea brands such as Tea Baidao, Mixue Bingcheng, Gu Ming, and Shanghai Auntie have all gone to IPO, and now there is another tea face.

On the one hand, listing can bring a lot of financial support to Chayan Yuese, which will help accelerate brand expansion, increase market share, and optimize the supply chain. On the other hand, going public can also increase the brand awareness and influence of Chayan Yuese, and attract more consumers and partners.

Especially in the context of the current new tea drink market "rolling out of the sky", whoever can take the lead in a successful IPO will be able to seize the opportunity.

But to tell the truth, compared with other tea brands that are advancing their IPOs, Chayan Yuese has no advantage in scale.

At present, Chayan Yuese is mainly concentrated in Hunan, Wuhan and other central and southern provinces and cities, with less than 700 stores. And there are four or five thousand stores in the same action.

According to the prospectus, as of September 2023, Mixue Bingcheng has 36,153 stores, 7,297 Shanghai Auntie stores, 9,001 Gu Ming stores by the end of 2023, and 7,927 Chabaidao stores as of February 18.

The second point is that Chayan Yuese is the only brand that has not been opened to join, and it is a bit different in the entire large consumer chain industry. To achieve rapid expansion, the franchise model as an asset-light is generally the first choice, but the attitude of Chayan Yuese towards open franchise is clearly rejected.

The founding team also said, "At present, there is no ability to do a good job of joining, and the 'tonality' of joining the tea and face will definitely be out of shape, so I don't do it." ”

It's hard to say whether it will be open to franchise in the future, but Chayan Yuese has begun to establish a supply chain. The R&D and production base project of Chayan Yuese has started in Changsha in September 2023, with a total investment of about 520 million, and is expected to be put into trial production in 2025, and the production capacity will cover the supply of core technology raw materials for 5,000+ stores after full production.

Judging from the current number of stores of less than 700, it is also very possible for Chayan Yuese to open up to join.

In addition, for the next step of growth, Chayan Yuese has played a deck of cards. In recent years, Chayan Yuese has successively launched "Yuanyang Coffee" and "Goode Lemon", "Yuanyang Coffee" is positioned as a new Chinese coffee, and "Goode Lemon" is the main new Chinese lemon tea.

From a business point of view, the coffee track itself is already very crowded, and the experience of making tea cannot be replicated in the coffee track; although lemon tea is popular, the seasonal shackles are very obvious, and how to break through the influence of the season is a problem that needs to be considered.

In short, Chayan Yuese is a company with "feelings", so it will insist on doing direct sales and insisting on injecting national culture into the brand. But since you want to come to the capital market, you have to look at the thoughts and faces of the capital market.