The Internet celebrity milk tea brand "Yuan Zhenzhen", which was once known as the "light of Sichuan milk", has now fallen into the abyss of no return. The founder Xie Yao once set up a stall to repay debts, with a cumulative loss of nearly 10 million yuan, and a debt of 2 million at the age of 42.
What is going on here? What has a once popular Internet celebrity milk tea brand experienced, from glory to loss, and only 32 franchise stores remained? What kind of entrepreneurial story is hidden behind this? Let's uncover the truth about the fall of this "Internet celebrity milk tea".
From the venture capital industry to self-media entrepreneurship
With a master's degree, she has worked in the high-yield venture capital industry for many years, accumulating a wealth of business insight and decision-making skills.
In 2016, with the rise of Douyin, Xie Yao saw the business opportunities of self-media, so he resolutely quit his high-paying job and devoted himself to self-media entrepreneurship. In the process, she also accumulated a lot of experience in Chengdu's local cuisine.
Subsequently, Xie Yao opened a boutique café and went to obtain the international barista qualification certificate, which shows that she is serious and responsible for everything. However, due to the fact that the public's consumption habits of coffee had not yet been cultivated at that time, the coffee business was not ideal.
At this time, new tea brands such as Hey Tea and Nai Xue's tea began to become popular across the country. Xie Yao smelled a business opportunity and decided to turn to the milk tea business. With her advantages in the field of self-media, she spent 30,000 yuan to find a professional designer to create a unique brand image, and went to Taiwan to learn from experience, focusing on the business philosophy of "hand-made pearls".
In this way, Xie Yao used a start-up capital of 500,000 yuan to officially establish the "Yuanzhenzhen" brand in March 2019.
From the bright to the low: a broken entrepreneurial dream
As soon as it was launched, it sparked heated discussions on Douyin with its unique brand image and innovative concept of "freshly made and cooked", and the daily sales of the first store soared to more than 8,000 yuan. As a result, Xie Yao quickly built "Yuanzhenzhen" into a milk tea brand that is highly sought after by Internet celebrities.
In just half a year, Yuan Zhenzhen already has 10 stores. At the beginning of the following year, the company opened up the franchise model, and in just one year, the number of stores reached 300, covering many provinces and cities across the country.
This rapid development momentum continued into 2021, and even after the epidemic, most of Yuanzhenzhen's store revenue still performed well. However, it was in this year that the gears of fate also began to turn.
In order to cooperate with the development and standardization of the chain, Xie Yao had to give up the concept of "handmade" and changed to the concept of "chewy tea". As a result, this shift has not been recognized by consumers, but has led to a significant decline in Yuanzhen's competitiveness.
At the same time, Xie Yao also stopped joining outside Sichuan Province, which made the brand miss the opportunity to expand at the best time of development, which seriously dragged down cash flow. She admits that she didn't pay attention to the company's cash flow and risk management at all, and only cared about products and marketing.
Due to the lack of effective control and standardization, franchisees have also experienced business difficulties one after another, and Xie Yao even had to apologize to them, admitting that he had "insufficient ability and cognitive problems".
In 2023, Xie Yao will finally close the last directly-operated store, and Yuan Zhenzhen will have a cumulative loss of 10 million yuan. At the age of 42, she was in debt of up to 2 million and had to turn to a stall to pay off her debts.
The fall of Yuanzhen reflects the cruel reality of the current new tea industry.
Today's tea drinking rivers and lakes are completely the world of big players. Small brands trying to gain a foothold in this red sea are almost tantamount to killing themselves. Even the former first-line milk tea brands, such as 1 Diandian and Happy Lemon, have suffered the fate of large-scale store closures in the past two years.
According to expert analysis, the new tea industry has entered the stage of white-hot competition, and it is difficult to occupy a place in the market by relying on unique product concepts and low-cost marketing. The key is to form a scale advantage and master a strong supply chain strength, only in this way can we truly be invincible.
It can be said that the real failure of Yuanzhen is a microcosm of the status quo of this cruel industry. As a small brand that started in Chengdu, it neither formed effective standardized control nor expanded and occupied the market in time, and was finally crushed by the head brand and reduced to a "slump".
Netizen: The step is too big, and it's easy to pull the egg~~ [Dog Head] [Dog Head] [Dog Head] If I were a brand like her, I would slowly develop locally, and I don't need to open so many stores, just enough to make money!
Netizen: It's the first time I've heard of this brand
From Mount Everest to the abyss, Xie Yao's entrepreneurial road can be called a tragic dream of "Internet celebrity milk tea". But she still didn't give up, but bravely adjusted her direction and found another way. This tenacious spirit is perhaps the most valuable quality of an entrepreneur.
In the future, who can have the last laugh on this "hot and piping" new tea track needs to be further observed. But what is certain is that if you want to survive on this track, you must have strong product strength, supply chain strength and scale advantages, and unique concepts alone are far from enough.