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- Source/Night Deep Finance
- Author/Night Deep Finance
Introduction: Overlord Chaji has been exposed to the news of listing again.
Just recently, it was reported that the new tea drink brand Bawang Chaji will go public in the United States this year, and is expected to raise 200 million to 300 million US dollars, and if the listing is successful, the valuation can reach 3 billion.
Up to now, Chabaidao has obtained the Hong Kong stock admission ticket, and will soon launch a management roadshow. Bawang Tea Ji is eager to hit the IPO, and seems to want to compete with Tea Baidao for the title of "the second share of freshly made tea".
▶ Source: Sina Weibo
In fact, in addition to Bawang Tea Ji and Tea Baidao, there are many new tea brands that want to hit the market. So, why do new tea drinks have to be listed now? Could it be that if the listing is successful, it will be able to seize the opportunity in this extremely involuted track?
01, Overlord Chaji, can it be done this time?
In fact, this is the second time that Bawang Chaji has been rumored to be listed in the past year.
As early as July 2023, it was reported that six new tea brands, including Mixue Bingcheng, Chabaidao, and Bawang Chaji, were seeking to be listed in Hong Kong or the United States. It's just that at that time, the relevant person in charge of Bawang Chaji responded that there was no clear IPO plan.
Looking back now, the new tea drinks rumored to be listed at that time do have a certain degree of credibility, especially since the beginning of 2024, Tea Baidao, Shanghai Auntie, Gu Ming, etc. have all submitted prospectuses to the Hong Kong Stock Exchange, and Bawang Tea Ji is naturally not willing to lag behind.
According to public information, as a new tea brand from Yunnan, the mainland, Bawang Chaji's first store opened in Kunming in November 2017, positioning in the mid-to-high-end market of about 20 yuan. At the same time, it has received a total of more than 300 million yuan in financing in January and May 2021, and currently has more than 4,000 stores in China.
▶ Source: Bawang Chaji's official Weibo
With its main national style route, Bawang Tea Ji uses "original leaf fresh milk tea" as a selling point, and stands out in the new tea drink track that has long become the Red Sea market.
In terms of brand popularity, compared with the pleasant tea face that used to be in long queues everywhere I went, Bawang Tea Ji is as good as ever. Xiaohongshu searched for "Bawang Chaji" as the keyword, and there have been more than 900,000 related notes, and netizens have not hesitated to praise its products.
▶ Source: Little Red Book
So, why does Overlord Chaji, who seems to be developing smoothly, still want to go public in the United States in a hurry?
In the eyes of industry insiders, there may be two reasons:
First of all, the key to listing in the United States is that Bawang Chaji pays more attention to its own liquidity. Taking Nai Xue, the first share of the new tea drink, as an example, the turnover of Nai Xue, which has long been listed on the Hong Kong stock market, is quite sluggish, and the lowest day even has a turnover of more than 1.6 million Hong Kong dollars.
Secondly, now that the IPO of the domestic capital market has been reduced in stages, it is obviously extremely difficult for new tea brands to land on the A-share market for new tea brands that are difficult to tell too many new stories.
02, did the listing save the overlord tea girl?
Now that he plans to go public in the United States, he may have become one of the few choices for Bawang Chaji. It's just that what needs to be thought about is, can the listing really pull the overlord tea out of the red sea of new tea drinks?
It is undeniable that through product differentiation competition, Bawang Chaji has taken a good route. Focusing on new Chinese products, focusing on raw leaf fresh milk tea, at present, Bawang Chaji's products are mainly divided into four categories: original leaf fresh milk tea, Genting tea, pure tea and fruit tea, and the proportion of fresh fruits used in 40 SKUs is only 35%.
By cleverly avoiding other competitors, Bawang Chaji once set off a craze in the circle of milk tea lovers.
It's just that while taking the route of differentiation, the over-reliance on popular items has also made many people in the industry doubt the future of Bawang Chaji. According to its official website, the annual sales volume of Bawang Chaji's popular single product Boya Juexian exceeds 100 million cups, accounting for 35% of the brand's total marketing revenue.
▶ Source: Bawang Chaji's official Weibo
There are even many netizens who said that they will only give priority to Boya Juexian when they choose Bawang Chaji, and other products feel average in taste.
can't create a hit that can be compared to Boya's absolute strings, and it has always been a big mountain in front of the overlord Chaji.
Secondly, in terms of the number of stores and profitability, Bawang Chaji also has a big gap compared with competitors such as Mixue Bingcheng and Tea Baidao.
Let's talk about the scale of the store first, after getting financing and opening stores like crazy, the total number of stores of Bawang Chaji is now about 4,000. Needless to say, new tea brands such as Tea Baidao and Shanghai Auntie are now sprinting to the scale of 10,000 stores, and the gap is obvious.
Looking at the profitability level, according to the prospectus released by the major new tea brands, Mixue Bingcheng made a profit of 2.5 billion in the first 9 months of 2023, and the annual profit of Tea Baidao in 2023 was 1.15 billion.
▶ Source: Mixue Bingcheng's official Weibo
If it is finally successfully listed, it may be able to solve the current liquidity problem, but if you want to save yourself fundamentally, you obviously need to rely on continuous innovation to attract more milk tea lovers.
03. The capital market doesn't like to drink milk tea
An obvious trend is that although major new catering brands are piling up to go public, they don't want to drink milk tea for all kinds of capital.
On the investment and financing side, compared with the pursuit of new tea brands by various capitals in previous years, Mixue Bingcheng raised 2 billion yuan, and Heytea was valued at 60 billion yuan, etc., and the cooling phenomenon can be said to be quite obvious. According to statistics, in 2023, there will be only one financing of more than 100 million yuan in the entire new tea beverage track, which will provide strategic financing for the impact of tea Baidao before listing.
At the same time, with the slowdown in the growth rate of the entire new tea market, the outlook is not optimistic.
According to data disclosed by iiMedia Consulting, the market size of new tea drinks in mainland China will be 333.38 billion in 2023 and is expected to reach 374.93 billion by 2025. Although the scale is still in the growth channel, the growth rate has obviously slowed down, and the overall growth rate of new tea drinks in 2022 will be 13.5%, and in 2023, it will only be 6.4%.
▶ Source: iiMedia Consulting
The reason is, of course, because the scale of the entire new tea market is gradually hitting the ceiling, and it is difficult for major brands in the stock era to tell new stories, so it is naturally even more unpopular.
In order to maintain their market position, and even snatch food from other competitors, there seem to be only two options for major new tea brands: expand the scale of stores and hit the market.
In fact, more and more new catering brands have begun to pay attention to the pursuit of 10,000 stores. Mixue Bingcheng has already opened 28,000 stores through the franchise model, followed by tea Baidao, Shanghai Auntie and Gu Ming are also sprinting to 10,000 stores, trying to seize more market share with the help of scale effect.
The purpose of impacting the listing is similar, after all, it can solve the financial problems in store expansion.
▶ Source: Bawang Chaji's official Weibo
Regardless of whether it hits the market or opens 10,000 stores, in fact, it can only solve the urgent need, and in the end, for the new tea brand, it is still product innovation and marketing capabilities, can it continue to attract consumers?
In the face of such fierce competition in the new tea drink market, it is difficult to say who the "second share of new tea drink" can do.
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