All content in this article is based on official and reliable sources, and the specific information is detailed at the end of the article
Preface
This year's new tea market is very hot, and several emerging tea brands are vying to land on the Hong Kong stock market!
Since the successful listing of Nai Xue's tea on the Hong Kong Stock Exchange on June 30, 2021, the capital market has been discussing the prospects of the tea industry.
But after three years, no other company has successfully gone public.
Today, Cha Bai Dao will become the second "tea" brand to enter the Hong Kong Stock Exchange.
Not only have they opened more than 8,000 stores nationwide, but they have also completed their IPO listings.
Surprisingly, the founders of this tea rookie turned out to be a couple from Chengdu.
It's amazing how much they have achieved in just 15 years.
However, the successful listing of Chabaidao has also raised some doubts.
Not long ago, CCTV exposed the existence of problems with Tea Baidao, and then the company urgently refuted the rumors.
Now it seems that the successful listing of Chabaidao can be regarded as finally understanding some of the couple's "conspiracy......
So, as the "second share of tea drink", can tea Baidao still be favored by the capital market?
Behind the sale of 1 billion cups a year
Friends who often enjoy milk tea must be familiar with the brand name "Tea Baidao".
The various drinks of this brand are loved by many netizens.
Especially in the takeaway software, the monthly sales volume has reached 3000-4000 cups, ranking in the forefront.
Among the many tea brands, Tea Baidao stands out and occupies a leading position.
Relatively speaking, the price of tea is not low, but have you ever understood how much profit a cup of milk tea can create?
It wasn't until I saw Cha Baidao's "Prospectus" that the answer to this question was revealed.
In 2023, a total of 1.016 billion cups of milk tea will be sold in Chabaidao stores, with an average retail sales of 27.4 yuan per order.
Behind these 1 billion cups of milk tea, the number of tea Baidao stores is also leading in the country.
The new tea brands established that year, such as Naixue and Heytea, have awakened their brand awareness since 2016.
Nie Yunchen, the founder of Heytea, purchased the Heytea trademark that had been successfully registered in the same year.
"Nai Xue's Tea" has created a brand influence with a sip of good tea and a European bag, and has just opened four stores in first-tier cities.
In addition to these new tea brands in the first echelon, brands such as Gu Ming, Shanghai Auntie, Shuyi Yao Xiancao and so on.
They also began to "expand their territory" since this year, making the new tea market more and more crowded.
After two years of brand operation, Chabaidao began to join nationwide.
In 2018, the first store was opened in Zhejiang, and the number of stores reached more than 750 six years later.
Although Cha Baidao is a bubble tea shop, its true profit model does not depend on the sale of milk tea.
Rather, it generates revenue by selling raw materials and equipment to franchisees.
According to the data, the company's main revenue is concentrated in raw materials and packaging materials, accounting for about 95% for a long time.
This is followed by royalties and franchise fees from franchisees, but their contribution is only about 5% of total revenue.
This means that Cha Baidao does not make money primarily through the sale of milk tea.
Even the income from the franchise fee is negligible, and the main profit is obtained by relying on the expanding store size.
The advantage of the franchise model is the ability to quickly scale up the business, and with it, revenue and profit growth.
The total revenue in 2022 was 4.232 billion yuan, of which more than 4 billion yuan came from the sale of raw materials and packaging materials to franchisees.
Therefore, under the franchise model, the main cost of tea Baidao is the cost of sales.
Taking 2022 as an example, the cost of sales accounted for 65% of revenue, of which the cost of goods was 94%, about 2.6 billion yuan.
It is used to purchase tea raw materials, ingredients and packaging materials, including dairy products, tea, sugar, cups, paper bags, etc.
The other 2% is the cost of equipment, which is about 200 million yuan.
In other words, the profit of Chamochido mainly comes from the difference between the purchase price and the selling price of raw materials and packaging materials.
Suppliers receive about 60% of their annual revenue, which is used to purchase raw materials such as dairy products, tea, and fruit juices.
As of April 5, 2024, Chabaidao has 8,016 stores in 31 provinces and cities across the country.
It has directly achieved full coverage of all provinces and county-level cities.
Relying on these 8,000 stores, in 2023, Tea Baidao will sell a total of 1.016 billion cups of milk tea, with a total retail sales of about 16.9 billion yuan.
It is worth mentioning that from the establishment of Chabaidao in Chengdu to its landing on the Hong Kong Stock Exchange in 2024, it only took 16 years for this "new tea drink" listed company.
Mom-and-pop shops to tea giants
In the 90s of the last century, milk tea began to pour into the Chinese mainland market.
At that time, milk tea was made by mixing colorful powder with water, shaking it well, and then sealing it, which was what milk tea looked like in the first place.
Although milk tea at that time had neither a milky taste nor a tea aroma, it did not prevent it from becoming a favorite among students.
This sweet taste and novel category have swept the entire Chinese mainland market.
With the popularity of milk tea, Jiang Jianqi founded Xiangpiaopiao in 2005, and it was in that year that the first cup of milk tea was officially launched.
Jiang Jianqi attaches great importance to the advertising of the company's products, which makes the sales of Xiangpiaopiao's products grow rapidly.
In 2008, Xiang Piaopiao quickly became popular with a brainwashing advertisement that "sells more than 300 million cups a year, and the cups can circle the earth when connected".
This advertisement provided a strong impetus for the rapid expansion of the company's products, and the fragrant products were spread all over the major shopping malls and supermarkets, and became a popular drink among young people.
As sales continue to rise, Xiangpiaopiao has also grown from "selling more than 300 million cups a year" to "selling 1 billion cups a year", and the cups can circle the earth 3 times together.
With the development of the market, a large number of humble bubble tea shops have also sprung up.
In 2008, 25-year-old Wang Xiaokun and his wife Liu Weihong opened a 20-square-meter bubble tea shop next to Wenjiang No. 2 Middle School in Chengdu.
This shop mainly sells brewed milk tea and is aimed at students with low spending power.
The target customer base of Chabaidao has gradually adjusted from students to young urban women, and has been continuously adjusted according to market demand.
In 2016, Tea Baidao positioned itself as a "fresh fruit and Chinese tea" brand and began to sell poplar nectar.
The company carried out the first store upgrade and started franchise business in Chengdu, and finally the number of stores exceeded 100.
Two years later, the company incorporated giant panda elements into product design and launched the predecessor of Chacha, "Ding Ding Mao", which attracted a large number of consumers to patronize.
At the same time, Chabaidao expanded the scope of franchise to the whole country and opened a large-scale store opening model.
The effect of joining the country is remarkable, and the number of stores has grown rapidly, exceeding 500 a year later.
Subsequently, the number of stores continued to climb, reaching 6,361 in 2022, becoming a leader in the new tea beverage industry.
Chabaidao has made huge profits through its strong ability to open stores, and has grown from a mom-and-pop shop to a listed company.
Despite their wealthy families, founders Wang Xiaokun and Liu Weihong are low-key and pragmatic, rarely appearing in public, even the company's 1,690 employees.
According to media reports, the husband and wife are very diligent, and Wang Xiaokun often even works until 3 or 5 in the morning.
Unlike many bosses, they are happy to delegate authority to executives and focus on the research and development of milk tea.
It can be said that the achievements of the husband and wife are admirable, and the company's stores have expanded rapidly and have been successfully listed.
However, with success comes increased consumer demand for product quality and food safety.
Especially on the 315 Consumer Rights Protection Day, CCTV exposed the food safety problems of Tea Baidao.
The "Black History" of Tea Momodo
After watching last month's 315 party, not only the major businesses were frightened, but even the audience in front of the TV was in a cold sweat.
Especially those migrant workers who like takeout and milk tea, after reading it, they can't help but sigh: "Oh my God, who is this dealing with?"
Many netizens bluntly said that all walks of life are trying to "make money", and it is completely "lucky" to be alive.
In fact, consumers' requirements are not high, as long as they eat the same as your seller, but they always encounter a sentence "I don't eat".
Although many foods once exposed, people can choose not to consume them.
But milk tea has become an irresistible temptation, after all, a glimpse on the street almost everyone has a cup.
Especially when there is a strong sense of ritual, such as the first cup of milk tea in autumn, or when you are in a bad mood and need to be healed.
Drinking desserts for a long time is very taxing on the body, but some well-known bubble tea shops have done outrageous things.
What happens when the ingredients expire? They just need to put a label on it, and the ingredients are "magically" restored to health.
I have to say, this approach is really shrewd.
It is a trivial matter for consumers to eat a bad stomach, but it is their own interests that are lost, which is not a joke.
The fairy grass shop in the same industry prides itself on "half a cup of milk tea", but never says that their "half a cup of material" is overnight.
As for whether the ingredients are expired, their standard for judging is the human mouth.
As long as it tastes ok, keep using it.
Compared with other brands, Tea Baidao is unexpected.
During the day, when daily supervision is stricter, it maintains a relatively low-key style to ensure the correct use of expired labels.
But at night, these expired tags seem to have mysteriously disappeared without a trace.
As a result, ingredients that have not been labeled with their expiration dates are technically "unexpired" and continue to be used.
As we all know, food safety is a critical public issue that should be a top priority.
However, it is intolerable that some businesses put the health of consumers at the expense of their personal interests.
In fact, this is not the first time Cha Baidao has faced similar accusations.
As early as 2021, news about its use of expired materials has been on the hot search.
At that time, Chabaidao issued a letter of apology through its official Weibo, promising to conduct a thorough inspection of stores across the country.
Non-compliant stores will be dealt with strictly, and even closed down in serious cases.
Despite his determination to rectify the situation, more than two years later, the problem of using expired ingredients still exists.
Judging from consumer complaints, the use of expired ingredients is only one part of the food safety problem of Chabaidao.
According to data from the Black Cat complaint platform, consumers have repeatedly complained about serious problems such as cockroaches, lemons turning black, drinking steel wool balls, insects and hair in Chabaidao milk tea.
In addition, on March 14, a report released by the Ministry of Industry and Information Technology also named Chabaidao, pointing out that the ordering mini program on its Alipay platform had the problem of asking for too many user permissions.
With the rapid increase of tea Baidao stores, the company's management problems have been exposed, and the problems of food safety and internal management have become the company's main challenges and pain points.
epilogue
For now, milk tea is an indispensable drink in the daily life of modern people.
It is hoped that Chabaidao will avoid food safety problems while being listed, so that it can go further!
What do you think about this?
Resources
Tea Baidao fell sharply on the first day of listing, and some retail investors lost more than 4 million Hong Kong dollars--2024-04-23 22:55·China News Network
It was revealed that the expiration date label of raw materials was changed, and Cha Baidao apologized: closed stores, national self-inspection--2024-03-20 Top news
Changsha regulatory authorities raided and tea Baidao suspected of using expired raw materials-2021-05-27 Century Business Herald