Tea Baidao "overturned" again, who is to blame this time

New Weekly

2024-05-12 11:03Published on the official account of Guangdong New Weekly

Author | Ah Meat

Edit | Yan Fei

Title Picture | Visual China

Cha Baidao, it's been really a bit unlucky lately.

First of all, the news came in late April, and the dust of the protracted battle for the "second share of new tea drinks" has settled - Tea Baidao broke out of the encirclement, grabbed ahead of the "Snow King", Gu Ming and Shanghai Auntie, and was listed on the Hong Kong Stock Exchange, officially becoming the "second share of new tea drinks" after Nai Xue's tea in 2021. As a result, the good times did not last long, and Tea Baidao fell below the issue price on the first day of listing, and the total market value evaporated nearly forty percent two weeks later.

As of May 10, the share price of Chabaidao changed. (Photo/Baidu Stock Market)

In the recent fat cat incident, Cha Baidao was pushed to the forefront again. Some passers-by found that the tea Baidao milk tea that netizens ordered for the deceased spontaneously and at their own expense was filled with boiled water, or even directly empty bags, which caused strong protests from consumers.

The brand responded to public opinion as soon as possible, trying to calm people's anger with an attitude of being beaten and actively admitting mistakes. On May 3, Chabaidao officially issued an apology statement through Weibo, promising to refund, compensate, fire the employees involved and immediately terminate the contract with the franchised store. At the same time, the brand also officially announced that in the name of "Fat Cat", it will donate 1 million yuan to the Sichuan Youth Development Foundation for the development of public welfare undertakings.

On May 3, Chabaidao issued an official statement, promising to fire the employees involved and pay compensation. (Photo/Weibo)

However, this seemingly perfect solution still does not satisfy everyone. So far, Cha Baidao, who was forced to be involved in the public opinion turmoil, has done everything wrong, and it is too late to make amends.

From traditional street drinks to freshly made new teas

2008 was truly a magical year.

From a certain point of view, this year can be said to be a year of indiscriminate development of new tea drinks. Although it is still about ten years away from the official birth of this concept.

At that time, the 10,000-store-level brand "Snow King" Mixue Bingcheng was just a small cold drink shop that was beginning to take shape, doing the business of shaved ice and ice cream. The founders are three brothers from Kaifeng, and the eldest of the brothers, Zhang Hongfu, was 24 years old at the time. At that time, in order to enrich the store's categories, he brought a bag of 5 kg of coffee powder from the warehouse to flush and stir, added sugar and non-dairy creamer according to the proportion of the juice he made before, and handwrote "cappuccino" and sold it in the store for 1 yuan per cup, but he didn't expect it to sell out all of a sudden. As a result, Mixue Bingcheng, which has been established for 9 years, has its first popular item.

Netizens posted the price list of Honey Snow Bingcheng products ten years ago. (Photo/Xiaohongshu @ Xiaojing)

In the same year, in Chengdu, Sichuan, a post-80s couple started their first attempt at entrepreneurship. Next to Wenjiang No. 2 Middle School in Chengdu, the two rented a small door of less than 20 square meters and started a milk tea business. And this small store has become the starting point of the "second share of new tea drinks" in the future.

Above: Tea Baidao Wenjiang No. 2 Middle School Store in the early years; Bottom: The renovated "World's No. 1 Store". (Photo/Dianping)

However, at that time, whether it was Mixue Bingcheng or Tea Baidao, everyone was still in the 1.0 era, and they were all crossing the river by feeling the stones. The products in the store are mainly prepared with non-dairy creamer, and the price is within 10 yuan, mainly to provide consumers with a cheap freshness, and it is "buy and go" to achieve high repurchase and fast turnover.

In 2015, high-end tea drinks represented by Hey Tea and Nai Xue's tea began to emerge one after another, relying on the highlights of "freshly made" to make a signboard, and the tea Baidao also smoothly kept up with the rhythm and began to frequently launch new products.

Launching new products, on the one hand, is to continue to attract the attention of consumers, and on the other hand, it is also to test the water and find the optimal solution based on consumer feedback. In 2018, the initial results of the test of tea Baidao began, and the products began to be drastically streamlined, the original more than 40 products were deleted in half, and the signature products such as poplar branch manna and soybean milk jade unicorn began to be promoted, which not only reduced the decision-making cost of consumers, but also helped to standardize the production and reduce the supply cost.

In September of that year, the first upgraded test store after the streamlined menu of Chamodo was officially opened, and in just three days, an average of 1,500 cups per day were produced.

At present, the main classic tea in the tea Baidao store. (Photo/Dianping)

The information in the prospectus also shows the advantages of Chabaidao's signature products: in 2023, the total retail sales of Chabaidao stores will be about 16.9 billion yuan, and a total of 1.016 billion cups of tea will be sold, of which five classic products will account for nearly 40% of GMV, and 18 pieces of Yangzhi manna will contribute nearly 1.8 billion yuan in retail sales in a year.

More than a dozen pieces of milk tea,

It can sell a billion cups a year

Relying on these "hot styles", Chabaidao ushered in its own golden age. According to the Frost & Sullivan report, in terms of sales in 2023, Chabaidao currently ranks third in China's freshly made tea shop market, with a market share of 6.8%.

From the current point of view, the choice of tea Baidao in Chengdu is a very good choice, the city has a habit of drinking tea, so that tea Baidao and "Chinese tea" have a strong binding.

In recent years, Tea Baidao has also made a series of upgrades to the brand's positioning based on this, and played the concept of "good tea as the base and making fresh"; At the same time, the aura of Internet celebrity in this city also makes Tea Baidao never lack topics on the Internet.

Left: Brand IP "Ding Ding Cat"; Right: The panda "Cha Cha" adopted by Tea Baidao. (Photo/Tea Baidao Official)

In 2018, Chabaidao launched the brand IP image "Ding Ding Mao" based on the panda for the first time, and at the same time changed the style of the store, replacing the previous retro log style with blue and white color scheme, conforming to the minimalist style and national trend aesthetics, so as to achieve the possibility of dialogue with young consumers. Last year, Chabaidao also signed an agreement with the Chengdu Panda Base to adopt a giant panda and name it "Chacha".

It can be said that from the very beginning, Chamodo has set its sights on the young group.

According to the data of Narrow Door Catering, there are currently a total of 8,345 stores in Chabaidao across the country. Looking at the number of stores in the country alone, the market share of Tea Baidao is not only inferior to that of its predecessors, but also inferior to the mid-range new tea drink Gu Ming, which is also priced at around 15 yuan. However, from the perspective of urban distribution, the distribution of Chabaidao's stores is more even, basically covering all major provinces and cities across the country, including not only the vast sinking market, but also four super first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen.

Comparison of the distribution of the new tea drink "Royal Three" stores. (Photo/Narrow Door Catering)

This gives Chabaidao a wider audience base and lays the foundation for the brand to nurture social topics. Over the years, in every piece of news about tea Baidao, "focusing on sincerity" is the most significant label, which can be said to have grabbed the lives of young people.

Last year, when it was co-branded with the mobile game "Book of Undetermined Events", Chabaidao appeared on the Internet as a textbook-level positive case.

Even in this fat cat incident, Cha Baidao also responded as soon as possible and saved passers-by to the greatest extent.

But now, the co-branding of new tea drink brands is becoming more and more frequent, which also makes people aware of the hidden crisis under the excitement of cooking oil. "Co-branding" means that the brand itself can do less and less, and it seems to be "killing friends", but in fact, everyone is working together to lift the table - because the more co-branding, the more numb consumers are to co-branding activities.

This year, the joint name of Tea Baidao and the mobile game "Honkai: Star Dome Railway" caused netizens to complain. (Photo/Screenshot of Xiaohongshu)

Compared with the "second share of new tea drinks",

Tea Baidao wants to be the "first share of joining tea"

Although it is said that Chabaidao is an IPO drunk by young people, a closer look at the profit source of this brand is actually not.

For brands, making money from franchisees is the main source of income for Chabaidao.

Taking the revenue in 2023 as an example, the revenue realized by Chabaidao through franchised stores will be 5.659 billion yuan, of which the revenue from the sale of goods and equipment accounts for 95%, and the gross profit margin is 31.8%; Royalties and franchise fees accounted for 4%, and gross profit margins were as high as 92%.

It is true that judging from the financial report data, the profitability of Chabaidao is very impressive. According to the prospectus, from 2021 to 2023, Chabaidao will achieve revenue of 3.644 billion yuan, 4.232 billion yuan, and 5.7 billion yuan respectively, with a compound annual growth rate of 25.1%.

However, for franchisees, the profitability of tea Baidao is becoming more and more "difficult to evaluate". In the early years, in order to expand its territory, Chabaidao relied heavily on online takeaway platforms to acquire customers, but this also made consumers develop the habit of buying online. Many franchisees have complained that 60% of the store's orders come from the platform, and they have to continue to buy traffic from the platform and rebate the platform to maintain the daily sales of the store.

After calculation, to open a tea Baidao store, the initial investment is about 300,000 yuan. (Photo/Tea Baidao official website)

Such a profit model that is highly dependent on franchises naturally has a great hidden crisis, because the brand cannot put forward too many requirements for franchisees. In the prospectus, Chabaidao also included the misconduct of franchisees as a risk factor - "If any franchisee breaches the agreement with us or misbehaves, the relevant franchisee may not be able to fully compensate us for the losses caused to us by the breach of contract or misconduct." "Taking this fat cat incident as an example, due to the illegal operation of the franchisee to send empty bags, the brand image was damaged, and the final bitter fruit can only be swallowed by the brand.

In the comment area, you can still see netizens' doubts about the brand. (Photo/Weibo @ Black Cat Complaint)

At present, the profit model of "joining the tea drink" is mainly inherited from Mixue Bingcheng. However, unlike Mixue Bingcheng, which has formed its own supply chain, Chabaidao's own supply capacity is insufficient, and it needs to be highly dependent on external suppliers, and due to the wide distribution of stores, the level of these third-party suppliers is also uneven, which is very fatal for the main freshly made new tea drinks. In recent years, in the reports on the safety of the new tea diet, Tea Baidao has also repeatedly "been on the list", which is enough to show that for the current crazy involution of the new tea drink track, the level of the supply chain may determine its future fate.

Whether to have a full meal or a full meal may be a common problem for all new tea drinks.

Proofreading: Meet

Operations: Ono

Exclusive edition: 段枚妤

[1] The post-80s couple sold milk tea and started a listed company/red meal network

[2] 600 stores were opened in 11 years, and the brand upgrade road of tea Baidao was reviewed

[3] 6.9 billion in one day, Tea Baidao sounded the alarm bell/city boundary

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