Recently, China's new tea drink brands have made frequent moves to "go overseas", which has once again attracted attention. On July 5, Nai Xue's first Singapore store was officially opened at Changi Airport's Jewel Changi Complex, which is Nai Xue's second overseas store after the opening of its store in Bangkok, Thailand in December last year. On the same day, July 5, local time, Heytea's pop-up store "HeyTea Paris Viewing Tea Room" built in Paris, France, officially opened, and Heytea became the first Chinese new tea brand to enter the French market...... Why are so many new tea brands turning to a broader international market? What are the challenges they face on the road to "going to sea"? How to hack? Explore incremental space
△ NAIXUE Changi Airport Store has a unique design with about 20 seats in the seating area.
In recent years, the number of new tea beverage enterprises in mainland China has been increasing, the overall market scale has been expanding, emerging enterprises and existing head enterprises have continued to develop, and the domestic market can be said to be a red ocean. While expanding innovative categories, optimizing supply chain systems, and introducing digital technologies, a number of new tea brands are also constantly exploring incremental space in overseas markets.
According to the "2023 Report on China's New Tea Brands Going Overseas", since 2018, the wave of "going overseas" of new tea drinks in mainland China has gradually formed, and brands such as Hey Tea, Nai Xue's Tea, Mixue Bingcheng, and Bawang Tea Ji have started the journey of "going to the South Seas" and "going to Europe and the United States".
"There are multiple reasons behind the rush of China's new tea brands to 'go global' in recent years." Wang Haining, secretary-general of the beverage branch of the China Non-staple Food Circulation Association and general manager of the Whole Foods Exhibition, told the "China Report" reporter that on the one hand, the growth space of the domestic market is gradually shrinking, and the new tea beverage brands are facing involution competition, resulting in increasingly fierce competition between brands, the living space of small and medium-sized brands is squeezed, and innovation and differentiation are becoming more and more difficult to achieve. On the other hand, the attitude of the capital market has also tended to be calm, and the total amount of financing in the tea track in 2022 has decreased compared with 2021, indicating that the head brands have basically completed capitalization and the industry is maturing. At the same time, the homogenization of tea drinks is becoming more and more serious, which further intensifies market competition.
In the investigation, the reporter found that many new tea brands "go overseas" and take Southeast Asia as the first choice. "The competition of Chinese new tea brands in overseas markets is diverse and complex, but there are also some advantages." Wang Haining said that for example, the Southeast Asian market has become the preferred destination for Chinese new tea brands to 'go overseas', mainly because of the hot climate in Southeast Asia, the large demand for cold drinks, and the cultural customs are similar to those in China. In addition, data from Southeast Asian food delivery platforms shows that milk tea orders have doubled year by year since 2018, showing huge consumption potential.
Unlike their peers, which are focusing on Asian markets such as Southeast Asia, many new tea brands are also exploring the European and American markets. For example, Heytea has successively entered the United Kingdom, Australia, Canada, the United States and other countries and regions, and opened its first store in London, New York and other high-potential cities; Nayuki's first stores in overseas markets such as the United Kingdom and the United States will also open this year.
Supply chain and product localization are the biggest challenges
△ On July 5, local time, Heytea's pop-up store "HeyTea Paris Viewing Tea Room" built in Paris, France was officially unveiled.
However, it is not easy for new tea brands to "go global" from "0" to "1", and the overseas market situation is difficult to predict, the differences in consumer perception and interests, overseas laws and regulations, high cross-border logistics and transportation costs, and supply chain control are all challenges. At the same time, how to capture the hearts of local consumers, how to build a more complete supply chain abroad, and how to deal with competitors are also issues that companies need to continue to explore.
According to the "2023 Report on China's New Tea Brands Going Overseas", the new tea beverage "going overseas" industrial chain is mainly divided into three links: first, the upstream of the industrial chain is the supply of raw materials, and the market participants include raw material suppliers such as tea, dairy products, fruits, sugar and packaging materials; Secondly, the midstream of the industrial chain is the core of the industrial chain of brand owners, and through direct sales and franchises, raw materials are purchased from upstream suppliers to complete beverage preparation; Finally, the downstream of the industrial chain obtains orders through takeaway platforms, stores, and mini programs to achieve sales.
"The shaping of the supply chain is one of the biggest challenges for new tea drinks to 'go global'." Wang Haining said that the establishment of a sound supply chain can not only reduce transportation costs and procurement costs, ensure the freshness and quality of raw materials, but also adapt to the needs and regulatory requirements of different markets, and improve the brand's competitiveness and market share in the local market. The construction of overseas supply chains needs to solve the problems of raw material costs, transportation costs and storage, which poses a challenge to the financial and technical strength of enterprises. Therefore, the establishment of a complete supply chain system determines the core competitiveness of new tea beverage enterprises overseas.
It is understood that among the new tea brands, Heytea has been building a localized supply chain in overseas markets; In the future, Nayuki's tea plans to establish a local supply chain center, R&D center, and logistics center.
Wang Haining also pointed out that there are huge differences between overseas markets and Chinese markets in terms of cultural background, business environment, consumption habits, etc., and new tea brands need to make changes in brand building to get closer to local consumers.
When it comes to brand building, new tea brands know the importance of telling a good brand story. Opening stores in landmark buildings and high-end department stores is one of the ways for new tea brands to open up their popularity overseas, such as Heytea mostly chooses the local core business district, close to many local landmarks, and brands such as Cha Baidao, Nai Xue's tea, and Bawang Chaji also choose to open big stores in the best local shopping malls to build brand potential and enhance their local influence. In terms of product settings, for example, Heytea will adjust the menu according to the fruit supply in different regions, such as the Melbourne store in Australia, which will have new seasonal kiwifruit products, and London and Kuala Lumpur will have products containing mulberry and strawberries.
"With the global spread of Chinese tea culture, it is expected that Chinese new tea brands will continue to expand into new international markets, especially in Asia, North America and Europe. Wang Haining said.
Regarding the many challenges faced by new tea beverage brands to "go overseas", Wang Haining suggested that, first of all, formulate a clear "going global" strategy and target market positioning, and formulate different marketing strategies and product lines according to the consumption habits and cultural backgrounds of different countries and regions. Second, strengthen cooperation with overseas partners and establish a stable supply chain and logistics system. Third, pay attention to product innovation and quality control, provide tea products that meet the tastes and needs of local consumers, and improve brand competitiveness. Fourth, strengthen brand building and marketing, use social media, online advertising and other channels to promote brand image and product features, and attract the attention and purchase of overseas consumers.
Written by: Wen Xin
Editor-in-charge: Zhang Lijuan
Editor: Zhao Jun