Author: Mak Zhiqing Editor: Lv Xinyi Producer: Retail Business Finance
Consumers have concerns about "cheap but not delicious", and franchisees have the question of "8 months to return to the original or 3 months to close the store".
"It's cheap, yes, but it's not delicious" "The equipment cost of 80,000 is too high!" Tea and those equipment, 20,000 is enough! "If you want to open, you can go to Tianlala to work for a month and you will know the real situation, don't believe the so-called company, you must be optimistic about the money bag"......
Source: Xiaohongshu, Black Cat Complaint Platform, etc
The complaints from consumers and franchisees have made this Anhui tea brand "Tianlala", which has the gimmick of "Honey Snow Bingcheng Pingti", fall into the paradox of "only focusing on consumers and franchisees" (official argument).
In the eyes of industry insiders, there are still some hard flaws in Tianlala, such as: brand awareness is not strong enough, the supply chain system is weak, etc.
To this end, Tianlala began to make up for it everywhere, and the most direct way was to use the influence of the circle to focus on the joint activities of animation culture and takeaway platforms, such as co-branding with Universal Pictures' popular IP "How to Train Your Dragon", releasing co-branded peripherals such as cup covers, tattoo stickers, and packaging bags, and launching customized drinks for the first time; Through activities such as martial arts flash mobs, "Long Moon Embers" public welfare linkage, Longfor Music Festival, etc., it frequently "brushes" its presence in front of the public and amplifies the brand's voice.
Source: Internet
"Heavy branding" has become the top priority of Tianlala's "impact on 10,000 stores" in 2024.
7 years ago, Tianlala came out of the circle with "extremely low price", and approached the "king of cost performance" Michelle Bingcheng in terms of product price, but it lacked stamina in building brand power, and was also crowned with the "flat" hat hated by its founder. In order to be "seen" by more consumers and franchisees, Tianlala tries to increase the brand voice through co-branded marketing and other methods.
However, the brand power competition is the "ultimate quality-price ratio", rather than blindly low prices, in the final analysis, it relies on consumer insight, product innovation and R&D strength and the construction of the supply chain system, so as to attract consumers' "reputation".
Tianlala's current heavy marketing will only bring an increase in cost load, which is not only contrary to its proud "low price strategy", but also regarded as a "short-term" harvester for consumers and franchisees.
01 Why can't it attract customers' word-of-mouth Amway if the price is low enough?
With the label of "Snow King 2.0", Sweet Lala, in terms of quality and price, Sweet Lala can indeed "wrestle wrists" with Honey Snow Bingcheng, and the price of Shuangpin milk tea and taro round milk tea in Honey Snow Bingcheng is 9 yuan; The price of a full set of sweet lala milk tea is 9 yuan, and the price of red bean milk tea and brown sugar pearl milk tea is 8 yuan.
But in terms of brand voice, the gap between the two is not half a star.
Taking Douyin as an example, as of 18:00 on July 31, the highest number of followers of the Tianlala series account only reached 582,000, while Mixue Bingcheng was 3.681 million, Gu Ming was 5.844 million, and Chabaidao was 9.640 million. In Kuaishou, which is more in line with the tonality of the sinking market of Sweet Lala and Mixue Bingcheng, Tianlala only has 604,000 fans, while Mixue Bingcheng is 8.918 million, and Tianlala is just a "fraction".
Due to the low perception of the brand due to the weak voice, many consumers said on social media that they rarely saw the brand information of Tianlala on the Internet, and even thought it was a miscellaneous or unknown brand.
Source: Little Red Book
The brand voice is not strong, which directly affects the performance growth potential of Tianlala. In 2023, the cumulative annual sales of Tianlala, which has about 7,000 stores, will be 2 billion yuan, however, as early as 2019, Mixue Bingcheng has successfully crossed the revenue threshold of 2.5 billion yuan with the same number of stores.
In fact, the weakness of Tianlala's brand power is closely related to its business model, in order to achieve the most intuitive "cheap" or "hard discount" logic, Tianlala cannot and cannot invest a lot of money in brand marketing and publicity.
"Around 2015, a cup of milk tea sold for five or six yuan, and many people bought it, but if I sold it for twenty or thirty yuan, no one would buy it, and the store would not be able to open." In the view of Wang Wei, the founder of Tianlala, because it started in Bengbu, Anhui Province, its consumption capacity is relatively limited, so accurate price positioning is the top priority, and a signboard is not so important in comparison.
In order to maintain the low-price tonality, all aspects from product development to store operation have to be "picked".
In the design of the product matrix, Tianlala adopts a "following strategy" to replicate the idea of popular tea drinks in the market, reduce the risk of new product development, and at the same time reduce its own gross profit and exchange price for volume. According to the data, the average gross profit margin of Tianlala's full line of products is about 52%, far lower than the 65% gross profit of other brands.
Taking the sweet lala "Qingfeng Jasmine White" product as an example, its taste is almost the same as that of Bawang Chaji's "Boya Juexian" (fist product), which is only landed on the market after the Boya Juexian has been verified by the market, but the price of Qingfeng Jasmine White 500ml is 9 yuan; Boya Jue String 700ml is priced at 17 yuan.
Wang Wei once said that the cost of Qingfeng Mobai is more than four yuan, and the gross profit is less than 50%, and the cost of Boya Juexian is more than 200ml, and the cost becomes more than five yuan, assuming that the tea is increased by five cents, the cost will become more than six yuan, but the gross profit they sell has reached 60%-70%.
Based on imitation + low price, Tianlala has seized the consumer psychology of "tasting explosive products at low prices" in the sinking market. If you want to drink the fleshy bayberry of Hey Tea for 20 yuan, Sweet Lala has the same product for 6 yuan; If you want to drink jasmine yogurt for 29 yuan, sweet lala has an avocado drink for 12 yuan......
Taking the "One Barrel of Fruit Tea" launched in 2021 as an example, it sold 400,000 cups on the first day of listing, and sold 120 million barrels within 15 months, directly driving the brand out of the circle, triggering 600 million topic discussions on Douyin, and more than 10,000 related notes on Xiaohongshu.
Source: Internet
However, this logic does not have "reproducibility", although "a bucket of fruit tea" can attract traffic, other products of Tianlala have not undertaken the traffic, and the core sales still rely on imitation of explosive products.
Take Tianlala (Changchun Grand Shopping Center store) as an example, Qingfeng Mobai monthly sales are 200+; A barrel of fruit tea sells 200+ per month; Super red cherries monthly sales 36; Fragrant coconut horseshoe popping beads monthly sales 18. Most non-imitation products hover between double-digit or even single-digit monthly sales.
Due to the use of all efforts to "go to cost", Tianlala can only suspend the shaping of brand power, one of the most intuitive manifestations is: many product recommendation accounts are actually operated by franchisees themselves.
After searching, the author found that there is a sweet lala franchisee account named "Swing Bad Man Xiaobo", which has been creating content around the store since June 2023, and the number of fans as of July 31 is 584,000, close to the official account, and its video likes are at the level of 10,000, compared with the video likes of the official account, which is basically in the triple digits.
Figure: Douyin account "Bad People Xiaobo"
Over time, Tianlala, which does not pay attention to brand promotion, is naturally labeled as "miscellaneous" and "flat" by consumers in the process of imitating other brands. "If Mixue Bingcheng makes this product, maybe netizens will say that it is surpassed. But the popularity of the sweet lala brand is not enough, so it may be called Pingti. Wang Wei said in an interview.
Although these labels did not affect the popularity of sweet lala in the sinking market in the early days, the situation has changed now, and many tea brands are eyeing the "fragrant bait" of the sinking market.
According to the data in the prospectus of the tea brand, 38% of the stores of Gu Ming are located in towns and villages far away from the city center; Shanghai Auntie also plans to expand its brand business to more third-tier cities and below. Limited by brand positioning and target sales groups, the main battlefield of Tianlala in the future will still be in the sinking market. The founder Wang Wei also said that Tianlala will not increase prices in the future, and will not enter first- and second-tier cities with high rents for the time being.
The pattern of the sinking market has changed, and if Tianlala wants to continue to be the "hegemon" of the sinking market, it is necessary to break free from the "non-mainstream" or "miscellaneous" consumer impression, and more importantly, instead of pursuing a blind low price, it is better to achieve the real ultimate quality-price ratio, which can trigger the word of mouth of consumers, rather than in exchange for a sentence of "cheap yes, but not delicious".
02 Exchange quality for quantity, and imitate for flow
In the absence of brand potential energy, relying on cost control, Tianlala expanded to 7,500 stores in only nine years, which can be described as a dark horse in the tea industry.
The choice of the "extremely low price" route is related to the early experience of the founder Wang Wei. In 2014, Wang Wei entered the tea industry and operated a number of Mixue Bingcheng franchise stores, and then had the idea of creating the "Sweet Lala" brand. Wang Wei himself admitted that at the beginning, Tianlala's products and business logic were imitating Mixue Bingcheng.
Founder Wang Wei (first from right) Source: Tianlala official website
The first is to learn from the low price of Mixue Bingcheng, attract consumers at a price far lower than that of other brands, and flexibly price according to the product matrix, and create explosive products through lower gross margins;
Second, at the level of operation and management, including site selection and employee compensation, efforts are made to reduce costs.
After the two-pronged approach, Tianlala not only punctured the price bubble in the tea market, allowing consumers to taste similar products at lower prices, but also stabilized its position in the fierce tea "price war".
Third, in terms of operation, under the tutelage of Mixue Bingcheng, Tianlala opened the franchise model in the second year of its establishment, and the threshold of the franchise model is low, and the requirements for education, experience, capital, store, etc. are relaxed, and many franchisees who have been rejected by other brands have been absorbed.
In 2024, Tianlala will launch a franchise fee-free policy, including equipment, management, deposit, materials and other expenses, in addition to rent and decoration, only 130,000 start-up capital is required. In addition, the company will also help franchisees in terms of operation, such as providing subsidies for opening and drainage, and holding 4 free activities for franchisees every year.
Relying on the enthusiasm of many franchisees, Tianlala embarked on the road of rapid expansion. In the year of opening to join, the number of stores grew to 92; In 2018, it broke the 1,000-store mark.
Source: Tianlala official website
However, the low threshold for joining also brings another challenge, the quality of franchisees is uneven, and the difficulty of management is greatly improved. In terms of black cat complaints, there are many complaints about the safety of sweet lala food and lack of service.
It is true that new tea brands often fall into food safety problems, such as Mixue Bingcheng and Tianlala, which are very close in terms of price, product and business model. Due to the different brand effects, consumers have different tolerances towards it. For example, when there is a quality problem in Mixue Bingcheng, there are voices in the comment area that say, "He doesn't think I'm poor, what qualifications do I have to think Xiaoxue is dirty" and so on.
On the other hand, Sweet Lala, although it also imitated Honey Snow Bingcheng to design the brand IP "Bear Black Egg" and the brand theme song "If you love her, bring her to Sweet Lala", its influence is far less than that of Honey Snow Bingcheng's Snow King IP and the popular sentence "You love me, I love you".
On the Xiaohongshu platform, there are 360 million views on topics related to "Snow King", only 32,000 views on topics related to "Bear Black Eggs", and there are almost no notes related to the theme song of Sweet Lala. Therefore, when Tianlala faced the same food safety problem, it received complaints and complaints from online blockbusters.
In 2021, due to improper management of franchisees, Tianlala frequently had product quality problems. Wang Wei once said that in order to solve the problem, the forced closure of stores was started, involving five or six hundred stores.
Although the franchisees attracted by the low threshold have catalyzed the scale of Tianlala's stores in a short period of time, the uneven quality of the franchisees makes it more difficult for consumers to form a brand perception of Tianlala.
In fact, judging from the large-scale closure of Tianlala's stores, it is not that it does not care about the level of operation and product quality. It's just that it lacks the blessing of brand power and the operation style of low price sinking, consumers always think that it is a small roadside store from a rural county, not a big brand that can do quality.
03 What is the basis for achieving the goal of 10,000 stores?
There is no "golden signboard", and there is a lack of word-of-mouth communication among consumers, and it cannot attract high-quality franchisees.
At this stage, in addition to increasing brand marketing, Tianlala has also begun to strengthen the construction of the supply chain system, the purpose of which is to:
While building brand power to attract consumers, while increasing the supply chain to enhance their own franchise competitiveness. After all, only after being "seen" by consumers and the market, Tianlala can get the possibility of being franchised, and strengthening the strength of the supply chain can increase the chips for Tianlala to seize the "opportunity to be seen".
Specifically, Tianlala has adopted the model of "self-production + core production area procurement", and has successively built tea bases and orchards, established packaging material companies, and increased capital investment to build a data center. Not only that, Tianlala is also trying to build an advanced warehousing and logistics network system that comprehensively covers the eastern region.
Pictured: Tianlala Headquarters Park
"Retail Business Finance" believes that not only the low-price model, but also the "profit" idea of Tianlala is also the same as that of Mixue Bingcheng. You must know that the biggest business of Mixue Bingcheng is to sell consumables, which is the "invisible currency" issued by Mixue Bingcheng, and the convergence of business models determines that Tianlala, like Mixue Bingcheng, has gradually become a "store" company.
It's a pity that the potential of Tianlala's supply chain is restricted by brand capabilities and has not been fully activated, and it is in an embarrassing situation of "low-price model and means to build brand power are contrary".
As a franchisee said, although the supply chain has been strengthened, the gross profit of the product has gradually increased, but the popularity of Tianlala in the field is low, the sales cannot be raised, and the overall profit is not optimistic when it comes to labor and rent. As a result, foreign franchisees are facing a higher risk of survival.
On social media platforms, there are not a few posts about "joining Tianlala need to be cautious" or Tianlala's closure and transfer.
Source: Little Red Book
In addition, Tianlala's overseas and listing plans have also put forward higher requirements for the strength of the brand and supply chain.
As of March 2024, Tianlala's first stop in the overseas market, Jakarta, Indonesia, has successfully landed and steadily expanded, with the number of stores increasing to 13, and at the same time, the first store in the Philippines is also in the pipeline.
There are great opportunities and challenges for going to sea. New tea brands going overseas face challenges such as supply chain, raw materials, consumer groups, and team building. Not only do we need to rebuild our overseas supply chain and overcome the differences in the quality of raw materials, but we also need to adjust our brand image to suit local aesthetics, which is a great test of the brand's comprehensive operational capabilities.
At the same time as the announcement of the overseas strategy, Tianlala also revealed its plan to sprint to the capital market in 2025. However, the current attitude of the capital market towards new tea brands has quietly changed, no longer focusing only on the "illusion" of store size, but more rationally examining the sustainability of the brand's business model and its inherent "hematopoietic" ability.
In the final analysis, Tianlala's ideal "10,000 store scale" may not be able to impress investors, and how to form brand potential energy and form a virtuous circle of "brand, consumers and franchisees" is the problem that Tianlala needs to face at present.
The white label that started by imitation and low price either ends its career after making a wave of quick money, or it takes a long-term route to do quality and branding, and Tianlala is obviously the latter. However, in order to eliminate the label of "flat", Tianlala should not only do marketing and promotion, but also innovate in product categories, so that consumers can realize its ability to innovate independently.
At the same time, the core of brand power building is still its own products are of high quality, low price, affordable and high quality, which requires strong cost control and supply chain strength as support.
The competition in the tea industry is still intensifying, and the phenomenon of involution is becoming more and more significant. Whether it can stand out in the fierce competition and open up a unique development path depends on whether Tianlala can really conquer the "brand power".