A cup of milk tea and fruit tea, which cost more than 20 yuan at every turn, have begun to lower their prices, and 10 yuan to drink a cup of milk tea is no longer a dream.
The new tea drink opened the "ten-yuan era", and this industry that was "rolled" to boil is not having a good time at the moment.
Recently, two listed companies in the new tea beverage industry, Nai Xue's tea and tea Baidao, released their 2024 semi-annual reports, of which Nai Xue's tea lost 440 million yuan during the period, and tea Baidao also saw a decline in revenue and net profit.
This "chill" of the industry has also spread to the capital market, and since the beginning of this year, among the brands that have submitted prospectuses, only one of them has been listed.
A large number of stores were closed and prices were slashed
In the past 90 days, the number of newly opened stores of Shuyi Xiancao is 496, but the number of closed stores is as high as 1,605, and some media have even exposed that the second-hand equipment of its franchisees is unsalable. At the same time, Nai Xue's tea, the first share of new tea drinks, also closed 48 directly-operated stores in the second quarter of this year.
According to the data of Narrow Door Restaurant, as of the first half of this year, the total number of stores in the mainland milk tea track reached 418,000, and 167,600 new stores were opened in the past year. It is worth noting that the net growth of bubble tea shops in the past year was only nearly 30,000, which means that nearly 140,000 stores in the entire new tea industry have closed.
Behind the closure of a large number of stores, the capacity of the new tea beverage industry may tend to be saturated, and it is gradually entering a new stage of stock competition. iResearch previously predicted that from 2023 to 2025, the market size growth rate of the new tea beverage industry will be 13.4%, 6.4%, and 5.7% respectively, and the growth rate will slow down year by year.
The research report of SDIC Securities pointed out that the main driving force for the growth of new tea beverage brands still comes from the opening of B-end stores, and franchisees have become the key to the brand's staking of land. For example, Chabaidao said in the semi-annual report that considering the impact of consumer habits on the company due to changes in the external environment, in the first half of 2024, the company will increase policy support for franchisees and preferential efforts to sell goods and equipment to franchisees, and at the same time share marketing activities with franchisees in the form of material sales subsidies. According to the financial report, the distribution and sales expenses of tea Baidao in the first half of 2024 will be 105 million yuan, an increase of 140.2% from 43.83 million yuan in the first half of last year. While reducing the fees for franchisees, Chabaidao continues to increase marketing expenditures.
Industry insiders believe that there are many entrants in the new tea beverage industry, and the product differences between brands are small, and it is difficult for consumers to form a high loyalty to a brand. Enterprises need to continuously invest a lot of money in marketing and promotion in order to stimulate the consumption desire of the target customer group. In addition, in order to compete for market share, brands have started a "price war" to compress profit margins, which is also the reason for the difficulty in making profits for new tea beverage companies.
"In Xiamen, after a certain product of ours is subsidized by the supplier, the price is less than 10 yuan." A related business person of a milk tea brand said that the industry is too volatile and has to implement a low-price strategy.
According to Red Meal Big Data, from 2020 to 2023, the proportion of consumption of new tea brands below 10 yuan will increase from 7.1% to 29.6%, and the proportion of more than 20 yuan will decrease from 32.7% to 3.6%.
It is difficult to accommodate at home, and the "volume" goes overseas
Although the growth rate of the new tea beverage market is slowing down, it is an indisputable fact that the leading enterprises are still speeding up the staking and becoming more and more involved in various ways, constantly making efforts from multiple dimensions such as products and franchises, and striving to further enhance brand influence and market share in the fierce market competition.
At present, the domestic new tea market has begun to show a trend of supply exceeding demand. According to the data of Narrow Door Restaurant, in the current new tea beverage market, the top three stores are Mixue Bingcheng, Ancient Tea, and Tea Baidao, with the least number of stores, more than 8,500, and the number of stores of new tea brands such as Shanghai Auntie, Shuyi Yao Xiancao, Bawang Chaji, and Hey Tea has also reached more than 4,000. The reporter noticed that in a large shopping mall in Qingdao, dozens of new tea stores of different brands can be seen, which not only have a high degree of homogeneity, but also have almost the same products and prices.
It is worth noting that after hitting the ceiling of the growth of the stock market, new tea brands have "gone overseas" to expand the market.
As of the end of the third quarter of last year, Mixue Bingcheng has opened about 4,000 stores in 11 overseas countries.
Chabaidao regards 2024 as the first year of its internationalization strategy, plans to open up to 30 stores in Korea, and accelerate the layout of the second batch of target markets in Viet Nam, Malaysia, Indonesia, etc.;
Heytea has also laid out nearly 30 stores overseas; Bawang Chaji has more than 100 overseas stores in Malaysia, Singapore and Thailand, with Malaysia having the largest number of stores. "We plan to provide 15 billion cups of modern oriental tea to consumers in more than 100 countries and regions around the world every year in the future," said Zhang Junjie, founder and chairman. ”
According to the plan, Bawang Chaji will open stores in eight Asian countries, including Singapore, Malaysia, Thailand, Indonesia, Viet Nam, the Philippines, Japan and Korea.
According to an insider of a new tea brand, the overseas new tea market is relatively not so volatile, with more space to be developed, higher customer unit prices than domestic ones, and a shorter payback cycle for opening stores.
The domestic market is not moving, and overseas is of course one of the options for brand expansion. It's just that when everyone has chosen this path without exception, they will continue to roll in the overseas market.
The capital chill is also strong, and it is even more difficult to go public
Not only is the performance in the terminal market declining, but the cold wave of new tea drinks in the capital market has also hit.
In the first half of the year, Naixue's tea revenue fell 1.9% to 2.544 billion yuan from 2.594 billion yuan in the same period last year, and the adjusted net profit changed from a profit of 70.2 million yuan in the same period last year to a loss of 437 million yuan in the same period in 2024.
Judging from the stock price, it is even worse. From mid-March to the end of August this year, Nai Xue's tea stock price plummeted by more than half, and investor confidence can be described as relatively weak.
For new teas that are busy coming to market, the market situation is not friendly. The Hong Kong listing of tea chain brands can be described as a "collective cliff". On January 2 this year, Mixue Bingcheng and Gu Ming submitted a prospectus to the Hong Kong Stock Exchange at the same time, and then on February 14, Shanghai Aunt also submitted a prospectus to the Hong Kong Stock Exchange. But so far, only Chabaidao has passed the hearing of the Hong Kong Stock Exchange in March and successfully listed on April 23. The listing application documents submitted by Mixue Bingcheng, Gu Ming and Shanghai Auntie on the Hong Kong Stock Exchange have all expired.
Single-mindedly trying to launch a new tea drink that replenishes blood has a long way to go, and even becomes far away. Taking Shanghai Auntie as an example, public data shows that up to now, Shanghai Auntie has completed four rounds of financing, with a total of 480 million yuan and a valuation of about 5 billion yuan. It's a pity that now even the market value of Nai Xue, the "first share of new tea drinks", has fallen to only 2.5 billion.
Even the tea and joy that often triggers a queue boom, capital seems to have lost patience. Some time ago, the company to which Chayan Yuese belonged changed shareholder information one after another, and investment institutions, including Shunwei Capital under the name of Lei Jun, withdrew from the ranks of shareholders, and the company's registered capital decreased from 7.01 million to 5.067 million.
Some industry insiders said that the homogeneous competition in the tea track has entered a white-hot stage, and enterprises need to continuously replenish funds to invest in expansion and price wars. However, in the overall cold environment of consumer investment in the primary market, it is difficult for VC/PE to continue to add to tea companies, and listing and financing has become a process that has to be promoted.
Therefore, the listing must continue to "gamble" and fight. Zhu Yonghua, the founding partner of Meituan Longzhu, the investor of Mixue Bingcheng and Gu Ming, publicly stated that the company's situation is normal and will resubmit the listing application; Wei Zhe, a partner of Jiayu Capital, an investor in Shanghai Auntie, also said that Shanghai Auntie will re-apply for listing.
(Popular News · Fengkou Financial Reporter Wang Beibei)