In just over half a year, traditional Chinese medicine milk tea has cooled down sharply from a hot spot, a large number of shops have closed down, and entrepreneurs have lost their money. What is the reason for the ups and downs of the Chinese medicine milk tea market? What are the key issues exposed?
Source: Diagnostics
Editor: Lingxing
Cover source: Little Red Book
"Invested 100,000 yuan to join the Chinese medicine milk tea brand, and at the beginning of the opening, there was a lot of traffic relying on marketing popularity and group buying, but after the event, the customer flow plummeted, and only 5 yuan of sour plum soup sold slightly better, and other products were ordered less. The competition among peripheral brands is fierce, and they began to rely on coupons and group purchases in July to continue their lives, and closed their stores due to a typhoon in September, and the equipment worth more than 60,000 yuan when they joined changed hands and only sold for more than 7,000. ”
In recent years, with the concept of health preservation deeply rooted in the hearts of the people, a series of innovative drinks and foods with traditional Chinese medicine as elements have quickly become popular in the market, among which traditional Chinese medicine milk tea is particularly eye-catching. However, this boom did not last long, from the explosion of popularity to batch bankruptcy, Chinese medicine milk tea and similar "Chinese medicine +" catering products are experiencing a fierce market baptism.
The rise of a new track of health preservation
Traditional Chinese medicine milk tea started a boom
Young consumers' emphasis on health and wellness has made traditional Chinese medicine milk tea gradually popular. Since the end of last year, traditional Chinese medicine milk tea has gradually become popular on social media and has become the new favorite of young people vying to check in. Combining traditional Chinese medicine and modern beverage technology, the merchant has developed a variety of flavors of health milk tea, such as Silver Lotus Milk Tea, Bohol Milk Tea, Shuixing Milk Tea, etc., which are matched with different ingredients and effects according to the needs of different physiques.
Image source: Xiaohongshu netizens shared
A cup of traditional Chinese medicine milk tea, with its novel concept has attracted a lot of attention, opened up a new market area, not only to meet the needs of young people for "milk tea and health", but also has a certain health care effect, many Chinese medicine halls have also launched a variety of "health tea", major brands such as "open a prescription" and "Qingnan · five-flavor tea" and so on quickly seized this market opportunity, have launched their own traditional Chinese medicine milk tea products.
According to a report in August 2023, brands such as Jiangsu Bailitang Traditional Chinese Medicine Museum's health tea drink "Kai Yi Zi" and Yunnan Chinese herbal tea shop "Qingnan Wuwei Tea" are focusing on franchise promotion. At that time, the health tea brand Chunfeng had already broken through 100 stores, and "Hetian Shuipu" and "Yifang Four Seasons Materia Medica Light Tea" under Sinopharm Guangdong Yifang Pharmaceutical were also steadily expanding stores. "The first in Nanchang", "the first in Wuxi", "the first in Chengdu" and other places began to emerge the first store of traditional Chinese medicine milk tea.
With the rapid increase in the number of traditional Chinese medicine milk tea stores, a large number of traditional Chinese medicine milk tea entrepreneurship and check-in records have appeared on social platforms, and topics such as "post-90s entrepreneurial Chinese medicine milk tea shops with a daily income of 1000+", "traditional Chinese medicine milk tea half a month return to capital" and "check-in young people's health milk tea" have attracted a lot of attention. As if overnight, Chinese herbal milk tea has become a hot market outlet and has quickly become a hot spot in the market.
However, the good times did not last long, and in just over half a year, the Chinese herbal milk tea market experienced a sharp cooling.
From scorching heat to drastic cooling
The market for traditional Chinese medicine milk tea has risen and fallen
Traditional Chinese medicine milk tea has become a new favorite in the market in a short period of time, but its popularity did not last long. A large number of Chinese herbal milk tea shops have fallen into a situation of closure and loss. According to reports, many entrepreneurs invested hundreds of thousands of yuan to join the Chinese medicine milk tea brand, but not only failed to return their capital, but lost their money in a short period of time. Some stores had to close their doors after less than three months of opening, making it difficult to maintain basic operations with an average daily turnover, and became victims of the market bubble.
Image source: Xiaohongshu netizens shared
An entrepreneur joined a traditional Chinese medicine milk tea shop in Ningbo, and invested nearly 400,000 yuan before and after, including a franchise fee of 40,000 yuan, a deposit of 10,000 yuan, an equipment fee of 80,000 yuan, and the first batch of raw material costs of 60,000 yuan, as well as training fees, service fees, store decoration and rent. The store opened in the snack street, and I thought that the flow of people was guaranteed, but the actual daily turnover was only 200 yuan, and then it couldn't even go to the triple digits, and it closed before August.
A post-90s generation joined the Chinese medicine tea brand last year and invested 200,000 yuan, including franchise fees, brand fees, store decoration fees, equipment purchase fees, etc. It is expected that the return cycle will be about a year, and the average daily order will be 7 or 80, but in fact, in addition to the opening of some heat, there is almost no customer flow, and I want to give up after 1 month of opening, and I will lose all my money in 3 months.
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The rise of TCM milk tea relies heavily on its novel concept and health labeling, but in practice, many products do not really meet consumer expectations. The combination of low material use, little effect, name gimmick, and high price has led to a low repurchase rate. It's hard for consumers to pay again after the first attempt. This means that although TCM milk tea once attracted attention in the market, its appeal will soon fade without substantial product support.
Although health preservation is a hot topic among young people at present, most people's health behavior is still "three days of fishing and two days of drying nets". As a non-rigid product, the continuous demand for traditional Chinese medicine milk tea is not high. Once the novelty wears off, market demand quickly declines. Therefore, the market demand for traditional Chinese medicine milk tea is not stable, and it is difficult to rely on temporary hot spots to maintain long-term operation.
With the popularity of traditional Chinese medicine milk tea, more and more brands have poured into the market, and the phenomenon of product homogenization is serious. Whether it's staying up late, Yuanqi tea, or other traditional Chinese medicine drinks, almost every one has a similar product and lacks a unique competitive advantage. In the fierce market competition, it is difficult to stand out, making the competition between brands more intense.
Joining a Chinese herbal milk tea brand usually requires a high initial investment, including franchise fees, brand fees, store decoration fees, equipment purchase fees, etc. However, due to limited market demand, fierce competition, and problems with the product itself, many stores struggle to achieve profitability. At the same time, the store has a single profit model and poor anti-risk ability, and it is easy to fall into trouble once the market changes. This means that the high initial investment does not bring a corresponding return, but instead increases the financial pressure on the operator.
Some netizens said:
Although Chinese herbal tea drinks focus on the concept of health preservation, not everyone likes the Chinese medicine version of the drink. For example, some consumers said that the Chinese medicine version of sour plum soup is "too sour and has been infiltrated by Chinese medicine", and they need to bring their own rock sugar, and the taste is still the primary pursuit of young consumers.
The rapid rise and fall of the Chinese herbal milk tea market has exposed a series of key issues. First, the quality and positioning of the product itself are very important; Second, the stability of market demand cannot be ignored; Third, the fierce market competition requires products to have unique competitive advantages; Fourth, the diversification of profit models and the ability to resist risks are the key to long-term operation. Only by solving these problems can the Chinese herbal milk tea market truly usher in healthy and sustainable development.
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Source of this article: Diagnosis lock boundary
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