The competition is in full swing and the development is facing challenges
New Tea Drinks: From "Wind" to "Crossroads"
Our reporter Yang Ranran
"Workers Daily" (February 22, 2022 Edition 07)
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After several years of rapid development, the market size of new tea drinks has grown rapidly, and competition has become increasingly fierce.
The competition in the new tea drinking track is already a red sea, and many companies have begun to explore diversified and differentiated operations to find new market growth points.
Shortly after the start of 2022, the new tea market staged a magical scene.
As of February 11, Nai Xue's tea fell to HK$7.38 per share, less than half of the issue price of HK$19.8 a year ago.
Nai Xue’s tea announced that the group expects a net loss of about 135 million to 165 million yuan in 2021.
Hey Tea is also facing the same embarrassing situation as Nai Xue's tea.
Just after the Spring Festival, rumors of layoffs at HEYTEA continued.
Unlike the two former new tea drink stars who showed signs of fatigue, some media reported that the new tea drink brand Book Yi Shao Xiancao received an investment of over 600 million yuan a few days ago, with a valuation of 10 billion yuan.
With the strategy of "surrounding cities from rural areas", Michelle Bingcheng, which has been running all the way from small and medium-sized counties to first- and second-tier cities, has started listing counseling, and the next IPO in the new tea industry is coming.
Half sea water, half flame, the competition of new tea brands is in full swing, and the new tea track seems to have reached a "crossroads" from the "wind".
price war intensifies
On January 5, Tea Yanyuese, which is affordable to the people, issued an announcement announcing a price increase, mainly focusing on milk tea products, and most products were generally adjusted by 1 yuan.
In fact, it's not just the Chayan Yuese family that has raised prices at the same time.
Recently, some consumers found that 1:00 has quietly raised the price of some products; Xiang Piao Piao recently announced that the price of the main products of solid brewed milk tea will be increased by 2% to 8%... These brands mainly attribute the price increase to raw materials, etc. Costs continue to rise.
In contrast, on January 7, some consumers found that HEYTEA, which used to be the "price ceiling" of new tea drinks, quietly lowered the price, and the prices of some products were reduced by 1 to 7 yuan. Ordered pure tea products within 10 yuan.
After Hey Tea, Nai Xue's tea also launched products below 10 yuan.
Recently, on Nai Xue's tea applet, a number of tea products have experienced significant price reductions.
Among them, tea and coffee with the lowest price are only 9 yuan.
The price cuts of two new leading tea brands have sparked heated discussions in the market.
The products with the lowest price not only crossed the price range of tea and pleasant colors, but also directly hit the hinterland of Michelle Ice City.
Between the rise and fall of the price, the new tea industry, which was originally involution, fell into a more intense price war.
Decisive battle in the mid-market
After several years of rapid development, the market size of new tea drinks has grown rapidly.
According to iiMedia Research, China's new-style tea market will reach 279.59 billion yuan in 2021, and it is expected to exceed 300 billion yuan in 2022.
According to Tianyancha data, in 2021, nearly a dozen financing events will occur in the track, with a total financing of over 800 million yuan.
The reporter's investigation found that the new tea industry can be roughly divided into three price bands based on the unit price of customers: the low-end market below 10 yuan, which is firmly controlled by Michelle Bingcheng, which covers the most extensive and numerous cities and consumer groups. Huge; in the high-end market of more than 20 yuan, HEYTEA and Naixue's teas form a dual-male pattern, firmly occupying the high-end image position in consumers' minds; in the mid-end market of 10-20 yuan, there are many entrants, and it is also a fight most intense field.
According to the "2020-2021 Chinese New Tea Industry Development Report" released by Meal Collection, in the acceptable price range for a single cup of milk tea, the proportion of consumer groups corresponding to 10-15 yuan is 57%, and the proportion of consumers corresponding to 15-20 yuan is 57%. Consumer groups accounted for 27%.
It can be seen that the mid-end price band is the mainstream consumer market for new tea drinks.
Faced with such an attractive market share, it is not surprising that high-end new tea brands are tempted.
If the top brands want to maintain profit growth and occupy more market share, they can only continue to explore the sinking market and provide consumers with cost-effective products.
And their "sinking" into the mid-end market has brought a huge impact on mid-end brands such as Chayanyuese, Chabaidao, Coco, and Gu Ming's tea.
For low-end milk tea brands, it is more to reduce costs and maintain profitability through economies of scale.
However, under the reality of rising raw material costs, it faces the pressure of shrinking profits, and product upgrades are also imminent.
Some industry experts believe that whether the price increase of Tea Yanyue or the price reduction of HEYTEA is a microcosm of the current development of new tea brands.
It is foreseeable that the competition in the mid-end market of new tea drinks will become more and more intense.
Differentiated scene coding
The competition in the new tea drinking track is already a red sea. The price is adjusted in the same direction. The narrowing of the price difference may bring about product convergence and blurred positioning. The competition is becoming more and more fierce, and the products are seriously homogenized.
Many companies have begun to explore diversified and differentiated operations to find new market growth points.
"Tea + Baking", "Tea + Coffee", "Tea + Alcohol", these are all attempts and explorations by new tea brands, such as HEYTEA's launch of coffee and cocktail products.
Nai Xue's Tea has launched a boutique coffee series, featuring signature items such as raw coconut latte and thick milk latte, as well as selling zero-calorie sparkling water and opening izakaya.
At the same time, new tea brands hope to occupy more consumer scenes in consumers' life.
For example, HEYTEA has successively launched retail products such as biscuits, french fries, and popcorn, and launched sugar-free sparkling water, which has filled various convenience stores.
Nai Xue's Tea has also opened the country's first DreamWorks in Shenzhen Coastal City. DreamWorks products cover more than 1,000 products in the fields of baking, steak, retail, wine, tea and coffee.
The "2021 New Tea Drinks Research Report" released by the China Chain Store & Franchise Association shows that the growth rate of the new tea drink market in 2020 will be 26.1%, and the growth rate will drop to about 19% from 2021 to 2022. The market growth rate is slowing down in stages.
How to find a breakthrough in the fiercely competitive market and find new development increments?
Be the challenge that every new tea brand must face.