The grass and trees in the world are called "tea", and the grass and trees have withered and prospered, and the tea industry will naturally rise and fall.
After experiencing a period of "lively" industry for several years, such as frequent Internet celebrities, permanent hot searches, brainwashing in divine comedy, and long queues, the new tea industry is currently showing a phased slowdown in growth rate. Quiet" period.
However, the heat is still there, and the dividends are still attractive.
Today, the top brands of new tea drinks have become more and more full-fledged, and the competition between brands has escalated.
Entering 2022, when the costs of major raw materials, labor, transportation, energy, etc. continue to rise, even the old-fashioned milk tea company, "the first share of A-share milk tea" Xiang Piao Piao can't bear the pressure and choose to raise prices, many new teas. Drinking brands have chosen to go against the market, and have played the "price reduction" card one after another.
Hey Tea and Nai Xue's tea "completely bid farewell to the era of 30 yuan", what is pressed is a new round of traffic war, what is the truth of the business war behind the civilian line?
The three new tea drink giants bid farewell to the era of 30 yuan
It is rare to have a weekend without overtime. Xia Nan (pseudonym) plans to have afternoon tea with Murong Xi (pseudonym), a classmate who has not seen her for a long time, and will name milk tea.
Nai Xue's tea is ringing the bell on the Hong Kong Stock Exchange. Behind it is a new tea brand carrying the banner of "changing lifestyle", quietly occupying the minds of consumers, and has countless fans - the team ordered a table of HEYTEA to be delivered during the celebration , When shopping at Hopson, consumers don't forget to pack a Lele tea before leaving...
The wings of the new tea head brands are becoming more and more full, and the competition between brands is also escalating.
Entering 2022, when the costs of major raw materials, labor, transportation, and energy continue to rise, the "price reduction" brand has been launched by China's high-end new tea drinks.
HEYTEA took the lead in piercing the window paper in February, and Nai Xue's tea then chose to "completely bid farewell to the 30 yuan era".
The Beijing News Shell Finance reporter noticed that 15 yuan to 25 yuan has become the mainstream price band of HEYTEA, and Nai Xue's tea has launched an "easy purchase" series, and promised to launch a new "1 prefix" product every month.
In March, Lele Tea's "price reduction" seems to be even bigger. It announced in the statement of no quality discount: the price of some drinks has finally been controlled below 20 yuan, and you can drink a cup of freshly extracted jasmine green for a minimum of 8 yuan.
Regarding this change, Lele Tea CMO Guo Sihan told the Beijing News Shell Finance reporter that Lele Tea made a product line adjustment some time ago.
The addition of this product line is not just a price adjustment, but also promises to insist on using fresh fruit and good tea.
"Lele Tea's menu products are rich, new products are added every week, and there are products for users to choose from each price band."
The price cuts and new product lines are just the overtones. The three new tea drink giants have already set their sights on "affordable products", trying to provide consumers with a wider price band and a lower consumption threshold.
Product price cuts, "explosive orders" hit.
Chen Xiaolei, the tea-related person in charge of Nai Xue, told the Beijing News Shell Finance reporter that since the launch of the Easy Series, the number of takeaways and store orders has increased significantly, especially during the peak hours of orders such as lunch and holidays, in order to ensure good customers. experience, and sometimes have to temporarily close the online ordering business.
"Within a few days after the announcement of the price adjustment, HEYTEA's stores in many places across the country continued to explode orders. Many stores in Beijing, Chengdu, Jinan, Shenzhen, Guangzhou, Shanghai and other cities across the country had too many orders because of too many orders. We can choose to temporarily close online ordering. Therefore, we have rationally allocated the number of employees in some stores." Cheng Hao, senior director of HEYTEA, told the Beijing News Shell Finance reporter.
"Affordable products" become traffic passwords
In recent years, in order to win this traffic war, new tea brands have frequently used marketing tricks, such as celebrity endorsements, IP creation, cross-border co-branding, helping niche fruit out of the circle, and building a "milk tea social" scene... The distance of Generation Z captures the stomachs and hearts of young people.
There are many doubts and concerns in the market around this price cut.
"The increase in cost is visible to the naked eye. Will the price cut reduce the quality?" "Is it because no one has paid for the high-priced product, so I was forced to reduce the price?"
In this regard, Heytea, Lelecha, and Naixue's tea gave almost unanimous answers, "This price adjustment is based on the accumulation of brand, digitalization and supply chain, and does not affect product quality and materials."
On the surface, after years of exploration and accumulation, the leading brand of new tea drinks has established a cost-effective supply chain system, so as to choose to share dividends with consumers, thus launching products with "high quality and low price".
From a business point of view, the logic is not so simple.
"For HEYTEA and Nai Xue, adjusting the cup type and launching products with smaller capacity will not affect the cost, but only affect the unit price of the customer. This is worthwhile. First, the two brands have a large volume and a large number of stores. , the economy is not very optimistic due to the impact of the epidemic, and the tea industry will also have cyclical fluctuations, and it is difficult for the overall store to acquire customers, so the threshold for acquiring customers is lowered.” An industry insider analyzed Shell Finance reporters.
Customer acquisition has become the key for tea giants to "reduce their stature".
Wu Daiqi, CEO of Shenzhen Siqisheng Company, told the Shell Finance reporter that brands such as Hi Tea have successively cut prices in order to expand the customer base.
When some mid-to-low-end brands have to raise prices due to rising costs, these original high-end brands cut prices, further narrowing the price gap with mid-price brands, and are expected to attract new customers to try.
As for the cost pressure of enterprises, Wu Daiqi said that whether the price reduction of products will aggravate the cost pressure of enterprises depends on the original profit situation of the enterprise.
If the original operating efficiency of the company is relatively high and the profit margin is relatively large, the store customers will increase and the revenue will increase through certain profits, which can cover the decrease in revenue caused by the price reduction.
On the other hand, companies have actually made certain improvements in their products, so it is possible that the cost of formulas has dropped.
Financial commentator Zhang Xuefeng and chain industry expert Wen Zhihong believe that small profits but quick turnover itself is a classic marketing strategy. It is actually a wise move for HEYTEA to make themselves more accessible and popular by reducing prices.
In fact, as far as new tea brands are concerned, "the height is too cold" is becoming more and more apparent.
The customer base behind affordable products is a new battlefield for traffic.
The "2020-2021 Chinese New Tea Industry Development Report" released by NCBD (Meal Collection) shows that in 2020, nearly 60% of consumers can accept milk tea of 10 yuan to 15 yuan the most, and the market below 20 yuan accounts for more than 80%.
"User stickiness in the tea beverage industry is not high, which requires brands to continue to promote new ones. At this stage, the top brands of new tea beverages have realized that this is a traffic competition. Therefore, by reducing prices, such as A topic that is very eye-catching and easy to attract public attention to do event marketing is a very good way to attract new people.” An industry insider analyzed Shell Finance reporters.
Expansion and pressure behind "fever reduction"
After Nai Xue's tea was listed, the capital moves of Hey Tea and Lele Tea still stayed last year.
In June 2021, it was reported that HEYTEA's latest round of financing was about to be finalized, and the valuation reached an unprecedented 60 billion yuan, which once again set a new financing record for China's new tea drinks.
In September of that year, it was reported that Lele Tea was discussing with banks to list in Hong Kong as soon as next year, and planned to raise 300 million to 500 million US dollars through IPO.
However, both companies denied the news.
Under the new crown pneumonia epidemic, the life of new tea companies is not easy. Nai Xue’s tea lost about 145 million yuan in net profit last year. Lele Tea withdrew from the Guangzhou market not long ago, and Hi Tea was also exposed at the beginning of the year. The news of a large number of layoffs.
At that time, HEYTEA responded that "there is no so-called major layoffs in the company, and a small number of staff were adjusted to normal staff adjustment and optimization based on year-end assessment."
The B side of the phased slowdown in the growth rate of new tea beverages is the more intense R&D competition and market expansion.
The Beijing News Shell Finance reporter learned from insiders that Nai Xue's tea has already started to reduce the price in January before the new year (Lunar New Year), and after the new year (Lunar New Year), HEYTEA is the first to officially announce the price reduction, and Nai Xue's tea is unwilling. Follow up weakly.
From the speed of new products, the number and scale of stores, the location of stores, to product marketing methods, the construction of supply chains, and the improvement of digital capabilities, the "competition" between new tea brands is everywhere.
For the top brands, even in the cooling-off period of the industry, the staking cannot be stopped, and the market share is related to the life and death of the brand.
From the point of view of the number of stores, at present, HEYTEA has opened nearly 900 stores in more than 70 cities around the world; as of the end of last year, Nai Xue's Tea had 817 stores in 80 cities, and plans to open 350 new stores in 2022 .
Lele Tea has 100 directly-operated stores, and has deployed in 14 first-tier and new first-tier cities including Shanghai, Beijing, Hangzhou, Suzhou, Nanjing, and Chengdu.
In 2022, Lele Tea will further increase the speed of store opening, focusing on the first- and second-tier markets in East China, and opening 250 stores.
In recent years, the new tea industry has become one of the hottest tracks in the venture capital circle.
According to the statistics of the Red Food Brand Research Institute, as of November 25, 2021, there will be 32 financings in the new tea beverage industry in 2021, with a total disclosed amount exceeding 14 billion yuan. The number of financing events and the disclosed financing amount are already higher than 2020. Throughout the year, it reached its peak in the past 10 years.
The track is crowded and the competition is brutal.
This wave of price cuts caused by HEYTEA and others has also sparked new thinking in the industry, "Has the competition for the new tea drinking track entered a white-hot stage?" How much impact does the city have?
Bai Wenxi, Chief Economist of IPG China, believes that the price cuts of HEYTEA and other brands can be described as a dimensionality reduction blow to affordable tea companies such as Chayanyuese and Mixue Bingcheng. On the one hand, they will erode and crowd out these affordable teas. The corresponding market share of enterprises, on the other hand, will also bring huge pressure on the market expansion of these cheap tea drink enterprise brands.
"Brands such as HEYTEA have strong potential. According to my observation, after the price adjustment, the traffic of many of their stores has increased a lot. If the market is compared to a cake, some people will share more and others will share less. For brands in the affordable product area, it is bound to bring pressure and challenges." said Wen Zhihong.
However, Wu Daiqi has a different opinion. He believes that strictly speaking, there is still a big price gap between brands such as HEYTEA and brands in the price range of 10 to 16 yuan, and they are not necessarily the same consumer group.
And consumers who pay attention to price may not buy it many times even if they have tried high-end milk tea.
Therefore, it is difficult to say that the price reduction of HEYTEA will have a great impact on the color of the tea.
Facing the price cut cards thrown by the leading brands, Chayan Yuese, who just raised the price at the beginning of the year, said that he would face market competition with a "normal mentality" and "do things that match his own actuality and ability", and pointed out that "although the price It is relatively close, but each brand’s own situation is different, including business philosophy, development direction, etc.”
Four or two thousand-pound replies lead the question to another direction. How should milk tea companies build their own moats?
After all, competition will not disappear, and its own strength is strong enough to develop in the long run.
"Milk tea shop brands belong to chain enterprises. To establish their own competitive advantages, in addition to the scale advantage of the chain, the successful model of a single store is still very important, including a series of contents such as store image, business district location, products, and operational efficiency. " Wu Daiqi pointed out.
In the fancy competition of brands, it is still this golden land that is fancy.
The "2021 New Tea Drinks Research Report" released by the China Chain Store & Franchise Association shows that from 2017 to 2020, the scale of my country's new tea drink market revenue increased from 42.2 billion yuan to 83.1 billion yuan, and is expected to reach 142.8 billion yuan in 2023.
However, in the next 2 to 3 years, the growth rate of new tea beverages will gradually slow down and be adjusted to 10% to 15%.
According to the analysis of the report, from the perspective of enterprises, in the face of intensified competition, high rent, limited talent pool, food safety management that needs to be further strengthened, and high proportion of takeaways and low profits, rapid growth will have great management risks. ; From the perspective of external competition, the consolidation of the sinking market and the development of the western and northern markets all require market verification.
"If companies solve important issues such as branding, operational capabilities, and food safety management in the next 2 to 3 years, the growth rate of the new tea industry will quickly return to more than 15%," the report said.
Beijing News Shell Finance reporter Yan Xia