Ups and downs: the entrepreneurial history of a cup of milk tea
The brand in the new tea drinking era continues to iterate, and the entry of capital intensifies the fierce competition in the industry. The "second half" innovation competition will be a game for leading companies
More than ten years ago, there were such a group of young people who smelled the milk tea business earlier, not only found a way to start a business, but also cultivated the consumption habits of milk tea everywhere.
As an early entrepreneur, Wu Jian witnessed the brutal growth stage of the tea industry from "low quality and low price" and "powder blending", to learning management experience from Taiwan-funded brands, and then to the birth of leading brands leading the industry to upgrade and innovate. The whole process of the new tea drinking track.
After experiencing a wave of capital running into the market and the climax of brand staking, he also felt the serious involution and the difficulty of making profits after the tide recedes.
Today, the tea industry has entered the "second half".
From the perspective of the industry, it is difficult to run out a new brand with a scale of tens of thousands. In the future, innovation will be a game between leading companies.
From starting a business to reshuffling the industry, what happened in this cup of milk tea?
Founders of tea brands such as Wu Jian, Hu Jihong and Tan Li told their stories.
savage growth
At present, due to the epidemic, the Shanghai area of throbbing burning fairy grass has closed warehouses and stores. Wu Jian, the co-founder of the brand, described it as "nervous".
He and the team are always preparing for the resumption of work through live pre-sale and other forms.
On the evening of April 9, Wu Jian stared at the live broadcast screen on his mobile phone. When the news of the pre-sale of more than 10,000 single tea coupons reached his ears, he had a hunch that retaliatory consumption after the epidemic was coming.
Thrilling Burning Immortal Grass is a Shanghai tea brand, but Wu Jian is an authentic Fujianese.
In my childhood memory, my grandmother would pick fairy grass from the mountain every summer. "After cooking, soak it in well water, add a little honey, and you can eat it after a dozen."
Such a sparse and ordinary bowl of "jelly" was only two or three cents on the street at that time.
It was not until my brother was admitted to university that the brothers saw a small shop opened by a Taiwanese couple at the gate of the school. They knew that taro, taro balls, milk, milk tea and other ingredients could also be put into the fairy grass, and it became a dessert.
In 2007, Wu Jian and his brother came to Shanghai to start a business with the skills they learned from a Taiwanese couple. The first throbbing herbal drink shop was selected next to East China Normal University, priced at 3.5 yuan a cup.
Due to the low awareness of burning fairy grass in the local area, many customers confuse it with the bitter-tasting Guiling paste. On the first day of the store's opening, the business was bleak, with a turnover of only more than 80 yuan.
Later, with the recognition of the student group, the business in the store gradually improved. At the peak, 1,500 copies of burning fairy grass can be sold a day, and the average daily turnover is close to 5,000 yuan.
"This was a very high number at the time. After that, we opened 3 stores in Songjiang University Town and 2 stores in Nanhui University Town. The brand gradually grew up like this, and then people wanted to join. By 2009 More than 100 stores have been opened in the past year.”
In Wu Jian's eyes, the tea industry at that time was in a barbaric growth stage. Although there were not many chain brands, the competition in Shanghai was already very fierce.
Many of the "opponents" of throbbing and burning fairy grass are mom-and-pop stores. The front of the door is blocked by glass, leaving only a small window to collect money and pick up the goods. There is almost no emotional communication with customers. Regardless of the store format or product ingredients, they still stay in the powder hook. Adjust the times.
Empathy is also felt by Hu Jihong, the founder of Yihetang.
In 2006, Hu Jihong quit her sales job and opened her first milk tea shop next to a university in Wuhan with the skills she learned from a friend's shop.
He recalled that at that time, the raw materials of milk tea were mainly tea powder, fruit powder, and jam, and the price of each cup was 2-5 yuan, which can be described as "low quality and low price"; Drink brands are complex but not large.
In 2008, Hu Jihong moved to Hainan's own tea brand "Changyingang". "At that time, there was no brand awareness, so I just thought of a name, which is equivalent to moving the milk tea experience in Wuhan to Hainan." Fortunately, "Changyingang" is located in Hainan. Hainan became an instant hit, and more and more people were looking for Hu Jihong to join and cooperate. By 2009, 7 directly-operated stores and nearly 30 franchised stores had been opened.
At this time, Hu Jihong began to realize the limitations of the Hainan market, so he decided to return to Wuhan to start a business.
apprenticeship
After only 3 years of business, Thrilling Burning Immortal Grass has opened more than 100 stores in Shanghai, but the bottleneck period is coming soon.
In 2009, Wu Jian found that the number of stores could not be broken through, and the biggest problem was the lag in management.
"At that time, only my brother and I were in charge of management. One was external and the other was internal. We had to participate in everything from investment promotion, site selection, research and development, operation, and store preparation, with limited energy."
During the same period, Taiwanese tea drink brands CoCo and Happy Lemon entered the mainland market for three years, followed by not only open stores, hand-cranked milk tea, juice and jam ingredients, but also standardized chain management concepts.
According to media reports, at that time, CoCo could stipulate that all tea drinks in the store should be based on the first tea juice, and the storage time should not exceed 3 hours; Eligible to go to the counter... With a series of standardized management methods, CoCo has opened 197 stores in the mainland by the end of 2009.
Throughout the development of the entire tea industry, Taiwanese brands play an important role in it.
According to Nai Xue's tea prospectus mentioned earlier, bubble tea was founded in Taiwan, China in the 1980s.
Since the first bubble tea came out, not only have more ingredients and flavors been introduced, but the overall quality has also improved, and many brands have standardized their production processes.
"It can be said that Taiwan-funded brands have driven the initial iteration of the entire tea industry, including SOP standardized management." Wu Jian said frankly that when Thrilling Burning Immortal Grass started its business, it happened to be at the point where Taiwan-funded tea brands entered the mainland market.
"At that time, the market demand was greater than the supply. Just opening a store could be successful as long as it had a good taste, no need for strong operation management. Later, we saw the gap between ourselves and Taiwan-funded brands, and began to adjust and improve management. So far , the overall standardization of mainland tea brands has been on par with Taiwanese brands, or even surpassed."
After breaking through the management bottleneck, throbbing burning fairy grass returned to the growth track in 2010-2012.
At this time, in Wuhan, which is more than 600 kilometers away from Shanghai, Hu Jihong also began to adjust the brand image and product structure, trying to make the operation and management more standardized, so he founded "Yihetang" in 2012.
Hu Jihong said frankly that Taiwanese tea brands started early and recognized the importance of chain brand operation and management. "Before they entered the mainland, they figured out how to operate the brand in a long-term and standardized manner, and their ideas were mature. At that time, mainland tea brands were not yet available. Up-and-coming, at least until 2014, Taiwanese brands were leading the market.”
Leading the way in innovation
In Hu Jihong's eyes, before 2015, it was a period of accumulation for the tea industry, "Taiwan's experience has been almost absorbed by mainland brands."
Around 2015, the three major fruit tea brands in Guangdong, "Hey Tea", "Naixue's Tea" and "Youcha", took the lead in the industry with product innovation and opened up new tea drinking tracks; some previously unknown brands, such as Hunan Tea Yan Yuese, Yihetang in Hubei, Mixue Bingcheng in Henan, Tea Baidao in Sichuan, Gu Ming in Zhejiang, etc. have also begun to take shape, regional leading brands have begun to form, and the entire industry has entered a period of rapid growth.
The so-called "new tea drink" usually refers to one or more of raw leaf tea, fruit, freshly squeezed fruit and vegetable juice, and dairy products as raw materials. mixture.
The new tea drink emphasizes the real ingredients of tea, milk and fruit, and the simple blend of powder or jam is no longer popular.
Under the combined effect of modern planting industry and logistics development, China Chain Store & Franchise Association's "2021 New Tea Drink Research Report" believes that my country's tea drink industry has entered the 2.0 era of "tea + milk + fruit" from 2012 to 2019, and a large number of tea drink brands Keep iterating.
According to the company's data, there are currently 331,500 milk tea-related companies in my country, and the number of related companies has been increasing in the past 10 years.
In 2012, there were 9,100 new milk tea-related enterprises, and 85,600 in 2021.
In addition, according to the data reported by the China Chain Store & Franchise Association, the revenue of my country's new tea beverage market increased from 42.2 billion yuan to 83.1 billion yuan in 2017-2020. Revenue is expected to reach 142.8 billion yuan.
The rapid development of the industry is not unrelated to the demonstration role of the two leading tea brands, HEYTEA and Naixue.
In 2012, the predecessor of HEYTEA, "Imperial Tea", started in an alley of "Jiangbianli" in Jiangmen City.
In 2016, due to the inability to register a trademark, "Imperial Tea" was renamed "Hey Tea", and in the same year, it received an investment of 100 million yuan from IDG Capital and angel investor He Boquan.
After receiving the capital blessing, HEYTEA has expanded nationwide since 2017, and has successively entered cities such as Hangzhou, Beijing, and Nanjing.
In 2015, Naixue's Tea, another new tea brand in Guangdong, opened its first high-end ready-made tea shop in Shenzhen.
In 2017, Nai Xue's tea was assisted by Tiantu Capital, and in November of the same year, it went out of Guangdong and faced the national layout.
In March 2018, it completed the A+ round of investment, with a valuation of 6 billion yuan, becoming the first tea industry unicorn in public information.
According to Wang Qinglin (pseudonym), an investor in the consumption field, HEYTEA and Naixue's tea have found a different development idea from that of Taiwanese brands, using differentiated products, good raw materials, and the location and design of large shopping malls. , to create the tonality and sense of value of tea, which is equivalent to upgrading the entire industry. Nie Yunchen, the founder of HEYTEA, is also called "genius product manager".
"2016 and 2017 are the beginning years of the two leading brands, which raised the price band of 10 yuan originally created by Taiwanese brands to 25 yuan and 35 yuan, which also created the soil for our new brand to launch high-end products. "In 2017, Tan Li introduced the Taiwanese milk tea brand "Lujiaoxiang" to Guangzhou and Shenzhen, and grabbed the traffic dividend with the help of the newly emerging Douyin platform.
Driven by the leading brands, the entire tea industry has set off a wave of upgrading, and continued to improve in terms of operation management, talent introduction, and raw material quality.
In 2013, in the face of the rapid development of the industry, Wu Jian decided to launch a sub-brand of tea drinks, and handed over the throbbing burning fairy grass to the company's executives. As a result, the operation of the main brand took a sharp turn, and the number of stores in 2014 dropped rapidly from the previous 400. Break 200.
In 2015, Wu Jian re-adjusted the product line, operation system and price system of throbbing burning fairy grass one by one, and introduced fresh fruit production. By 2016, the number of stores had exceeded 500, and the current number of stores has exceeded 2,500.
Also in 2015, the number of Yihetang franchise stores reached 200, but problems such as operation, training, and store decoration emerged one after another, which also made Hu Jihong realize the importance of talents, so he poached people from international chain restaurant brands. I am doing it all, and it has been completely handed over to professionals in the food field." In 2017, Yihetang underwent its third brand upgrade, and the number of stores exceeded 1,000. By 2021, the number of stores nationwide has exceeded 5,600.
The rapid development of the tea industry has also driven the growth of upstream raw material companies.
In April 2021, Jiahe Foods was listed as the "first stock of non-dairy creamer", and several tea brands are its customers.
In the financial reports of Panda Dairy, the first share of condensed milk and Miaoke Lando, the first share of cheese, the tea brand is also a B-end customer that it has focused on expanding.
The inflection point has come
From 2020 to the first half of 2021, with Nai Xue's tea listing, HEYTEA's valuation of 60 billion yuan, and Michelle Ice City's breakthrough of 10,000 stores as landmark events, the entire tea industry will usher in a development climax, one of which is an important performance It is capital running to enter.
The China Chain Store & Franchise Association's "2021 New Tea Drinks Research Report" shows that 2020 is a critical year for the capitalization of tea drink brands, and the industry chain rate and brand concentration rate will further increase.
According to the company's data, there have been 85 investment and financing events of tea brands in the past ten years, and the total disclosed financing amount has reached 8.832 billion yuan.
Among them, there are 12 cases in 2020, and 14 cases in the first six months of 2021.
In the financing list disclosed in the "2020 New Tea Drinking White Paper", in addition to the leading brands of Heytea, Naixue's Tea, and Mixue Bingcheng, you can also see Guming, Punchaji, Qifentian, Lulu On the figure of the aunt and other waist brands.
Among them, HEYTEA, the head brand of the direct sales department, and Michelle Bingcheng, the head brand of the franchise department, attracted the most attention.
In June 2021, Nai Xue's tea was listed and became the "first share of tea drinks"; the news that HEYTEA's latest round of financing was about to be finalized also came out during the same period.
According to the "Investment Circle" report at the time, "After multiple confirmations, the investors in this round of HEYTEA are all old shareholders. The financing process lasted for several months, and the valuation reached an unprecedented 60 billion yuan, which once again refreshed the financing record of China's new tea beverages. "
According to the information of the company, Michelle Ice City will complete the first round of financing of 2 billion yuan in January 2021, which will be jointly invested by Longzhu Capital, Hillhouse Capital and CITIC Industrial Fund.
After the financing is completed, Michelle Ice City is valued at about 20 billion yuan.
Then, on the eve of the National Day in 2021, Michelle Bingcheng completed the IPO guidance filing at the Henan Securities Regulatory Bureau.
The heat of capital is hot and attractive.
With the changes in consumer demand, in February 2021, Tan Li stepped away from "Antle Alley" and founded the lemon tea brand "Ningji" in Changsha. In just 150 days, ByteDance and Shunwei Capital completed tens of millions of financing. In 2022 In January of this year, it received hundreds of millions of investment from ByteDance and Tencent. By February 2022, the number of stores signed has exceeded 400.
Different from the previous direct sales brands such as HEYTEA, Naixue’s tea, and Tea Yanyuese, which are favored by capital, according to Wu Jian’s observation, a large amount of capital will enter the tea franchise system from 2019 to 2021. “Direct sales and franchise are two different things. Model, we must consider clearly what the capital is for, is it for resource integration, market expansion, or cash flow? If you don’t think clearly, capital is not necessarily a plus.”
Soon the tide receded.
Since the end of 2021, there have been news of price cuts, losses, layoffs, and store closures in the tea industry.
The report of the China Chain Store & Franchise Association predicts that the overall growth rate of new tea drinks will be adjusted to 10%-15% in the next 2-3 years, and the franchise-based brands will enter a period of differentiation and reshuffle.
In Wu Jian's view, the rapid development experienced by the tea industry after the epidemic in 2020 stemmed from a retaliatory consumption growth.
After a large amount of capital entered the tea beverage industry, it accelerated the speed of brand expansion, but it also promoted the involution of the industry, and many brands that were profitable before became no longer profitable.
With the recent price reduction of top brands, it is tantamount to a dimensionality reduction blow for mid-end brands, which reflects the fierce competition in the industry to a certain extent.
"The industry reshuffle in 2018 has already begun." According to Wang Qinglin's estimation, the tea industry has entered the "second half", and national top brands have been born in each price band.
In terms of sales, the top five in the industry have accounted for half of the market share.
"In the future, capital will still pay attention to the tea drinking track, but it prefers 5-10 leading brands. With the exhaustion of innovation space and insufficient financial strength, it is difficult to run out a new brand with a scale of tens of thousands. In the future Innovation will be a game between the leaders.”
Written by version B02-B03/Guo Tie, chief reporter of the Beijing News