China News Service, January 24 (China News Financial Reporter Zuo Yukun) "The taste of strawberry mochi can only remain in my memory. From now on, there will never be a milk tea shop like yours." On a recent social platform, Many netizens have posted posts, nostalgic for the milk tea they once loved but gradually disappeared.

  We are talking about the new tea brand “Fu Xiao Tao”.

At its peak, Internet celebrity milk tea, which had 200 to 300 stores across the country and was once known as the "King of Queuing", now has less than 30 stores in operation.

  The first generation of Internet celebrity milk teas seems to have gradually become a fading story in the hot new tea drinking circuit.

In the past, there was discussion about "little by little milk tea disappearing little by little", and later there was the reality that many once popular milk tea brands were gradually closing their stores. Is it really time for the new tea market to be reshuffled?

  In 2021, a Fuxiao Tao store just opened in Beijing.

Photo by Zuo Yukun, China News Service

The "disappeared" Fu Xiaotao

  The solid wood-colored tables and chairs, the simple design, and the elegant and beautiful style set up the brand concept of "Huayue Shi Wine and Tea". Fu Xiaotao's signature products are mostly fresh and cute milk tea, marshmallow cream tops, and brightly colored tea. Strawberries, pink drinks and names were once popular standard for check-in photos on social platforms.

  Consumers may be more familiar with the original name of "Fushimi Momoyama" than "Fu Xiaotao", but in the beginning, Fu Xiaotao started under the name "Bianjing Tea House", and the first store opened in Nanjing in 2017.

However, with the emergence of a series of controversies and turmoil over Japanese elements, Fu Xiaotao's performance gradually declined after changing its name several times.

  According to statistics, Fu Xiaotao opened nearly 300 stores in China at its peak, and its valuation once reached 200 million yuan.

But currently, in the "Fu Xiaotao Ordering" mini-program, only 29 stores can be seen across the country, and 3 of them are shown as "closed."

  Around 2021, Fu Xiaotao also came to Beijing, but they are currently closed.

A reporter from Sino-Singapore Finance contacted the former store manager of the Sanlitun store in Beijing. He said that closing the store was the company's decision and that he was not sure about the specific situation.

  The reporter also contacted a franchisee of a former Fuxiao Tao store in Shandong. She joined the brand during the "Fushimi Momoyama" period, but the store closed in 2022.

In her opinion, Fu Xiaotao changed his name three times, which had a great impact on the store's business.

  "When I joined, I felt that the decoration and products in the store were very unique, and the business was really good when it first opened. But after changing the name, the sales volume dropped significantly. In the final stage, we sold less than 1,000 cups per month. Business was good before. There were more than 1,000 cups a day." The franchisee said that the rent of the store he rented was very expensive, so he did not renew the contract with the mall after it expired.

  "There are too many milk tea shops now, and they all follow the route of small profits but quick turnover. They open and close one after another. Maybe this will inevitably happen in the end. If they are opened for a long time, they will slowly collapse." She believes.

  "Their milk tea is very thick and the toppings are very special. The taste of mochi is different from other stores. The strawberry jam is also made with real strawberries and hand-mashed fresh strawberries, so the price is relatively high, but the profit is not really high. Big." Ono (pseudonym) once worked part-time at Fu Xiaotao for a while. When she recalled this brand, what impressed her most was the abundance of materials used.

"But the current trend is toward light milk tea. This is always the case in the catering industry. It's hard to say what will become popular."

  A Fushikomomo store in the period when the brand name was "Fushimi Momoyama".

Photo by Zuo Yukun, China News Service

Why do milk tea shops frequently close?

  At a time when competition for new tea drinks is in full swing, a group of once-sudden Internet celebrity milk tea brands have turned on their endangered signals.

  Using raw materials as a criterion, the industry roughly divides the milk tea industry into three development stages: the first generation of tea drinks is the 1.0 "powder era" where non-dairy creamer is mainly prepared, and the second generation of tea drinks is 2.0 where fresh milk and fruit tea appear. In the "street era", the third-generation tea drink is the 3.0 "new tea drink stage" based on original leaf tea base + fresh milk and fresh fruit.

  Not long ago, the topic "I feel like I'm slowly withdrawing from the milk tea world" became a hot search topic. This old Internet celebrity brand, which was once a hit around 2017, has closed stores in many places.

Although some loyal fans started the "1DianDian Defense War" in the past, and later the brand officially refuted the rumors and said that it did not go bankrupt, it is also true that in recent years, 1DianDian has closed nearly a thousand stores and its business has been impacted by other brands.

  Similarly, the old wave of non-dairy creamer brewing brands such as CoCo, Gongcha, and Happy Lemon are facing challenges. "Fresh milk tea" with cream top, pure milk, less ingredients, and original leaf tea base has gained popularity. New Internet celebrities have also begun to compete with old brands.

  But these new milk tea brands are not without their worries.

Mr. Wu, a media practitioner, just invested in a new tea brand that has become popular in the past two years in the summer of 2023.

However, from the opening to the present, the income has not been as good as expected.

  “Rent is a big issue when opening a store in Beijing, but if you want to join these new brands, you must be prepared to invest more than 1 million yuan in addition to rent.” Mr. Wu revealed that stores have requirements for area and decoration. The cost will be 300,000-400,000 yuan. After stabilizing, it will be calculated based on the monthly turnover of 500,000 yuan, and the actual revenue will be 400,000 yuan. Because the raw material rent and labor costs are very high, a net profit of 60,000-100,000 yuan is very good. Yes, the payback cycle takes half a year to a year and a half.

  Ms. Qu, who has opened a second-generation tea shop in 2021, is also worried.

"Recently, the company is asking franchisees to renovate the latest version of the decoration style. The store's current profit is only about 10%. It will cost hundreds of thousands of yuan to renovate again, and it will take more than ten months to recover the money. So many businesses are not doing well. The store didn’t want to renovate, so we simply took the opportunity to close the store.”

  Consumers order at a milk tea shop.

Photo by Zuo Yukun, China News Service

Where is the new tea drink heading?

  Of course, looking back at the new tea market in 2023, in addition to the sad exit of the "first-generation Internet celebrity" milk tea shops, some brand stores have also experienced explosive growth in store expansion. There is good news about the presence of many leading brands in overseas markets, and the market size is still growing. expand.

  The last time the industry attracted widespread attention was at the beginning of 2024, when Mixue Bingcheng Ancient Ming submitted a prospectus to the Hong Kong Stock Exchange on the same day.

Following the listing of Nayuki’s tea on the Hong Kong Stock Exchange in June 2021, the competition for the “second share of new tea drinks” has become increasingly fierce.

  It has been more than a year since Heytea, Nayuki, Chabaido, etc. launched vigorous price reduction strategies.

While these leading brands are penetrating the market by lowering prices and opening up franchises, they are also constantly grabbing eyeballs through co-branded marketing.

  There is also a category of brands with local characteristics that are emerging, such as Grandma's Handmade in Guangxi, Bawang Tea Girl in Yunnan, Tea Hua Nong in Xi'an, Adiao in Tibet, etc. These new regional forces have achieved intensive farming by deeply cultivating the regional market. Become a new top player.

  It is not difficult to see that with the continuous changes in consumer trends, differentiated competition among milk tea brands is becoming increasingly important.

Industry experts believe that competition on the new tea beverage track will still be fierce in 2024, and the market prospect of 100 billion yuan is broad, which may usher in a new round of development opportunities.

In the next step, efforts need to be made in broadening innovative categories, optimizing the supply chain system, and introducing digital technology.

  "More and more consumers are tending to healthy eating habits and lifestyles, and pay more attention to the health and authenticity of raw materials. The brand's new product development ideas should focus on keywords such as 'health' and 'wellness'." Zhongguancun New said Tian Liyuan, director of the research department of Zhiyuan Health Management Research Institute.

  Brands come and go, but people still frequently stop at milk tea shops on the streets where people come and go.

Is the milk tea in your hand still the familiar cup in your memory?