Nowadays, all walks of life are competing for the sinking market. In the severe internal market environment, can Heytea "sinking successfully"?
Since milk tea became popular in the mainland market, many milk tea beverage brands have emerged, and these brands are basically divided into three levels in price levels.
Heytea and Naixue’s tea are the first-level logo brands, and early milk tea basically cost about 28 yuan; the second-level milk tea brands focus on cost-effectiveness, among which brands such as Yidian, CoCo and Tea Baidao are deeply loved by consumers; when it comes to the third-level, it seems that the only one who has been successful in this ladder now seems to be the "Snow King" from Henan - Mixue Bingcheng.
Due to the epidemic, the economic growth trend is not as good as before, and consumers have also begun to spend on their own. As a result, the sinking market has become a "one acre and three-point land" that many brands are competing for.
In the sinking of Heytea's market, it is mainly manifested in reducing the selling price and building a sub-brand.
Last year, Heytea and Naixue’s Tea issued statements to adjust the price, aiming to attract more customers. However, if you look closely, you will find that logo items like succulent grapes are still high-priced, and milk tea with only new products and less ingredients have reduced the price. The purpose of establishing Xi Xiaocha, a subsidiary of Heytea, is to attract the sinking market.
1. The embarrassment of "Xi Xiaocha"
In March 2020, Heycha released a new sub-brand "Xi Xiaocha Beverage Factory" on its official Weibo, WeChat and other platforms, and its first store was located in Huaqiangbei, Shenzhen.
Xi Xiaocha created low-priced products at the beginning of its establishment with the goal of opening up the sinking market. Xi Xiaocha’s mini program mainly sells tea drinks, including five categories: fresh milk tea, fruit tea, coffee, ice cream and pure tea. The price is mainly between 6-16 yuan. This momentum is obviously aimed at Mixue Bingcheng.
Although in the eyes of competitors, Heytea's operation can be said to be a dimensional reduction and suppression, the sub-brand is still similar to the main brand Heytea in many positions, which has caused consumers to be confused.
Heytea and Xi Xiaocha are only one word apart in their names, and they also use the same character drinking milk tea style in the logo design, which will largely make consumers who do not understand think that Xi Xiaocha is a fake brand, which will weaken the purchase of Xi Xiaocha.
Then for those who know Heytea and Xi Xiaocha, the existence of Xi Xiaocha is indeed embarrassing. Because Xi Xiaocha is also promoted under the banner of "high-quality raw materials", this is the same as Heycha's promotional highlight, except that Xi Xiaocha is cheaper. But consumers will definitely understand that as long as they are cheap, they will definitely cut corners.
Regarding the difference between Heytea and Xi Xiaocha, the official introduction is as follows: At Heytea, we hope to make the best tea drinks with the highest standards; but at Xi Xiaocha, we are committed to providing suitable and just-in-one tea products, and as affordable as possible in qualified standards.
means that Heytea uses high-standard raw materials and high-standard production procedures, so the quality is better and the price is higher; but Xi Xiaotea only uses qualified raw materials and production standards, so the quality is just qualified, so the price is so low.
Although this explanation is reasonable, it is not so comfortable to hear it in the ears of consumers. It turns out that those who buy Xixiaocha are customers who do not pursue quality, so why not buy other brands that are affordable but better quality?
Xi Xiaocha’s awkward positioning also determines its hasty departure.
On November 2 this year, the last "Xi Xiaocha" store under Heytea was closed. This store is located in the Guangzhou Chengtou Building and is also the first Xi Xiaocha in Guangzhou.
It only took two years from birth to the end, and Xi Xiaocha's failure was attributed to the above reasons.
2. Xi Xiaocha failed to test the waters and started the franchise system
In order to ensure good quality and high-end brand tone, Heycha has not let go of "franchise". However, a few days ago, there was news that in order to bring good quality to more customers, Heycha began to look for partners nationwide, which means starting the franchise system.The news of
was also confirmed on November 3 that Heytea will start a franchise business and has launched a business partnership business, launching this business with a suitable store type in non-first-tier cities, so that more users can drink Heytea faster.
series of price cuts and Xi Xiaocha’s delisting may be really anxious. As a representative of direct-operated brands, Heytea has opened nearly a thousand direct-operated stores. Now that I have relaxed my acceptance of the franchise system, what are the reasons behind it?
The main reason is that it comes from competitors. In fact, after Heytea's price cut, its competitors are no longer Naixue's Tea, but mid-range price brands such as Cha Baidao, Shanghai Auntie and Gu Ming. However, competing with these brands, Heytea's store size is like a "little brother".
These new tea brands often have thousands of stores, and they are even opened on university campuses. The number of stores with less than 1,000 Heytea is obviously not enough to compete. Moreover, the expansion of other new tea brands has also been very popular. In the past three years, the number of Mixue Bingcheng direct stores has increased from 39 to 47, and the number of franchise stores has increased from 7,186 to 22,229.
From the product perspective, Cha Baidao has the iconic soy milk tea and the Shanghai Auntie's Blood Glutinous Rice Milk Tea, these are all original large items among affordable milk tea. On the other hand, Heytea and succulent grapes are indeed the first hot product, but the price of 28 yuan does discourage consumers. In addition, with the creation of new products from other brands, there are more products that can replace succulent grapes.
So, Heytea has launched a franchise system when it has no choice.
Regarding this franchise, according to Heytea, based on the comprehensive implementation of the store partner mechanism in stores across the country, Heytea will rely on the experience, capabilities and resources accumulated over the past ten years to carry out business partnership business in non-first-tier cities with suitable store types. Heytea will strictly screen and fully empower business partners, and will provide support for business partners in terms of brand, products, quality control, food safety, operations, training, supply chain, etc. The business partnership cost of Heytea is less than 500,000. The
passage is simply understood as: Although Heytea has launched a franchise system, not everyone can join. Heytea will strictly screen franchisees and manage them strictly. Even Heytea opened by franchisees will have good quality assurance.
3. How to make the "sub-line brand" shine?
We can see that the launch of Xixiaocha is also a regular operation of many big brands. So what should we do to make the secondary brand develop well?
The first time is to create flexibility. Multi-brand strategy is more conducive to brands taking advantage of their skills and fully adapting to market differences. In fact, there is no problem with the idea of Xi Xiaocha created by Xi Xiaocha, but Xi Xiaocha is not flexible enough. Heytea can completely build a lower-priced sub-line brand to compete with the only Mixue Bingcheng instead of diving into the middle-level brands with many brands.
Then pay attention to the independence of the sub-line brand. Xi Xiaocha and Heycha are not independent in terms of names, and they are not independent in terms of logo and store design. Just like the lucky kids created by Mixue Ice City, these are two completely different categories. If no one promotes them, who would know that Lucky kids and Mixue Ice City belong to the same place?
Xi Xiaocha is also the most fatal point of being confused with the main brand. In fact, after Heytea saw a price cut, the price of some products has dropped to around 16 yuan, and Xi Xiaocha’s milk tea also has many products with this price range, which has led to competition between the two brands. In such cases, Xi Xiaocha not only did not create differentiation, but also weakened Heycha's brand image.
If you master these principles, you will have unexpected results when building a sub-line brand. For example, Honor initially borrowed Huawei, but in recent years, in order to maintain independence, it has actively developed and fed back to the mother. The world's first AI mobile phone Honor Magic comes from the Honor brand. After the brand's independence, the glory gradually emerged from the shadow of "like Xiaomi" and "like Huawei", realizing the independence of brand connotation.According to Global Network, in 2019, against the backdrop of a nearly 10% decline in China's overall market, Honor's overall market share in China reached 13%, becoming the fourth and second largest mobile phone brand in growth.
Conclusion
Today's milk tea brands are indeed available. Under the gradually saturated market trend, innovation may have become a common attempt. However, before innovating, we must still do a good job in market research and analysis to avoid embarrassing situations like Xi Xiaocha.
