Every Chinese town has a snack street like this. Whenever evening comes, the snack street is brightly lit, with light signs of different colors lined up side by side, attracting young people to linger.
However, this street seems to be full of fireworks, but it has an undercurrent. On the snack street, there must be at least 3 or 4, and as many as 7 or 8 milk tea shops standing side by side. They have made great efforts in menus, signboards, LED screens and even employee uniforms, all trying to win over those who like the new and dislike the old. Customers' delight.
Today, with the popularity of milk tea, the endless milk tea stores on the street tell us that the milk tea circle has long passed the barbaric era of barbaric expansion.
The inner roll of today’s milk tea is no less than that of the chicken baby.
Data in 2020 shows that the number of chain milk tea stores nationwide has reached 370,000 to 400,000. Competition in the industry is extremely fierce, and strange things happen one after another.
Naixue’s Tea, which has lost hundreds of millions in three years but was listed on the Hong Kong Stock Exchange, broke on the first day and fell 13% by the close. Heytea opened 304 new stores last year and completed Series C financing. There are also affordable milk tea endorsements, and Mixue Bingcheng has completed its first round of 2 billion capital financing. Under the
giants, there are more small shops that are not paid attention to, 80% of which have a daily income of less than 150 yuan.
Behind the seemingly simple cup of milk tea, people will be curious, what is the secret to making money by opening a milk tea shop?
And what fierce capital battles have these current giants launched in order to gain a foothold in the deeply involved milk tea circle?
Today, let’s delve into the history of “milk tea” and gain perspective on this capital battlefield without gunpowder.
The budding period·1990-2005
The story of milk tea can be started from the "pearl milk tea" in memory. In the 1980s, bubble tea was a popular drink in Taiwan, and many bubble tea shops were opened in Taiwan at that time.
Among these black tea shops, there are two time-honored teahouses, one is Hanlin Teahouse in Tainan and the other is Chun Shui Tang in Taichung.
They found inspiration in the Taiwanese street snack powdered balls - blending and blending the powdered balls with ice milk and black tea, so they had their first cup of pearl milk tea.
Chun Shui Tang Pearl Milk Tea
In the late 1990s, some people began to introduce plastic cups and "automatic sealing machines" to replace the glass cups used for dine-in meals, making it possible to take out milk tea.
Taiwanese businessmen with a keen sense of smell quickly set their sights on "brand chain takeaway stores" and quickly copied pearl milk stores to the mainland in this form.
There used to be a small pearl milk tea shop woven with non-dairy creamer and sweetener in front of the school. Since 2000, it has been gradually replaced by street chain milk tea shops.
A 20-year milk tea competition has officially begun.
At that time, those ignorant boys and girls would go to milk tea shops to buy milk tea together. Drinking milk tea together became a beautiful relationship. The taste of first love is sour, and the milk tea shop has become the sweetest memory there.
This year, a milk tea shop called "Black Pearl" opened on the corner of Wen'er West Road, Hangzhou. This humble shop, , was the predecessor of Zhejiang Boduo Holding Group, the founder of the milk tea empire.
is different from other milk tea shops. Hakata's ambition is not to open a chain of milk tea shops, but to penetrate into the entire industry chain of the milk tea industry and become a top group company.
It starts from the upstream raw material production and sales, and directly produces non-dairy creamer, jam, compressed juice, fruit powder, tea and other raw materials. At the same time, it does brand incubation operations. It can output the ERP management system to you, and output raw material formulas such as creamer to you, and you can directly join and open a store.
Due to its early start, Hakata is very fast. Two years later, the first tea raw material factory, Boduo Industry and Trade Food Factory, was established in Hangzhou. Industrialized production effectively controls costs, which has become a great advantage for its brands in the market.
In only about five years, Hakata started a crazy era of milk tea franchises and also started its own golden age.
In Hakata’s golden period, the number of stores once exceeded 20,000, and the number of milk tea brands reached 300 to 400. Honey Fruit, Tea Orange , Ganchadu, Meet the Cow, Kowloon Bus, Kurotaki Taro, Aunt Zhang Milk Tea, Black Jade, Ji Yi, Yincha, Science Captain... Behind these well-known or unknown milk tea brands, It's all handled by Hakata.
Bodo’s brand
In the first wave of expansion of milk tea shops after 2000, Bodo did not choose to “dig gold mines”, but smarter to “sell shovels”.
's practice of earning franchise fees and raw material fees by joining the brand allowed Bodo to reap the first wave of dividends in the milk tea era to the greatest extent, and also accelerated the expansion of milk tea chain stores.
Scale and Brand·2005-2011
After 2005, the mainland’s milk tea shops exploded, and brands accelerated their efforts to gain territory. Taiwan’s CoCo, mainland China’s Dakasi, Jiike, subway, etc. gradually entered people’s field of vision.
In that year, CoCo completed 100 stores, and Happy Lemon became the first milk tea shop to enter a shopping mall in 2007. Subway was launched in all prefecture-level cities in Guangxi.
Milk Tea Shop finally left the campus and entered a broader business world.
Milk tea at that time was undoubtedly a hugely profitable industry. According to the wholesaler, 4.5 yuan of pearls can be used to prepare 40 cups of milk tea. The wholesale price of one kilogram of milk tea creamer is 15 yuan. Taking a 320 ml cup as an example, it can prepare at least 50 cups.
A cup of milk tea costs only a few yuan, and the material cost is only 50 cents. This insider industry knows it well. The stimulation of huge profits has made opening a milk tea shop a hot spot for entrepreneurship.
The blue ocean of the milk tea industry is beginning to attract big capital and big players.
In 2005, cup milk tea represented by xiangpiaopiao began to enter the market.
Xiang Piaopiao made a crazy decision: they spent 30 million on advertising on Hunan Satellite TV , threatening to spread their products into the hearts of users. Soon, they spread their products to small counties and cities where milk tea shops have not yet penetrated. Xiaoshang Supermarket, and made a bold statement that impressed us deeply: 1 billion cups are sold a year, and the cups can circle the earth together.
Xiangpiaopiao’s overwhelming advertising has undoubtedly added fuel to the exposure of the milk tea industry.
香piaopiao milk tea
Around 2007, competition in the milk tea industry reached a stage of intense intensity.
The branded milk tea shops that emerged during this period had unified store design, VI image, systematic product research and development, and refined internal management. If
wants to become a giant in the homogeneous milk tea track, the brand must create barriers to competition. The first is to seize the track and form a herd effect of and . Each brand "races to enclose the territory" and the speed of opening new stores increases rapidly. For example, Coco milk tea , which was founded in Taiwan, adopted the model of single store franchise + regional agency to quickly open milk tea stores all over the country.
The second is to expand the product line and develop all categories. For example, COCO milk tea has expanded its beverages into six categories: red and green tea, milk tea, chocolate/coffee, selection, special blend/ Oule , yogurt/snow bubble/smoothie - basically covering what milk tea shops could do at that time. All drinks manufactured.
However, once the industry reaches its peak, you need to be vigilant. If you don't pay attention, there will be a cliff ahead. No one thought that the financial crisis of 2008 was coming! The milk tea industry was caught off guard and suffered a heavy blow.
The cold winter of the financial crisis has just passed, and Taiwan's "plasticizer" incident has dealt a heavy blow to the industry. Domestic media have begun to cover the inside story of the milk tea circle. "Rubber pearls", "additives", "creamer", etc., a large number of brands have "fallen" on the way to dominate the country.
The three years after the financial crisis were the first wave of major reshuffles experienced by the milk tea industry - it also announced the disappearance of the "blue ocean" and "huge profits" in the milk tea industry.
The rise of local brands·2011-2016
The first wave of milk tea "big reshuffle" after the financial crisis marked the end of desktop milk tea in mainland China. Previously, most of the various milk tea products were inseparable from the shadow of the original "pearl milk tea".
Affected by the "plasticizer" incident in Taiwan, some local brands are trying to escape the shadow of Taiwanese milk tea and find another way to give milk tea a new definition.
Among them, the first internet celebrity brand to stand out in 2012 was “Yidiandian”.
A little bit of milk tea has a special "Yidiandian" star tag. This is a very special packaging design, which triggered the first wave of milk tea promotion in the social media era.
Since then, social media, a new publicity field, has begun to be taken seriously by milk tea brands.
In addition to packaging, "Yidiandian"'s signature product "Macchiato Milk Cap" at that time was also something that traditional milk tea did not have. For a long time, long queues of people could always be seen in a few stores.
Starting from "a little bit", consumers who like the new and dislike the old have promoted the technological innovation of the milk tea industry. In the iteration of competition, the quality of milk tea has begun to improve.
Non-dairy creamer has a "zero negative" health concept, and more stores are beginning to explore using milk to make milk tea. We have tried everything from ordinary room temperature milk to pasteurized milk with a better taste.
In addition to raw materials, milk tea brands have also made a lot of innovations in taste, from single pearl milk tea to milk green, caramel macchiato , and the auxiliary ingredients that can be added are extended to pudding, roasted grass jelly, etc. .
As these brands become more sophisticated, the price of milk tea is also forced to increase. At this time, the upstream supply chain that can ensure both raw material quality and cost is still the winner.
For example, Hakata is like the king of the milk tea country and has secured its position. Hakata's milk tea brands undergo rapid changes and facelifts every 2-3 years. But no matter who is replaced, it will be the small business that loses and it will always win.
After Hakata, there is Jiahe Food, which is the first company in milk tea raw materials. This company comes from Suzhou and has brands such as Xiangpiaopiao, Wahaha, CoCo, Guming, Yihetang, and Mixue Bingcheng. , because it caught up with the explosive development of the industry, it became the lucky darling of the traditional tea drinking era.
But after all, both focus on the raw material supply chain. At this time, people's demand for milk tea is no longer just a large cup of mixed milk tea costing three or four yuan.
As young people have higher pursuits of health and quality, a new consumption era of "fresh milk, fresh tea, and fresh fruits" is coming.
In 2011, 21-year-old Nie Yunchen opened a small shop called "Imperial Tea" on Jiuzhong Street in Jiangmen, Guangdong. He is responsible for store decoration, menu design, product preparation and other work alone. When the weather is bad, he can only sell a few cups of tea every day.
He had been starting a business before this. From his attempt to open a mobile phone chain store, he learned a lesson: relying on sales sources and lack of own brand are shortcomings.
He found a common problem among these chain milk teas: they all use non-dairy creamer for seasoning, which has a single taste and is unhealthy. "Milk tea is milk plus tea." He used the simplest idea to find fresh milk and tea leaves to mix until he found the most suitable raw materials. Before opening the store, he spent a year researching how to make a representative tea suitable for publicity.
He noticed that the most commonly spread keywords among young people on Weibo are mango and cheese, but the taste of mango and milk caps does not match well with tea; and cheese and milk caps can not only enhance the milk The taste of the cover is also more layered when combined with the tea. After several months of debugging, Heytea’s signature brand – “Cheese Tea” was born. We all know the story after
. In the small city of Jiangmen , it only took half a year for Heytea to go from almost no one paying attention to starting to queue up.
HiTea has promoted the era of "high-quality" milk tea, a bit like the "Apple Company" of the milk tea circle. During the period when " Nokia " Hakata was suppressing costs, he paid more attention to the product itself and the consumer experience.
At the same time as Heytea became popular, Peng Xin and her husband Zhao Lin also decided to start Naixue’s Tea.
Naixue is a mom-and-pop shop with a high initial positioning, targeting young women aged 20-35 as its main customer base. It creates a scene: "A cup of Naixue, a bite of soft European buns, meet two kinds of beauty in Naixue".
Nayuki’s tea targets young women
In 2016, Heytea received an investment of over 100 million from IDG Capital. This news instantly caused a sensation in the milk tea industry. After receiving the investment, Heytea quickly opened stores in China.
A year later, Naixue’s Tea, which only had 24 stores, also received 100 million yuan in financing from Tiantu Investment.
After big capital intervenes in the milk tea industry, what determines the success or failure of a brand is no longer just whether a cup of milk tea tastes good or not. The way this industry is played has begun to undergo fundamental changes.
Capital War · 2016-present
How does capital fight?
In the past, Nayuki and Heytea purchased raw materials from upstream suppliers. After the entry of capital, the funders knew the benefits of the Hakata strategy, so they began to quickly enter the upstream industrial chain to reduce costs and ensure product quality, such as self-built Tea gardens and single-product fruit planting bases.
According to the current mainstream materials for new tea drinks, the most important upstream supply chain of milk tea is the raw materials of fresh milk, tea and fruits.
also invested in Naixue’s Tiantu Capital, Baiguoyuan , and Bama tea, a tea brand that is sprinting towards A shares . Capital is trying to integrate the entire supply chain to achieve optimal benefits, and the ambition behind it is ready to emerge. The stable income of
milk tea shop seems to be the front-end brand premium, but the change speed of this industry has completely exceeded imagination. Young people who drink milk tea must be more disgusted with the new than the "middle-aged people" who drink Starbucks . So the underlying source of revenue has not changed, which is to make money from the supply chain.
Boduo knew this truth 20 years in advance, and capital parties such as IDG and Tiantu Capital also knew it.
For new players, although you may make "the best milk tea". However, it is almost impossible for one family to obtain cheap and stable supplies from the upstream supply chain.
This is why 80% of milk tea shops are losing money and are on the run. Only a small number of brands supported by capital can survive and even create a carnival in the milk tea circle.
In addition to the supply chain, the other end is connected to traffic exposure. Another benefit of capital injection is that it can open up the traffic side of other investment areas to provide concentrated exposure for the brand and seize the consumer market traffic.
At this point, Hakata, the "King of Milk Tea", compared with Heytea and Nayuki, does not have an Internet celebrity brand and stable traffic blessing, and the supply chain is corroded by the latter, and the "throne" is likely to fall. .
However, it is not impossible to break through.
Just when Heytea and Naixue became popular on the Internet, a childhood cold drink shop "Mixue Bingcheng" that was almost forgotten by the public began to undergo brand transformation.
Mixue Bingcheng cleverly avoided the high-end tea market occupied by Heytea and Naixue, and actively captured the sinking market. “2 yuan ice cream, 4 yuan lemonade” has become Mixue Ice City’s iconic hot-selling item.
In 2018, Mixue Bingcheng also made a decision to cooperate with the corporate consulting company Huayuhua to create the Snow King IP. Three years later, Snow King IP and Mixue Ice City theme song perfectly realized a "viral marketing", proving that social media does not only belong to high-end brands, but cheap brands can also become "Internet celebrities".
"Pinduoduo" in the milk tea world - Mixue Bingcheng's way of survival reminds people of Huang Zheng's words:
What we attract are people who pursue high cost performance. He will buy a Hermès bag. We will spend 9.9 yuan to buy a box of apples. What we satisfy is the many aspects of a person.
Who is making money from milk tea?
Looking back on the 20 years of development of the milk tea industry, the era when you can make money just by joining the franchise has passed. The current players in this industry who can still survive and make profits are nothing more than the following three categories:
1. Either, like Boduo and Jiahe, they master the upstream of the supply chain and the business model , and do not dig gold mines themselves, but rely on Make money selling shovels. Its brands have changed one after another, but it has remained firmly entrenched.
However, with the help of capital, highly exposed new tea brands such as Heytea and Naixue have also gained supply chain advantages. Can veteran players in the entire industry chain like Bodo really still sit back and relax?
2. Either like Heytea and Naixue’s tea, make money by relying on high brand premiums and online marketing.
The emergence of Heytea and Naixue has diverted many young people who pursue fashion and brands, and is a clear blow to "former Internet celebrities" such as Yidiandian. But maybe one day, Heytea and Nayuki will also become "former internet celebrities".
3. Or, like Mixue Bingcheng, enter fourth- and fifth-tier cities, reduce costs to the extreme, and make money by relying on small profits but quick turnover. The expansion of Mixue Bingcheng is killing the previous generation of low-end market participants such as Youlemei and Xiangpiaopiao.
According to the financial report, in the first half of 2020, Xiangpiaopiao had a net loss of 92.5 million yuan, reaching the lowest point in historical performance. This brand that once shouted "circle the earth" has entered the countdown to death.
In the future, with the further involution of the milk tea industry, the three still making money seem to be on different tracks. Heytea, Nayuki, etc. occupy the high-end market, while old brands like Mixue Ice City and Hakata , then it cuts into the low-end market, one goes up and the other goes down.
But secretly, the capital war between them has begun.
For example, Heytea has entered the low-end market through its sub-brand "Xixiaocha". The price of around 10 yuan is in direct conflict with Mixue . Mixue is also trying to increase its brand premium by expanding in first-tier cities and raising the prices of some individual products to more than 10 yuan.
This is very similar to the competition in the mobile phone industry. Huawei can upgrade and increase prices, and Apple can also reduce dimensions and attack.
HiTea sub-brand - HiLittleTea
These leaders have obviously understood that with the deep involution of the milk tea industry, profits have been squeezed to the extreme, and the milk tea industry is about to enter a "winner takes all" era.
In the "2020 China's Top Ten Tea Brands List", Mixue Bingcheng ranked second closely behind Heytea. From the perspective of investment return ratio, compared to Heytea and Naixue, which have been investing for several years and are still losing money, Mixue Bingcheng achieved revenue of 6.5 billion and a net profit of 800 million in 2019.
According to previous media reports, in January 2021, Mixue Bingcheng completed its first round of financing of 2 billion yuan, with Longzhu Capital, Hillhouse Capital jointly leading the investment. Mixue Bingcheng’s financing marks that capital has occupied every corner of the milk tea industry.
In the future, with the help of capital, the iteration speed of the milk tea industry is bound to be faster.
For consumers, competition between brands is not a bad thing. At least in the future, you can always taste new milk teas with different flavors, and the supporting services will also be improved. Like Heytea, product updates and iterations are very fast, and four new flavors can be launched in about a month.
But for milk tea brands and the capital behind them, it is a completely different story. Winter is approaching, and the cruelest war has arrived.
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Honey Fruit, Tea Orange , Ganchadu, Meet the Cow, Kowloon Bus, Kurotaki Taro, Aunt Zhang Milk Tea, Black Jade, Ji Yi, Yincha, Science Captain... Behind these well-known or unknown milk tea brands, It's all handled by Hakata.
Bodo’s brand
In the first wave of expansion of milk tea shops after 2000, Bodo did not choose to “dig gold mines”, but smarter to “sell shovels”.
's practice of earning franchise fees and raw material fees by joining the brand allowed Bodo to reap the first wave of dividends in the milk tea era to the greatest extent, and also accelerated the expansion of milk tea chain stores.
Scale and Brand·2005-2011
After 2005, the mainland’s milk tea shops exploded, and brands accelerated their efforts to gain territory. Taiwan’s CoCo, mainland China’s Dakasi, Jiike, subway, etc. gradually entered people’s field of vision.
In that year, CoCo completed 100 stores, and Happy Lemon became the first milk tea shop to enter a shopping mall in 2007. Subway was launched in all prefecture-level cities in Guangxi.
Milk Tea Shop finally left the campus and entered a broader business world.
Milk tea at that time was undoubtedly a hugely profitable industry. According to the wholesaler, 4.5 yuan of pearls can be used to prepare 40 cups of milk tea. The wholesale price of one kilogram of milk tea creamer is 15 yuan. Taking a 320 ml cup as an example, it can prepare at least 50 cups.
A cup of milk tea costs only a few yuan, and the material cost is only 50 cents. This insider industry knows it well. The stimulation of huge profits has made opening a milk tea shop a hot spot for entrepreneurship.
The blue ocean of the milk tea industry is beginning to attract big capital and big players.
In 2005, cup milk tea represented by xiangpiaopiao began to enter the market.
Xiang Piaopiao made a crazy decision: they spent 30 million on advertising on Hunan Satellite TV , threatening to spread their products into the hearts of users. Soon, they spread their products to small counties and cities where milk tea shops have not yet penetrated. Xiaoshang Supermarket, and made a bold statement that impressed us deeply: 1 billion cups are sold a year, and the cups can circle the earth together.
Xiangpiaopiao’s overwhelming advertising has undoubtedly added fuel to the exposure of the milk tea industry.
香piaopiao milk tea
Around 2007, competition in the milk tea industry reached a stage of intense intensity.
The branded milk tea shops that emerged during this period had unified store design, VI image, systematic product research and development, and refined internal management. If
wants to become a giant in the homogeneous milk tea track, the brand must create barriers to competition. The first is to seize the track and form a herd effect of and . Each brand "races to enclose the territory" and the speed of opening new stores increases rapidly. For example, Coco milk tea , which was founded in Taiwan, adopted the model of single store franchise + regional agency to quickly open milk tea stores all over the country.
The second is to expand the product line and develop all categories. For example, COCO milk tea has expanded its beverages into six categories: red and green tea, milk tea, chocolate/coffee, selection, special blend/ Oule , yogurt/snow bubble/smoothie - basically covering what milk tea shops could do at that time. All drinks manufactured.
However, once the industry reaches its peak, you need to be vigilant. If you don't pay attention, there will be a cliff ahead. No one thought that the financial crisis of 2008 was coming! The milk tea industry was caught off guard and suffered a heavy blow.
The cold winter of the financial crisis has just passed, and Taiwan's "plasticizer" incident has dealt a heavy blow to the industry. Domestic media have begun to cover the inside story of the milk tea circle. "Rubber pearls", "additives", "creamer", etc., a large number of brands have "fallen" on the way to dominate the country.
The three years after the financial crisis were the first wave of major reshuffles experienced by the milk tea industry - it also announced the disappearance of the "blue ocean" and "huge profits" in the milk tea industry.
The rise of local brands·2011-2016
The first wave of milk tea "big reshuffle" after the financial crisis marked the end of desktop milk tea in mainland China. Previously, most of the various milk tea products were inseparable from the shadow of the original "pearl milk tea".
Affected by the "plasticizer" incident in Taiwan, some local brands are trying to escape the shadow of Taiwanese milk tea and find another way to give milk tea a new definition.
Among them, the first internet celebrity brand to stand out in 2012 was “Yidiandian”.
A little bit of milk tea has a special "Yidiandian" star tag. This is a very special packaging design, which triggered the first wave of milk tea promotion in the social media era.
Since then, social media, a new publicity field, has begun to be taken seriously by milk tea brands.
In addition to packaging, "Yidiandian"'s signature product "Macchiato Milk Cap" at that time was also something that traditional milk tea did not have. For a long time, long queues of people could always be seen in a few stores.
Starting from "a little bit", consumers who like the new and dislike the old have promoted the technological innovation of the milk tea industry. In the iteration of competition, the quality of milk tea has begun to improve.
Non-dairy creamer has a "zero negative" health concept, and more stores are beginning to explore using milk to make milk tea. We have tried everything from ordinary room temperature milk to pasteurized milk with a better taste.
In addition to raw materials, milk tea brands have also made a lot of innovations in taste, from single pearl milk tea to milk green, caramel macchiato , and the auxiliary ingredients that can be added are extended to pudding, roasted grass jelly, etc. .
As these brands become more sophisticated, the price of milk tea is also forced to increase. At this time, the upstream supply chain that can ensure both raw material quality and cost is still the winner.
For example, Hakata is like the king of the milk tea country and has secured its position. Hakata's milk tea brands undergo rapid changes and facelifts every 2-3 years. But no matter who is replaced, it will be the small business that loses and it will always win.
After Hakata, there is Jiahe Food, which is the first company in milk tea raw materials. This company comes from Suzhou and has brands such as Xiangpiaopiao, Wahaha, CoCo, Guming, Yihetang, and Mixue Bingcheng. , because it caught up with the explosive development of the industry, it became the lucky darling of the traditional tea drinking era.
But after all, both focus on the raw material supply chain. At this time, people's demand for milk tea is no longer just a large cup of mixed milk tea costing three or four yuan.
As young people have higher pursuits of health and quality, a new consumption era of "fresh milk, fresh tea, and fresh fruits" is coming.
In 2011, 21-year-old Nie Yunchen opened a small shop called "Imperial Tea" on Jiuzhong Street in Jiangmen, Guangdong. He is responsible for store decoration, menu design, product preparation and other work alone. When the weather is bad, he can only sell a few cups of tea every day.
He had been starting a business before this. From his attempt to open a mobile phone chain store, he learned a lesson: relying on sales sources and lack of own brand are shortcomings.
He found a common problem among these chain milk teas: they all use non-dairy creamer for seasoning, which has a single taste and is unhealthy. "Milk tea is milk plus tea." He used the simplest idea to find fresh milk and tea leaves to mix until he found the most suitable raw materials. Before opening the store, he spent a year researching how to make a representative tea suitable for publicity.
He noticed that the most commonly spread keywords among young people on Weibo are mango and cheese, but the taste of mango and milk caps does not match well with tea; and cheese and milk caps can not only enhance the milk The taste of the cover is also more layered when combined with the tea. After several months of debugging, Heytea’s signature brand – “Cheese Tea” was born. We all know the story after
. In the small city of Jiangmen , it only took half a year for Heytea to go from almost no one paying attention to starting to queue up.
HiTea has promoted the era of "high-quality" milk tea, a bit like the "Apple Company" of the milk tea circle. During the period when " Nokia " Hakata was suppressing costs, he paid more attention to the product itself and the consumer experience.
At the same time as Heytea became popular, Peng Xin and her husband Zhao Lin also decided to start Naixue’s Tea.
Naixue is a mom-and-pop shop with a high initial positioning, targeting young women aged 20-35 as its main customer base. It creates a scene: "A cup of Naixue, a bite of soft European buns, meet two kinds of beauty in Naixue".
Nayuki’s tea targets young women
In 2016, Heytea received an investment of over 100 million from IDG Capital. This news instantly caused a sensation in the milk tea industry. After receiving the investment, Heytea quickly opened stores in China.
A year later, Naixue’s Tea, which only had 24 stores, also received 100 million yuan in financing from Tiantu Investment.
After big capital intervenes in the milk tea industry, what determines the success or failure of a brand is no longer just whether a cup of milk tea tastes good or not. The way this industry is played has begun to undergo fundamental changes.
Capital War · 2016-present
How does capital fight?
In the past, Nayuki and Heytea purchased raw materials from upstream suppliers. After the entry of capital, the funders knew the benefits of the Hakata strategy, so they began to quickly enter the upstream industrial chain to reduce costs and ensure product quality, such as self-built Tea gardens and single-product fruit planting bases.
According to the current mainstream materials for new tea drinks, the most important upstream supply chain of milk tea is the raw materials of fresh milk, tea and fruits.
also invested in Naixue’s Tiantu Capital, Baiguoyuan , and Bama tea, a tea brand that is sprinting towards A shares . Capital is trying to integrate the entire supply chain to achieve optimal benefits, and the ambition behind it is ready to emerge. The stable income of
milk tea shop seems to be the front-end brand premium, but the change speed of this industry has completely exceeded imagination. Young people who drink milk tea must be more disgusted with the new than the "middle-aged people" who drink Starbucks . So the underlying source of revenue has not changed, which is to make money from the supply chain.
Boduo knew this truth 20 years in advance, and capital parties such as IDG and Tiantu Capital also knew it.
For new players, although you may make "the best milk tea". However, it is almost impossible for one family to obtain cheap and stable supplies from the upstream supply chain.
This is why 80% of milk tea shops are losing money and are on the run. Only a small number of brands supported by capital can survive and even create a carnival in the milk tea circle.
In addition to the supply chain, the other end is connected to traffic exposure. Another benefit of capital injection is that it can open up the traffic side of other investment areas to provide concentrated exposure for the brand and seize the consumer market traffic.
At this point, Hakata, the "King of Milk Tea", compared with Heytea and Nayuki, does not have an Internet celebrity brand and stable traffic blessing, and the supply chain is corroded by the latter, and the "throne" is likely to fall. .
However, it is not impossible to break through.
Just when Heytea and Naixue became popular on the Internet, a childhood cold drink shop "Mixue Bingcheng" that was almost forgotten by the public began to undergo brand transformation.
Mixue Bingcheng cleverly avoided the high-end tea market occupied by Heytea and Naixue, and actively captured the sinking market. “2 yuan ice cream, 4 yuan lemonade” has become Mixue Ice City’s iconic hot-selling item.
In 2018, Mixue Bingcheng also made a decision to cooperate with the corporate consulting company Huayuhua to create the Snow King IP. Three years later, Snow King IP and Mixue Ice City theme song perfectly realized a "viral marketing", proving that social media does not only belong to high-end brands, but cheap brands can also become "Internet celebrities".
"Pinduoduo" in the milk tea world - Mixue Bingcheng's way of survival reminds people of Huang Zheng's words:
What we attract are people who pursue high cost performance. He will buy a Hermès bag. We will spend 9.9 yuan to buy a box of apples. What we satisfy is the many aspects of a person.
Who is making money from milk tea?
Looking back on the 20 years of development of the milk tea industry, the era when you can make money just by joining the franchise has passed. The current players in this industry who can still survive and make profits are nothing more than the following three categories:
1. Either, like Boduo and Jiahe, they master the upstream of the supply chain and the business model , and do not dig gold mines themselves, but rely on Make money selling shovels. Its brands have changed one after another, but it has remained firmly entrenched.
However, with the help of capital, highly exposed new tea brands such as Heytea and Naixue have also gained supply chain advantages. Can veteran players in the entire industry chain like Bodo really still sit back and relax?
2. Either like Heytea and Naixue’s tea, make money by relying on high brand premiums and online marketing.
The emergence of Heytea and Naixue has diverted many young people who pursue fashion and brands, and is a clear blow to "former Internet celebrities" such as Yidiandian. But maybe one day, Heytea and Nayuki will also become "former internet celebrities".
3. Or, like Mixue Bingcheng, enter fourth- and fifth-tier cities, reduce costs to the extreme, and make money by relying on small profits but quick turnover. The expansion of Mixue Bingcheng is killing the previous generation of low-end market participants such as Youlemei and Xiangpiaopiao.
According to the financial report, in the first half of 2020, Xiangpiaopiao had a net loss of 92.5 million yuan, reaching the lowest point in historical performance. This brand that once shouted "circle the earth" has entered the countdown to death.
In the future, with the further involution of the milk tea industry, the three still making money seem to be on different tracks. Heytea, Nayuki, etc. occupy the high-end market, while old brands like Mixue Ice City and Hakata , then it cuts into the low-end market, one goes up and the other goes down.
But secretly, the capital war between them has begun.
For example, Heytea has entered the low-end market through its sub-brand "Xixiaocha". The price of around 10 yuan is in direct conflict with Mixue . Mixue is also trying to increase its brand premium by expanding in first-tier cities and raising the prices of some individual products to more than 10 yuan.
This is very similar to the competition in the mobile phone industry. Huawei can upgrade and increase prices, and Apple can also reduce dimensions and attack.
HiTea sub-brand - HiLittleTea
These leaders have obviously understood that with the deep involution of the milk tea industry, profits have been squeezed to the extreme, and the milk tea industry is about to enter a "winner takes all" era.
In the "2020 China's Top Ten Tea Brands List", Mixue Bingcheng ranked second closely behind Heytea. From the perspective of investment return ratio, compared to Heytea and Naixue, which have been investing for several years and are still losing money, Mixue Bingcheng achieved revenue of 6.5 billion and a net profit of 800 million in 2019.
According to previous media reports, in January 2021, Mixue Bingcheng completed its first round of financing of 2 billion yuan, with Longzhu Capital, Hillhouse Capital jointly leading the investment. Mixue Bingcheng’s financing marks that capital has occupied every corner of the milk tea industry.
In the future, with the help of capital, the iteration speed of the milk tea industry is bound to be faster.
For consumers, competition between brands is not a bad thing. At least in the future, you can always taste new milk teas with different flavors, and the supporting services will also be improved. Like Heytea, product updates and iterations are very fast, and four new flavors can be launched in about a month.
But for milk tea brands and the capital behind them, it is a completely different story. Winter is approaching, and the cruelest war has arrived.
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