The sinking market has always been the world of mid-level tea beverage brands. However, this situation is about to be broken.
On November 3, the high-end tea brand Heytea confirmed the opening of franchise business and will launch a business partnership business in a suitable store type in non-first-tier cities. In the past, high-end tea drinks represented by Heytea and Naixue's Tea not only generally match the price of " Starbucks ", but also had the ambition to become the Chinese version of "Starbucks". Adhering to the direct sales development model has made them less likely to expand the market than the mid-level brands, but they are highly sought after by many consumers.
Heytea, photo provided by the interviewee
However, as the competition in the new tea beverage market becomes increasingly fierce, high-end tea beverages not only have the prices become more affordable, but also have begun to test more transformation measures. Will the relaxation of franchise become the "key" for high-end tea drinks to explore the sinking market?
"High-end Tea" has relaxed non-first-tier cities to join
As the "first generation of internet celebrities", brands such as Heytea, Naixue's Tea, Lele Tea have led the trend of check-in in a generation, and have been on the hot search many times due to the long queue. In terms of product price, high-end tea drinks once caught up with "Starbucks" and insisted on opening up the market with a direct sales model.
But in recent years, high-end tea drinks have become a friendly and friendly style. Taking Heytea as an example, at the beginning of this year, the brand completed a comprehensive price adjustment and bid farewell to the "30 yuan era". Not long after, another representative brand, Naixue's Tea also announced a comprehensive price adjustment, and there were no more products above 30 yuan. At present, the main products of these two brands are below 20 yuan, and some products are even in single digits.
has changed not only the price of high-end tea drinks.
When high-end tea drinks are still "circling" around major business districts and office buildings, brands such as Mixue Bingcheng , Guming , Shuyi Shaoxiancao , and other brands that focus on the sinking market have quickly expanded their territory through the franchise model. Public information shows that as of March this year, Mixue Bingcheng has about 22,000 stores, of which only 47 are directly operated stores, which are impacting the listing of A-share . The number of Gu Ming stores has reached more than 6,600, and the number of Shuyi Shaoxiancao stores is also more than 6,500.
Compared with the scale of tens of thousands or thousands of franchise tea drinks, high-end tea drinks that insist on direct sales seem a little "confidence". So far, Heytea has more than 800 stores nationwide, Naixue’s Tea has more than 1,000 stores nationwide, and Lele Tea has only about 140 stores.
In terms of performance, high-end tea drinks also seem to be under pressure. The financial report released by Naixue's Tea shows that its revenue in the first half of the year was 2.045 billion yuan, and fell 3.8% year-on-year compared with , and its adjusted net loss was 249 million yuan. Heytea also exposed the news of layoffs this year and announced not long ago that it would close its sub-brand Xi Xiaotea.
Regarding the release of franchise this time, Heytea responded to the reporter of Upstream News: "At present, Heytea stores are still mainly distributed in first-tier and new first-tier cities. In many cities, including new first-tier cities, there are still not many stores, and many second- and third-tier cities do not even have stores. Therefore, we hope to work with our business partners to provide users with high-quality products in more cities."
However, not all high-end tea drinks have stated that they will immediately announce the release of franchise. Naixue’s Tea revealed that Naixue’s Tea has always adhered to the direct sales model and there is no relevant information yet. The Cha Yan Yuese , which is positioned for the people, is also more cautious about joining, saying that there is no relevant plan yet.
Heytea, photo provided by the interviewee
Food safety is the pain point of the franchise model
In recent years, it has been common for milk tea shops to expose food ingredients and eat foreign objects, many of which are related to joining milk tea brands.
Take Mixue Bingcheng as an example. There are reports that in early May 2021, Mixue Bingcheng was exposed to have problems such as tampering with the validity period of Kaifeng ingredients and using overnight tea soup and milk pulp. In response, Mixue Bingcheng also issued an apology statement. Subsequently, the supervision offices at all levels in Zhengzhou conducted "carpet-style" supervision and inspection of stores under Mixue Bingcheng in the city, ordered 35 stores to rectify within a specified period of time, 3 stores closed for rectification, and issued administrative penalty decisions to 9 stores on the spot.
Mixue Bingcheng also pointed out in its prospectus that if the freshly made drinks and freshly made ice cream industries have a significant impact on the food safety incident , the overall consumer confidence in the industry will inevitably be severely weakened, and consumers may turn to other alternative products such as bottled beverages, resulting in a significant reduction in market demand and a decline in the company's operating performance.
is not only because of the food safety risks associated with joining milk tea, but even high-end tea drinks that focus on direct sales are difficult to avoid. In August 2021, the Guangzhou Market Supervision Bureau found during the inspection that some tea brands had problems such as the pre-packaged food pre-packaged food after Kaifeng, and the labeling of pools, refrigerators, ice pellet machines, etc., including Heytea.
Therefore, in order to avoid food safety risks as much as possible, most of the high-end tea drinks were previously mainly direct sales. The relaxation of franchise will undoubtedly bring greater challenges to the subsequent management and operation of high-end tea brands.
franchise model focuses on strictly checking the
franchise model has many disadvantages, so why is it still more popular in the market? Some industry insiders pointed out that the industry has generally explored a complete set of methods, such as strictly assessing personnel when applying for franchise. If the applicant needs to work in the store for more than 3 months, the franchise will also be assessed to the franchise experience and financial strength to avoid the risks of related problems thereafter. In addition, in terms of franchise training, supply chain management, personnel management, etc., we have also entered a relatively mature stage.
The person also pointed out that food safety is a common problem faced by the catering industry and cannot be completely avoided. However, with the overall scale of brands with thousands of stores and tens of thousands, it can still ensure overall smooth operation. It has proved that the franchise model is not uncontrollable, but can be made bigger and stronger.
China Food Industry analyst Zhu Danpeng believes that there is no distinction between direct sales and franchise models themselves. In fact, many multinational catering chain giants are mainly franchise models. "Heytea uses its business partnership business to open up more urban markets, which is a relatively reasonable choice under the current market environment. The further development of this business and its impact on the industry are worth paying attention to."
He further pointed out that there are many types of franchise methods, and adopting a dual-track franchise model such as direct sales in first-tier cities and non-first-tier cities franchise. On the one hand, it can ensure the brand tone, and on the other hand, it can accelerate the expansion of market layout at a lower cost. No matter which franchise model is, the most core is the parent brand. As long as the parent brand continues to gain a foothold in the market, strictly review the franchisees and improve the management mechanism in subsequent operations, risks can be reduced to a certain extent.
Naixue's Tea, photo provided by the respondent
Upstream News Reporter Tang Xiaolan
Editor: Yang Sihai
Editor: Wu Jinming
Editor: Feng Fei
