75 yuan a cup? The inner rolled milk tea is becoming more and more expensive

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more than 300 million people have become consumers of new tea drinks in China.

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Text: Chen Chang; Editor: Lu Jia

Source: Caijing Tianxia weekly (ID: cjtxzk)

I don’t know when to drink a cup of milk tea will pay a price beyond imagination.

Located in Zhijian Times Square, Longgang District, Shenzhen, there are more than ten milk tea shops in a street less than 200 meters. There are honey Snow Ice City, tea Baidao, book burning fairy grass, ancient tea, linlee hand-made lemon tea, etc. it can be said to be a real “milk tea Street”. But “the first cup of milk tea in autumn” , it is particularly difficult for many local people to choose a more people-friendly honey snow ice city or a more luxurious tea.

In April this year, chayan Yuese flash store, which landed in Shenzhen for the first time, created a “queue of more than 60000 people, and the purchasing fee is 500 yuan” Drinking a cup of milk tea is no longer a simple thing. This year’s Mid Autumn Festival, Xi tea, the world’s first handmade store, officially opened in Nantou ancient city, Shenzhen. There are more than 50 products in the store, including Shuangdao Shanzhu guava and slow grinding Shanzhu Xianlu, which have a large number of buyers. The price has reached 75 yuan a cup. Even so, it takes two hours to drink on the scene.

Many consumers lamented: “since when will it take more time and money to drink a cup of milk tea?”

According to meituan’s insight into tea consumption in 2021, Guangzhou ranked first and Shenzhen ranked second among the top 15 cities in the number of milk tea stores in China. In 2020, with the gradual recovery of the epidemic, the consumption of drinks in stores also gradually recovered, and the consumption of tea increased by 150% year-on-year. Behind this, in order to compete for the growing milk tea consumer group and market, milk tea brands opened an internal battle.

The homogeneity of new tea drinks is serious

“When I was a child, milk tea was a happy tea that could be bought for 5 yuan at the school gate. When I grew up, milk tea was a complex of tea, fruit, cheese, milk cover and grain. It was a material for the circle of friends or a tool for daily social entertainment.” a milk tea lover described this.

According to the white paper on 2020 new tea drinks, the number of consumers of new tea drinks in China has continued to increase since 2017 and is expected to reach 365 million in 2021. In addition, according to the data of insight consulting, the total market size of China’s current tea drinks will be 113.6 billion yuan in 2020 and 340 billion yuan in 2025, with an annual compound growth rate of 24.5%.

Ping An Securities Research Institute reported that today’s ready-made tea has evolved from the powder preparation era to the new tea era. Its development has experienced three stages: chain, high-end and brand innovation.

The first two stages took place before 2015. At that time, the production of milk tea was mostly completed by “powder flushing and blending” or “adding milk essence at the bottom of tea”, and the price is generally less than 10 yuan; in some core business districts, a cup of milk tea can be sold for about 20 yuan. Such representative brands include honey Snow Ice City, Yidian, happy lemon, coco, etc.

After 2016, milk tea entered the “3.0 new tea drinking era”. Merchants began to use natural raw materials for high-quality tea extraction, and then add fresh fruit or milk for seasoning. The price of a cup of milk tea is usually more than 20 yuan. Representative brands include Xi tea, Naixue tea, Lele tea, etc.

In the whole process, milk tea has been upgraded in terms of materials, packaging and environment, and the price of milk tea has also increased. This is closely related to the consumption upgrading trend of young people, the target group of milk tea. According to the iResearch report, from the age of users of representative brands of new tea, the post-90s and post-95s account for more than 60%. They pay attention to beauty and are willing to please themselves These consumption habits are redefining the new tea consumption market.

Unlike other food and beverage categories, milk tea has shallow industry barriers, and young people often lack loyalty to the taste of tea. In order to continuously create freshness and attract them, new tea brands try their best to “make an article” in a small drink Like the Pearl and coconut milk tea in the past, it has become outdated. Now adding milk cover and cheese to milk tea is standard. At the same time, red beans, tapioca, Oreo and other additives are also popular. What’s more, unknown fruits with strong regional characteristics such as oil Mandarin and yellow skin have also been excavated and added to milk tea.

Source: screenshot of the fourth season of talk show Conference

“A few days ago, I bought a cup of milk tea with glutinous rice, oats, bean paste, taro paste and a whole salted egg yolk. I feel that I don’t drink milk tea, but a zongzi mixed with water.” although this paragraph by talk show actor Pang Bo is slightly exaggerated, it is very vivid.

According to public data, there are about 40 SKUs for Xi tea, Naixue tea and LeLe tea. In 2020, the tea of the three brands will be updated about 40 times, reaching the frequency of launching a new product every 1-1.5 weeks.

However, because milk tea is mainly cheese tea, fruit tea, milk tea, pure tea and other categories, the homogenization of products is more serious, which once triggered a “war of words” among families.

In November 2018, “Naixue’s tea is like tea plagiarism” was hot searched on the microblog, which was full of gunpowder. Peng Xinfa, the founder of Naixue’s tea, accused Xi tea of copying Naixue’s cheese and strawberries, as well as domineering peaches, domineering spades, domineering pomegranates and domineering chelizi. Nie Yunchen, the founder of Xi tea, is unwilling to show weakness. Under this circle of friends, he said frankly that the “theory of plagiarism” is very childish. He said that innovation is not “seizing time and occupying space”. The difficulty of real innovation is to find cracks and deficiencies and provide better things.

Other new online black milk tea brands are also forced to be involved in the war of differentiated competition. The jade Unicorn with bean milk is popular. LAN Xiong uses local pure fresh milk as raw materials, and aunt Hushang is most famous for blood glutinous rice. For this phenomenon, an insider told Caijing Tianxia weekly: “many attempts may not succeed, but if you don’t try, you are likely to fail.”

Milk tea products are seriously homogenized, including fruit tea, cheese tea and other categories. Source: Ping An Securities Research Institute

The “inner roll” of milk tea industry intensifies

Consumers see that milk tea is more and more expensive, but enterprises are facing the cruel reality of intensified competition and no money.

According to the statistics of prospective industry research institute, the number of new tea stores in China exceeded 500000 in 2019. Later, affected by the epidemic, the number of stores decreased to 480000, but it is expected that the number of stores will increase to 550000 in 2021.

Among them, there are emerging players such as Xi tea, as well as some old cross-border stores. They compete for firepower on each segment of the track either by relying on their super financing speed or their own brand influence.

The first store was only opened in February 2021, which attracted much attention because of the introduction of investment. In just four months, more than 150 stores were opened. Uncle Qiu, the lemon tea brand, became popular by “duck excrement flavored lemon tea”, and also completed the pre-A round of financing of RMB 100 million in September.

According to incomplete statistics, in the first half of 2021, there were 18 financing cases for tea brands, and the total amount disclosed exceeded 5.2 billion yuan. The number of financing events and the amount disclosed have been higher than that in 2020, reaching the peak in the past 10 years.

Even traditional beverage enterprises such as Wang Laoji and Wahaha can’t help but enter new tea drinks with the intention of subverting consumer cognition. Wang Laoji opened the “1828 Wang Laoji” tea shop, focusing on the concept of “health and health preservation”. The menu in the shop is a series of ancient herbal tea, Chinese herbal herbal tea, herbal fresh fruit tea and health preserving milk tea, trying to solve the problem that young people worry about high calories when drinking milk tea. Wahaha sells lactic acid drinks with its own products AD calcium milk, lactic acid milk and other elements.

Bao Yuezhong, a new retail expert, told Caijing Tianxia weekly that the new tea has entered a highly heated state. Under the fierce competition, the key to the future depends on who has stronger marketing ability, product innovation and iteration ability, which is very important for the development of enterprises.

“Although it may be difficult for consumers to accept and understand the hand-made tea of happy tea at 75 yuan a cup, this measure plays a certain role in improving the impact of happy tea brand and helps it expand its consumer group in the competition of low, medium and high product portfolio.” Bao Yuezhong believes.

Xi tea handicraft shop, source: Xi tea supply map

Compared with the enterprise’s own sense of crisis, the external factors that catalyze the “internal roll” of the milk and tea industry come from the profit pressure brought by capital betting. Most of the new tea drinks adopt the direct marketing mode. Qiexi tea, Naixue tea and LeLe tea have made it clear that they do not join in, but direct marketing also means focusing on asset investment and manpower. It has become an industry consensus that it is difficult to make money.

According to the prospectus of Naixue’s tea, from 2018 to 2020, the company’s net losses were 66 million yuan, 39 million yuan and 202 million yuan respectively, with a cumulative loss of more than 300 million yuan. By the first half of 2021, its net profit was 48.2 million yuan.

Although the profit turns positive, a large part of the reason comes from the speed of expanding stores. In fact, 61 new stores opened by Naixue in first tier and new first tier cities in the first half of the year also brought great cost anxiety. According to the financial report, the cost of Naixue’s tea materials in the first half of the year was 466 million yuan, accounting for 39.5% of the revenue, an increase of 43.6% over the same period in 2020; The staff cost was 368 million yuan, accounting for 31.2% of the total revenue.

According to the data of China catering category and brand development report 2021, 14000 milk tea enterprises were closed, liquidated, revoked and cancelled in 2020, and the number of cancelled and opened stores increased at the same time, which is enough to explain the rapid enterprise renewal rate of the new tea industry.

In addition, there is also the problem that the explosive formula of the new existing tea drinks is imitated. According to the report of Ping An Securities Research Institute, the conversion cost of some new tea drinks is almost zero, the user stickiness is low, the competition is fierce and the pattern is scattered. In recent years, a large number of new stores have been closed every year, and the survival rate is less than 18.8%.

Behind it is the “inner volume” of capital

Naixue’s tea and LeLe tea adopt the dual product line strategy of “tea + soft European bag”, and Naixue’s tea also sells tea gift boxes and leisure snacks. In the first half of the year, its accompanying gifts and retail products accounted for 3.3%; Xi tea used to be mainly made tea, but later it successively released bottled sugar free gas water, European bags, alcoholic drinks, coffee and other products; There are also tea Yan Yuese’s stake in the network red fruit drink “fruit Yaya”, Lele tea design and sales of derivative peripheral commodities, etc.

Even the “king of parity” Honey snow ice city has broadened its consumers and entered the high-end market, successively launching the high-end tea brand “m +” and the high-end ice cream brand “polar chart”.

With the border expansion, more and more listing news came. In recent years, the list of new tea enterprises that have rushed to the market includes head brands such as Xicha, miyue ice city, chabaidao, Guming and LeLe tea. The range of IPO fund-raising is mostly US $300 million to US $500 million.

Zhou Yunnan, founder of Beijing Nanshan investment, analyzed to Caijing Tianxia weekly that new tea drinks are seeking listing for four purposes: first, for enterprises to raise funds more quickly; Second, give enterprises a more reasonable valuation; Third, improve brand awareness; Fourth, investment institutions can exit easily.

However, “milk tea listed companies go one after another. In fact, they are extending from the inner volume of the sales market to the inner volume of the capital market, which also indicates that the new tea circuit will inevitably produce large mergers and acquisitions and reshuffles among industries in the future,” Zhou Yunnan said.

Naixue’s tea mentioned in the 2021 mid-term report that the company’s cash flow soared to 4.808 billion yuan from 500 million yuan at the end of last year, and the debt ratio decreased to 28.7% in the current period from 112.8% at the end of last year. It can be seen that listing financing is “iron truth”.

Bao Yuezhong said that the capital market focuses on the scale and future expectations of an enterprise. Enterprises that get financing are bound to seek realization in the secondary market, which drives enterprises to rapidly expand their scale. At the same time, it puts forward a test for enterprise leaders on how to grasp the rhythm of listing and choose the best time to land in the capital market.

According to the data of meituan data view, now nearly 29% of them consume more than 100 yuan of milk tea every week, and nearly 50% of them drink 2-4 cups of milk tea every week. When they placed an order to buy milk tea, they did not expect that their consumption of about 20 yuan per time could give birth to a huge tea market in just a few years. For the new tea enterprises, how to deal with these young people has become the key. Therefore, the inner battle of milk tea industry may not end in the short term.

The picture material comes from visual China

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75 yuan a cup? The inner rolled milk tea is becoming more and more expensive

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