China Food

Local tea does not need to “break into the front line” to prove its worth

“ 
road is still long, and each has its own way to go.
 ”
After the first shot of local tea in Changsha, regional tea brands began to enter the public’s vision.
 
Yunnan’s guofengxin tea drink “bawangchaji” broke into Chengdu and Shanghai all the way and opened its stores to Malaysia and Thailand; “Grandma’s handicrafts”, based in Guangxi, rushed into Shenzhen, the first-line tea concentration, and created a myth of waiting in line for four hours in Shanghai.
Northwest light “Fangha” expanded in Gansu along the Silk Road, and killed all sides in Shanghai with sweet fermented grains milk tea. Shandong Qingdao health preserving medicinal tea “Hetian shuipu”, which is famous for its food homology, marched south into Shantou, the Cantonese circle, and north to Beijing, the capital circle.
 
(source: @i dark horse)
New tea, a track that has been repeatedly verified and passed, is now boiling. The low and medium price old brand chains occupy the sinking market, and the regional new tea brands begin to rise as a whole. Although the founders of new tea drink, Xi Cha and Naixue, rely on big capital and brand strength to lead half a body, they can’t get rid of the biting pursuers, so the price reduction has become the only way to lose face.
 
According to the comprehensive statistical data of public comments, tianyancha and other parties of BBB Research Institute, more than 120 new tea brands were born nationwide from 2017 to 2022. Even in Lhasa, Tibet, a local chain of new tea brands “a Diao” has appeared, and Xining, Qinghai has also born an innovative tea snack bar “baohulu tea shop”. Milk tea yogurt and brewed skin steamed bun appear on the same menu at the same time.
Send “local tea brands in China” in the background to get a high-definition picture of the statistics of new tea brands in all provinces and cities across the country
When local tea brands are booming, the two concentration trends are still obvious. First, some tea brands began to hunt for the front line after contacting with capital, but it is easy to ignore the potential risks in the promotion of brand influence. Second, the new tea brands in the region are accelerating to roll in. Taking Nanning, Guangxi as an example, there are at least 20 local brands competing for excellence, not including major chains such as coco, happy tea and tea Baidao.
 
According to the observation, research and judgment of BBB Research Institute, the store expansion of local tea brands can penetrate north to Shenzhen, and then gradually jump to the front line is not only a good thing, but also a strength move, but it is not “having to enter the first tier cities” to highlight the brand value. If we ploughed deep into specific areas and made products in previous years, the brand strength will naturally precipitate.
 
For tea, both capital and the public should learn to follow the natural law of the development of consumer goods industry. For more than ten years or even decades, it has become a famous brand, which is not humiliating and worthy of respect.
 
“Entering the city” and “returning home”
 
In the 40 years of reform and opening up, the two words experienced by workers may be summarized enough in the development history of the new tea industry.
 
This is almost the epitome of the tea brand’s pursuit in the past eight years, and it is also the long migration path of new tea practitioners.
Even as a brand trader, it is probably divided into two factions. Those who go to the left focus on the city, hunt the front line and seek to go to sea. Those who go to the right anchor and sink the market. Returning home is a dimensionality reduction attack, and the expansion of the territory is like a fish in water.
 
For example, kuntea kuntea from Nanchang, Jiangxi Province, has a master of civil engineering who has been in Tongji, designed bridges, won national awards and worked as an excellent graduate in Shanghai. When he was teaching in Gaotang primary school in Suichuan, Ji’an, Jiangxi Province, he was influenced by the local landscape tea culture. He and his team launched the “bamboo tube milk tea” that caught fire on social media, and then spread it in important local business districts such as Causeway Bay and Vientiane exchange.
(source: xiaohongshu user @iiiok#)
 
In middle note, Lao Geng, who also stayed in Beijing, opened a cafe in Gansu, Lanzhou in 2010, and then incorporated the local fermented grains into milk tea. The northwest light “Kazakhstan” went along the Silk Road into Gansu Tianshui and Qinghai Xining, and all the way to Shanghai.
(landscape feature drink, source: public comment user @ meow omelet)
 
The former may have felt the sweeping tide of new tea drinking in Shanghai during his postgraduate study, and then “returned home” to revitalize local tea drinking. The latter took ten years to make sure that a regional brand was reborn and changed shares and “entered the city” again. This time, it has at least proved that local tea drinking has great potential.
 
First of all, we must clarify a premise that the larger market is at the bottom. According to the 2020-2021 report on the development of Chinese new tea industry, in 2021, the market share of products with a unit price of less than 20 yuan in China’s new tea industry exceeded 80%, and nearly 60% of consumers can most accept tea with a unit price of 10 yuan to 15 yuan. Therefore, honey snow ice city can roll out 10000 and only 900 like tea – which means that there is great potential to sink the market.
 
Sinking the market does not mean that the consumption power of customers is “not good enough” or the market environment is “lack of vitality”. On the contrary, if hierarchical differentiation has been formed in the region and head brands appear, it will stimulate more enthusiastic and benign competition in the market.
 
Taking Nanning, Guangxi as an example, when “Grandma’s hand” entered Shanghai and Shenzhen to carry the banner of new tea drinks in Guangxi, other brands in the region followed suit one after another: more than 20 local brands, including tea extractor, baozhugong and Yongcheng tea, are innovating raw materials, expanding products and upgrading.
When the regional market accelerates the involution, consumers are also striving for perfection. In addition to the success of “yam” as the raw material of “yam” in the United States, she also believes that the reason for the success of “yam @ as a local brand” is the introduction of “yam” as a raw material. In particular, the raw materials for the local soft waxy taste of rice cassava are not common in Guangxi, which is an important reason for its differentiation.
Netizen @ Niji compared 10 Nanning tea brands and key drinks on his social media to analyze the subtle differences of tea flavor, milk flavor and fruit flavor, so as to make consumers accurate.
As the “hometown of fruits in China”, Guangxi’s abundant supply of fruits also provides the development possibility for the new tea sub category “fruit tea”. In the streets and alleys of Nanning, you can buy mango and guava slices mixed with chili powder, which is also the reason why Ding xiansen, aunt Xiaotang and other local stores specializing in fruit tea can survive.
 
Unlike grandma’s main high-end line, regional milk tea brands that mainly focus on medium and low prices can gradually form an echelon, and better digest and adapt to the customers with different local consumption capacity.
 
In the milk tea shops all over the streets in Pingnan County, Guigang City, Guangxi Province, the price of a single cup usually does not exceed 10 yuan. Chain brands with a single cup price of 15-20 yuan, such as Jotun Road, chabaidao and cuicha teacher, are expensive locally. Compared with a high-end milk tea shop with an investment of at least 600000 yuan, the starting threshold of ordinary local milk tea shops is low, and the cost is about 100000 yuan,
 
In March 2018, local Chen Youjie established Guangxi Pingnan Milk Tea Association. Through information resource sharing, upstream raw material suppliers and downstream milk tea enterprises can match directly.
 
Local people like to drink milk tea and are willing to “manage” milk tea. Chen Youjie thought of a way: the Association came forward and established a free franchise to provide 10000 yuan worth of technical guidance, equipment and raw materials for everyone who wants to do milk tea business. This way not only enables more than 300 poor families to regain their livelihood, but also enables the industry to penetrate deeper locally.
(list of Pingnan milk tea brands, source: Catering o2o)
Wang Gangyi, a professor at the school of economics and management of Northeast Agricultural University, went to Pingnan for research at the end of 2019. He found that the milk tea industry formed based on clan relations has rapidly penetrated the network of Pingnan milk tea shops across the country, and these Pingnan people “do not compete with each other”.
 
According to the report of China Daily, under the coordination of the local milk tea association, the usual model is that each lineage family first takes over a mature brand, and then when the brand obtains a certain market share in the local area, they develop a new brand.
 
This is a possible path of benign competition and common development. Pingnan milk tea industry has further developed a fine division of labor from raw material procurement to marketing, thus forming a more perfect and powerful industrial cluster. Relying on the development of milk tea industry alone, it has digested the local labor force of nearly 200000 people.
 
At present, there are more than 200 local milk tea brands in Pingnan County, with more than 40000 stores. The annual sales revenue of the whole industry exceeds 50 billion yuan, and some brand stores have penetrated into Southeast Asian countries. Chen Rensheng, Secretary General of Pingnan Milk Tea Association, said, “this figure is about 20% of the market share of the country.”.
 
The risk is hidden
In fact, local tea brands with good development momentum and capital involvement are not without risks if they blindly adhere to “first tier cities”.
 
When local tea brands enter the front line, the traffic and popularity brought by a good geographical location are particularly important to open up the situation. But in Shanghai, every inch of land is worth every penny of money.
 
As the public already knows, the battle of “store competition” kicked off in Shanghai with the battle of the coffee industry as the horn. Ruixing and even coffee, Starbucks and manner were involved, and there was no accident that there was no winner. When the store premium doubles, or even 4 or 5 times, it puts great pressure on the flow and profitability of a single store, and the sustainable operation of the store is naturally in jeopardy.
 
Local brands have no advantage in this “point competition”. Taking the “Hetian shuipu”, a health preserving herbal tea in Qingdao, Shandong, as an example, its first store in Shanghai is located in the food street on the second floor of the underground of Jing’an International Center. Even the address description on the public comment should be marked next to “a canteen”. Although the product is good, it is too unobtrusive without an independent door.
 
When the representative of Yunnan new tea drink “Bawang chaji”, who has reached round B, came to Shanghai, one store is located in Nanyang Road, next door is a ramen shop, and the momentum will fall by half. The other one is opened in Fengxian Bailian. If the extension of line 5 is not opened to traffic, it will be far away from even the subway.
 
Even if we get the envy of the Xintiandi, the “Grandma’s handmade” in the “landmark” business circle does not make Shanghai consumers completely buy it.
The first reason is the consumer experience. In the words of a post-90s investor, “no milk tea can make me queue up for more than an hour.”.
This also shows that the discount service experience will more or less degrade the brand value. According to the recent landing of the first store of blue bottle coffee in Shanghai, wait in line for 6 hours, pick up the goods after placing an order, and wait another hour. No matter how expensive the seven hour coffee is, it will change its taste in your mouth.
 
This seems to have created a dilemma for local tea brands in the location of “first tier cities”. Going higher, single store income can not cover store rent and labor cost; Going low, the money thrown down can’t splash at all, and it’s difficult to establish brand awareness.
 
In addition to site selection, the process of consumers’ cognition and acceptance of local tea products also takes time. For example, some northwest tea brands have launched “apricot peel water” drinks in Shanghai, which is as difficult for southerners as the acceptance of “bean juice” in Beijing. It’s not that bean juice or apricot peel water is bad. Like broken ear roots and coriander, some people like it very much, while others can’t accept it at all.
 
After the northwest light “Fangha” entered Shanghai, it also faced the running in of Gansu characteristics and Shanghai flavor. An investor close to the brand said that it may take some time for Shanghai consumers to accept “sweet fermented grains”.
 
Being in the whirlpool of tea drinking battlefield in first tier cities is also a protracted war in terms of time. The brand needs to invest a lot of human, material and financial resources for a long time, deeply cultivate local needs, and add a little essential luck, so that the local tea brand can really stand on its feet.
 
Otherwise, this trip to the city is meaningless to both brand reputation and Book figures.
 
At this point, the already famous tea Yan Yuese has set an example. Even if the capital has been approached, the pace of chayan’s expansion is quite cautious. Starting from Changsha, they have been expanding in Hunan Province on a small scale at first. The choice of cities is also Changde and Zhuzhou, which rank high in GDP in the province. Even entering Wuhan is the end of 2020. It was not until April this year that chayan began to enter Chongqing, the second big city outside the province.
 
The twists and turns in the middle may be heard by the public. Under the aggravation of the overall uncertainty of the industry and the repeated outbreaks of the epidemic, chayan, who is so cautious, has closed stores for many times. Even for local head tea brands, what about the second and third echelons?
As consumer goods, we should be in awe
If the market capacity in the region is large enough and the risk of venturing into the front line is far greater than the income, why do most local tea brands still have to make great efforts to “compete for the front line”?
 
There is a seemingly ridiculed digression, but it may also be true. A local tea founder said that most investors are resident in first tier cities such as Shenzhen and Hangzhou in the north. They have invested you and paid money. You always have to open a shop close to him and let him go on a tour from time to time. It’s kind of like regular inspection.
 
But “marching into the front line” is more a historical factor. In the first three decades when luxury brands and FMCG brands were concentrated in China and fully rolled out, high-line cities formed a “brand dimensionality reduction attack” on low-line cities. This feature is deeply remembered by this generation of brand creators and builders.
 
At that time, the concept of “brand building and management” was still a new word for Chinese local brands, and the academic circles were relatively unfamiliar with this system. The lack of mass consumption market has contributed to the people’s enthusiastic desire for mature European, American, Japanese and Korean brands, and also made foreign brands more “holding” when transmitting brand values – holding, which is a top-down attitude.
 
In this discourse system, the price tag of the brand locks in its own target customers in the most efficient way, and achieves good brand image shaping and management through the commodity display and VIP service of the flagship store – don’t think that the interior design of the flagship store is not important. These flower racks represent the historical connotation and aesthetic trend of the brand, but also imply the status and level of the brand in the whole brand kingdom.
 
This also explains why nowadays, no matter catering brands, clothing brands or cultural and creative brands, as long as they fall into the offline physical space, they all pay special attention to the beauty of design. This is the most intuitive visual impact that this generation of Chinese brands learned from European and American brands.
 
Similar to the direction of the whole wave of social modernization in China, when the consumer brands of this generation change and evolve, like the concept of “entering the city” I mentioned earlier, they tend to go up rather than down. Although this is not necessarily the real “next”.
This idea makes brand builders hope to be recognized by higher quality people and larger circles, and choosing first tier cities is the fastest way, because the characteristics of local people are clear enough and the sample size is rich enough.
 
Therefore, to some extent, there is no essential difference between the gathering of local tea brands to first tier cities and the competition of new tea brands Naixue and Xi tea to go to sea first. The former has many difficulties in going north, and the latter has many difficulties and obstacles overseas, but they all believe that they have a bright future.
 
Under the frequent Black Swan events in recent years, Naixue once lost her halberd in Japan, and Xi tea also slowed down the pace of entering overseas, but there are still countless brands of the first and second echelons of new tea to keep up. Bawang chaji has opened its stores in Thailand, Malaysia and Singapore. Some investors of Lele tea are also waiting for the opportunity to go to sea.
 
Because after 30 years of polishing, at a time when every consumer category is likely to be redone, Chinese consumer brands represented by new tea need a stage to prove that they are “strong, I can, I can”. For local tea brands, it is to go to the first tier cities, and for new tea head players, it is to go overseas for trial.
 
This generation of brand builders should be alert to possible foam and traps when they are sincere, courageous and confident.
 
We have always said that we should maintain enough awe and soberness for the consumption track to meet the basic living needs of food, clothing, housing and transportation. For local new tea brands, good things and ensuring food safety are the biggest confidence. As for the overall improvement of visual symbols and the construction of brand connotation, it doesn’t matter. There is still time in the future.
 
As for the rise of valuation data, the beauty of capital story and the “good drink” in the eyes of consumers, sometimes it is really the same story between the two circles. The scenery of the former needs to be supported by the rapidly expanding number of stores and the increasing flow of single stores. The praise of the latter may be just a “casual mention” when the taxi driver takes you to your destination.
 
The former’s reputation can only be achieved through the rush of primary school students to buy after school. However, whether it is to become the “light of new tea” in China or the “representative of China” in the world’s tea, no one is more noble as long as it is delicious and praised by everyone.
作者:李小歪;设计:银瀑布;来源:BBB研究所(ID:gh_c21f49b602dc),转载已获得授权。
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