under the blowing of the hot monsoon, the tide of milk tea strikes again.
The new tea drinking track is still lively, but there is no new war.
The competition of the first echelon is too fierce. Two aspects that can not be ignored are: the head brand extends its tentacles to the sub circuits such as bottled drinks, tea and coffee wine, oat milk and ice bock; The successive popularity of perfume lemon, oil orange and yellow peel reveals the fact that ingredients and ingredients tend to be homogeneous.
When VCs are looking for new investment opportunities with eagle eyes open, people outside the wall are afraid to enter the game too late, while those who enter the game strive to expand outward.
The “Honey snow ice city”, which originally settled in the second, third and fourth tier cities, can only continue to go down to attract consumers who still have a fresh sense of new tea drinks. In the close combat of sinking the market, they are already experienced players who earn more experience value.
Gu Ming, who is a middle-end market, went to Tuscany, Italy. Coco has also cultivated in Australia, Japan and North America for many years. Southeast Asia, which is geographically close, has naturally become a hot land for new tea to go to sea, and a pearl milk tea boom has been set off again.
In November 2018, Xi Cha and Naixue’s tea will be the first stop in Singapore. In September of the same year, the first overseas store of honey snow ice city had already landed in Hanoi, Vietnam.
A set of data shows that the turnover of the store on that day was as high as 9681 yuan. Honey snow ice city continued its low price strategy in China, setting the price of pearl milk tea at 25000 vnd, or about 7 yuan. Nearly 1400 cups are sold a day, which is impressive enough in Vietnam’s local consumer market.
After having a lemon and a super large 1L fruit tea, the non explosive “I drink good” also announced on its official website that it “has more than 2500 stores in the country and even Southeast Asia”.
Bawang chaji, founded in Yunnan in 2017, only gained a firm foothold in the mainland in 2019 and immediately opened its first store in Malaysia. So far, it has 25 stores in the local area (according to incomplete statistics of BBB Research Institute), and extends to Thailand, Singapore and other countries.
The sunrise tea lady, black whale, yihetang, koi, Tianren tea, chunshuitang, Lujiao lane, world tea and tribute tea, who entered the Southeast Asian market in the early years, have already prepared the Taoist arena for the re boiling of tea soup – Southeast Asia is undoubtedly the first solid land for xincha to set foot on the sea.
All kinds of signs show that this is a coincidence of sweet taste.
Chunshuitang in Taichung and Hanlin teahouse in Tainan went to court over which company invented pearl milk tea. The lawsuit lasted for 10 years. In 2019, the judge finally decided that pearl milk tea is a new beverage, not a patent, and there is no need to dispute who the “ancestor” is.
The origin of pearl milk tea is unknown, but it is obvious that it has already floated around the world along the monsoon and by the ocean current.
If you look in the direction of “Nanyang”, you will subconsciously think that this is a paradise for cold drinks. The annual average temperature in Southeast Asia is close to 30 ℃, which is almost the “golden spot” for tea production. People have a demand for cold drinks all year round, and the light and peak seasons are not clear. Looking back on the history of pearl milk tea in Singapore, you will find that there are three distinct consumption waves.
The first time was when pearl milk tea was first introduced into Singapore in 1992.
The brand bubble tea garden is the first entrant. Its store is located in the marina Plaza in the south of Singapore’s core business district. Its menu has strange flavors such as pearl milk tea, yam milkshake, honey egg yolk, whisky black tea and honey mint, but surprisingly, the store is very popular. As you might expect, most of the customers are also students. Most of them speak Chinese and patronize the store in groups.
At this time, the existence of “milk tea shop” is far from providing “communication space”. Wall message boards or social media haven’t appeared yet, allowing customers to express their ideas.
So more and more small stores are competing to join the market. At first, they were mostly scattered in the streets of the city in the form of milk tea kiosks, but soon evolved into “making takeout”. Therefore, the threshold of milk tea business is further reduced, because it only occupies about 22 ㎡ to 44 ㎡ of space, which can be handled by a clerk and an operating machine.
The need for low-cost stores and the increasingly popular milk tea culture have led to a significant increase in the number of milk tea stores across Singapore. At the peak of 2002, there were about 5000 stores in the market – you know, Singapore is smaller than Shanghai’s Pudong New Area.
Some small start-ups even rent shops in cake shops and shoe stores. According to local news reports, these milk tea shops can sell 800 to 1000 cups a day. There is a chain of quick girl and cool girl, etc.
In such intense competition, milk tea shops began to attract customers by means of advertising songs, buy one get one free promotion and lucky draw. Some even invited models with exposed clothes to attract business. At the same time, a fierce price war is also starting. The price of a single cup of pearl milk tea in some areas has fallen less than one dollar.
The market was saturated and the foam finally burst. Many milk tea stores have shrunk or simply closed down, which means that demand is also declining – the number of stores of the brand each-a-cup decreased from 51 in 2001 to 15 in 2003.
As a result, the consumption of milk tea came to a calm period, which was silent in the following years and became popular again in the late 2000s.
According to Google search data, the search proportion of local milk tea increased from 4% in January 2010 to 30% in January 2011.
Source: Google data search
In 2007 and 2009, Koi and gongcha entered the Singapore market one after another, and there was a winding queue at the door of the milk tea store again. This time, the quality and taste of milk tea soared, and the unit price of milk tea rose from S $3 to S $6 (14 to 28).
The third wave of consumption began in 2018, and a large number of new tea brands entered Southeast Asia. The emergence of cheese tea, fruit tea and black sugar milk enriched the categories of milk tea, and people’s interest in pearl milk tea increased exponentially.
As a result, under the tropical monsoon, the milk tea fever struck again.
In Kuala Lumpur, Malaysia, the SS15 block of Subang Jaya has always been the best place for diners to find food. In this 400 mu square area, there are more than six universities and private schools. College students holding drinks shuttle from morning to night. Neon lights hide the signs of Penang pork powder, desktop thick cut sandwiches and new cafes.
Milk tea is naturally the highlight – SS15 is the local famous milk tea street. The main brands of black sugar milk are Lujiao lane, Xingfu hall and leopard black sugar. Next door is the Banxian Doufu who has closed the store, and not far away are two overlord tea girls who are 300m adjacent.
Subang Street source: low yen yeing
According to the data of grabfood, a local takeout software in Southeast Asia, the order volume of pearl milk tea in Southeast Asia has been increasing rapidly, with an average growth rate of 3000% in 2018.
*Time period: January 2018 to December 2018, or from the date when grabfood is launched locally.
Data also shows that on grabfood, an average of 4 cups of pearl milk tea are purchased per person per month. Thai consumers are 2 cups higher than the average, followed by Filipino consumers, who drink an average of 5 cups of milk tea per person per month.
Behind this revival, social media has generated a great driving force. As milk tea brands pay more and more attention to product aesthetics and marketing, consumers begin to punch in and take photos of milk tea on social media.
The new tea brands entering the Southeast Asian market have also formulated strategies on product details.
Bawang chaji, who specializes in the original leaf fresh milk tea, designed an “ultra-high paper cup”. The lower layer is a removable hollow blind box. Consumers can get a small gift at random, such as a mask, a pen and so on. It also invited Li Zongwei as the spokesperson of Malaysia and the node of brand 2.0 upgrade.
According to media reports, on the day of double 11 in 2021, Bawang chaji sold 30000 cups of milk tea in all stores in Malaysia, with an average daily turnover of 25000 yuan.
All these measures are obviously effective, and the “culture card” is also a strange trick. The focus on national style enables it to seize the opportunity to become a head brand in a specific region under the background of the gradual integration of Oriental culture.
In the category of menu, the uniqueness of Bawang tea lady is highlighted. “Drunk Yunnan” and “Boya Juexin”, which concentrate Chinese culture, have long been routine operations in China, but they are very different from tealive, the largest milk tea chain in Malaysia. New concepts are coming one after another. The traditional pearl material with cassava powder as the core + fat powder to brew milk tea, or have been shot several times.
In terms of price strategy, the average price of Bawang chaji in China is 15 yuan to 25 yuan, taking the middle-end route; In Malaysia, the price is RM10 9 to RM20 9 (about 16.6 yuan to 31.9 yuan), which is not much different from that in China, but it is RM3 more expensive than teaive’s signature Earl milk tea.
High prices have not solidified the consumer group. Of course, young people are keen to pursue this new trend. After all, holding avant-garde and exquisite cold drinks in their hands is a happy thing – this is also the chain reaction of young people’s fear of missing the trend and hope to keep in touch with new things forever (fomo Psychology).
Leonard Lee, a professor of consumer psychology at the National University of Singapore, analyzed, “consumption can serve more experience or hedonistic goals, but importantly, it can also serve symbolic values.”
Therefore, drinking milk tea not only brings the pleasure of taste buds, but also an expression of identity and a signal of willingness to try. In the article “milk tea rolls to the United States and gets involved in tiktok” previously published by BBB Research Institute, we also mentioned that the action of “drinking milk tea” has subtle Asian characteristics, resulting in a large number of memes. To some extent, drinking milk tea has also become a part of Asian identity, which may explain the reason why domestic new tea brands go to sea.
All domestic brands are facing the same problem when going to sea, that is, how to really win the overseas market. In the early stage of landing, tea brands may be able to dig deep into overseas Chinese groups, and their strong purchasing power should not be underestimated; However, by lengthening the timeline, most of them are trapped in the narrow area of “Chinatown” and have never become a brand recognized by local consumers, such as Banxian Doufu, who disappeared in Subang SS15 block mentioned above.
So the road to the sea has become a struggle for families to tell stories and shape a sense of brand.
The salary of Bawang tea lady’s full-time tea drinker in Malaysia is between RM 1.8K and RM 2.8k, that is, RMB 3200-5000; The equivalent position in Shenzhen can reach 5000 yuan to 10000 yuan.
Although the overseas person in charge of Bawang chaji said that the labor cost of Malaysian stores is 1 / 4 lower than that in China, and the rent cost is 1 / 3 lower than that in China, the requirements for overseas operation and human resource capacity are much higher than that in China: “our employees are required to speak at least Chinese, English and Malaysian. Even some stores require employees to speak Taiwanese because there are many Chinese customers in Southern Fujian, so they have high requirements for employees’ academic qualifications and overall quality.”.
The shaping of this brand sense must also endow the tea itself with enough stories in order to maintain its vitality.
Turn your attention to Malaysia’s neighboring country, Singapore, on the lower right. The business ecology here is very different from that of Malaysia.
Bawang chaji’s selection points in Malaysia are mostly located in the center of the top shopping center, but the rent is lower than that in China. According to Jason Lim, senior director of royalland real estate company, the rent of commercial real estate in Singapore is not cheap.
Go down the Singapore River and head for Merlion park from Clara wharf. The first shop of Xi tea in Singapore is located here. Through Clarke Quay center, Riverwalk, one Raffles Place and other shopping centers, every stop and every piece of land beside the river is full of land and money.
Less than two blocks away from the Fullerton, a five-star hotel, is Raffles square, the nearest shopping center in the core downtown area. It is only 8 minutes from here to the Merlion statue, a landmark in Singapore.
In this area, the stalls used for food / drinks are divided according to the advantages of location, flow of people, water and electricity equipment, etc. the unit price (PSF) per square foot is between S $9 and S $34 (about 481 to 1817 yuan / square meter). In addition, according to the sales volume of the store, the floating rent of 1% to 15% shall be drawn according to the point.
The Citylink mall, which is close to the subway and Binhai Bay, is next to Singapore’s Art Center and concert hall, with a huge flow of people. In this area, there are three different areas of retail space, and the unit price per square foot (PSF) ranges from 20-25 Singapore dollars (about 1068 yuan to 1336 yuan / square meter).
It can also be seen in the figure that the point price of food and drinks in the hotel is generally lower than that in single buildings such as shopping centers, and the point price in pure hotel buildings is slightly higher than that in hotels in shopping centers.
When renting specific milk tea or restaurant shops, the price will be increased according to the existing facilities. Many stores are transferred before taking over. If the store has been equipped with floor drain, gas, oil separator and water bar, the decoration cost of the store for new tea will be reduced, and the rent price will rise moderately at this time.
The shop is open and the money is burning.
A few years ago, milk tea brands in Southeast Asia seemed to have been evil, and most of them could not escape the storm of “agency”. Two famous cases were tribute tea and sunrise tea.
Around 2017, as a well-known Taiwan pearl milk tea chain in Singapore, Gong Cha is gradually disappearing, and even the official Facebook is no longer updated. Zheng Zhenliang, a Singapore agent of tribute tea, unilaterally cancelled the seven-year cooperation with Taiwan tribute tea company, and 80 branches began to withdraw. Instead, it was a brand called “liho”.
The cause of the incident was that he found that royal tea Taiwan, the parent company of tribute tea in Taiwan, had sold the company to Korean tribute tea. This growing sense of betrayal prompted him to create his own brand.
New material wholesalers, new tea making techniques, new store decoration and menu logos all seem to silently prove the necessity of creating their own brands with their heads held high, and liho is the Minnan pronunciation of “hello” – there are 2 million Minnan people in the permanent resident population of Malaysia.
According to local media reports, after Malaysia opened its first “sunrise tea shop”, the single store achieved a revenue of NT $1 million within six months, with a net interest rate of more than 30%, higher than the net interest rate of 12% to 15% of the single store in Taiwan at that time.
However, the dispute began in January 2017. At that time, La Kaffa, a Taiwanese company behind sunrise tea, terminated loob holding’s contract as the franchise holder of sunrise tea because agent LV Weili was accused of breach of contract: purchasing unapproved raw materials.
As a result, LV Weibi (95% of the stores at that time) will continue to operate as chalive.
The subsequent disputes were not obvious. The examples of tribute tea and sunrise tea lady sounded an alarm to the latecomers: “agent” or “direct sale”? This is a problem.
When entering the new market, it also depends on the refined management of local agents and whether they pay attention to the brand – which is related to the survival time of the brand in the local market.
On June 22, 2021, mixue, the overseas brand of Michelle ice city, announced on its Facebook account in Vietnam that it would provide preferential treatment free of franchise, design and management fees in the third quarter of 2021 to attract franchisees to join.
It’s the same way to join in. Honey snow ice city is obviously much more familiar. The light franchise fee and its own raw material supply chain are the trump card for honey snow ice city to maintain a low price. The franchise fee in the mainland is only 10000 yuan. With the addition of equipment and raw materials, the annual investment cost is between 300000 and 400000 yuan. Each franchise store is responsible for its own profits and losses, and the revenue of honey snow ice city comes from the franchise fees and material fees of stores across the country – in other words, it is all accumulated by the scale of a huge volume, and all it earns is hard money.
While the expansion of honeysnow ice city in the sinking market has already become saturated. Middle end milk tea brands such as Gu Ming, Shu Yishao Xiancao and cha Baidao began to try to take over the overflow of honeysnow ice city. The head brand hi tea also launched “Hi tea” priced between 6-15 yuan.
So going to sea is necessary. When capital and lens revolve around new domestic consumer brands, some people will still break a narrow road. But the new tea drink is only a business after all. How to tell a good brand story while expanding itself is still the knowledge that the founders need to clarify.
It is certain that when local tea brands have not been born in this hot land of Southeast Asia, domestic new tea brands have long been ready to move towards it.
Original title: milk tea goes to Nanyang, and the new tea is no longer trapped in Chinatown
Author: silver waterfall; Source: BBB Research Institute (ID: gh_c21f49b602dc), reprint authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);