China Food

Is Nanyang the way out for “rolling” abroad? The bloodbath after drinking new tea at sea

From the domestic “roll” to foreign countries, talk about the stories of new tea drinking outside Nanyang.

By: Corin

Source: foodaily daily food (id:foodaily)

Many regions have their own representative new tea brands, such as the “city card” of Changsha, Hunan Province, the “tea beauty” of Changsha, the Bawang tea lady who started in Kunming and based in the southwest, and the grandma’s works called “the light of Guangxi”, etc.
Most of the regional new tea brands with local characteristics want to go nationwide, but they are not smooth sailing on the road of national expansion, or they will be acclimatized, their tastes will not adapt to local preferences, or they will have problems such as narrow scope of supply chain radiation and difficult rapid expansion of business mode.
After all, the domestic new tea industry is too voluminous. According to the 2021 new tea research report released by the China Chain Management Association, the number of beverage stores in China by the end of 2020 was about 596000, of which the new tea stores accounted for 65.5%.
The leading brands are still pushing new products layer by layer to seize the segment circuit. It is not easy for regional tea brands to find a way out among many brands, and breaking the regional cage is a challenge.
Source: Bawang chaji official website
In addition to domestic expansion, what is the way out for growth? In addition to 2019, Bawang chaji went to Nanyang and opened its first store in Malaysia. At present, Bawang chaji has nearly 40 stores in Malaysia.
Next, let’s walk into the stormy journey of new tea brands fighting overseas.
The water and soil nourish the tea,
It’s not that easy to break the circle
As one of the leading regional new tea brands, tea beauty has truly become the “city card” of Changsha, Hunan. Many people must have “tea beauty” in the to do list when they travel to Changsha. As one of the first batch of new tea brands to emerge from the circle with the national fashion style, tea Yan Yuese took the lead in launching the milk tea combination of “nut crumbs + fresh milk oil + milk foam + Chinese tea + fresh milk”. The taste was completely different from the popular “creamy milk tea” and “tea loving fresh fruit tea” in the market at that time. The Chinese taste not only captured the consumers in Changsha, but also enjoyed a good reputation, making the milk tea lovers all over the country excited and longing.
Image source: Cha Yan Yue se official microblog
Bawang chaji followed closely. This brand, which has come out of Yunnan, the dominant tea producing area, has also launched the banner of “Oriental new tea shop”, determined to become “Oriental Starbucks”, adhered to the “national style” route, created the core category of original leaf fresh milk tea with the idea of “original leaf + fresh milk”, and integrated Pu’er, Dianhong, glutinous rice fragrant leaves and other tea varieties with Yunnan characteristics.
At the same time, not only Bawang chaji’s brand logo and store decoration are integrated with the quintessence of Chinese opera elements, but the product names are also partially used with the names of songs and brands with a long history, “Boya Juexin”, “Guangling San”, “guifulan fragrance” and other names with ancient meanings and lingering fragrance, so that consumers can immerse themselves in the oriental cultural atmosphere they have built.
Photo source: Bawang chaji’s official microblog
Kawanka, which came out of Hefei, took another road. Kawanka, which was established in 2008, has made a great success in the circle of friends of Anhui people by virtue of its taste and quality. Most of its base teas are Anhui’s specialties – Maofeng Tea and Qimen black tea. As long as you spend 13 yuan, you can have a full set of milk tea full of taro balls, coconuts and black bricks, which is very cost-effective.
At the same time, kawanka also wants to become the “Haidilao” in milk tea, bringing many considerate services to consumers. Coupled with its simple store decoration, supplemented by exquisite Chinese design everywhere, kawanka has gradually taken root in the hearts of Hefei people, and its reputation has slowly spread.
Picture source: kawanka official microblog
Although these regional new tea brands have conquered the tastes of local people, they have encountered many problems when they want to get out of the comfort zone. For example, some brands are deeply “bound” to the local market with the support of local policies. It is not so easy to go global.
For example, the brand is deeply rooted in regional characteristics and tastes. Once the territory is expanded outward, there will be problems such as the taste is not recognized and the supply chain is difficult to keep up. Moreover, it is not easy for local brands to quickly gain national brand awareness. At the same time, it is difficult to achieve national scale expansion due to insufficient capital reserves, which also helps to complete the closed loop of brand education weakness.
Take chayan Yuese, the leader of regional new tea drinks, as an example. It is now reducing the number of stores in Changsha and starting to march across the country. At present, it has radiated to the surrounding Wuhan and Chongqing. Although it has just made a high-profile announcement that it is ready to enter Jiangsu and Zhejiang, as early as last year, it went to Shenzhen and took the step of long-distance brand expansion.
However, due to the direct marketing mode adopted by chayan, all raw materials need to be regularly transported from Changsha. Even if they are far away in Shenzhen, they still need to be supplied from Changsha. Due to the high logistics costs and the relatively low pricing in the industry, chayan’s revenue and expenditure balance is not optimistic. Therefore, after experiencing the “flash forward” of Shenzhen for five months, Cha Yan returned to Changsha to re plan its road of national expansion.
Source: Cha Yan Yue se official account
At the same time, it is not difficult for us to find that the new tea market in the north is not favored by the southern brands. Even if the regional new tea brands want to bite the hard bone of the northern market, they have to weigh whether their logistics and transportation costs can achieve revenue and expenditure balance. Therefore, going south to sea has become the starting point for these brands to try to break the situation.
New tea drinkers want to go abroad
Why don’t we take a look at the experience of our predecessors
With the increasingly fierce competition in the domestic new tea market, more and more enterprises turn their attention to Southeast Asia, an overseas market that has not been intensively cultivated. It is one of the most populous regions in the world, with the rise of middle-class consumption. It has a similar tea culture with China. Moreover, most of the local new tea drinks are still in the 1.0 era of tea powder. For brands, this is an attractive cake, and everyone can’t wait to get a piece of it.
Of course, Bawang tea lady is not the first new tea drinker in China. As early as 2011, coco milk tea had opened its first store on the streets of New York. In september2018, the first overseas store of Michelle ice city was also located in Vietnam. At present, Michelle ice city has more than 200 stores in Vietnam. In November of the same year, the first overseas store was selected in Singapore. As soon as Bawang tea lady gained a foothold in China in 2019, she rushed to Malaysia nonstop.
With the tide of the market, what are the secrets of these new tea brands that can take root locally?
Correct site selection for brand tone
Southeast Asia, such as Singapore, Malaysia, Vietnam and other places, has a tropical climate and is almost always hot. It is naturally suitable for the development of cold drinks and desserts. Coupled with the impact of China’s tea culture on Southeast Asia, the people there also have a long history and culture of drinking tea, so they are relatively easier to accept the new tea from China.
Source: Official Website of snow city Malaysia
Localize according to local taste
In order to successfully hit the target population, it is necessary to make localization adjustment according to the needs and tastes of the local people. For example, after Xicha entered Singapore, it was found that local people prefer durian flavor and salted egg yolk flavor, so they developed drinks and ice cream with these two flavors.
Image source: instagram
After entering Vietnam, the honey snow ice city adjusted and improved the sugar content of milk tea according to the sweet characteristics of local people, and removed the common three sugar and sugar free products in China. Coco, taking advantage of the upsurge of pearl milk tea sweeping overseas, mainly promotes its three brothers of milk tea and other products that meet the expectations of overseas consumers, thus successfully entering overseas groups.
Subdivide target groups and carry out targeted marketing
Xi Cha continues to follow the middle and high-end route in Singapore, targeting the middle class. It is not only located on Orchard Road, where top retail and high-end residential buildings gather, but also cooperates with KOL on instagram and Facebook. Once new KOLs are launched, they will update their punch in comments and use the appeal of online celebrity to build momentum for themselves. (does this move look familiar?) Also aiming at the Southeast Asian group, snow ice city chose to continue to follow the sinking market route and detonate the market through the low price strategy. Compared with the domestic pricing, the price of honey snow ice city in Vietnam is lower, almost 20% off that in China.
Photo source: Singapore online Red punch in photos on INS
In addition to the Southeast Asian market, the European, American and Korean markets also have a high degree of acceptance of table pearl milk tea. In addition to Taiwan brands such as Gong tea, chatime and sharetea, many non Chinese brands with high market share have emerged in various places, such as the Boba guys and cuppacha. Some regional tea brands, such as Yingge soul, have also targeted this part of the market and plan to attack quickly to win this blue ocean.
However, not all new tea drinkers can achieve success when they go abroad. Failure is the norm in many cases. Almost all new tea drinkers entering Japan have suffered a head-on blow. In addition to pearl milk tea, the Japanese do not like the current domestic popular tea drinks with small ingredients added into Babao porridge. Elderly people think that this is a stain on the traditional tea drinks, which they scoff at. Chinese traditional tea culture is more popular in the Japanese market than the new-style prepared tea. Therefore, new tea still has a long way to go in terms of market education if it wants to enter Japan.
In 2020, Naixue’s tea will enter Japan with a large amount of money. It has built nearly 200 square meters of stores in Osaka, focusing on three sectors: fresh fruit tea, baking and retail.
However, it is well known that Japanese fruits are very expensive and are not friendly to Naixue, who specializes in fresh fruit tea. At the same time, the labor cost in Japan is also very high, which further aggravates the operating cost of Naixue. In addition, under the epidemic situation, all brand activities in Japan have been affected by the strict epidemic prevention policy. Naixue, who had relied on the media and event marketing to build momentum, did not succeed in laying a solid foundation in Japan. In September 2021, Naixue had to close its stores in Japan.
Ins punch in photo of Naixue’s first store in Japan just opened
Image source: ins
Although hitcha registered the twitter account of the Japanese station as early as 2019, it has been rumored that it will open the first station in Japan in Tokyo in 2020, but there is no following at present. Machi Machi, which once appeared in Jay Chou’s MV, has disappeared in the streets of Japan.
Set sail to sea and “roll” the door to go abroad
What problems will new tea drinkers face?
The epidemic situation can not stop the new tea drinkers from going to sea one after another. However, the risks of going to sea are real. If you want to succeed overseas, you must at least make some preparations.
The most important thing is to solve the problem of supply chain. In the past two years, affected by the epidemic, the pressure on shipping logistics has increased, the port is crowded seriously, the shipping cost has skyrocketed, and even some raw materials are stuck in the port and cannot reach the local stores. The blockage of Suez Canal in 21 years has affected the flow of milk tea raw materials to Canadian stores. Therefore, the topic of bobashortage has also appeared on twitter.
In order to solve the problem of supply chain, in July last year, snow ice city began to build its Asian headquarters in Chengdu. It is expected to be completed in January 2023. At that time, its raw materials such as tea, seasoning milk slurry and packaging materials can be transported to the sea from the transportation network of Chengdu to solve the problem of supply chain layout to the greatest extent.
In 2021, there was a shortage of pearls in a milk tea shop
Image source: Twitter
At the same time, in the third year of the outbreak of the epidemic, offline physical stores were affected to varying degrees, and the passenger flow of new stores should be reasonably estimated. In addition, if you want to open a carpet shop overseas, you should not only do a good job in market research and estimation, but also have a full understanding of local policies. The carpet store strategy like snow city is not feasible in the UK. Coco, which has long entered the European and American markets, has opened three stores in the UK.
The third is to plan the overseas operation mode. In the past, coco and Gong Cha cooperated with overseas agents. Gong Cha was lucky. In 2017, it was taken over by Korean capital in the form of share acquisition. However, its agents in Singapore also cancelled their cooperation with Gong Cha and established a new brand.
At the same time, coco has also fallen into the agency quagmire. Since 2016, the Taiwan headquarters has fought an unfinished agency lawsuit with Korean agents. Now, brands such as snow ice city and Bawang chaji are more inclined to join in, and plan to build management teams overseas, so as to control overseas business more vertically and avoid business disputes to a certain extent.
Image source: Weibo@_ July time
In addition, sufficient market research should be done before entering the overseas market. The repeated upsurge of precious milk in the Japanese market has also sounded an alarm for new tea brands who want to go to sea. In Japan, the category of pearl milk tea has the highest acceptance. When it first entered Japan in the 1990s, it was popular for a while. Later, around 2008, Taiwan tea brands made pearl milk tea a little popular. In 2019, the popularity of precious milk reached its peak in Japan again. Even in the public opinion survey, some people hoped to take pearl milk tea as the new year’s title.
Unfortunately, the upsurge came and went quickly. When the heat went away, there was only a mess left. According to a report on the Japanese website, there were 35 milk tea shops in Biao sendo. By 2021, there were only 11. This phenomenon is related to the epidemic situation, social culture, product price and taste in Japan. Therefore, new tea drinkers still have a long way to go to develop the Japanese market.
Source: ikebukurogu com
Nowadays, under the background that China’s new tea drinks are pouring into the overseas market one after another, overseas and local brands are also growing savagely. China’s new tea drinks have made a good sample for them, and many local brands have broken through the ground and will also join in the market share competition in the future. It can be predicted that there will be a bloodbath in the overseas new tea market in the future.
It is not difficult to find that in the future, new tea brands still have a long way to go if they want to gain a foothold overseas, become bigger and better, and stand firm and become overseas leaders. Moreover, in addition to domestic regional new tea brands, tea brands from other regions such as Thailand, Singapore and South Korea have also joined the competition in overseas markets.
At the same time, while representing China’s new tea brands to the world, can regional new tea brands “kill” the domestic market in the future, and walk out of a circuitous but effective way to become the king of regional new tea? Let’s look forward to it.
reference material:
[1] Will the overseas battlefield be a new outlet for the new tea “gold rush” in Southeast Asia?, Red meal, June 14, 2022
[2] Tea color is pleasant, Changsha fulcrum is “difficult to pry” the national market, PAIKE: brand digital reading, June 9, 2022
[3] China’s tea “harvest” overseas: sell 30000 cups a day and earn 300million yuan in two years, operation research society, April 27, 2022
[4] The store is closed and the enthusiasm fades! What happened to the “Crazy” pearl milk tea in Japan?, Catering o2o, April 12, 2022
[5] When milk tea rolls abroad: store closure, pearl foam and kidnapping rumors, daily people, March 15, 2022
[6] End of year observation in 2021 | the Jianghu of new tea drinks overflows overseas, no taboo in finance and economics, December 27, 2021
[7] Research Report on China’s new tea industry, iResearch consulting, October 2021
[8] How Bubble Tea Conquered the
British High Street, vice. com, Mar 17, 2022
[9] Sorry to burst your boba:
Bubble tea supplies running low in Canada, CBC Kids News, April 20, 2021
[10] The Future of Bubble Tea &
Insights on Who’s Leading the Industry, Worldteanews, Dec 3, 2020
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