Nayuki s tea lost to the parity market

Text |Value Planet Cheng Jia.

Edit |Tang Fei.

Shi Ningning, who claims to be the "head of milk tea", drank a cup of milk tea almost every other day when he was in college in Beijing. After returning to her hometown, she thought that there were fewer bubble tea shops in her hometown than in Beijing, but she didn't expect that there were two bubble tea shops near her home that could not be drunk in Beijing. "Walking towards the main street of our county, you can see ancient tea, Mixue Bingcheng, Tea Baidao, Shanghai Auntie, Shuyi Burning Fairy Grass, Yihetang, and a little bit of ...... along the wayIt is not an exaggeration to say that there are more than 10 bubble tea shops. ”

Tang Nuo, who is from the northeast, also found that the milk tea market near his hometown has also changed dramatically. "It was said before that milk tea in the north is far behind, and most of the famous brands on the market are concentrated in the south. But in the last year or two, I can't think of any brands that haven't settled in my hometown. Don Nuo finally thought for a while and said, "Heytea opened a store here at the end of last year, and the common brand may not have opened a store with us yet." ”

As described to Value Planet by many friends who have returned from big cities, among the bubble tea shop brands in the sinking market, the names of Mixue Bingcheng, Gu Ming, Tea Baidao, Shanghai Auntie, and Tianlala are densely displayed, but the names of "Nai Xue" and "Hey Tea" are rarely mentioned.

It seems that the land of the sinking market has little to do with the latter.

It's not new that the sinking market is full of bubble tea shops, but what is rare is the lack of high-end tea brands. In the past, high-end tea brands have done a lot of strategic layout for the "sinking market", and they are bound to continue to "sink" in the future.

Nayuki "bent her waist" several timesThe house leak happened to rain overnight, and Nai Xue, who had been unable to attack the sinking market for a long time, decided to discard the "chicken ribs".

A few days ago, Naixue released the operation of the fourth quarter of 2023, and the announcement showed that the company is gradually closing the stores of the sub-brand Taigai.

In fact, there are only a few stores left. According to the data, as of December 31, 2023, the company has operated a total of 7 Taigai stores, and it is expected that the remaining 7 Taigai stores will be closed one after another in 2024.

Regarding the reason for the closure of the sub-brand Taigai store, Nai Xue said, "The closure of the Taigai store is mainly due to the fact that the Taigai brand has not created considerable profits for the group in the past, and the group hopes to focus its business on the main brand Nai Xue's tea. ”

In fact, in recent years, as "sinking" has become the main theme of the consumer market, Nai Xue has "put down her body" more than once.

The sub-brand cover to be shut down this time can be said to be Naixue's "first attempt" in sinking. On the one hand, the product of the platform cover is low, and on the other hand, the platform cover was opened to join early.

According to the data on the official website of Taigai, there were 800+ franchised stores at the peak of Taigai, and judging from the latest "7" store data released by Naixue, the number of stores is almost a cliff**. Naixue's 2022 financial report data shows that its revenue from Taigai that year was 825840,000 yuan, a year-on-year decrease of 14%, and the revenue contribution of the platform cover is only 19%。In 2023, the revenue contribution will be further reduced, with very little.

Interestingly, this is not the first sub-brand that Nayuki has closed. In 2021, Naixue will close its sub-brand "Lishan", which is mainly engaged in "famous tea fresh-cut fruits".

After the Lishan brand was discontinued, the platform cover also "undertook" some products from Lishan. In 2022 and 2023, Taigai has successively created the concepts of "super large cup of fruit tea" and "fruit tea".

The sub-brands Lishan and Taigai, which are oriented to the most sensitive users, have failed one after another, and Naixue began to use the main brand to try to sink.

Nai Xue, who was once synonymous with "high-end tea drinks" in the past, officially announced a price reduction as early as 2022, and lowered the ** of many products, of which the highest reduction was 10 yuan. And launched a new tea drink product line of less than 20 yuan easy series, and promised to launch at least one new product with a price of "1 word" every month.

In addition to the price reduction, Nai Xue, which once maintained its own operation in the past, will also open its franchise in July 2023.

As Nai Xue said at the time of opening up the franchise, the opening of the franchise is to "reach the market that cannot be temporarily covered by direct sales". Combined with the current situation of "directly operated stores are mostly distributed in first- and second-tier cities", what Naixue values is the "sinking market".

The "second" Nai Xue is in dangerNayuki, who is sinking at an accelerated rate, has repeatedly hit a wall.

With the successive deaths of its sub-brands, Nai Xue, who has declared that it will "focus its business on the main brand", is only "left" Nai Xue.

Cover? Rishan? Sorry, I haven't heard of it. When asked if they had heard of the two sub-brands launched by Nai Xue in the past, many milk tea fans shook their heads after hearing it. Considering that most of Naixue's sub-brands are concentrated in South China, Value Planet also consulted with many friends from Guangdong, but without exception, the answers they got were "I don't know" and "I don't know".

The sub-brand's inability to break out of the encirclement is not Nayuki's fault.

It is no exaggeration to say that the "vast world" of the sinking market is the desire of all consumer brands. Heytea once launched a sub-brand "Xixiaocha" for the sinking market, but now Xixiaocha has also silently withdrawn and can no longer be found in the market.

However, the same is to embrace the sinking market, but there is a gap between the two.

In terms of brand awareness, Heytea still firmly grasps the hearts of young consumers by relying on various co-branded "activities". In terms of the number of stores, red meal big data shows that as of now, the number of Heytea stores is 3,326, and the number of Naixue's existing stores is 1,505.

Zhu Keli, executive director of the China Information Association and founding president of the National Research Institute of New Economy, believes that although Naixue and Heytea are both leaders in high-end tea drinks, the differences in the number of franchises and popularity are not caused by a single factor. Heytea does have a wide range of customer coverage, and its product line is relatively rich, which can meet the needs of different consumer tastes. Although Naixue's product line is also quite distinctive, there are slight differences with Heytea in terms of market strategy.

Heytea is indeed playing more 'wild' in terms of co-branding, cooperating with brands in different fields, continuing to create topicality and freshness, and continuing to improve brand popularity and market share. In terms of franchise strategy, Heytea pays more attention to the selection and training of partners to ensure the quality and reputation of each franchise store. Zhu Keli said that Naixue needs to be strengthened in this regard, especially in the sinking market, consumers are more sensitive to the first, and their loyalty to the brand is relatively low.

You Xi, co-founder of Communication Planet APP, pointed out to Value Planet that the difference in the development of Naixue and Heytea in the sinking market may be mainly due to many factors such as brand image, market strategy and operation model.

First of all, Heytea is younger, more fashionable in terms of brand image, and has a high brand awareness, which makes it easier to attract young consumers in the sinking market. Secondly, Heytea pays more attention to product innovation and co-branding in its marketing strategy, and constantly launches new products and interesting activities to improve consumer stickiness. However, Naixue's popularity in the sinking market is relatively low, and its brand influence has not yet been fully covered. In addition, Heytea's franchise policy may also be more flexible, which is conducive to attracting more franchisees. You Xi said.

Obviously, compared with Heytea, Nai Xue's sense of crisis is heavier.

Nayuki Nayuki Naruo? Milk tea is sweet, but milk tea is a bitter business.

Unlike the mushrooming of bubble tea shops in the early years, the prospects of the industry are booming. Now the industry has signaled weakness.

It is true that the new tea drink is a large market of 100 billion yuan, but with the large number of entrants, as well as the inherent low threshold and serious homogenization of the new tea industry, the growth rate of the new tea industry has slowed down as a whole.

At present, the main new tea players in China also tend to settle down from prefecture-level cities and above and gradually expand outward.

As You Xi said, although the new tea market has been developed for many years, it still has great potential in the sinking market, "consumption upgrading, consumers' requirements for quality and taste continue to improve, and new tea drinks just meet this demand; The power of social communication enables new tea brands to rapidly expand their popularity; The franchise model enables the brand to quickly expand the market. ”

However, Yu Xi also stressed that "as the market gradually saturates, the new tea market is also facing the emergence of a ceiling, and the growth rate may slow down in the future." ”

Pan Jun, director of commodity strategy consulting of a world-renowned consulting company, observed the development trend. He believes that the new tea market will not be close to the ceiling, but the competition will be more intense.

In the increasingly crowded sinking market, it is not easy for Nayuki to gain a foothold.

A consumer living in the county told Value Planet that the frequency of milk tea shops on the main street of the county is calculated on an annual basis, from a little bit, Yihetang, Da Kasi, to Mixue Bingcheng, Tea Baidao, and Gu Ming, and the frequency of milk tea brand updates in the county is significantly higher than that of other consumer brands. "On this main street, Juewei and Zhou Heiya, which sell duck goods, have been open for many years, and they may have fallen into a brilliant place. But the bubble tea shop opened, and after it poured, a new store opened. Every time I go home in the past few years, I find that the brand of the bubble tea shop on the main street has changed. Shi Ningning said to the value planet.

In the lively cycle of new and old stores "opening upside down", Nai Xue is an "outsider" who has never been able to integrate into the circle.

Pan Jun pointed out that high-end tea brands do not do well in the sinking market, which may be related to problems such as **, chain, and franchise. "First of all, the ** of high-end tea brands is relatively high, and it may not be easy to be accepted in the sinking market. Secondly, the first-class chain of high-end tea brands is relatively complex, and there may be difficulties in logistics and distribution in the sinking market. In addition, the franchise policy of high-end tea brands may be more inclined to operate in large cities or high-consumption areas, and there is not enough attention to the sinking market. In addition, some bubble tea shops are not engaged in consumer business, but franchise business, which may also affect the expansion of high-end tea brands in the sinking market. ”

Zhu Keli directly pointed out that consumers in the sinking market are more sensitive to the highest quality, and the cost of raw materials and production processes for high-end tea drinks is relatively high. In addition, the ** chain in the sinking market is relatively yet to be improved, which also increases the difficulty and cost of operation. For this reason, many bubble tea shops need to pay more attention to franchise business rather than consumer business, and at the same time, some franchise stores cannot meet brand standards in terms of quality and service, which affects the overall image and reputation of the brand.

However, even in the face of the franchise model, Nai Xue still maintains a "noble" head and has more than the "three high" thresholds of her peers.

According to the data, Naixue's franchise fee is high, at least 1.5 million for a single store and 4.5 million for a region; The store area requirements are high, Naixue is 90-170 square meters, and the opponent Heytea only requires 50 square meters; Personnel requirements are high, single store partners need more than 1.5 million capital verification and 2 years of catering experience, regional partners need more than 4.5 million capital verification and more than 3 years of operation experience.

Such a high threshold also means that the road to joining is destined to be unsmooth. According to the announcement, as of September 30, 2023, Nai Xue's tea has only 4 franchised stores.

In short, if Naixue wants to expand into the sinking market, it needs to solve not only the best problems, but also find a business model and business strategy that suits it, and optimize and innovate on this basis.

Shi Ningning and Tang Nuo are pseudonyms in the article.