The domestic new tea drink market has become saturated.
At present, both domestic HE Tuber leading brands Heytea and Naixue's tea, as well as many mid-range brands, and even Mixue Bingcheng, which focuses on the sinking market, are facing the problem of peaking traffic and profits.
In 2022, Heytea was first exposed to a layoff crisis, and then began to close stores. According to statistics, there were more than 60 Xicha stores last year, including a number of specialty theme stores exploring new models, hot wheat stores, Lab stores, and the world's first handmade store in Shenzhen. Affordable sub-brand "Xixiaocha" also closed its last store.
Heytea's 100th store in Shenzhen is also the first local antique
themed store. It will close in October 2022 after two years of operation. The hot wheat store that provides tea + bread is also not doing well due to the baking requirements. The required area was too large and the revenue could not cover the costs. Heytea closed all the hot wheat stores in East China. For the Lab stores opened in high-end business districts, which focused on large areas and provided drinks, only 3 of them were left in Shanghai, Guangzhou, and Shenzhen. Home.
In addition, Heytea's handmade store opened in Nantou Ancient
Town, Shenzhen in September 2021 has also closed in November 2022. This four-story hand-made store is gorgeously decorated and offers high-end drinks ranging from 32 yuan to more than 100 yuan. It is Heytea’s most high-end offline store and carries Heytea’s attempt at “slow tea drinking.” However, it only took more than a year to Declare failure.
At the beginning of 2022, Heytea stores began to reduce prices. On the "Hiytea GO" mini program, the prices of many drinks were reduced to the range of 10 to 20 yuan; since then, Heytea has closed its affordable sub-brand "Xi Xiaocha" - Heytea. The tea side said that with the downward adjustment of the price of Hey Tea, the historical mission of Hey Tea has ended.
After 2018, new tea drinks have developed rapidly in China.
A number of tea drink brands have sprung up rapidly, and consumers have more and more choices. Although HEYTEA's "milk cap + fresh fruit tea" model is unique, and later developed a series of new Internet celebrity products such as taro milk tea, its high-end image alone is obviously not enough to become a unique brand moat. No matter how high-end the positioning is, , and cannot stop consumers from "voting with their wallets."
In the high-end new tea market, Heytea also faces two major competitors: Naixue’s tea and Lele tea. Although Nayuki's tea broke its IPO immediately after its listing, with its stock price falling from HK$19.8 to HK$5.52 at the close of trading on June 26, and Lele Tea also fell into store closures and losses, competition among the three highly homogeneous brands still existed relation.
On June 13, Naixue’s Tea completed the plan to acquire
Lele Tea announced in December last year, acquiring 85.08% of the shares of Lele Tea for 525 million. After the acquisition, Lele Tea will continue to operate under the original brand.
Industry insiders believe that the profitability of Naixue Tea and Lele Tea is not satisfactory, and it is difficult to predict when Naixue Tea will turn a profit. However, after Nayuki's Tea acquires Lele Tea, it will gain a similar market share to Heytea, and the high-end tea market will become an oligopoly competition led by Heytea and Nayuki's
Faced with its own series of difficulties,
as well as the increasingly saturated and
intensified competition in the domestic new tea beverage market, Heytea has no choice but to strive for a broader market overseas. Initially, Heytea chose Singapore as its first overseas destination. However, it is clear that the current degree of involution of the new tea beverage market in Southeast Asia is no lower than that in China. This regional market alone cannot satisfy Heytea’s desire for a broader market and higher profits. expect.
As early as 2018 to 2019, various new tea brands have begun to deploy in Southeast Asia. In 2018, Mixue Bingcheng opened its first overseas store in Hanoi, Vietnam; in the same year, Heytea opened its first store in Singapore; and in 2019, Bawang Tea Ji also opened its first store in Southeast Asia in Singapore.
Southeast Asia is relatively close to China. The local climate is hot, consumers have the habit of drinking cold drinks, and there are a large number of Chinese in the local area. These factors are suitable for new tea drinks to "take root" in Southeast Asia. Currently, Mixue Bingcheng has more than 200 stores in Vietnam, and Heytea also has 5 stores in Singapore.
The saturation of the Southeast Asian market requires Heytea to find new growth points. Therefore, when Heytea announced the recruitment of overseas business partners in March this year, it took developed regions such as North America and Europe into consideration and quickly promoted implementation within a few months.
