2024-07-18
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Original first release | Jinjiao Finance (ID: F-Jinjiao)
Author | Ying Bao
Being on the hot search list three times in one day, Bawang Cha Ji is even more frightening than its subsidiary product “Wanli Mulan”.
Topics are directed toThe incidents of Bawang Cha Ji poaching a large number of people in the industry, publicly disclosing the personal information of former employees, and issuing an official apology were all caused by themselves.
Currently, Bawangchaji is poaching people from Starbucks, Tims, Xiaohongshu, Huawei and other major companies, from headquarters to branches. It is rumored that the vice president of Starbucks has resigned and will join Bawangchaji, but Bawangchaji denies this: "We have not found Li Tao and have not met him in any occasion."
Earlier in early July, Bawang Cha Ji offered a monthly salary of HK$70,000 to HK$90,000 to recruit management personnel in Hong Kong, which caused an uproar in the industry.
On the other hand, a netizen who claimed to be a former employee of Bawang Cha Ji posted that even though he submitted his resignation 20 days in advance and completed the resignation process normally, his name and ID number were posted in the store by Bawang Cha Ji, and he was described as "repeatedly violating company regulations and causing adverse effects. After research by the company, he was fired and blacklisted, and was not allowed to engage in any work at Bawang Cha Ji within three years." Subsequently, Bawang Cha Ji apologized and said that it had withdrawn the public notice.
The two personnel disputes in different dimensions both point to Bawang Cha Ji’s increasingly aggressive business strategy.
In May this year, Zhang Junjie, the founder of Bawang Tea Princess, publicly stated“Sales will exceed Starbucks China”;AfterwardsThere are reports that Bawang Chaji is preparing to go public in the United States.There may be significant progress in the second half of the year.
At a time when both investment and consumption are shrinking, Ba Wang Cha Ji is making such a big splash. It has huge traffic, but also huge controversy.
Wanli Mulan, Boya Breaking His Strings, in addition to the product name that is full of oriental cultural flavor, the most eye-catching mark on the Bawang Tea Cup may be its caffeine content.
Under the name of oriental tea, they are actually trying to steal the coffee business.Even if Starbucks executives are really poached, can Bawang Cha Ji really become the "Chinese Starbucks"?
There is a widely circulated joke about Bawang Chaji in the investment circle: When an investor was asked what he thought of Bawang Chaji, he showed a panic expression: "I dare not make any comments, I can only envy her."
It is enough to see how popular Bawang Chaji is. When it is mentioned, even people who have never drunk it will say "oh", indicating that they have seen the topic of it to some extent - this is the credit of marketing. From the recent overwhelming elevator advertisements, we can see thatCompared with its competitors, Bawang Cha Ji’s “marketing first” attribute is more obvious.
According to LatePost, in 2024, Bawang Chaji is expected to invest up to 1 billion yuan in marketing, with the budget for the niche channel alone reaching 200-300 million yuan. A tea industry practitioner acknowledged the authenticity of this data in an interview, "but 200-300 million yuan should be the annual budget, and the specific consumption depends on the situation."
There are many tea brands that are good at marketing, but Bawang Tea Princess always stands out.
In 2022, to celebrate the 5th anniversary of the brand, Bawang Cha Ji replaced the shells of tea cups and paper bags with those inspired by the Ancient Tea-Horse Road. Whether it is the dark blue color, logo position and font, or the simply sketched animal + plant combination pattern, they all resemble DIOR's tote bag; the Sakura Oolong launched in 2023, the fluorescent rose-red paper cup color and camellia pattern, remind people of Valentino and CHANEL at a glance; even the small pendant label is almost the same in design as the Tiputik scented tablets product.
A series of "coincidences" at Bawang Cha Ji once triggered netizens to make jokes - "I thought a Bawang Cha Ji opened in Sanlitun, but when I looked closely, it turned out to be a DIOR enclosure. Bawang Cha Ji's shameful business war even became a compassionate act."
Although black and red are also red, the combination of Chinese pure tea culture and out-of-circle topics, coupled with the trend of domestic products, has given Bawang Tea Princess a social attribute, butA business empire built on traffic has no moat.
Back to the product itself, the "pure tea + fresh milk" track that Bawang Cha Ji focuses on has long been crowded. Brands such as Heytea, Chabaidao, and Nayuki's Tea all have this category, and the price range of 15-25 yuan is almost overlapping with Bawang Cha Ji.
In terms of brand concept, Ba Wang Cha Ji, which started out by replicating Cha Yan Yue Se, has no uniqueness or outstanding advantages - Cha Yan Yue Se's logo and store main visual style are in the style of Chinese opera, and so is Ba Wang Cha Ji; Cha Yan Yue Se's product names are mostly four-character ancient names, such as "Sheng Sheng Wu Long" and "Yan Hua Yi Leng", and so is Ba Wang Cha Ji, with its main products including "Bai Ya Jue Xian" and "Wan Li Mulan".
The investment circle is well aware of the shortcomings of Bawang Cha Ji and did not place a heavy bet on it in the early stage. In 2021, Bawang Cha Ji only received a total of more than 300 million yuan in rounds A and B financing. In the same year, Mixue Bingcheng completed its first round of financing with an amount of more than 2 billion yuan; Heytea completed a new round of financing of US$500 million (approximately RMB 3.63 billion).
Regarding the "neglect" of Bawang Chaji, an investor once said in an interview,If Cha Yan Yue Se opens up to franchising, Ba Wang Cha Ji will have a hard time surviving.
Today, Bawang Cha Ji has become a hotshot in the investment circle. On the one hand, she "picked up a bargain" by Cha Yan Yue Se's early stubbornness of not leaving Changsha. On the other hand, she seized the right to speak with the help of radical marketing methods and achieved scale of operation in a short period of time.
However, the marketing enthusiasm is for a "disposable product", and Bawang Cha Ji has not given consumers a reason to repurchase.When the national trend and marketing enthusiasm subside, after consumers buy the first cup of Bawang Cha Ji and take photos and post them online, the second cup of tea can also be Heytea, Nayuki Tea, or even Chayan Yuese.
Sales data is the confidence that Bawang Cha Ji can surpass Starbucks.
Starbucks China's revenue in fiscal year 2023 reached US$3 billion (approximately RMB 21.718 billion), and Bawang Cha Ji's transaction volume in the first quarter of 2024 exceeded RMB 5.8 billion; according to a report by Shijie in July this year, Bawang Cha Ji's monthly sales per store were RMB 400,000 to 500,000, and Starbucks China's monthly sales per store were RMB 400,000 to 600,000.
Sales volume only reflects the brand's sprint situation in the current period. Just as Bawang Cha Ji was still in a loss of 48 million yuan in 2022, whether the sudden surge in net profit to the range of 800 million to 1 billion yuan in 2023 is a flash in the pan still requires more time to observe.
This concern is ultimately due toBawang Cha Ji also lacks a strong concept of brand power, which simply means the resonance between the brand culture/story and consumers.
In addition to the product itself and the inherent time advantage, Starbucks' brand power is also made up ofIt entered the Chinese market in 1999 and became the coffee enlightenment for those born in the 1980s and 1990s.There is also the more classic concept of "third space".That is, to provide consumers with multiple scenarios such as office, social, reading, etc. Today, although there are coffee shops and tea shops all over the streets and alleys in China, when it comes to "finding a place to rest" or "changing a meeting place", many people still think of Starbucks first.
Bawang Tea Princess is also actively building its brand culture. Its founder Zhang Junjie wrote in the PPT for investors: "Become the Bawang Tea Princess in 100 countries around the world" and "Make friends around the world with oriental tea."
Looking at the global market, there is indeed a lack of an influential oriental freshly brewed tea brand. Using this as a starting point to lay the foundation for the brand is indeed a strategy to win favor, but the problem is“Oriental Tea” has never become popular. Is it really just because the Tea Queen did not appear?
According to DataVision, Bawang Chaji's tea-making equipment can automatically brew tea and add sugar, so its employees can start work after one week of training. According to Zhang Junjie, Bawang Chaji only takes 8 seconds to make a cup of tea, with a difference rate of 0.2%. The super high production efficiency has become the backing of the brand's tens of billions of transactions.
HoweverEfficient standardization is exactly contrary to the core of oriental tea, which is "calmness and slow tasting". The essence is not "drinking" but "tasting", and what is "tasted" is not just the tea, but also the brewing process and tea tasting etiquette.
Tea bags are a typical negative example. They break down the brewing process, shorten the brewing time, and eliminate the need for tea-brewing tools, allowing everyone to drink tea quickly. However, they also weaken the presence of the tea's origin.
The British brewed tea brand Lipton is a household name around the world, but when consumers drink Lipton tea bags, they do not think "I am drinking British tea". Just as it once purchased tea from Sri Lanka, Kenya, China and other countries to make blended tea bags, but how many people care about this?
Back to Bawang Cha Ji, the business operation model that puts efficiency first.It has essentially deviated from the concept of "Oriental tea culture" and cannot provide more derivative values such as spatial scenes like Starbucks.
Bawang Tea Princess may not care about these and is still trying to move towards the direction of "Eastern Starbucks". For example, it changed "tea polyphenols" on the ingredient list to "caffeine", which undoubtedly highlights the refreshing effect of the product.
It sounds like it has less and less to do with "tea".
From another perspective, Bawang Tea Princess wants to be the "Oriental Starbucks" and "International Oriental Tea" perhaps to tell a more appealing story for its overseas expansion.
In the past two years when Bawang Cha Ji was booming, its competitors were also developing on a large scale.
According to the data from Jihai, as of the end of the fourth quarter of 2022, Bawang Chaji had a total of 934 stores, and as of December 11, 2023, the number of stores soared to 3,114, which means that more than 2,000 stores were opened in the past year. In 2023, Mixue Bingcheng, Tianlala, Shanghai Auntie, Guming, and Heytea also achieved a growth rate of 1,000 stores, among which Heytea ranked first with a growth rate of more than 2,300 new business partnership stores.
Despite the crowded market, competitors are continuing to expand their stores to squeeze out other brands. In 2024, Heytea launched a preferential policy for partners, promising to waive all cooperation fees for new partners in the first quarter; Nayuki's Tea reduced the threshold for opening a store from 980,000 to 580,000 yuan; Guming launched a 0 franchise fee policy for the first year.
Under the internal circulation, even the leading brands have become cannon fodder. For example, in order to cope with the price war, Luckin Coffee opened 8,034 new stores in 2023. In the end, the scale was unable to spread the cost, resulting in a loss of 65.1 million yuan in the first quarter of 2024.
Going overseas has almost become the only way out for tea brands. It is against this background that Bawang Chaji made a bold statement to seize a "high ground of public opinion" in the overseas market and leave a good impression.
However, Bawang Tea Princess' overseas business strategy has not brought out the advantages of the concept of "Oriental tea culture" nor realized the vision of "internationalization".
In terms of layout, Bawang Cha Ji is still limited to the Southeast Asian market where pure tea is more accepted.
Malaysia is the country where Bawang Cha Ji operates best outside of China. Bawang Cha Ji adopts the same joint venture model as Starbucks, often opening stores next to Starbucks. It also uses its marketing strengths, signing a contract with Malaysian badminton player Lee Chong Wei and co-branding with Malaysia's national treasure-level pewter brand Royal Selangor. However, according to media reports, the local Chinese community still has a high sense of identity with the Bawang Cha Ji brand.
Starbucks has penetrated the Chinese market for many years and has brought about China's coffee culture, but Bawang Chaji has not yet opened up the European and American markets.It is worth mentioning that the relatively low-key 7fentian has expanded beyond Southeast Asia and opened its first store in Canada in January this year.
In fact, Bawang Chaji is not the first tea brand to call for Starbucks. As early as 2014,Peng Xin, the founder of Nayuki’s Tea, once said confidently: “Nayuki is quite similar to Starbucks when it was first established in the United States.”In the following years, when competitors were actively embracing small stores and even the pickup model, Nayuki's Tea was still imitating Starbucks and adhering to the "big store strategy + third space".
Peng Xin once believed that products are not the key to competition in the new tea beverage industry. Just like Starbucks and Pacific Coffee, McDonald's and KFC's fried chicken, the products will not be much different.
But the result presented today is that Nayuki's Tea has higher store opening costs than its peers and is more difficult to effectively control. In the early days, it was limited to the Asian market, resulting in insufficient scale, and it failed to run a profit model like Starbucks. In 2021, Nayuki's Tea fell below its IPO price on the first day of listing. In the three years since its listing, its stock price has fallen by nearly 80%. The myth of "the first stock of new tea drinks" has long been shattered.
This moment is just like that moment. Three years later, when Nayuki looks at Bawang Chaji, will her eyes be filled with her own reflection from three years ago?Nayuki’s Tea failed to defeat Starbucks in the same way as Starbucks, but was instead dragged down by the obsession of “becoming Starbucks”.
How can the Overlord Tea Lady, who has decided to go against the ancestral teachings of Oriental Tea, prove that there is a Starbucks hidden in Oriental Tea?
References:
ChinaVenture.com "I, a consumer investor, dare not make irresponsible comments about Bawang Tea Princess"
Doujiao Spicy "A comprehensive analysis of Bawang Chaji's radical marketing: How to become the "Eastern Starbucks"? "
Juchao "Nayuki's Tea, the most "helpless" Starbucks believer"
Salt Finance "The Overlord Tea Princess, Very Ambitious"
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