news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

This article was originally published by Hongcan.com, author: Zhou Mo; editor: Fang Yuan.

From more than thirty yuan to 9.9 yuan, new tea drinks seem to be entering the "10 yuan era".

Behind the crazy price increases is actually the new tea brands’ desire for traffic and growth.

After all, at the moment, the growth rate of the entire industry is slowing down, and new tea beverage brands are facing expansion bottlenecks.

According to Hongcan Big Data, by the end of 2023, the new tea beverage market size will reach 162.4 billion yuan, a year-on-year increase of 19.3%. The market size is expected to be 175.7 billion yuan in 2024, with the growth rate slowing down to 8.2%.

At the same time, Hongcan big data shows that in the past three months, among the top ten tea brands in terms of newly opened stores, nearly half of the brands have seen a month-on-month decline in the number of newly opened stores.

Under the competition for existing market share, the close combat among brands will become more intense, but blindly engaging in "price war" is obviously not the optimal solution. How to reduce costs, increase efficiency and seek a new growth curve has become the common demand of new tea brands.

New tea drinks urgently need a breakthrough

The ever-declining price range has brought about a carnival among consumers, but new tea brands are not having an easy time.

△Photo source: Hongcan.com

A franchisee of a fresh fruit tea brand revealed to the media that although the price reduction led to an increase in sales, profits actually decreased.

According to reports, before the price cut, the store's average daily sales were 300 cups, each priced at 13 yuan, with a gross profit margin of 50%-60% and an average daily profit of about 2,000-2,500 yuan. After the price cut, sales increased by about 100 cups, but nearly 80% of customers chose the group purchase discount of 11.9 yuan for 2 cups, and the daily net profit was only maintained at around 2,000 yuan.

According to Southern Metropolis Daily, some franchisees are worried that price cuts will further squeeze their profit margins and are considering closing stores. For example, Li Li, a franchisee in Zhejiang, plans to close her store in September this year.

She said that the price reduction did not significantly increase customer flow, but the price reduction led to a decrease in revenue. The large cup of jasmine milk tea, which originally sold for 16 yuan, is now priced at 11 yuan, with a cost of about 5 yuan; the new fruit product is on sale at 8.8 yuan, with a cost of more than 4 yuan.

"When we first opened, our daily turnover was over 2,000 yuan, but now it has dropped to over 1,000 yuan, which can't even cover the labor costs."

Behind the continuous price involution is the fact that the growth rate of the entire industry is slowing down, and new tea beverage brands can only fight in the existing market.

According to Hongcan Big Data, by the end of 2023, the new tea beverage market size will reach 162.4 billion yuan, a year-on-year increase of 19.3%. The market size is expected to be 175.7 billion yuan in 2024, with the growth rate slowing down to 8.2%.

At the same time, Hongcan big data shows that in the past three months, among the top ten tea brands in terms of newly opened stores, nearly half of the brands have seen a month-on-month decline in the number of newly opened stores.

Qichacha data shows that the number of new tea beverage companies in the first half of 2024 was 285,100, a decrease of 7,000 compared with the same period last year.

With scale expansion encountering bottlenecks and price wars showing no end in sight, new tea beverage brands are actively seeking new ideas.

Hongcan.com learned from platform data that recently, the "Instant Pickup Store" created by Cha Baidao and Meituan has brought Cha Baidao more than 280,000 incremental orders per month. At the same time, the store's group purchase redemption rate has also increased by 20%.

What exactly is a "second-hand store"? At a time when many new tea brands are struggling to grow, how did Chabaidao open up a third growth space besides takeaway and group buying through "second-hand store"?

Seizing instant consumption, new tea drinks bring new value with new experience through "instant delivery"

"Instant Pickup in Store" is a new service officially launched by Meituan Group Buying on July 2, providing users with the dining experience of "order online and pick up in store instantly without queuing".

After actual experience, Hongcan.com found that the online part of the instant pickup service is similar to the traditional scan code ordering or mini program ordering, and the offline in-store pickup. The biggest difference is that the group purchase voucher verification is more convenient. Order online in advance and the store clerk will do it in advance, reducing the passive waiting time of users entering the store.

Specifically, after consumers purchase group-buying coupons, they can click "Go to Order" on the order page to complete the coupon verification, ordering and self-pickup reservation at the selected store in one stop. They can then pick up the food with the pickup code, eliminating the process of jumping to the mini program and manually verifying the coupons in the store.

△Image source: Screenshot of Meituan APP

As of April this year, Cha Baidao has launched the online ordering function of pick up in seconds in most of its stores across the country.

After Chabaidao stores launched the instant pickup function, the most obvious change is that "the efficiency of group purchase ordering has been improved, and the write-off rate has also been further improved."

In the past, after consumers purchased group-buying coupons, they went to the store to redeem them. The store needed to arrange special staff to redeem the order. After a set of procedures, it took about 2-3 minutes to redeem a group-buying coupon. If multiple cups were redeemed at the same time, it would take longer.

Now, consumers do not need to go to the store in person. They can place orders online with Miaoti, redeem group purchase coupons online, and then pick up their meals at the store with the pickup code.

For cooperative brands such as Cha Baidao, Miaoti simplifies the entire verification process. Stores can save the manpower costs incurred in verifying group purchase coupons, while also alleviating operational pressure during peak hours.

The verification process is more convenient, which has further increased the utilization rate of group purchase coupons. Data shows that after the opening of Chabaidao stores nationwide in April, the consumer utilization rate of the instant withdrawal function in May has exceeded 50%. At present, the group purchase verification rate of Chabaidao stores has also increased from 70% to 80%.

△Photo source: Chabaidao official Weibo

It is worth mentioning that Miaoti did not impact or divert the merchants’ original takeaway and group purchase transaction volume, but instead opened up a new growth space and developed new customer groups and new demands.

Hongcan.com learned that in the past, the group purchase portal could only put up a limited number of group purchase packages, usually only more than 10 group purchase packages, but the SKUs that can be put online through Miaoti can reach dozens or even hundreds. By increasing the richness of products, the diverse needs of consumers can be met, thereby increasing store sales.

In fact, after the link between group buying and instant delivery is opened up, in addition to online verification of group buying products, consumers can also directly order items without discounts on instant delivery, or add small ingredients to further increase the average order value.

To meet the pursuit of efficiency, "second pick-up" covers more than 10,000 stores in one month

Simply lowering prices is not a solution, just as Zhai Bin, a columnist for Hongcan.com, said: 9.9 yuan cannot save the catering industry. Blindly lowering prices will only hurt the enemy by 1,000 yuan and yourself by 1,200 yuan.

For catering businesses, in addition to "ultimate value for money", how to create "ultimate experience" and "ultimate efficiency" may become the key to breaking the deadlock.

Meituan’s group buying “instant pick-up” service just happens to meet consumers’ demand for convenient services.

In the past, group buying may have discouraged some consumers due to the cumbersome steps of in-store verification. The emergence of instant pickup stores has simplified this process, making group buying more attractive.

△Photo source: Hongcan.com

Next, with the full replication of the second-hand stores in major business formats, it will become possible for busy workers to buy an affordable breakfast, a cup of discounted coffee, a cup of 9.9 yuan milk tea, or an affordable dinner on their way to and from work.

At the same time, under the high pressure of price wars, catering brands need to tap into greater profit increments through lower operating costs. The emergence of "second-hand store" is equivalent to opening a new traffic entrance for merchants, further reducing customer acquisition costs, thus bringing a new solution to improve efficiency.

In the past, the traffic entrances of restaurants mainly included in-store, mini-program ordering and self-pickup, takeout, group buying, etc. Users who come to the store are generally natural customers or familiar customers, while mini-programs are more related to private domain traffic, which mainly depends on the brand's user base.

The online point of instant payment relies on Meituan’s user pool. The first quarter report of 2024 shows that Meituan has nearly 500 million annual active users. This means that merchants can acquire users and complete transactions without additional marketing, thereby reducing customer acquisition costs.

It is understood that at present, Chabaidao's instant delivery service has no marketing support, but due to the richness and convenience of the product, it still attracts many new customers to buy directly at the original price. This is equivalent to reducing the cost of attracting customers on Meituan group buying by 2-3 yuan.

According to Meituan, more than 50 chain brands have launched the "second pick-up" function, and more than 10,000 "second pick-up stores" have been added in a month. Currently, they mainly cover the two major tracks of coffee and tea drinks, but "second pick-up stores" will be replicated in more catering formats in the future to form a complementary service with take-out and dine-in.

Cover image source: TuChong Creative.