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"I always want to do better than it. But if we can only open two stores in each place, I hope it will be just the two of us (Tianlala and Mixue Bingcheng) running the show. Wouldn't that be more fun?"

Text｜Hu Nannan, reporter of "Chinese Entrepreneurs"

Editor: Mina

Header photo｜Liu Xuewen

Wang Wei, the founder of Tianlala, has been a "child king" since he was a child. When he was a teenager, there were always a group of children gathered at his home. At that time, Wang Wei's mother steamed a pot of steamed buns, which was enough for the family to eat for three days, but they were often eaten up in one day. Wang Wei joked that with a group of people every day, his parents' monthly salary was not enough to feed his friends.

This "king of children" temperament continued until Wang Wei founded Tianlala. In 2015, Wang Wei founded Tianlala in Bengbu, Anhui. The first batch of Tianlala franchisees came from his friends and relatives. "They saw that I made money by opening a store, so they wanted to follow me." Wang Wei said. But later, some of them made money, and some lost money. According to Wang Wei himself, even those who lost money are now doing other things with him.

The practice of "sharing the steamed buns" has also continued. When Wang Wei first founded Tianlala, he wanted his friends who followed him to make money so that everyone could share a little. In early July, at Tianlala's industrial park headquarters in Bengbu, Anhui, Wang Wei told China Entrepreneur that until last year, Tianlala's executives were able to get dividends regardless of the weather, with some getting one or two million yuan a year, and some getting three or four hundred thousand yuan. But he also said that without the help of his friends, Tianlala might not be what it is today.

Photography: Hu Nannan

In less than 10 years since its establishment, Tianlala has quietly opened more than 6,000 stores. This store scale ranks among the top five in the freshly brewed tea beverage industry, and it is the latest to be established among the top five.According to the data from Zhaimen Canyan, as of July 24 this year, Tianlala has 6,357 stores in operation, second only to Mixue Bingcheng, Guming, Chabaidao, and Shanghai Auntie.Tianlala’s internal sales now exceed 2 billion yuan, and it can make a net profit of 200 to 300 million yuan a year.

Like most tea brand entrepreneurs, Wang Wei also came from a grassroots background and started a catering business in a small town when he was in his early 20s. Before founding Tianlala, he opened a barbecue restaurant, sold spicy hot pot, and briefly joined Mixue Bingcheng. Less than a year later, he founded Tianlala in 2015.

People often compare Tianlala and Mixue Bingcheng. In many places, Tianlala and Mixue Bingcheng stores appear at the same time: one Mixue Bingcheng and one Tianlala, one red and one yellow, are particularly eye-catching. Since the two are almost in the same price range and focus on affordable tea drinks, Tianlala is jokingly called "the substitute of Mixue Bingcheng". To date, Tianlala has even sunk deeper than Mixue Bingcheng. According to the data from Zhaimen Canyan, more than 80% of Tianlala's stores are located in third-tier and lower-tier cities, and more than 33% are in townships. The two data for Mixue Bingcheng are 57% and 24% respectively.

Wang Wei does not deny that he did learn from Mixue Ice City in the early days of its establishment - learning its products, menus, and how to build its own supply chain. And even now, he still thinks there is a lot to learn from Mixue Ice City.

He claims he doesn't want to be an imitator.When asked whether Tianlala would also sell the 1 yuan ice cups recently launched by Mixue Ice City, Wang Wei's first reaction was "I won't do it" and "I don't want to do anything it (Mixues Ice City) does."Wang Wei said.

In Wang Wei's eyes, Tianlala and Mixue Bingcheng have a kind of "love-hate relationship", and he enjoys it. "I always want to be better than it. But if there are only two stores in one place, I hope it will be the two of us (Tianlala and Mixue Bingcheng) running the show, wouldn't that be more fun?" Wang Wei said.

However, the competition is not just Mixue Ice City. Since last year, with the price reduction of freshly brewed tea drinks, the previously high-priced tea brands such as Heytea have all dropped to the price range of Tianlala and Mixue Ice City. It is understood that the price of a single cup of Heytea has even dropped to more than 10 yuan. In the past, Wang Wei never felt that there was competition between Heytea and Tianlala, "In the past, Heytea sold at a high price and Tianlala sold at a low price. Now these high-priced tea brands have lowered their prices to my price range to steal my jobs and customers. Aren’t you panicking at this time?"Wang Wei said.

Wang Wei also realized that in addition to opening stores, Tianlala still had a lot of lessons to learn. He also changed his previous plan to rush to 10,000 stores and go public, and changed from pursuing the speed of opening stores to pursuing the quality of store operations, so that franchisees can really make money. Although Wang Wei said that going public is inevitable, he is not in a hurry now. Regarding the goal of opening 10,000 stores by the end of the year, he said that it is not certain that 10,000 stores will be opened next year.

He wants to do long-term business. Recently, Wang Wei often says in the company,"Can we make 100 million every year for 100 years and run a long-term business?" Between the two results of wanting to win and not fail, Wang Wei prefers "not failing.""I think not failing is winning," said Wang Wei.

Crazy store opening: more than 6,000 stores opened in 9 years

Wang Wei feels that everything has been going too smoothly for him in these years of entrepreneurship. He said that sometimes, when a problem is difficult to solve, someone will suddenly come and say to him: I can help you solve this problem.

Opening a store seemed easy for him. Before founding Tianlala, Wang Wei had more than ten years of experience in the catering business. Wang Wei was born in 1980 in Shangqiu, Henan, and grew up in Xiaoxian, Anhui. At the age of 25, he opened a barbecue restaurant in the town, and at that time he could earn 500 to 600 yuan a day. After a few years, Wang Wei didn't want to stay in the small town for the rest of his life, so he went to the neighboring city of Bengbu, Anhui, to open a spicy hot pot restaurant, and the business was also very successful - after working for 6 years, he bought a house and a car, and Wang Wei felt very happy.

But he is not a person who is content with the status quo. In 2013, he noticed that a Mixue Ice City opened opposite his Malatang restaurant and sold very well. Later, he asked the boss and found out that he could make 7,000 to 8,000 yuan a day. So he was tempted, thinking that tea shops were simpler than Malatang restaurants and were also popular among young people, so Wang Wei joined Mixue Ice City. The first one opened in February 2014, and then 8 Mixue Ice City stores were opened in one go. At that time, Wang Wei opened more than 10 Malatang restaurants and milk tea shops, and could make more than 100,000 yuan a month.

He had a friend who was doing well in business. After discussing with his friend, Wang Wei decided to open a tea beverage company and franchise it himself. After only two or three months of preparation, Wang Wei opened the first Tianlala store in January 2015 and opened it for franchising. In the first year, all the franchisees were his friends and relatives. That year, Tianlala opened 92 stores.

With high cost-effectiveness and deep cultivation of the sinking market, Tianlala had more than 1,000 stores three years after its establishment, and the number of stores increased to 1,800 by the end of 2019. Even though offline business has been greatly affected in the past few years, Tianlala has not slowed down the pace of opening stores. From 2020 to 2022, it still expanded at a rate of more than 1,000 stores per year. 2023 is the year of Tianlala's most rapid expansion, with 2,400 new stores added throughout the year.

But along the way, Wang Wei also "crossed the river by feeling the stones". Although there was a "teacher" in the early stage to learn from, Tianlala still took many detours. Around 2021, because it ran too fast, Tianlala had many unprofitable franchise stores, causing many franchisees to lose confidence. At that time, Tianlala forced the closure of 500 to 600 stores that were unprofitable and had poor operating quality.

In the past, Wang Wei was so focused on opening new stores that he neglected the brand. In the past, Wang Wei might have only paid attention to how much the store sold, how to make franchisees profitable, and whether consumers were satisfied.But from the end of 2023, Wang Wei began to realize the lack of brand of Tianlala - among the tea brands with the same store scale, Tianlala may be the least well-known one. And now he feels thatBuilding a brand is the only way to maximize the profits for franchisees.

Initially, Wang Wei thought it was easy to open a tea shop. "Catering is about managing stores, and store management is interconnected. What matters is the product, store hygiene, service, and whether it is popular." This was his idea when he founded Tianlala. Compared with the spicy hot pot business at the time, Wang Wei thought it was too easy to open a tea shop. But as Tianlala has developed to this stage, his answer has changed. He feels that the tea business has become more complicated.

In Wang Wei's view, this change in thinking depends on a person's cognition. "If a person has little knowledge and understanding, everything is simple, but if your ability improves, nothing is simple."

Reform: The time for easy wins is over

Especially in the past two years, when high-end tea drinks reduced their prices and competed for his customers, Wang Wei felt the pressure.

The 10-yuan price range was originally the main market for Mixue Bingcheng and Tianlala, but tea brands that were originally mid-to-high-priced, such as Heytea and Chabaidao, have begun to reduce their prices to the 10-yuan price range by adjusting menus, issuing coupons, and group buying. According to Hongcan Big Data, from 2020 to 2023, the proportion of new tea brands priced below 10 yuan increased from 7.1% to 29.6%, while the proportion of those priced above 20 yuan decreased from 32.7% to 3.6%. The 10-yuan price range has become a battleground for freshly brewed tea.

Wang Wei realized that Tianlala had to change.

With the first blow, Wang Wei "chopped" the management.Originally, Tianlala's management team consisted of dozens of people, and most of them held company shares, with some holding 1% and others holding only one ten-thousandth. But Wang Wei discovered that this led to a problem: everyone wanted to win without doing anything.

So starting this year, Wang Wei adjusted the dividend mechanism for the management team - how much money can be obtained at the end of the year depends on performance, and if it is not achieved, money will be deducted.

Although on the surface no one had any objection, it was only on the surface. When the change was implemented, no one from the Tianlala executive team left, "because everyone believed in me," Wang Wei added. In fact, the management team did not receive less money, but the method was changed so that they could receive it for longer. "If he didn't even realize this, I wouldn't feel sorry if he left the team."

Photography: Hu Nannan

The second is to enhance the awareness of the entire team and strengthen the service to franchisees. At the same time, improve the quality of franchise stores to ensure that franchisees can really make money. Especially in the context of ready-made tea brands rushing to open 10,000 stores and sinking to lower-tier cities, everyone is scrambling for franchisees. This also made Wang Wei realize the importance of serving franchisees well and allowing franchisees to really make money.

Wang Wei reflected that in the past few years he only knew how to open new stores continuously, but ignored the core of the freshly brewed tea franchise model, which is to make franchisees make money.Under the franchise model, new tea brands are actually doing B2B business. If the franchisee does not make money, the company will not be able to develop for long. Previously, Tianlala co-founder Xu Zhou also said in an interview, "If (the franchise store) is of poor quality and has poor survival ability in the later stage, it will cause great damage to the brand."

Changing the team's cognition is not something that can be done overnight. In the past, the team was running at a high speed, focusing only on opening stores. It was not easy to slow them down suddenly, and it was not enforced. However, Wang Wei would communicate with the senior management team frequently. On average, he would meet with about 8 senior management members every day. Sometimes, senior management members would bring middle management members to discuss work with him. At this time,Wang Wei would tell them to slow down, think more, and change the executive team's perception in a general way.

In addition, Wang Wei also formulated some new systems to constrain the team and let them be cautious in opening stores.For newly opened stores, Wang Wei requires that each store should make a profit. If a newly opened store closes, Wang Wei will ask the team to review the situation and find out where the problem lies.——Is it a problem of site selection, franchisee awareness, or subsequent store management? If it is a problem of franchisee awareness, then it is the problem of the investment department, which did not do a good job; if it is a problem of store site selection, then it is the problem of the development department not finding a good store; if it is a problem of subsequent store management, then it is the problem of the marketing department.

Through this system, Wang Wei wants to make the team realize that they cannot close the store easily."To easily release a store is like committing murder and arson."

Make 100 million every year, and then make money for 100 years

Freshly brewed tea drinks are already a red ocean. The 2023 New Tea Drinks Research Report shows that as of August 31, 2023, the total number of new tea drink stores in operation will be about 515,000. As competition in the industry intensifies, leading brands are accelerating the expansion of stores or opening franchises to increase market share. "Franchise, 10,000 stores, low prices" has become a general consensus in the tea drink industry.

Tianlala was once a member of this team. In September last year, Wang Wei said that Tianlala was receiving guidance from securities firms and planned to be listed on the Hong Kong stock market in 2025. But now Wang Wei has changed his mind. He said that he wanted to go public for the sake of the brand, but now he feels that going public will not help the brand. In particular, seeing that the tea beverage peers that have already gone public seem to be not doing well after going public.

The two companies listed in the new tea beverage industry, Nayuki’s Tea and Chabaidao, both suffered from the dilemma of breaking the IPO price on the first day of listing; the new tea beverage brands waiting in line for listing have not progressed smoothly. Recently, the official website of the Hong Kong Stock Exchange showed that the listing prospectuses of Guming and Mixue Bingcheng have expired, and the listing process has been temporarily stalled.

Wang Wei is no longer in a hurry to go public.He knew that his brand was not as famous as those of his peers. It might be right for others to do so, but it might not be right for him to do the same. He still had to think about what he should do based on the company's development.

He wanted to take this opportunity to improve the quality of franchise stores and enhance team awareness. Wang Wei also felt that Tianlala now had more than 6,000 stores and an annual internal sales volume of 2 billion yuan, which was good.The long-term business he wants to do must rely on quality, not quantity - "From the day you start a business, you have to consider how long your business can last."

Among the well-known domestic entrepreneurs, he admires Wang Jianlin the most. "He was able to get out of it without being overwhelmed by some things." Wang Wei said that everyone wants to have more money and more power, but the experience of those who have been through it made him realize that "really see yourself clearly, why you do things, and what you should do."

In the past, he worked for money. But he said that from now on, he should not work for money, but think about how to do business well so that everyone can have food to eat and make money.

Facing the current tea price war, Wang Wei told China Entrepreneur that he might sacrifice his own profits to ensure profits for franchisees. Tianlala will not cut prices either, he said, and will not lose its footing, but will stick to its own products and make good products. In Wang Wei's view,“Volume” is actually a good thing, the market is getting bigger and bigger. “What is being rolled out is consumer awareness, what is being rolled out is the market. Because of the volume, I have to learn and grow.”

If he didn’t make freshly brewed tea, what would he do? Wang Wei’s idea is quite simple, “People have to have food and drink, unless there is no one, this thing can’t be done.”

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