news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

At a time when new consumption is quiet, "god-level" entrepreneurs have emerged in the new tea beverage industry.

Author|Xiao Feng

Source | Investor (ID: touzijias)

At a time when new consumption is quiet, "god-level" entrepreneurs have emerged in the new tea beverage industry.

This entrepreneur lost his parents at an early age, never went to school, learned to read at the age of 18, started from scratch, and reversed his life.

He is Zhang Junjie, a post-90s generation from Yunnan and the founder of Bawang Tea Princess.

Recently, Zhang Junjie and his Bawang Cha Ji have been frequently searched. First, he accurately bet on Zheng Qinwen, China's first female tennis Olympic champion; second, Bawang Cha Ji, a "back wave" founded in 2017, has raised funds in two rounds in seven years and has emerged as China's most competitive new tea beverage track, opening more than 4,500 stores. This is the most "fantasy" point. You know, the reason why new tea drinks are called the most competitive track is that they have killed 50,000 companies and crushed the "first stock of new tea drinks" Nayuki's Tea, while Bawang Cha Ji, which lacks the endorsement of large companies and has little funds, has stood out, with a GMV (gross merchandise volume) of 10.8 billion yuan in 2023, closely following the "first stock of the future" Mixue Bingcheng; third, Zhang Junjie shouted out the slogan of "China's No. 1 liar" Lu Zhengyao when he was in charge of Luckin Coffee, "surpass Starbucks."

If you say that Bawang Cha Ji is a capital game, there are only three VC/PE companies involved, but the tea drinks are selling well. If you say that Zhang Junjie has a lot of resources and a strong background, he basically has none, and he succeeded in breaking through the internal competition, which is very "magical". Is he really a business genius that is "rarely seen in a century"? Or is he a "story king" who is better at painting cakes than Lu Zhengyao?

one

There are many stories about entrepreneurs, but none of them are this "fantasy".

If Zhang Junjie's resume as publicized and reported by the media is true, then he is a business genius that is "rarely seen in a century."

Regardless of what he did as the Overlord Tea Princess, how could he break out of the ambush from all sides?His resume that "violates the logic of contemporary entrepreneurial success" must be enough to shock countless people.CompetitionProducts and capital.According to public information from major media, "He was born in Yunnan in 1992. His parents died very early. From the age of 10 to 17, Zhang Junjie was wandering around, worrying about food and clothing every day."

"He had no basic education and didn't learn to read until he was 18. Later, he worked hard to save some money and wanted to make a cup of healthy milk tea, so he started a business. When he explained to investors, there were still many characters he didn't know and had to use pinyin to replace them."

Look at the above two paragraphs about Zhang Junjie. Do they sound “fantasy”?

To be honest, if it weren’t for the public information from major media, Investor.com might have thought that “China’s No. 1 scammer has a successor.”One of the “magical” things is that the VC/PE industry’s so-called “investing is investing in people” philosophy requires the fulfillment of three major elements (high education, good resume, and strong resources). Otherwise, among the many entrepreneurs in the world who have dreams, only a few will be able to raise funds.

What about Zhang Junjie? He has none of these, his resume is worse than that of an average person, and VC/PE doesn’t even consider the three major factors. How dare they invest the money in Bawang Cha Ji with the LPs?The key point is that new-style tea drinks are not a "blue ocean", and there is no question of developing a new track to "occupy a pit". According to the Tianyancha APP, the actual controller of Bawang Cha Ji is a company registered in Singapore, CHAGEE INVESTMENT PTE.LTD.

Of course, most companies register overseas with the intention of seeking an IPO channel on the U.S. stock market.In terms of financing, Bawang Cha Ji only received two rounds of financing in 2021, respectively, XVC and Fosun Group invested in the A round, and Congbi Qiushi and XVC invested in the B round, with a total financing of over 300 million yuan. In theory, the B round financing of over 300 million yuan is not small, and the "first stock of new tea drinks" Nayuki's Tea also raised 300 million yuan in the B round.

mean,When determining its valuation, Bawang Tea Princess’ benchmark was the “first stock in the new-style tea beverage sector.”The difference is that Nayuki's Tea obtained B+ round, C round, and Pre-IPO financing, and introduced top VC/PE such as Tiantu Investment, Jack Ma's "old friend" PAG, Shenzhen Capital Group, GF Fund, and Southern Fund. In contrast, Bawang Tea's financing stopped at the B round, and its valuation appreciation was stranded.

This is a very interesting matter. Since Bawang Cha Ji is "benchmarking" Nayuki's Tea and has figured out the capital path of financing and US stock IPO, why hasn't it continued to raise funds?In 2021, Heytea was valued at 60 billion yuan, Mixue Bingcheng was valued at 20 billion yuan, and Nayuki Tea, which had not yet gone public, was valued at 20 billion yuan. At that time, Bawang Chaji's post-round B investment valuation was 3 billion yuan, which was obviously seriously "undervalued."

A VC investor once bluntly said, "New-style tea drinks are a track that lacks barriers and relies on burning money to grab market share and expand the scale by opening stores."

The characteristic of this track is, "either you crush your peers or you are crushed by them, the fight continues until you die."This has made various large companies, capitals, and entrepreneurs have a special liking for it. According to the statistics of Baidu Wenku's "New Tea Drink Research Report", the scale of China's new tea drink market is 190 billion yuan. In the past few years, about 480,000 companies have invested in new tea drinks, and 50,000 companies have been killed in the competition.

Faced with such cruel internal competition, Bawang Cha Ji, which received two rounds of financing, "miraculously" survived. Isn't that "fantasy" enough?

two

All we can say is that the world is always full of "fantasy" and capital has ignored the "once-in-a-century" business geniuses.

Zhang Junjie fought his way out despite having "no education, no resume, and no resources". He also pointed out the direction of entrepreneurship for ordinary people who dare not dream, "There are miracles in the world. As long as you are willing to persevere, you can succeed even without capital."

If we have to give King Tea Princess an explanation for her reasonable and brilliant survival, it is that she can "endure well."

The influx of capital and the formation of a new trend in China's new tea drinks have gone through two stages of competition. In the first stage, Heytea, Nayuki's Tea, and Mixue Ice City emerged; in the second stage, Chabaidao, Guming, Chayan Yuese, Shanghai Auntie, and Bawang Chaji emerged.

The situation in the first stage is that capital giants are deeply involved and entrepreneurs have strong financial resources.Heytea, Nayuki Tea, and Mixue Ice City have all received large amounts of financing from wealthy families. Sequoia China, Hillhouse Capital, Shenzhen Capital Group, Yunfeng Fund, Temasek, Meituan Longzhu, Tiantu Investment, PAG, and Highlight Capital, which are ranked high on various VC/PE "TOP lists", have actively supported them and promoted the outbreak of the trend.

In the second phase, the situation changed and capital giants rarely participated.This is also related to the poor performance of Nayuki's Tea's Hong Kong IPO in the first phase, making 2021 a "watershed year for new tea beverage financing." That year, Nayuki's Tea landed on the Hong Kong stock market under the guise of "the first new tea beverage stock." On the first day, it fell below the issue price and plummeted by 13.54%, destroying the "consensus" of the primary market on the trend of new tea beverages.

"The first and second levels are inverted."What does it mean? Before Nayuki's Tea's IPO, VC/PE had a positive outlook on the prospects of new-style tea drinks in the Hong Kong stock market. New consumer investors generally believed that "new-style tea drinks will have greater room for appreciation after listing, and obtain high returns on investment, once they have achieved market share and scale."It is quite surprising that "Hong Kong stocks are not buying into new-style tea drinks, and investors have decided to vote with their feet."

"The US stock market is difficult, the A-share market doesn't like it, and the Hong Kong stock market doesn't buy it." Under such circumstances, the primary market must re-examine new-style tea drinks.This track is different from the technology field."There is no threshold, so we just copy and paste. If we have money, we can do it. If we don't have money, we will die."If the secondary market does not recognize it and shareholders do not "take over", what is the benefit of VC/PE investing in new tea drinks? Will it just cause a huge waste of social resources?

Investing in new-style tea drinks doesn’t make money, and the IPO is a joke, so why keep investing so heavily?The "divergence" in the primary market has created a confusing second phase for new tea drinks. For example, Cha Baidao, the leader in the second phase, plans to IPO on the Hong Kong stock market in 2024, but in 2023 it suddenly attracted 1 billion yuan in strategic financing from "top" VC/PE companies such as CICC Capital, Loyal Valley Capital, and Orchid Asia.From another perspective, VC/PE predicted that Cha Baidao had a high probability of IPO on the Hong Kong stock market and rushed to invest.Cha Baidao was founded in 2008 and received no capital for 14 years.

It sounds dramatic, but actually the investors are afraid to invest. Chabaidao, which is known as the largest IPO in Hong Kong stocks this year, also broke the issue price on the first day, plummeting 26.86% and evaporating HK$7 billion in market value. This shows that after three years, the "Mercury retrograde period" of new-style tea drinks in Hong Kong stocks has not passed.

Bawang Cha Ji is considered a rising star in the second stage. They started to emerge in first-tier cities and online platforms in 2023, and it took them five years to survive. Within five years, if Bawang Cha Ji had any influence in first-tier cities, the main battlefield of new tea drinks, they would have been dead long ago.From this perspective, Zhang Junjie, who "knows the times and is a hero", is a "tough guy" who can keep his composure.

three

The advantages of an entrepreneur who has never been to school and can read at the age of 18 are that he has social experience that the top students do not have, and can stand the test of time.Talking about this, I thought of an opposite case, Liu Zihong, the founder of Royole Technology.

Liu Zihong and Zhang Junjie are really "worlds apart".At the age of 17, Liu Zihong won the top score in the science college entrance examination in Fuzhou, Jiangxi Province. At the age of 21, he received a bachelor's degree in electronic engineering from Tsinghua University. At the age of 23, he received a master's degree. He was hailed as a "Tsinghua genius." After that, he went to the United States to study and was admitted to the Department of Electronic Engineering at Stanford University. He was the "fastest Chinese doctor to graduate in history" and returned to China to establish Royole Technology.

As it fully meets the three elements of "investment is investment in people" in the eyes of VC/PE, flexible screen unicorn Royole Technology has attracted the attention of more than 20 "top-tier" VC/PE and industrial capital, and hired Liu Shuwei, who became famous in the "Lantian incident", as an independent director. Logically, Royole Technology should at least be the "No. 1 in China's flexible screen industry", but the company went bankrupt due to poor management.

The dream of a unicorn with a valuation of 50 billion yuan was shattered overnight, and VC/PE cried.This story sounds quite "fantasy", the entrepreneur who has gathered "halo" can no longer continue. Comparing Liu Zihong and Zhang Junjie, what Liu Zihong lacks is "social experience".

After a lot of work, he ended up with a product that the market didn’t need. Zhang Junjie had a clear mind. He worked hard to find the right position and push the hot product. New tea drinks have been trying to increase the price and new products over the years, but they still haven’t left a good impression on consumers.In the eyes of consumers, "new tea drinks are essentially a story mixed with technology and hard work, which is of no benefit to young people."

Bawang Chaji hits the pain points of consumers, and its main slogan is "insisting on using good tea and good milk to make tea drinks that are friendly to the body". In 2023, Bawang Chaji swept the young group with "health", announced a total of 3,511 stores, and hit the first and second stage players of new tea drinks by surprise. This is really a big move, and it doesn't give peers a chance to encircle and suppress.

Entering 2024, Bawang Chaji's momentum is getting bigger and bigger, and it continues to expand its stores to 4,500. In terms of marketing strategy, they have come up with a lot of tricks to "brainwash" users of major social platforms, and at the same time announced the GMV, an indicator of company development in the Internet and new consumption fields. Data shows that in 2023, Bawang Chaji's GMV reached 10.8 billion yuan and the number of registered members exceeded 130 million, which brought considerable pressure to its peers who have not yet IPOed. New tea brands such as Gu Ming and Shanghai Auntie have completed IPO applications on the Hong Kong Stock Exchange this year.

Zhang Junjie was not in a hurry. There was news in the market that Bawang Cha Ji was seeking an IPO on the US stock market, but it was later shelved.

The Paris Olympics kicked off, and Bawang Tea Princess bet on China's first female tennis Olympic champion Zheng Qinwen, and was called "China's hottest new tea brand" by netizens. Before the Paris Olympics, Zhang Junjie, who had been working hard for a long time, showed the outside world a greater ambition. He shouted out the slogan of "China's No. 1 liar" when he was in charge of Luckin Coffee, "The overall sales this year will exceed Starbucks China."

A "homeless man" who had never been to school and could read at the age of 18, took 7 years to turn his life around and achieved a GMV of 10.8 billion yuan a year. I'm afraid even TV dramas wouldn't dare to film it like this. Is this real?If Bawang Cha Ji goes public on the US stock market one day, Zhang Junjie can be regarded as the first truly self-made entrepreneur born in the 1990s. After all, the level of suffering he experienced in his early years made it difficult for him to "survive".

So, do you think Zhang Junjie will be successful? Will Bawang Chaji surpass Starbucks China?