"grandpa doesn't make tea" comes to beijing. can the goal of expanding stores be achieved under the competition of existing stocks?
2024-09-21
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the new tea brand grandpa doesn't brew tea, which originated in wuhan, hubei, is about to enter the beijing market as part of its nationwide expansion plan. a beijing news reporter learned that 10 stores of grandpa doesn't brew tea will soon open in beijing, in chaoyang district, changping district, tongzhou district and other areas, and the beijing operation center has already moved in. at the brand upgrade press conference in march this year, grandpa doesn't brew tea set the store number target at 2,000.
relevant data show that there are currently about 430,000 new tea drink stores nationwide. the competition landscape of the new tea drink industry has undergone significant changes in the past few years, and the incremental market is gradually turning to the stock market. in the first-tier market, although the high-quality locations have been "swept" by various brands, there are still regional brands that hope to make their brands famous through the first-tier market. industry insiders pointed out that the theme of the new tea drink industry in recent years is still centered around "listing, going overseas, sinking, and co-branding", and the industry's internal circulation has become a foregone conclusion. under the siege of giants, new brands can only break through through differentiation.
on september 20, on the first floor of longhu beijing daxing paradise walk, the new tea brand "grandpa doesn't make tea" had a text description saying "hello, beijing". photo by beijing news reporter wang ziyang
entering the beijing market
in 2018, "grandpa doesn't brew tea" started in wuhan and opened its first store in nanhu baigang city. later, inspired by the old wuhan scented tea, the new chinese tea drink "oriental fragrant tea" was launched, which became a popular local tea drink brand in wuhan. at that time, the brand was called "grandpa brewed tea". after changing its name to "grandpa doesn't brew tea" in march 2022, it upgraded the brand and opened for franchising.
public data shows that in may this year, grandpa bu pao tea entered fujian province for the first time and opened 70 stores nationwide; in june, the number of stores nationwide reached 52; in july, it entered chongqing and guizhou for the first time, opening 97 stores nationwide, and the number of stores nationwide exceeded 500 that month. the catering data platform zhaimen canyan shows that the changes in grandpa bu pao tea stores from 2020 to 2024 show that 2024 is the year of its efforts. in just two months of july and august, grandpa bu pao tea opened more than 210 stores.
similar to the development path of bawang cha ji, soon after launching its efforts in the national market, ye ye bu bu cha began planning to open a store in beijing. "now that we have a store in beijing, we don't have to go to other places." in early september, a netizen posted photos on a social platform showing that a ye ye bu bu cha store in a shopping mall in beijing was already under renovation, with the text description on the fence reading "hello, beijing." some netizens said that it is expected to open at the end of september, but some stores may be delayed.
on september 20, a reporter from the beijing news came to longhu beijing daxing tianjie, where the fences on the first floor of grandpa doesn't brew tea have not been removed. in this mall, competition among new tea drinks is still fierce. about 3 meters away from grandpa doesn't brew tea is a luckin coffee store, and about 10 meters away is a new tea brand jasmine milk white, which is twice as large as the grandpa doesn't brew tea store. many consumers are queuing at the door to pick up their meals. in addition, there are new tea brands such as heytea, nayuki's tea, cha baidao, shanghai auntie, and chahuanong in the mall. a clerk at a nearby store told the beijing news reporter that she was not sure when the renovation of grandpa doesn't brew tea was carried out, and she learned that the store might open around national day.
on september 20, on the first floor of longhu beijing daxing tianjie, the fence around grandpa bu bu pao cha was still there. about 3 meters away directly opposite was a luckin coffee store. photo by beijing news reporter wang ziyang
a beijing news reporter searched dianping and found that 10 ye ye bu bu cha stores were "not yet opened". most of the 10 stores are located in iconic areas, such as sanlitun, shijingshan wanda, chaoyang joy city, daxing longhu paradise walk, etc. among them, chaoyang joy city will be the first ye ye bu bu cha store in beijing.
it is understood that before this, the beijing operation center of grandpa bu bu cha had already landed in sanlitun soho and had recruited multiple positions such as operation support, engineering specialists, training specialists and supervisors, human resources supervisors, platform operations, and finance. on september 20, the customer service of the grandpa bu bu cha franchise hotline confirmed that 10 stores in beijing have been confirmed to open, and it is not clear how many stores are planned to be opened in the beijing market in the future. at the same time, the customer service said that the hainan province market will also be opened soon.
suffering from the troubles of "quick recruitment companies"
the experience of grandpa bu pao tea is similar to that of heytea and nayuki's tea in the early years. although they are now open for franchising, these well-known tea brands have officially stated that they do not accept franchising. however, a large amount of franchising information can be searched online, but they are told that they can join "new brands under their umbrella." such websites or companies are "quick-hire companies," and it is not uncommon for catering brands to be affected by quick-hire companies.
in may this year, grandpa doesn't bubble tea issued a statement saying that the company has recently received feedback from the public that in many places across the country, there have been businesses using the name of "grandpa doesn't bubble tea agents" to engage in franchise cooperation, using false information and illegal means such as fabricating facts, inflating charges, and promising to complete store openings to deceive trust and defraud potential customers of investment funds for opening stores, which has seriously damaged the company's brand image.
grandpa does not brew tea said that the "grandpa does not brew tea" brand has not carried out "various forms of agency (including but not limited to regional agency, upper and lower level agency)" franchise cooperation, and all claims of "grandpa does not brew tea municipal agency/city agency, provincial agency, etc." are false and untrue information. the "grandpa does not brew tea" brand has not established any investment agency or similar cooperative relationship with any third party. do not trust the false information of the so-called "official website link" of the third party on various network channels.
a milk tea practitioner revealed to the beijing news reporter that these websites are actually operated by some "quick recruitment companies" behind the scenes. they use well-known tea brands such as heytea, nayuki's tea, and yidiandian to attract traffic online, and take the opportunity to recommend new brands when they are in contact with interested parties, and claim that they are cultivated by the well-known brands. in fact, these "quick recruitment companies" do not have the qualifications to franchise. after some entrepreneurs paid to join the franchise and opened a store, they found that the franchisee hardly provided post-maintenance, and it was difficult to get a refund. the store operation was far from the effect of the publicity, and some people lost hundreds of thousands of yuan for this.
downstream markets are key
although grandpa bu pao cha is making every effort to develop the first-tier market, the sinking market is the "wilderness" for new tea beverage companies. according to the prospectus of new tea beverage companies, the sinking market is a frequently mentioned keyword. according to data from zhushi consulting, from 2017 to 2022, the scale of the freshly brewed tea beverage market will expand at a compound annual growth rate of 19.6%, and the compound annual growth rate of the third-tier and below cities will reach 30.2%, expanding from 19.6 billion yuan in 2017 to 73.2 billion yuan in 2022. the market growth rate of third-tier and below cities is expected to reach 31.4% in 2023, and the growth rate will remain above 20% in the next two years.
according to the data from zhaimen canyan, as of september 10, grandpa bu bu cha had a total of 634 stores, including 26 stores in the first-tier market, accounting for 4.1%; 235 stores in the new first-tier market, accounting for 37.07%; and 161 stores in the second-tier market, accounting for 25.39%. the rest of the market accounted for about 33.44%. more stores are still concentrated in the first- and second-tier markets. however, in early september, in a report by hubei local media, yu lina, general manager of grandpa bu bu cha, introduced that as of now, the total number of its stores nationwide has exceeded 1,200, covering 25 provinces, autonomous regions and municipalities.
liang zhe (pseudonym), who has been engaged in the new tea beverage industry for 10 years, told the beijing news that the new tea beverage industry has long entered the stage of stock competition. if new tea beverage brands want to develop, they still need the support of funds, sales, and single-store competitiveness. "tea beverages have never been a mainstream market and are still marginal consumption. in other words, everyone will drink it only when they have disposable marginal consumption, and only when everyone drinks it can they make money. if you want to seize the opportunity, you can only adjust the business model and enter the sinking market."
it has become an industry consensus to focus on the sinking market. mixue bingcheng disclosed in its prospectus that as of the first three quarters of 2023, its store network has spread across 1,700 counties and 3,100 towns. shanghai auntie also mentioned in its prospectus that the sinking market is its important advantage and it has strategically focused on the sinking market. shanghai auntie said that it plans to increase the brand's store network density in second- and third-tier cities in the next five years, and at the same time, combine the "light edition" brand concept upgrade to cover more third-tier and lower cities.
the person said that it is an industry trend for the new tea beverage industry to focus on the sinking market. in the sinking market, franchisees can open stores with lower employee costs, water and electricity costs, and rental costs. when the product pricing gap is not large, they have greater profit margins to organize activities to attract customers.
differentiated competition is on the agenda
the reason behind the efforts to enter the sinking market is that the new tea beverage industry has entered a stage of severe involution and homogenization after development in recent years.
a co-founder of a new tea brand said that the opportunity for small-scale expansion of new tea brands in the future is not completely impossible. but there is a necessary prerequisite, that is, the high probability of sinking the market. "if the brand is positioned at 10-20 yuan, it is highly likely that there will be no chance in small towns, and the overall local consumption capacity cannot support it to survive." but in the future, more stores will definitely be in the hands of fewer brands. only the leading brands with stronger supply chain advantages and operational capabilities can survive in the industry reshuffle.
in an internal letter to business partners titled "creating differentiated brands and products for users," heytea also pointed out that with the changes in the consumer environment and the more intense competition in the tea beverage market, the development of the tea beverage industry is facing new challenges. "since the growth of consumer demand is not synchronized with the growth of the overall supply of the tea beverage industry, facing limited consumer demand, the industry generally chooses similar product and brand strategies, resulting in increasingly intense homogeneous competition." similar products and brands continue to consume users' enthusiasm for tea beverage products and brands.
heytea said that it will not do homogenized things in the future, but will focus on what it is good at and what users need. in the future, heytea will continue to carry out necessary marketing activities, but will never simply roll up its sleeves at low prices. heytea will insist on providing users with differentiated products and brand experiences that go beyond price.
the founder of a leading new tea beverage company also told the beijing news reporter that the market has entered a state of stock competition, and the only way for small and medium-sized brands to develop is to develop in a differentiated way.
public data shows that in 2024, the grandpa doesn't bubble tea brand will be renewed and upgraded again. at the same time, this year, grandpa doesn't bubble tea is expected to have 2,000 stores across the country, covering hubei, jiangsu, shanghai, shandong, henan, hunan, jiangxi, zhejiang, guangdong and other regions, and layout overseas markets. from the product point of view, grandpa doesn't bubble tea streamlined the number of products while adding fresh milk tea, and created a large single product of lychee ice brew, eventually forming the current "global model" with fresh milk tea as the signature, ice brew as the hot product, and lemon tea and fruit tea as auxiliary. from the product point of view, in addition to ice brew products, fresh milk tea/light milk tea still cannot escape the problem of homogeneity in the new tea beverage industry.
in addition to bawang chaji, which plays an important role in the light milk tea market, chahuanong from shaanxi and chayan yuese from hunan have also been deeply involved in the market for many years. in addition, starbucks china recently launched the "tea blossoming" series of products, including longjing green grape milk tea and dahongpao snow pear milk tea. earlier, luckin coffee, a giant in the coffee industry, also launched the "light jasmine" product, officially focusing on the tea beverage business.
a report released by the prospective research institute pointed out that in the current chinese new tea market, if a brand wants to gain a foothold in the industry, it is crucial to create differentiated products and form a unique brand culture. facing competition from giants, there are still variables for grandpa bu bu tea to break through.
beijing news reporter wang ziyang
editor: tang zheng
proofread by zhao lin
