The water in the new tea drink industry is boiling again.

At the end of the year, the capital market is rarely active. in November 2020, Shanghai Auntie announced the completion of nearly 100 million yuan of A round of financing; in December 2020, Xiaoman Chatian announced the completion of tens of millions of Pre-A round of financing; in January 2021, Naixue's Tea announced a C round of more than $100 million financing.

Recently, even the consistently low-profile honey snow ice city also rare burst of the first round of financing, although the brand later denied the news, but the successive good news to the outside world to see the new style of tea drinks is breaking the Chinese tea drinks market "ceiling", bringing more possibilities.

After a series of operations such as the rapid expansion of stores, the launch of new products and attempts to get rid of homogenization, the hot money in the market has also been a small cup of new tea drinks to a new height.

Looking back at the 20 years of China's milk tea industry, it is not difficult to find that, from the powdered milk tea, bucket milk tea, hand-shaken tea to today's freshly made fruit tea, tea drinks in addition to quench their thirst, but also be endowed with a sense of value and social functions.

The milk tea industry, which seems to have a low threshold but is extremely popular with young people, is rushing into the deep waters of the FMCG industry.

"Hei Cha and others have pioneered the industry by putting fresh fruit categories into milk tea, which is essentially a change in the way fruit is consumed." Liu Zizheng, founder of Xiaoman Chatian, told 'Startup Forefront'.

10 years ago, with the changing needs of consumers, a new style of tea drink featuring freshly extracted tea came into being, and milk tea stores underwent a revolutionary upheaval in the selection of raw materials, the production process, and store decoration. When the addition of fresh fruits and other ingredients in tea drinks became mainstream, Xicha and Nexue's Tea also became the representative brand of the new tea drinks. Since then, the tea drink industry has also begun to segment the development of new tea drink brands such as Xiaoman Chatian and Cha Yan Yue color.

Take Xiaoman Chatian as an example, this is a "high-value" cup of fresh fruit tea drink with carrots as the main focus, with a unique product and positioning to capture a lot of consumers, and this fruit tea drink in the past tea drink industry is very few and far between.

As we all know, in the traditional consumption pattern, the delivery form of fruit is always limited, either the original form or fruit cut. Therefore, before the birth of fruit tea drinks, fruit cut in the takeaway platform sales growth is very fast.

Liu Zizheng analyzed, after adding fruit to the tea drink, fruit drinks, lower prices, better taste, the product is also both creative, but also can add other accessories, the delivery form was upgraded, drinking fruit than eating fruit experience is better. This is precisely the fundamental reason why ready-made fruit drinks can be popular.

"The charm of the beverage industry is that it can continue to access the content and share of other areas to cup all the ingredients." Liu Zizheng said.

In fact, the key to the tea industry's ability to innovate, endure, and move through market cycles is its addictive qualities.

Newer tea drinks are commonly made with ingredients such as pearls, coconuts, milk caps, and even fresh fruits, which are sweet enough to make the human brain secrete dopamine, making people feel happy and healed. Not to mention the fact that new tea drinks are healthier, more flavorful, and more ornamental than powdered milk tea, which is generally easier to capture young users with diversified needs.

This also explains scientifically why milk tea is becoming a new consumer product and lifestyle for today's young people, even evolving into a social currency.

And as the forms and brands of tea drinks continue to emerge, the consumer base continues to expand, all of which has allowed the tea drinks market to grow in size. In this, the most direct manifestation is the surge in the registration of milk tea enterprises in China in the past decade.

According to the data of "an enterprise information query platform", there are 306,300 milk tea-related enterprises (including individual households) in China. From the trend of the last ten years, only 7410 milk tea related enterprises were registered in 2010, 10,000 in 2013, 50,000 in 2017, 87,683 in 2019, and 94,300 in 2020, the number of new registrations.

Under this year-on-year increase in data, China's new-style tea drinks market size "soaring". CBNData data show that in 2019, the market size of the new-style tea drinks has nearly 100 billion yuan, and the "2020 white paper on the new-style tea drinks" also shows that the market size of the new-style tea drinks market is expected to exceed 110 billion yuan in 2021. 110 billion yuan.

It can be seen that the new tea drinks still have huge market potential, especially the young generation of "90" and "00" become the main consumer of new tea drinks, they are highly accepting of new things, the pursuit of personalization, diversification and experiential consumption. Experience consumption, so practitioners in the field of new tea drinks still have the opportunity to find gold.

However, with so many competitors in the new tea beverage market, how do you get your product and brand into the hearts of the people?

Looking back at the history of the development of new tea drinks, it is not difficult to find that in the early stages, some brands are with a single product explosion and product differentiation hit the popularity.

Such as Xi tea is regarded as the first creator of cheese milk cover; Nexue's tea was the first to focus on the "tea + soft Ou Bao"; Lele Tea was the first to create dirty tea and dirty packet; Lujiao Lane was the first to launch the black sugar pearl milk tea; Shanghai Auntie will add glutinous rice to the tea drink ......

When these mixed tea drinks, it is difficult to see why they are so popular, because they are so popular. p>

When these mixed tea drink products in the market segment recognized, and then have the opportunity to "out of the circle" and development and growth. The "horse race" is an important proof of the development of the brand, but also an important way to "show muscle".

To the head of the brand Xi tea, for example, from the beginning of the A round of financing in 2016, it has not stopped the expansion of the footsteps, 2017-2019, the number of stores were 80, 163, 390, behind the brand for the scale of the thirst. 2020, the Xi tea opened about 289 stores, more than the annual plan of 200 stores.

Also as the head of the brand of Nai Xue's tea is the creation of a dual product model, and constantly research and development of new categories, in 2020 Nai Xue created "fresh fruit bubble tea" "fruit milk tea" and other new categories, as well as snacks, cultural and creative peripherals and other new The company has also developed new retail products such as snacks and cultural and creative peripheral products.

As of December 2020, Neshe's tea has opened nearly 500 directly-managed stores in more than 70 cities across the country, as well as in Japan, Singapore and other places; in addition, it has also opened up a variety of types of physical stores such as Neshe's BlaBlaBar, Neshe's Dream Factory and Neshe's PRO, so it's clear that Neshe's ambition is not just a new tea.

Another relatively low-profile new tea drink brand Honey Snow Ice City is the main focus of the sinking market groups, and inadvertently grew into a "stealth" giant - in June 2020, Honey Snow Ice City released a news release saying, "The number of stores in the world, the number of stores in the world, the number of stores in the world, the number of stores in the world, the number of stores in the world, the number of stores in the world. Honey Snow Ice City global store number exceeded 10,000," to become the first store number of more than 10,000 tea drink enterprises.

In 2020, other tea drink brands are similarly cultivating internal strength. Xiaoman Chatian has completed tens of millions of Pre-A round of financing, Shanghai Auntie is ready to counterattack first-tier cities from the sinking market, and has opened 2300 stores.

However, in the many different new tea drink brands, has derived a very different business logic - Neshe's tea as a representative, it focuses on upgrading and iteration, will be based on seasonal raw materials to maintain the rhythm of a new product every month, take the multi-category strategy.

And Liu Zizheng believes that in the new tea beverage industry, the era of super category is here - high frequency of new is not necessarily the best way to play.

The pop-up is not bumped out, but there is a systematic way to play. "Our product selection logic is 'one horizontal and three vertical'. 'One horizontal' is the core category, and 'three vertical' refers to the flow category, the seasonal category and the currency category. Let's say during strawberry season, Xiaoman Chatian can stack Chelsea and seasonal fresh strawberries. Creating a pop-up in this way doesn't really require a particularly high-speed uptake, but rather mindful sedimentation." He added.

In his view, the new tea drinks industry has ushered in the era of "reduction". More than a decade ago, there were only a few choices of milk tea, and since then most brands have been expanding their categories and doing SKUs to "increase allocation". But when everyone can buy everything in all places, there is actually a lack of differentiation, and a specialized division of labor is bound to emerge.

He also cited, if the new tea drinks industry as a whole, the upper part is a high value solution such as Xicha, Naixue, the lower part is a little bit, CoCo and other cost-effective solutions, small full of tea field is in the middle of the two. "In the future, we are optimistic about high-value sense solutions in the whole consumer sector, because the user mind is here."

In the opinion of Zhuang Shuai, founder and analyst of Bailian Consulting, there are usually two directions of development in the retail industry, one is horizontal development, that is, expanding more channels and opening more stores. The other is vertical development, that is, from the product category to do expansion.

It can be seen that whether it is a multi-category expansion or a single product explosion of the operating logic, behind the brand to create the influence of ambition.

With the market competition into the middle of the game, tea drink brands are also keenly aware of the breath of the incremental market outside the first and second tier cities - channel sinking has gradually become a standard action in the industry.

At the beginning of 2020, Xi-cha launched a sub-brand "Xi-Small Tea", the price and packaging of the product are different, which is considered to be an important step to enter the affordable market; Hushang Auntie focus on the second, third and fourth tier cities, and is now beginning to gradually counter-attack the first-tier cities. Shanghai Auntie founder Shan Weijun said, "We already have 100 franchises in Shenzhen, and we also plan to do 50 stores in Shanghai next year."

In his view, at present, the first two lines have actually become saturated, three, four and five lines are also becoming saturated, the future is more of a stock market competition. "The head brand will squeeze the waist brand, small and medium-sized brand space will become smaller and smaller. The chance of survival of miscellaneous brands in the future will be very small." Shan Weijun said.

In the view of Zhang Jian, industry expert of the China Electronic Commerce Association, the competition in first-tier cities has become saturated, coupled with a substantial increase in the consumption capacity and consumption concepts of second- and third-tier cities, the channel sinking has become inevitable.

However, in his view, first-tier city brands in the process of sinking may encounter four obstacles:

1, first-tier city consumer positioning and second-tier cities are certainly different, the second and third-tier cities of the consumer capacity and first-tier cities, whether the price of the price of the positioning of the match;

2, the battle line to extend, inevitably will result in supply chain lengthening, which leads to the supply of untimely, the quality of the unity and so on.

3, the rapid expansion of enterprises will lead to capital pressure, talent shortages and increased management costs and other issues;

4, first-tier cities will face the sinking of the brand of the region's original brand resistance, and even suppression.

At present, direct operation and franchise is the mainstream form of tea beverage brands choose to sink.

In Liu Zizheng's view, the extreme direct and franchise may encounter bottlenecks. "The bottleneck of the direct mode is the limited number of gold stores in the national middle and high-end shopping centers, which is the 'ceiling' for brands to open large stores." He said.

The bottleneck of the franchise model is that the expansion of the entire beverage industry over the past 10 years has been less than healthy, and the word "harvesting" has been repeated. "In fact, the franchise must not be a means of making money, but a reasonable expansion path. Today, the era of boutique franchise has arrived." Liu Zizheng said.

"The advantages of the direct mode for the high gross profit of the product, the chain of stores management is difficult, data to facilitate decision-making and analysis. Disadvantages for the slow speed of scale, capital pressure, high labor costs. On the contrary, it is the disadvantages and advantages of the franchise model." Zhang Jian added.

In addition to choosing the expansion method carefully, the logic that companies need to reduce costs and increase efficiency, and develop the supply chain also applies to the new tea beverage industry.

In Liu Zizheng's view, one of the weaknesses of the new tea beverage industry is the materials are complicated, which also leads to the back-end warehousing and the design of the line is very cumbersome. "Therefore strengthening the control of the back-end supply chain is one of the necessary capabilities of the brand." He analyzed.

"The new tea beverage industry has now reached an era driven by the supply chain." He added that the ability of brands to provide more valuable products is essentially considered supply chain capabilities. If there is a lack of supply chain support, prices and costs are relatively transparent, then all brands can only carry out the stock stranglehold, so that it is difficult for new brands to stand out.

It is understood that in 2020, the average monthly procurement volume of fresh fruits in the small full tea field has reached tens of thousands of pounds. At present, Xiaoman Chatian has reached cooperation with China's largest car cherry importer Jin Guo and other upstream top suppliers. At the same time, all the core materials of Chelsea have completed in-depth self-research.

Wang Yi, senior director of public relations of Naishue's tea, also told "Entrepreneurship Forefront" that the brand has always insisted on the creation of upstream supply chain advantages, in addition to the cooperation with high-quality suppliers, but also through the establishment of exclusive tea gardens, orchards and centralized factories, as well as the application of digital management control, to ensure a stable and high-quality supply of raw materials.

With the continuous emergence of new tea drink brands, "product homogenization" has gradually become an industry-wide problem.

It has been reported that the formula of the Xicha can be bought online for only a few dozen dollars, and the founders of Naixue's tea and Xicha have also disliked each other in the circle of friends because of product innovation and plagiarism, and LELO's tea has been exposed to plagiarism of the tea color. "Without looking at the logo, few customers even recognize the origin of milk tea at a glance." Some media described the homogenization of new tea drinks this way.

Therefore, brands want to stand out, we have to continue to push the boundaries of innovation, expand new products and give meaning to the drinks outside, which has become the fundamental continuation of the tea drink business.

Nie Yunchen, the founder of Xi Cha, once said bluntly, "I am anxious every day." In 2018 alone, Xi Cha had launched 48 new products. There are even rumors that Nie Yunchen's office is filled with more than a dozen types of newly developed milk tea and bread every day, and every one of them has to be personally tried.

Zong Hao, vice president of Yuanqi Forest, has also said that the company has a 300-strong R&D team and spends a lot of money on R&D every year.

Shan Weijun, on the other hand, believes that the previous milk tea, may be over 20 years the menu will not change, but now we have to continue to push the envelope to enhance the brand's impact.

To this end, Shanghai Auntie set up a special market research team, in addition to consumer interviews and buy third-party research data and Tmall, Jingdong data to analyze trends, will also go to various supermarkets to visit the shelves of the sales situation, in order to understand the needs of consumers in the first place.

Shan Weijun also revealed that Shanghai Auntie will launch 2-4 new products every quarter. After the successful development of new products, the company will first through the directly-managed stores to test sales. When sales reach 4% of the store's total monthly sales, it will be fixed in the menu and gradually promoted in the franchises. Today, Shanghai Auntie has formed a multi-product line*** of more than 40 SKUs based on five-grain tea and fruit tea.

However, the entry threshold of the new tea drink market is not high, and in the face of an increasingly fierce and diverse competitive market, in addition to product expansion, the formation of a highly iconic and widely recognized brand kernel has also become a focus of the power of the new tea drink brands.

"Offline stores can not only provide tea drinks, but also expand to associated categories, such as sparkling water, coffee, snacks and cupcakes." According to Zhuang Shuai, expanding product categories is a surefire way for new tea drink brands to achieve sustained growth.

As it turns out, many brands have opened up categories such as coffee, sparkling water and even desserts in addition to tea drinks. For example, Xicha and Nexue's Tea have both launched coffee-based drinks in some stores. Ali local life big data show that in the sample tea drink stores, coffee products account for about 10% of sales.

Wang Yi believes that, for Naishue, its product development has never been detached from the core of the "tea". From the first store, Naishue launched a retail gift box of tea and cold brew tea.

At the time, consumer response to this niche product was lukewarm, with average daily store sales of only two or three cups. But after five years of research and development of pure tea and related tea products, Nexus customers after 95 and 00 have become more and more fond of tea culture. Wang Yi revealed that now Naixue stores pure tea sales have reached 10% of the tea drinks.

Most importantly, the opening of stores, is still the focus of the brands competing.

Yi Wang told Venture Forefront that store expansion and upgrades are an important part of reaching more customers and better meeting consumers' daily needs.

"Tea drinks are not like large-scale superstores, generally within a certain range, there is a shopping center it is difficult to open a second one, but a street can open four or five tea drink stores, lively neighborhoods or even open a dozen stores are acceptable." Zhuang Shuai said that the conditions of space, but also allows tea drink brands to continue to choose to open stores offline.

Shan Weijun also believes that there will be many more opportunities for tea drink brands to open stores. "Starbucks has 20,000 stores in North America alone, and China's population is four times that of North America. By analogy, there could be a brand in China that will open up to 50,000 stores."

As it turns out, in order to continue to expand to capture the market, it is clear that the new tea drink players will not let go of any opportunity.

In addition to the layout of stores, the direction of the flow of hot money from the capital market can also be seen in the industry pattern changes.

"A corporate information query platform" data show that after 2016, the tea drink brand investment and financing activities began to frequent. 2020 tea drink brand investment and financing events 12, the disclosure of the amount of more than 1.7 billion yuan, financing events slightly higher than last year, the amount of financing is much higher than last year.

From the point of view of the number of financing of tea drink brands, "ChaLi ChaLi" ranked first with 6 financing, "Naixue's tea", "Xi tea" tied with 4 financing. Second.

From the point of view of the total amount of financing of tea drink brands, "an enterprise information query platform" data show that "Naixue's tea" with 1.52 billion yuan to win the top, "inWEinWE tea" with 500 million yuan to rank first, and "inWE" with 500 million yuan to rank first. "inWE" with 500 million yuan in second place, and its investor is Liu Qiangdong.

From the financing trend of tea drink brands in the past decade, in the early years, the main freshly squeezed, hand-brewed brands are easy to get financing; later, with the rise of Xicha, focusing on young people's mid-range and high-end tea drink brands blossomed; and in recent years, focusing on health, high-end and business and other segments of the market, such as the tea drink brands are favored by investors, focusing on brown sugar drinks, mango drinks and carmelized drinks and other raw material segments The tea drink brand entered the market.

According to Lastpost, the new tea drink brand Honey Snow Ice City recently completed its first round of financing. This round of financing was jointly led by Dragon Pearl Capital and High Tide Capital, with each side investing 1 billion yuan. After the financing was completed, Honey Snow Ice City was valued at more than 20 billion yuan, the former later denied the news. After Naixue's tea completed the C round of financing, its valuation is also expected to be close to 13 billion yuan, while the valuation of Xi tea as early as last year has exceeded 10 billion.

From another point of view, from Naixue's tea, hi tea and honey snow ice city valuation are over ten billion, the threshold of the entry of investment institutions is also increasingly high. Take the financing events in 2020 for example, there is no lack of potential waist dark horse brands.

In Zhang Jian's view, the current market space for new tea drink brands is large enough, so it is still in the stage of savage growth, capital injection will require rapid development of enterprises to seize more market, and its ultimate goal is to get the enterprise listed and then get 10-30 times return.

Capital is driven by profit, so the "new tea drink first share" fight is more imminent.

According to public information, Nexue's tea has been rumored to be preparing for the listing of the news; Xi tea also seeks to be listed in Hong Kong by the end of 2021, seeking to raise $400 million - $500 million; Honey Snow Ice City plans to be listed on the A-share listings, is expected to complete the listing process in 2021. However, all three have repeatedly clarified that there is no relevant plan, and the market has become more treacherous.

"The industry is far from mature." Liu Zizheng said, at present, the chaining rate is still less than 30%, the national market is waiting for penetration. When there is a single player really run out, only then may arrive at the decisive moment of the new tea beverage industry.

Nowadays, the new tea drinks are entering a new digital era, which also gives brands a different competitive latitude.

For example, Naixue has increased its investment in digital research and development and application since 2019, and is reaching more users through channels such as small programs and e-commerce platforms.

Wang Yi believes that the front-end digital application can help it draw closer to consumers and establish a closer connection. "So far, about 80% of Naixue's ordering transactions happen online." She said.

In her view, the rapid development of the new tea beverage industry also puts a higher demand on the optimization of internal efficiency, which requires the introduction of technology and intelligent decision-making, such as the intelligent scheduling of ordering in stores, and the development of automatic and semi-automated equipment.

In fact, Nexue's Tea, Hi-Tea, Lelouch Tea and CoCo have all launched WeChat applets for self-service ordering and self-service pickup, laying the groundwork for brand digitization.

Yi Wang told "Venture Forefront" that in the face of the epidemic in 2020, Naixue, through strategic adjustments and efforts in digitization, new retail and other aspects of the rebound in annual revenue, the average monthly revenue of a single store is about 1.0 to 1.5 million, and has accumulated more than 30 million members in nearly a year.

In May 2020, Xi-Tea released data saying that the registered users of Xi-Tea's small program had exceeded 26 million, with a reorder rate of more than 300%, and that more than 80% of the stores' online orders came from the small program.

Shan Weijun said, not only the head of the tea beverage brands, compared with traditional retail methods, digitalization allows brands to 100% identification of consumer profiles. Not only can we understand the frequency of consumer consumption, age group, repurchase rate, but also more intuitive understanding of consumer preferences. To do the former product-centric, completely transformed into a consumer-centric.

He revealed that the average online proportion of Shanghai aunts accounted for 30%-40%. First-tier cities takeout proportion even reached 60% -70%.

"Order online, fulfill offline." Ordering takeout is one of the scenes that can not be ignored by fast food. Zhang Jian believes that the takeaway of new tea drinks will definitely develop more and more. But with the arrival of new retail, offline experience is also the focus of new consumption, so the future is more optimistic about the new retail model of offline experience and online reordering.

But the new tea drink industry is similar to the restaurant industry, consumers only remember the "top brand", only in the head of the industry to survive.

As Zhang Jian said, the new tea drinks market will be a continuous growth process in at least 5 years, but from the perspective of consumer goods, the development of Internet companies and venture capital, there will be 3-5 head companies, the rest of the enterprises can only solve the problem of subsistence.

Nowadays, the basic pattern of the new tea drink industry has formed a Xicha, Nexue's Tea and Lele Tea and other directly-managed stores tripod, Honey Snow Ice City, Shu also burnt Xiancao and Shanghai Auntie and other franchise brands to catch up with the situation. In the future, as competition escalates, the Matthew effect is highlighted, the industry entered the supply chain driven, the product will be more homogenized, it is difficult to find a niche market through marketing.

With the rise of personalized generation Z, milk tea should take the road of differentiation. Simply put, now want to enter the industry brand, but also need to find the characteristics of the positioning, the production of their own "pop".

Of course, the new tea beverage industry product development is no longer limited to simple application of research and development, such as fruit and tea base selection and matching, but to the extension of raw material research and development, research and development focus more on the stability of the enhancement of the standardization of raw materials, including fruits, tea base, and other raw materials, automated and semiautomated production equipment research and development.

As Wang Yi said, for all the brands, the next stage is not rely on a single point of victory in an era, but requires the brand to go hand in hand in many aspects, in terms of product, brand, stores and digitalization and other aspects of the development of a full range.

Undeniably, 2020, is the new tea drinks continue to power the year. During this year, this new track seems crowded and lively. Turning to 2021, the new tea drink is embarking on a brand new track.