New Tea Race Track: Hi Cha, Naixue Continue To Lead The Race, Five Major Trends Worthy Of Attention

On the eve of the new year's Eve on February 11, new tea company Naixue's tea officially submitted a prospectus to the Hong Kong stock exchange to rush for "the first share of new tea". Behind the launch of Naixue is the rapid growth and fierce competition of the new tea racing track in the past five years.

Under the general trend of consumption upgrading, China's current tea consumption market has gone through the era of traditional chain tea represented by coco and yidiandian, and has officially entered the new tea age since 2015. Xicha, Naixue's tea, Lele tea and tea Yan Yuese all developed rapidly in this period, and obtained investment support from Hillhead capital, Sequoia Capital, IDG capital, Tiantu capital and Xiangfeng capital.

Through the statistical analysis of the data of the third-party institutions and interviews with the front-line practitioners and investors of the new tea industry, our reporter decodes the financing status of the start-up companies in the new tea industry in the past year, the differentiation and competitiveness of the leading enterprises, and analyzes the future development trend of the new tea industry.

Analysis of financing data of start-up companies

The 21st century economic reporter found that in the past year from March 2020 to February 2021, there were 14 publicly announced financing events in the new tea racing track by sorting out cvsource investment data and public information.

Among them, the capital side is particularly in favor of the head brand. The valuation of Xicha and Naixue both exceeded 10 billion yuan after financing. In June and December 2020, Naixue tea completed two rounds of financing successively, with the financing amount of about 100 million US dollars. The investors include Shenzhen Venture Capital, taimeng investment, Yunfeng fund, etc. After two rounds of financing, Naixue's valuation reached about 13 billion yuan. At the same time, Naixue also accelerated the pace of listing and submitted the prospectus.

Xicha, another leading enterprise of the new tea drinking circuit, obtained investment from hillhood capital and coatue in March 2020, with a post investment valuation of 16 billion yuan. In February this year, it was reported in the market that a new round of financing for Xicha was basically finalized, with a post investment valuation of about 25 billion yuan. In this regard, tea lovers said "the information is not true" to the 21st century economic report. At the same time, for the rumors that Xicha will submit its prospectus in March this year, Xicha also responded that "there is no listing plan in this year.".

In addition to the continuous leadership of the head enterprises, the capital side also pays more attention to the development potential of waist enterprises. Guming, qifentian and shanghai auntie have also completed new financing. Compared with the self operated development mode of Xi Cha and Naixue, many waist enterprises are actually developing in the mode of franchise chain, mainly facing the sinking market. This model helps them gain more stores and is recognized by the capital side.

For example, Gu Ming completed two rounds of financing successively in June and July 2020, with investors including Longzhu capital, Sequoia Capital, coatue, etc. According to the official website of Guming, the first store opened in 2010. In 2011, Guming began its chain operation mode. In the follow-up period, it has exceeded 100 stores in 2013 and 1000 stores in 2017. By 2020, the company has more than 4000 stores nationwide.

In November 2020, Auntie Shanghai obtained nearly 100 million yuan investment from Jiayu fund. It was established in 2013. It entered the sinking market from "dimension reduction" in Shanghai market, and expanded rapidly in the mode of franchise. At present, shanghai auntie has covered nearly 200 cities in China, with nearly 2000 stores in operation.

Competition among major players

Due to the low entry threshold of the industry and the easy imitation of product formula, the homogenization degree of new tea companies is high, which is often criticized by the outside world. However, by comparing the growth path and development situation of several leading enterprises, we can also see the differentiated positioning and their respective advantages and disadvantages.

Both Xicha and Naixue are relatively high-end new tea brands in the industry. They mainly develop in the first and second tier markets and adhere to the self-supporting mode. In the process of their development, they have also been strongly supported by capital.

In 2012, Nie Yunchen, a post-90s generation, started his own entrepreneurial road. His first milk tea store opened in jiuzhong street, Jiangmen City, Guangdong Province. It is understood that at the beginning of the business, the name of the store was "Huangcha". Later, due to trademark problems, the brand was renamed as "Xicha" in early 2016.

Xicha started from the low-level cities in Guangdong, and gradually entered the first tier cities such as Guangzhou and Shenzhen after verifying the business model. According to the public data, Xi Cha got the investment from IDG capital and LeBlanc founder he Boquan in August 2016. In the following years, Xicha has received investment support from Longzhu capital, Tencent investment and Hillhouse capital. As of December 31, 2020, Xicha has opened 695 stores in 61 cities at home and abroad.

Naixue tea was founded by Peng Xin in Shenzhen in December 2015. Before she started her business, she was the director of a listed company in Hong Kong. At first, it has been deeply rooted in the South China market, until 2017, it has gradually entered the national market.

With Shenzhen as its base, Naixue has gained investment support from Tiantu capital and Shenzhen Venture Capital with its headquarters in Shenzhen. Its latest round of financing was obtained from taimeng investment group and Yunfeng fund in December 2020. On February 11 this year, Naixue has submitted a prospectus to the Hong Kong stock exchange. According to the prospectus, as of September 30, 2020, the number of Naixue's stores has reached 422.

By contrast, Xicha is the brand with the largest number of stores and the most luxurious brand of investors among the new tea brands that insist on self-management. The number of Naixue stores is close behind, and it is also the brand with the fastest listing process. In addition, it is worth noting that from the financial data, Naixue's prospectus shows that the company as a whole is still in a state of loss. The 21st century economic reporter knows from insiders that Xicha is already in the overall profit state.

If we jump out of the domestic competition pattern, compared with the international giant Starbucks, Xi Cha and Naixue have a lot of room for improvement. For example, Starbucks has tens of thousands of stores around the world and thousands of stores in China. Both Xicha and Naixue are now of the order of magnitude with only a few hundred stores. In the future, with the increase in the number of stores, the management complexity will be higher and higher, which will be a new challenge.

At the same time, Starbucks is not only the largest coffee brand, but also forms a high degree of professionalism in the global coffee supply chain and plays an important role. For Xi Cha and Naixue, the tea supply chain is more decentralized and diversified. How to integrate the tea supply chain and form a depth and professionalism in the upstream of the industry is also to be considered in the future.

The company was first established in Changsha in 2013, and has been focusing on the regional market for seven years. It was not until the end of 2020 that it opened its first store in Wuhan to leave its hometown in Hunan. Tea color with the differentiated national style positioning, established the brand image and content rooted in Chinese traditional culture, passed on the unique brand values, but the product pricing was slightly lower than Xicha and Naixue. As a result, it quickly gained the favor of young consumer groups in Changsha area, and set up a high brand awareness nationwide.

However, compared with tea like and Naixue tea, the number and variety of tea color products are still less. How to retain its own characteristics and meet the needs of consumers in a wider range after leaving Changsha is a challenge. At the same time, in order to reduce the waiting time of consumers, Xi Cha and Naixue have made great efforts in Digitalization in recent years. There is still much room for improvement in the digitalization and membership system of tea color.

Michelle ice city was founded in 1997, headquartered in Zhengzhou, is a chain of fresh ice cream and tea. The company develops in the mode of franchise stores, which makes it occupy a large number of markets in low-level cities. It is also the brand with the largest number of stores among several top brands, and the number of its stores has reached tens of thousands. At the same time, compared with Xicha and Naixue, the products of mixue ice city are famous for their cost performance, and the price positioning is more popular. The high cost performance also reflects the comprehensive strength of the supply chain and other aspects.

However, compared with Xi Cha, Naixue and cha Yan Yue se, the financing speed of MI Xue ice city is relatively slow. In October 2020, it has been reported that a new round of financing will be completed in miyue ice city. The investors are hillhood capital and Longzhu capital of meituan. After this round of financing, the value of miyue ice city after investment is about 20 billion yuan, but it is quickly denied by the official of miyue ice city.

Analysis on development trend of new tea race track

Through the above research and analysis and interviews with practitioners and investors, we found that the following trends exist in the new tea track, which should be paid attention to.

First of all, new tea consumption scenarios increased, frequency increased, and the penetration rate of consumers increased. New tea is gradually becoming a high-frequency consumer category in daily life. It turns out that people may occasionally buy a cup when they go shopping on weekends. But now, many young white-collar workers will choose new tea as afternoon tea, and its consumption scene is gradually expanding. At the same time, the penetration rate of new tea in young consumers is also increasing, and even has become a "social tool" for young people.

Second, the new tea products pursue health and environmental protection. In the trend of consumption upgrading, young consumers seek new tea with more fresh ingredients, and pay more attention to the health of drinks, and tend to choose products with low sugar and low fat. Moreover, health concepts such as artificial meat, plant-based and 0-calorie sugar also bring more inspiration to new tea enterprises. In addition, with the implementation of the upgraded "plastic restriction order", new tea enterprises also pay more attention to responding to the policy for environmental protection product design, and have successively launched degradable paper straws, recyclable handbags, and degradable cup holders.

Third, sinking and internationalization are advancing simultaneously. At present, the growth rate of new tea shops in the first and second tier cities is slowing down, showing a downward trend to the third and fourth tier cities. Chain tea brands, such as miyue Bingcheng, Guming, Hushang Auntie and so on, have also gained more attention from capital and users.

At the same time, the head of the new tea enterprises are also in the international layout. For example, in July 2020, Naixue's first Japanese tea store was officially opened, which is the second attempt of Naixue's tea to expand into the international market after testing its water in the Southeast Asian market in Singapore. Xicha is also expanding new stores in Singapore and other places.

We believe that the international market is still affected by the epidemic because there is still a lot of room for improvement in the penetration rate of new tea drinks in the domestic market. Therefore, in the short term, seizing the sinking market will be the hot spot for the competition of new tea enterprises. It is a long-term development strategy for the head brand to go out and become a brand with global influence.

Fourth, pay more attention to digital transformation and improve efficiency. The digitalization of new tea brand includes driving product innovation and optimization by digital means, improving efficiency and accuracy by relying on big data location, and fine management of members through digital channels. Head enterprises are constantly improving their digital level, which leads to the improvement of efficiency.

For example, Xicha, with the help of "Xicha go" applet, guides consumers to flexibly arrange orders, thus improving the consumption experience and significantly improving the operating efficiency of stores. According to the data, in 2020, the average waiting time of consumers using the "tea go" applet was shortened by nearly a third compared with that when the "tea go" applet was just launched in 2018.

Fifthly, diversification has become the mainstream direction of development. New tea enterprises hope to occupy more consumer life consumption scenes. For example, Xicha has successively launched biscuits, chips, popcorn and other retail products, and launched sugar free bubble water products like small bottles. Naixue also opened the first dream factory in China in the coastal city of Shenzhen. Its products cover more than 1000 products in the fields of baking, steak, retail, wine, tea and coffee.