In 2021, the milk tea industry will set off another undersea listing.
Recently, Nai Xue's Tea has completed a new round of 100 million yuan C round of financing. The market has speculated that Nayuki's tea is preparing for the listing this time. In addition, since last year, there has been news of the listing of Hi Tea. Although both denied this, the "first new tea drink" competition has already started.
So, who can win the "first share of new tea" crown among the new tea brands in 2021? How far is Nayuki's tea from the IPO? Is the "blue-eyed" new tea-drinking track in the capital market a vent or a bubble?
In 2021, the new tea IPO competition will start
Milk tea, as a beverage that has taken the world by storm, has perfectly harvested the stomachs of generation Z young people.
Whether you are working, studying, or watching dramas, you can have a cup of milk tea, take a photo and send it to Moments. Milk tea is like the "life-renewing water" for young people. You can have a cup when you are in a good mood, and even a cup when you are in a bad mood. It seems that everyone always has countless reasons to buy milk tea. It is precisely these reasons why you can drink tea. Brands are particularly affected by the "blue eyes" of the capital market, and the top milk tea brands have already secretly made the wishful thinking of listing.
In addition to Naxue’s tea recently received 100 million yuan in Series C financing, it was rumored that it will be listed. There have been related rumors about the listing of Hey Tea and Michelle Ice City. There were related reports in September last year that Hey Tea plans to go public in Hong Kong before the end of 2021, and it is expected to raise US$400 million to US$500 million.
There are also reports that Michelle Ice City will be listed as the most highly valued tea brand. It will complete the final round of financing preparations for listing before the IPO. The financing amount will reach 1 to 2 billion yuan, and the post-investment valuation is about 20 billion yuan. .
This year, Nai Xue's tea is the first to obtain a new round of financing, with a valuation of about 2 billion yuan. This is undoubtedly the first shot in the battle for the "first share of new tea brands" in 2021. Although all tea brands currently deny listing rumors, the new tea-drinking track that has been "blue-eyed" by the capital market will not be a quiet track in 2021.
Who will get the "first new tea drink"?
As the leading brand of new-style tea drinks, Naixue's tea, Heytea, and Michelle Ice City will eventually be compared. But who can win the crown of "the first new tea drink"?
Naxue's tea was established in 2015. Unlike the traditional way of entering the market with tea, the company has provided tea and soft European bags since entering the market, and the audience is young women. Up to now, Nay Xue's tea has opened 497 directly-managed stores, covering more than 50 cities across the country.
Established in 2012, HiTea focuses on series of tea products such as cheese, fruit and milk cream tea. The audience is mainly white-collar workers aged 25 to 30. Up to now, Hi Tea has opened 696 stores, covering more than 60 cities across the country. Among them, the number of stores in Shenzhen and Shanghai has reached 100.
Michelle Ice City was first established and was established in 1997. Its main products include fresh ice cream and specialty teas, and its audience is mainly student groups in third- and fourth-tier cities. Up to now, Michelle Ice City has exceeded 10,000 stores, reaching 11,926 stores, becoming the first brand in China's local tea market to break through 10,000 stores.
The three tea brands have different audience groups, but in terms of the number of stores and the number of consumers, Michelle Ice City is firmly on the top of the list. However, due to different customer groups, the customer unit price is also different. Among them, Michelle Ice City harvests the sinking market at low prices, and does not have an advantage in the unit price of customers. Because of its specialization in the first and second tier markets, the unit price of Hey Tea is slightly higher than that of Naixue's tea.
But now, Hi Tea is accelerating its "sinking" and squeezing the third and fourth tier markets. It has launched "Hi Xiaocha" with a price of between 11 yuan and 16 yuan, which is about 10 yuan different from the previous product line; and Naxue's Tea accelerates "upward", takes the high-end route of consumption upgrade, focuses on the creation of high-end consumption scenes, launches a new store "Naixue PRO", and adds a series of retail products such as specialty coffee and light roast products to provide business professionals Breakfast and light dinner requirements.
In addition, from the perspective of brand recognition, Hi Tea ranks first. According to data from iiMedia Consulting, in 2020 Q2 new tea brands have the highest consumer awareness among consumers, accounting for 43%. IiMedia Consulting analysts believe that Heytea stands out among new tea brands by virtue of its excellent social media marketing and various cross-industry joint names.
Furthermore, from the comparison of financing strength, Michelle Ice City and Hey Tea have higher valuations after financing. According to observations, after Naixue’s tea recently received US$100 million in Series C financing, it has completed 5 rounds of financing, with a post-investment valuation of nearly 13 billion yuan. In March 2020, Hey Tea was jointly led by Hillhouse Capital and Coatue. After the fourth round of financing, the post-investment valuation exceeded 16 billion yuan; Michelle Ice City was rumored last year to receive a new round of financing led by Hillhouse Capital and Dragon Ball Capital under Meituan. About 20 billion yuan.
It can be seen in general that the advantages and disadvantages of the three are different from the perspective of store layout, audience groups, products, brand awareness and financing, but the fields in which everyone enters are gradually similar, and the consumer groups will also overlap in the future. The battle between the three is intensified. At present, Michelle Ice City still holds the sinking market tightly, Hey Tea holds the high-end market tightly, and Naixue's tea is between the two, but the strength is not weak. Therefore, whoever wants to be one step ahead of each other in the future must rely on differentiated play to tap new growth space.
In any case, the new tea-drinking track, which is "blue eyes" in the capital market, has great potential for future development. This time the protagonist Nayuki's tea listing also has many advantages, but how far is it from going public?
There are still four "hurdles" for Nayuki's tea to go on the market
There is still a long way to go before Nayuki's tea is available.
First, although it has won the favor of the capital market, the company's internal management problems need to be resolved. In October last year, Naxue’s tea broke the news that founder Zhao Lin had retired from the board of directors; in addition, in July last year, Naxue’s tea also had an industrial and commercial change, and the former Ruixing Coffee Chief Technology Officer (CTO) joined Nai Tea in the snow.
For a company, frequent changes in senior management will affect the listing process. As the saying goes, the company's internal management determines the company's strategic direction, and it is difficult to achieve a unified decision-making under the internal changes of the management, and it is difficult for the capital side to believe that the company's ability further hinders the listing process. In addition, there are also companies on the market due to frequent changes in company executives or problems that broke out on the eve of listing, which has delayed or blocked the listing process.
Second, Nayuki's tea has attracted many young milk tea friends by relying on the label of "healthy, natural tea", but these labels have begun to counteract itself, and the safety of its milk tea has frequently been questioned by the market. According to the black cat complaint data, up to now, there have been 219 tea complaints about Nayuki. The complaints focused on food safety problems, poor service attitude, and difficulty in refunding fees.
In fact, it is a good thing for tea brands to label themselves that are conducive to brand promotion. This is also a good way for tea brands to quickly enter the market. However, there are too many tea brands on the market that have been labeled as "healthy". In addition, food safety issues in the tea market are also common. The competitiveness of this method is no longer strong, which will also affect the next step of Nayuki's tea. development of.
Third, the competition of the new tea-drinking track has long been a red sea, and the homogeneity phenomenon is serious. At present, plagiarism among the top new tea brands continues. There have been plagiarism scandals between Nayuki's tea and Heycha. The founder of the former publicly pointed out that Heycha copied his own cheese, strawberry, black tea, etc. product.
According to observations, more than half of Naxue’s and Heycha’s products are very similar from ingredients to production, and the classic teas of each company are generally imitated by competitors. This shows that tea products are highly replicable and have a low production threshold. . Therefore, how to differentiate Nayuki in the market and maintain competitiveness is a big problem, which is also a common problem in the industry.
Fourth, the rapid expansion of stores has brought high losses, resulting in insufficient blood return for the company. Financial report data shows that Nayuki's tea opened 179 and 174 new stores in 2018 and 2019, which is equivalent to opening a new store in two days. The founder Peng Xin also revealed that "During the epidemic, the company opened 420 offline stores across the country with a total loss of more than 100 million yuan in ten days." The rapid expansion and the severe damage caused by the epidemic caused Naxue's tea to recover blood. Overwhelmed.
It can be seen that although Naxue's tea is the leading brand in the new tea drinking market, it faces many challenges in the future. What it needs to do is to find new growth space and create differentiated products, or to stabilize its brand image. So, at the beginning of the new year, will there be any changes in the new tea market in 2021?
After the market returns to rationality, will the bubble of Internet celebrity milk tea be burst?
According to the "New Tea Drinks White Paper 2020", the total size of China's tea drink market in 2020 will be 442 billion yuan, of which the size of the new tea drink market is expected to exceed 100 billion yuan by the end of 2020. Obviously, the importance of the new-style tea market in the overall tea market.
However, with the gradual return of the consumer market to rationality in 2021, how long can the fire of new-style tea be burned? Is this a tuyere or a bubble?
After the bubble burst, the capital and consumer markets will eventually return to rationality.
In the Red Sea competition stage, it is difficult for the new tea market to make money. As mentioned above, Nayuki's tea suffered a huge loss due to the epidemic, and there was a problem with blood recovery. In addition, according to a report by Unilever, the closing rate of tea shops in first- and second-tier cities has exceeded the opening rate since 2018, and nearly 90% of milk tea shops cannot make money.
It can be seen that the competition in the Red Sea is a bloody battlefield. If the new tea drinks cannot start the brand, they can only wait for the harvest of other brands, which will inevitably end in a flash.
In addition, the market share is too saturated, and the industry has a ceiling. At present, the operation of tea shops in first-tier cities has become mature and saturated, while the growth rate of the number of stores in third-tier cities and below has exceeded 138%. It can be seen that both roads are difficult to follow, and it is difficult for everyone to find room for survival and growth.
Therefore, many new tea brands have begun to lock their growth in the coffee market, and have launched a consumption scene that combines tea and coffee drinks. But this trick is nothing but futile. Consumers' coffee drinking habit is difficult to develop in China. The thunder incident of Ruixing Coffee is also shocking.
Finally, it is natural that the consumer market and the capital market have begun to return to rationality, and the fire of new-style tea has finally gone to calm. In fact, it seems that there have been frequent financing events for new-style tea brands in the past two years, but the capital market has gradually returned to rationality.
According to the company's data, in 2017 and 2018, tea brands received 15 and 13 financing respectively; in 2019 and 2020, under the trend of new tea drinking, the number of financings for tea brands has declined. In the past two years The number of financings obtained was the same at 10.
Therefore, in 2021, the new tea market may gradually calm down. When there are only two or three top brands left, it is also when the industry truly returns to rationality, and staking behaviors will also decrease, and now the era of the new tea drink market will be over.
Author: Yexiao An
Article source: Songguo Finance, please indicate the copyright for reprinting.