A naive panda is holding a cup of milk tea, its blue and white color reveals a fresh and pure atmosphere.
This silly and cute panda named Tintin accompanied Cha Baidao out of Sichuan and traveled all over the country.
At present, Chabaidao has a total of 7,117 stores across the country, and has grown into a leading brand in the new tea drinking track. According to Frost & Sullivan's report, in terms of retail sales in 2022, Chabaidao will rank third in China's new tea shop market, with a market share of 6.6%.
New tea drinks are one of the most dynamic areas in the current consumer market, and a large amount of capital has poured into this track in recent years. After Naixue’s tea was successfully launched, news about Michelle Ice City, Cha Baidao, Hey Tea and other leading brands preparing to go public has been circulating in the market.
On August 15, Sichuan Baicha Baidao Industrial Co., Ltd. (Chabaidao) finally officially submitted its listing application to the Hong Kong Stock Exchange, taking over Michelle Ice City and continuing to sound the clarion call for the listing of new tea brands.
At this moment when Nayuki’s big tea shop model is gradually being questioned and the stock price is gone forever, can Cha Baidao bloom “different fireworks” and make a good start for the coming wave of new tea drinks on the market?
Fresh fruit + Chinese tea, the secret of "passing the barrier" of Cha Baidao
Compared with HEYTEA and Nayuki's Tea, which are known as the "Big Three of New Tea Drinks", Chabaidao is the "predecessor".
As early as 2008, Chabaidao opened its first store near Wenjiang No. 2 Middle School in Chengdu, Sichuan. However, the brand did not start there and make great strides forward.
On the contrary, it took 8 years for Chabaidao to open up franchises, build basic systems such as franchise supervision, cold chain transportation, and training management, and then break through 100 stores. In 2016, Chabaidao was still a milk tea chain store without a significant brand image.
It wasn’t until HEYTEA and Nayuki’s teas sang all the way and launched the concept of new tea drinks that Chabaidao began to pay attention to the upgrading of brand positioning and the creation of IP, and the blue and white cute panda “Tintin Cat” was born. Talking about why pandas were chosen, Wang Hongxue, who is the operation president of Chabaidao, said: "The panda is the representative of Sichuan, and the panda is a national treasure animal known to people all over the country and the world, and its recognition is very high."
Of course, pandas have a distinctive image, but the key to building a consumer brand lies in the selection of competitive products. Only a large category can make a big brand. At the same time, only by focusing on categories can brands be sensitive to the "climate" like migratory birds, quickly adjust and create explosive products.
Therefore, at the same time as the new image was launched, Chabaidao began to simplify the menu, cut nearly half of the 40 products on the original menu, and followed the concept of "fresh fruit + Chinese tea" to take a high-quality route.
Relying on the 25 products of "Don't step on thunder every cup", especially the signatures such as poplar nectar and taro milk tea, Chabaidao not only attracted a group of brand fans, but also improved the efficiency of the supply chain, paving the way for cross-regional expansion When you are ready, you will start your own "counterattack road".
According to the prospectus, from January 1, 2020 to March 31, 2023, the number of Chabaidao's stores has rapidly increased from 531 to 6,597, and further expanded to 7,117 as of the latest practicable date. According to the Frost & Sullivan report, Chabaidao is the fastest growing among the top ten new tea beverage companies in China, with the highest CAGR in retail sales between 2020 and 2022.
Number of store growth (source: Narrow Door Restaurant)
So far, Chabaidao has become the leader of the new tea drinking track. With the new round of financing led by Orchid Asia in June this year, followed by Loyal Valley Capital, Grassroots Zhiben, CICC Capital, and Tomato Capital, Chabaidao’s valuation has reached 18 billion, making it the second largest company in terms of valuation. The fourth largest brand of Michelle Ice City, HEYTEA, and Guming.
After its previous brand upgrade conference (with "good tea as the basis, making fresh" as the new brand positioning), the market began to predict its launch time.
More than half a month ago, Bloomberg quoted news reports that at least six Chinese tea chain companies were planning overseas IPOs, including Chabaidao, Shanghai Ayi and Guming, which planned to go public in Hong Kong, and Bawang Tea, which planned an overseas IPO. Ji.
Today, Chabaidao has officially launched the "first shot" of a new round of listing on the ready-made tea track. From the perspective of financial data, Chabaidao’s performance is quite impressive: according to the prospectus, from 2020 to 2022, Chabaidao’s revenue will be 1.08 billion yuan, 3.644 billion yuan, and 4.232 billion yuan, with a compound annual growth rate of 97.9%; The net profit was 238 million yuan, 779 million yuan and 965 million yuan respectively, with a compound annual growth rate of 101.3%.
However, it cannot be ignored that with the “surge” in the number of stores for three consecutive years, the size of Chabaidao has also reached a larger scale, and it is still doubtful whether the new tea track can accommodate its continued high growth.
With the "crazy" expansion of old players such as Michelle Ice City and Chabaidao, as well as the continuous influx of new brands such as Bawang Chaji, the new tea drinking track is already very crowded. According to data from Ele.me, there will be 50,500 new tea-related companies in 2022. Judging from the proportion of the number of stores, tea drink is a subcategory with the largest number of stores in my country's ready-made drinks, and there are nearly 500,000 tea-related enterprises.
If it is difficult to maintain the speed of scale expansion, how will the new tea drinking track continue to write a growth story in the future?
"Crazy" joint marketing, the new tea has a hard time ahead?
Behind the expansion of the new tea drinking track is the continuous improvement of the industrialization of the industrial chain and the increasingly mature environment of various social media platforms. Based on this, major regional brands can accelerate nationalization and even globalization.
However, today, the dividends brought by the market are almost "digested" by the brands. Heytea, Naixue and other brands that used to focus on mid-to-high prices have lowered their prices one after another. Brands such as Michelle Ice City, Cha Baidao, Bawang Cha Ji, and Shanghai Auntie have expanded their volume through joining the staking.
Data source: Narrow Door Eye
In terms of unit price per customer, except Michelle has a certain price advantage, the unit price of HEYTEA and Chabaidao have entered the price range of 15-20 yuan, and the price difference is no longer obvious. Especially as HEYTEA and Naixue have launched group buying activities such as “10 cups of HEYTEA for 100 yuan” and “Nayuki’s home delivery for 9.9 yuan” on Douyin and other platforms, the price difference is actually getting smaller and smaller.
The new tea drink brand does not have a clear price distinction, so can it still "volume" the product?
From the product point of view, although there are waves of trends, brands cannot escape the increasingly serious dilemma of product homogeneity. Let’s just say that with Ruixing raw coconut latte out of the circle, which player in the field of coffee and tea drinks does not have its own “coconut juice”.
Source: Meituan APP
From milk tea, fruit tea, Chinese tea to the recently popular "yogurt", no matter how the pattern is refurbished, the homogeneity of products between brands is inevitable.
The prices are getting more and more expensive, and the products are getting more and more similar. The next thing to compete is marketing and store operations.
This year, an obvious phenomenon is that new tea brands are becoming more and more keen on IP co-branding. For example, HEYTEA co-branded fendi, Michelle Ice City co-branded Egg Party, and Nayuki co-branded Cardcaptor Sakura, etc.
Chabaidao is also an active player in the field of cross-border joint names. In the field of culture, Chabaidao co-branded the Dunhuang Museum and designed three cups of Dunhuang murals; in the field of games, Chabaodo joined hands with e-sports player TheShy to focus on the male market, and co-branded the otome game "Undecided Event Book" under Mihayou , focusing on the female market; even in terms of scene marketing, Cha Baidao joined forces with Fengchao, bringing cross-border play to a new level.
Under the crazy joint marketing, Cha Baidao engraved the word "serious" on its head. In July, when you walk into a Chabaidao store, you can hear the clerk change the call name to "Miss Lawyer", and change the names of the four joint drinks to the corresponding game character names.
After consumers have experienced the "immersive" joint event scene, it is not difficult to imagine the thought that the store has spent on employee training. This also reflects the importance Chabaido attaches to operations and content in order to break out from the fierce marketing battle.
However, in terms of commercialization, the IP side will cooperate with more fields. Therefore, co-branding is often a one-time event for new tea brands, and it is difficult to sustain a wave of attention based on freshness and fan enthusiasm.
As the mainstream consumer group of new tea drinks, the interests of young consumers often change from time to time, and it is likely that they will stay with a certain brand because of a joint event.
In particular, this seemingly influx of brand traffic is actually mostly stock in the new tea drink track. There are not many users who are actually exposed to fresh tea drinks for the first time, and there may be fewer and fewer users in the future. According to the forecast of iResearch, the growth rate of the market size of the new tea beverage industry from 2023 to 2025 will be 13.4%, 6.4%, and 5.7%, respectively.
Behind the "no volume" of the new tea industry is that the market is actually entering an era of "heavy wind and heavy rain" from the era of "big water and big fish".
The arrival of a new wave of listings is more like a group of players who run faster on this track have predicted the bumpy road ahead and are accumulating energy for the next "thrilling leap".
This also shows that in the fiercely competitive new tea drink market, "landing" is just the beginning. How to turn traffic into retention, and continuously improve the ability of intensive cultivation in regions, stores, private domains and other operations, is the main topic of Chabaidao at present.
Source: Hong Kong Stock Research Institute