On the holidays, how can you not have a cup of tea to celebrate?
Editor’s note: This article is from the WeChat public account “investing in the network” (ID: China-Venture), author Feng Yingxing, editor Han Honggang.
There is always a story behind the tea. Since ancient times, people have not only tasted tea, but also the elegance behind it.
However, Feng Weidong felt that “Chinese traditional tea culture is telling stories about small producing areas and small producing areas, and the fragmentation is serious, and it is difficult to become a large device.”
He is a partner and CEO of Sky Map Investment Management. In March 2018, they took out hundreds of millions of yuan and invested in the new Chinese tea brand Nai Xue の tea. Nai Xue’s valuation reached 6 billion yuan, which is close to the threshold of unicorns.
Feng Weidong positioned Nai Xue as “new Chinese tea”, saying that it is “fast fashion consumer goods” and “the whole industry is better to standardize and industrialize”.
From 2018 to the present, there have been nearly 20 financing events for new Chinese-style teas. Almost every month, the amount of financing is also generally large, and it is on the order of billions, hi tea, Lele tea, Nai Xue The share of head tea brands such as の tea is even “robbed”, in stark contrast to the current cold capital market.
Great market
In April of this year, the US group’s takeaway release of the “Mei Tuan’s take-out milk tea true fragrance consumption report”, which data show that in 2018 take-out orders, milk tea accounted for 210 million single, sales are much higher than coffee, and even more than Coke. At the same time, in 2018, the number of tea merchants on the Meituan platform has tripled compared to 2017. As of the third quarter of 2018, the number of tea-making stores in the country has reached 410,000, an increase of 74% in one year.
The 410,000 stores did not grow overnight. Since 2004, CoCo has been able to enter China with milk tea and has been expanding wildly. It has been 15 years. During the past 15 years, China’s tea market has undergone a revolution in powder blending, compounding, and new Chinese tea. The collision of fresh milk with oriental tea, combined with the innovative blending of cheese, cheese and seasonal fruits, the new Chinese-style tea has finally completed the transformation of the Chinese taste buds.
How big is the new Chinese tea market that is pervasive? According to data estimated by the China Business Research Institute this year through sampling statistics of 15-year-old 45-year-old consumers in 25 cities across the country, the market size of the existing beverages is close to 100 billion yuan.
But in the view of Zhang Yuqiu, vice president of Zhongle Investment and Investment, the investor of Lele Tea, the market is far more optimistic than this data. “The penetration rate is still very low. In Singapore, Taiwan, Hong Kong and other places, the per capita milk tea consumption is about 150 cups a year. In the Mainland, even in Hangzhou and Shanghai, where the milk tea culture is highly infiltrated, the per capita milk consumption is also However, 30 cups a year, at least 5 times the growth space.” In the first- and second-tier cities, it is not uncommon to find a situation in which a cup of red milk tea is hard to find.
New Retail
A lot of media have defined 2018 as the first year of new tea. Compared with last year, the power of the capital in 2019 is obviously more fierce. However, unlike the previous market perception of tea brands, the head tea on the market has positioned itself as a new retail company, and the goods sold are not only tea.
Starting in the second half of 2017, Xicha began to sell all kinds of peripherals, such as mobile phone cases, shopping bags, card sets, folding umbrellas, etc.; Nai Xue の tea also launched some limited-volume games related to the brand. Co-branded products with various brands; in addition, Lele tea also has a number of third-party derivatives gradually entering.
The head tea company has also begun to digitally transform. At the end of 2017, Xicha began to set up its own IT business department. The outside world even spreads that the IT department of Xicha is the largest internal department. The most significant answer to the diplomacy of the IT business unit is the online WeChat apple program HEYTEA GO. The founder Nie Yunzhen once told the media that the logic behind the HEYTEA GO is to linearize the whole tea, with data showing. As of May this year, Xicha small program orders have accounted for 40% of the total orders, and successfully tripled the repurchase rate, digital results began to appear. In addition, Nai Xue の tea and Lele tea are also undergoing digitization attempts.
This mode of operation is similar to Boxma Fresh, and has similarities with Ruixun Coffee, which has been in the US capital market for 18 months. However, in the view of investors in a head tea brand, Ruixing’s model is more radical. The current new Chinese-style tea market is mostly about product marketing and brand building, polishing front-end products and brands. Then innovate, optimize and integrate the back-end operations and supply chain. And Ruixing Coffee directly crosses the brand sales and premium, and first went to do the scale.
Capital competing for entry
A few days ago, there was news that Xihai had completed a new round of financing. Tencent and Sequoia led the investment. The investment network was exclusively informed that in the process of this round of financing, Xicha hopes to get 12 billion yuan. Valuation, Sequoia and Tencent received, Softbank reported a valuation of 11 billion yuan, failed to win the share of this round of tea.
Tianzhong.com was asked to verify the Tencent, Sequoia and Hicha, respectively. They were all told that they have not received any news that they can speak out, but the B round investment of Xicha