In 2015, domestic new tea industry entered a stage of rapid development. After 7 years of wild sprawl, the market has become overwhelmed by diverse tea-based drinks and there is little room for new brands to grow. It is believed that the tea market is going to up against a gloom and slow-development future.
The so-called new tea drink refers to a new type of freshly made tea drink with improvement and innovation in products. It usually uses fresh/high-quality raw and auxiliary ingredients such as original tea, fresh milk, and fresh fruit, and regularly launches differentiated new products.
According to the 2021 New Tea Drink Research Report released by the China Chain Store and Franchise Association, the growth rate of the new tea drink market in 2020 registered 26.1%, and the overall growth rate will slow down by a large margin in the next two to three years.
Therefore, some leading brands have already cast their eyes on overseas markets where is still an untapped “Pure Land”.
HEYTEA opened its first overseas franchise store in Singapore in November 2018. Local shopping center Ion Orchard saw the average daily sales of HEYTEA reaching once more than 2,000 cups a day. In the same year, "Nayuki's Tea" entered Singapore.
While "MIXUE", whose feature drinks are mostly between ¥3-¥10 yuan, cheaper than other brands’ products, chose Vietnam as its first try. According to the data, on the opening day of its first store in Hanoi, the turnover reached ¥9,681 yuan with the daily sales achieving nearly 1,400 cups.
CHAGEE entered the Malaysian market in 2019, and it focuses on high-end market. "Our average products’ price exceeds ¥20 yuan." Shang Xiangmin, co-founder of CHAGEE told the magazine Entrepreneurship Frontline. Today, CHAGEE has more than 60 overseas stores.
Most brands choose Southeast Asia as the first station to go global. Apart from the short distance between two countries and convenient transportation of raw materials, Southeast Asia also shares a similar "tea culture" to China, and consumers have a high degree of acceptance of new tea drinks.
Moreover, Southeast Asia is in the tropics which is more suitable for the development of cold drinks, and there is no off-peak season. In addition, Southeast Asian countries have a population of almost 600 million, indicating a huge consumption potential.
While going global is not always easy for milk tea brands. All of "Nayuki's Tea" overseas stores have been closed. This is related to multiple factors such as different diet habits, the stability of the supply chain, and the operating capabilities of stores.
In recent years, some new tea brands that have gone overseas mainly make fruit tea, while consumers in Southeast Asia, Japan and other countries are more obsessed with pearl milk tea.
"In Southeast Asia, there are small vendors selling fruit smoothies and fruit milkshakes everywhere on the street, which has lowered the price of fruit drinks. At the same time, Southeast Asian consumers currently have higher demand for milk protein than for fruit VC. "Shang Xiangmin said.
Residents in Southeast Asia like drinks that are calorie-rich and sugary. However, CHAGEE did not choose this type of drink as its featured product, instead it makes refreshing milk tea which is not too sweet. "Currently, major brands in Southeast Asia are “pearl milk tea producers”, but we want to differentiate ourselves from existing products on the market." , said Shang Xiangmin.
Although there are numerous difficulties facing tea brands, the market opportunity is directly proportional to the degree of difficulty. "Although the European, American and Australian markets are more difficult to break in, drinks’ price can yet be higher. For example, milk tea can be sold very expensive in German." Shang Xiangmin said.
Before this wave of "going overseas", brands such as Happy Lemon and Gongcha have already succeeded in entering the overseas market. Their "adventure" is a positive signal for all new tea brands.
Shang Xiangmin believes that if tea brands want to develop and grow in the long term, they would finally go overseas. " The menu, development model, and management system are things that need practitioners pay much attention to." Shang Xiangmin said.
