summer, the growing tribe of milk tea lovers in China will likely find glad
tidings as prominent brands such as Heytea and Nayuki announced they had
slashed the prices of their products over the past two months.
analysts said the country’s multibillion-dollar tea drink segment is set for a
round of rationalization as players are intensifying their competition for
bigger market shares. Market consultancy iiMedia Research sees sales of China’s
niche tea drink market exceeding 300 billion yuan ($47.1 billion) this year, up
from 279 billion yuan last year.
may be wary, however, that the long lines in front of trendy tea outlets in
urban hot spots, which typically would require one-hour wait times, might turn
that prospect may not dissuade everyone, especially those who, in the past,
were happy to fork out 30 yuan for a cup of milk tea in hip areas like
Beijing’s Sanlitun, a well-known shopping and lifestyle destination in the
ever since Nayuki slashed its tea drink prices from around 30 yuan to between 9
yuan and 19 yuan in March, the segment has come alive. Market buzz now is
centered around the brand’s decision to introduce at least one new product
cheaper than 20 yuan every month this year.
price cut was based on an insight into changing consumer needs … The company
hopes to provide consumers with more and easier options in a wider price
range,” Nayuki said in a statement.
move came a month after its biggest rival Heytea said it will not unveil any
new drinks priced over 29 yuan and promised not to raise the prices of its
existing products this year.
Nayuki and Heytea are considered pioneers of high-end premium tea drinks, an
emerging line of business where they enjoy the kind of reputation that
Starbucks commands in the lifestyle coffee segment. The two brands have created
new fashions like adding fresh fruits and cheese foam to their tea drinks.
year, when Nayuki unveiled an innovative cermai fruit-flavored drink, consumers
lapped it up, enjoying the new drinking experience that starts on a bitter note
but ends with a mouthful of sweetness, with digestive benefits thrown in for
by the COVID-19 pandemic, there is a change in consumption habits among certain
consumers. There seems to be a bit of consumption upgrade going on even as
overall consumption sees a COVID-related downtrend. Consumers are in pursuit of
more cost-effective goods that can pack in the same level of performance and
quality,” said Han Yi, head of tea drink and coffee special committee of
the China Tea Marketing Association.
to a survey report from market consultancy New Catering Big Data, from 2020 to
2021, 57 percent of Chinese consumers were willing to pay for milk tea products
priced between 10 yuan and 15 yuan, and only 27 percent of consumers said they
would be willing to part with 15 yuan to 20 yuan or more for a tea drink.
milk tea drink segment is also gradually developing in China, insiders said.
Some players in this segment have already turned profitable.
instance, Mixue Bingcheng, an ice cream and tea company founded in Henan
province in 1997, tasted success with both ice cream cones priced at 2 yuan and
tea drinks at 5 yuan to 10 yuan.
Bingcheng’s marketing strategy involved catchy lyrics of its theme song－I love
you, you love me, Mixue ice cream& tea－that went viral on
China’s social media platforms.
early 2021, the company quietly emerged as the single best-selling bubble tea
brand in China with annual revenue of 6.5 billion yuan and a market valuation
of 20 billion yuan, beating premium bubble tea brands Heytea and Nayuki.
the market continues to grow, mid-range tea brands are also launching
iterations and optimizing their products. This proves that some of the
companies are doing a good job of staying nimble in the marketplace. These
emerging brands with price advantages have put some pressure on high-end
brands,” said Wang Hongdong, founder of New Catering Big Data, a
consultancy specializing in the catering market.