Author | Xu Yun
Editor | Feng Yu
Produced by | Bullet Finance
Milk tea is very popular, but there are very few young consumers. Let’s talk about the veteran player Xiang Piaopiao.
Xiang Piaopiao is unwilling to admit defeat. In late August, Xiangpiaopiao renewed its contract with popular star Wang Junkai and continued to serve as the brand spokesperson, and launched 6 new solid milk tea products in one go; in September, it launched meal replacement milkshakes to test the light food field. In addition, Xiangpiaopiao is also applying for beer and beverage trademarks such as "Xiangpiaopiao Mojito" and "Xiangpiaopiao Rum", and there is speculation that it may enter the field of alcoholic beverages.
Obviously, Xiang Piaopiao is planning a change. However, traditional categories are under pressure, and Xiangpiaopiao, which is constantly launching new categories to test new markets, can it create a new growth engine?
Speaking of the first-generation “Internet celebrity” in the milk tea industry, Xiang Piaopiao was definitely the one.
Xiangpiaopiao claims to be the pioneer of cup-style milk tea. In 2005, it replaced the "pearls" in milk tea with coconut bag and launched 6 types of original, taro, wheat, strawberry, chocolate and coffee. Flavored solid brewed milk tea. In the early days of its establishment, Xiangpiaopiao spent huge sums of money on advertising products on Hunan Satellite TV and other TV stations with high ratings at the time.
With product differentiation, accurate positioning of marketing strategies and in-depth channel construction, Xiangpiaopiao's influence has rapidly increased, ushering in the era of popularization and industrialization of solid brewed milk tea. By focusing on the main business of solid milk tea, Xiangpiaopiao was able to deeply bind itself to milk tea, and took the lead in an era when ready-to-drink milk tea was not yet prosperous.
After years of market selection of survival of the fittest, the competitive landscape of solid milk tea has been basically determined. Brands such as Xiangpiaopiao, Youlemei and Xiangyue are the main players in cups and boxes of bagged milk tea. Among them, Xiangpiaopiao Piao Geng has occupied half of the country. According to Zhiyan Consulting data, Xiangpiaopiao’s market share in cup milk tea has increased from 57% in 2014 to 63.1% in 2018.
However, the one who defeats you will always be your invisible opponent. Crisis strikes Xiangpiaopiao from the outside. Just like instant noodles lost to takeout, clothing stores lost to Taobao... As takeout platforms penetrate into the public's three meals a day, the convenience of self-brewing cup milk tea begins to eclipse.
On the other hand, as consumption upgrades, Xiangpiaopiao’s competitors are growing stronger. New tea drinks such as Hey Tea, Cha Yan Yuese, Yidiandian and Gongcha have become the favorites of consumers and even capital with their more sophisticated ingredients and diverse flavors. In the increasingly expanding milk tea market, a barrier of consumption and capital has been built in front of Xiang Piaopiao.
The "2019 China Beverage Industry Trend Development Report" released by Meituan-Dianping shows that as of the third quarter of 2018, the number of current tea drink stores nationwide reached 410,000, with an annual growth rate of 74%. It mainly comes from the replacement of conventional drinks by new tea drinks and the demand of consumer groups for "healthy tea drinks".
According to data compiled by the Qianzhan Industry Research Institute, at the end of 2019, the number of current tea drink stores in China was about 500,000. Despite the impact of the epidemic this year, there were still about 480,000 tea beverage stores as of the end of June.
Milk tea shops are popping up everywhere, gradually eroding the living space of cup milk tea in the era of consumption upgrading.
Zhiyan Consulting data shows that China’s brewed milk tea market has experienced negative growth in 2015; it recovered in 2016, with a growth rate of 17.1%; in 2017 and 2018, the growth rate fell to single digits again 2.4%, 5%. Obviously, the bubble tea market has reached its ceiling.
New retail expert Bao Yuezhong bluntly told "Bullet Finance" that there is a big gap between solid milk tea and ready-to-drink milk tea in terms of experience. The entire milk tea market is increasingly transforming into a ready-to-drink scenario. Solid milk tea market share will continue to decline.
Xiangpiaopiao’s performance still relies heavily on cup milk tea. From 2014 to 2018, its brewing products accounted for about 90% of total revenue. In 2019, Xiangpiaopiao’s brewing product revenue was 2.936 billion yuan, still accounting for 74.48% of total revenue.
This also means that, 15 years after its establishment, Xiangpiaopiao is still relying on its solid milk tea roots.
As consumer preferences change and the growth of the solid milk tea market slows down, Xiangpiaopiao's leading advantage in this area is likely to turn into a disadvantage in the future.
Xiang Piaopiao still doesn’t want to change.
In 2017, Xiangpiaopiao was successfully listed after its third IPO. Perhaps Xiangpiaopiao finally realized the crisis, or perhaps it needed to tell a new story to enter the capital market. This year, Xiangpiaopiao, which had been established for 12 years, finally launched new categories of MECO milk tea and Lan Fong Yuen stockings milk tea for the first time, entering the market. Liquid milk tea field. In 2018, Xiangpiaopiao also launched MECO Honey Valley Juice Tea.
After the launch of new categories, Xiangpiaopiao’s performance has improved.
From 2012 to 2015, the development of Xiangpiaopiao, which relied on the brewing milk tea business, has obviously entered a bottleneck period. Most of its revenue was around 2 billion yuan. In 2014 and 2015, there was even negative growth, and most of its net profits were in Less than 200 million yuan. In 2018 and 2019 after the launch of the new category, Xiangpiaopiao's revenue growth rate reached 23.13% and 22.36% respectively, and its net profit growth rate reached 17.53% and 10.39% respectively. In 2019, Xiangpiaopiao had revenue of nearly 4 billion yuan and net profit of nearly 350 million yuan.
It is a consistent strategy for enterprises to diversify their expansion by launching sub-brands to differentiate themselves from the main brand and thus diversify risks. Xiangpiaopiao has a good idea, but in the early years it focused too much on its main business. For more than 10 years, it only made flavor innovations in the field of solid milk tea, neglected the expansion of new categories, and missed the opportunity for transformation when it was at its peak, which also created a problem for Xiangpiaopiao. The subsequent development of Gone with the Wind has laid hidden dangers.
Whether it is liquid milk tea or juice tea, when Xiang Piaopiao entered the market, there were already many players in the market. Large companies such as Master Kong and Uni-President occupied the ready-to-drink tea market ( Including milk tea, tea drinks), the majority of the market share.
With the launch of the new brand, Xiangpiaopiao, which has always been good at marketing, once again waved the banner of "marketing for growth", and sales expenses also increased accordingly. From 2014 to 2017, Xiangpiaopiao's sales expenses remained at 520-676 million yuan; in 2018, they exceeded 800 million yuan, a year-on-year increase of 29.65%; in 2019, sales expenses reached 967 million yuan, a year-on-year increase of 20.83%.
But the current situation is: Xiangpiaopiao’s new brand is inevitably inferior to the main brand in terms of popularity, and there is no “out-of-the-box” work in marketing. After the slogan "circling the earth x times", Xiangpiaopiao's later marketing has no new memorable points.
Under the influence of various factors, although Xiangpiaopiao strives to develop new products, after two or three years of hard work, ready-to-drink products have not become Xiangpiaopiao’s new hot products, especially liquid milk tea. Growth has declined.
In the Xiangpiaopiao liquid milk tea category, Lan Fong Yuan is the flagship brand. Xiang Piaopiao positions Lan Fong Yuen as the originator of Hong Kong-style milk tea and tries to create a brand image for the high-end market. However, in 2018, Xiangpiaopiao liquid milk tea product revenue was 218 million yuan, a year-on-year growth of only 0.55%; in 2019, revenue fell to 137 million yuan, a year-on-year decrease of 37.33%.
In the 2020 semi-annual report, Xiangpiaopiao stated that "liquid milk tea is less affected by the epidemic due to its high-end positioning, more focused market and channels," but the current sales revenue of this category was only 68.6687 million. yuan, a year-on-year increase of 9.72%.
In comparison, the performance of Xiangpiaopiao juice tea products is much better. In 2019, this category achieved revenue of 868 million yuan, a year-on-year increase of 332.43%. But it also failed to escape the epidemic. In the first half of this year, sales of juice tea dropped by 39.25% year-on-year.
The old business market has reached its peak, and the development of new categories is not very strong, which has also brought crisis to Xiangpiaopiao. Amid the epidemic, Xiangpiaopiao handed over its worst report card since its listing: In the first half of 2020, Xiangpiaopiao suffered a loss of 92.5264 million yuan in non-net profits, and its earning power dropped significantly.
"Behind China's consumption upgrade is the decline of solid milk tea. Xiangpiaopiao is the leader of solid milk tea. The industry has become oligarchic and no one can compete with it, so its development will be relatively stable. Ready-to-drink this For one thing, Xiangpiaopiao is also laying out plans, but its brand tone, core market and core channels are not enough to support this kind of high-end products, so it is currently in a phase of inactivity.
"China's food industry analyst Zhu Danpeng analyzed "Bullet Finance".
Although before the epidemic, Xiangpiaopiao’s performance was still on the track of growth, and it was also constantly promoting innovation, but the outside world’s remarks about it being “outdated” and “losing to the times” have always lingered. The aging of the brand has long been a certainty.
"Xiangpiaopiao has big problems in its entire product system, marketing system and channel system, and it has not kept up with the current need for transformation." Bao Yuezhong concluded.
“The most critical problem for Xiangpiaopiao is that there is a problem with the product system. The milk tea market has undergone great changes in recent years. Ready-to-drink milk tea has developed very fast, but Xiangpiaopiao still focuses on user experience. The main products are relatively poor solid milk tea, and product adjustments have not kept up, resulting in being replaced by brands such as Heytea and Naixue. In terms of communication and marketing, it has been surpassed by brands such as Yuanqi Forest, which mainly cuts into the new communication system and brand. The sense of interaction with young users is particularly strong,” he added.
It is obvious that the development of solid milk tea has entered a bottleneck period, and there are many voices in the industry that are not optimistic about the development of this category.
But Jiang Jianqi, chairman and general manager of Xiangpiaopiao, doesn’t think so. In his view, the solid beverage industry is not a sunset industry. It should adhere to innovative thinking and strengthen the leisure, health and functionalization of products to achieve broader development space and transformation. The solid beverage industry is bound to become a mainstream industry in the future.
As for the main business of settling down and making a living, Xiangpiaopiao is still increasing its efforts to develop. One notable manifestation is that Xiangpiaopiao has signed Wang Junkai as the brand spokesperson for two consecutive years, striving to rejuvenate the brand image and trying to get closer to the Generation Z consumer group.
In terms of marketing, Xiangpiaopiao is also trying to make changes. Jiang Jianqi said that Xiangpiaopiao will shift its main marketing position to the mobile terminal, such as Douyin, Kuaishou, Weibo, Xiaohongshu and other new social platforms that gather KOL (opinion leaders) and other high-exposure apps.
In addition, Xiangpiaopiao is also promoting product innovation in terms of solid milk tea flavors. In late August this year, Xiangpiaopiao launched *** 6 new products in three series: Bobo, Haolao and Shuangpin, including Bobo pearls, black sesame blood glutinous milk tea, etc. This combination is in line with the more popular ones on the market. Freshly made milk tea tastes similar.
What needs to be taken seriously is that most of the current new tea brands are based on the concept of health and use fresh milk, fruits and original leaf tea as raw materials. However, Xiangpiaopiao’s upgraded solid milk tea products still use non-dairy creamer ( Creamer) as raw material, such innovation is inevitably suspected of "changing the soup without changing the medicine".
In Zhu Danpeng’s view, the innovation and upgrading of solid milk tea will help Xiangpiaopiao in the third, fourth and fifth tier markets, but it is unlikely to become a hit product.
"Xiangpiaopiao is currently doing balanced development in the off-peak and peak seasons. In the past, it was relatively prosperous in the first and fourth quarters, and relatively weak in the second and third quarters. It is trying to reverse this situation. . Therefore, it is taking overall action in laying out ready-to-drink and promoting solid milk tea innovation. But the key is that due to the limitations of brand tonality, market, channels and consumer groups, it is impossible to say that it will have product upgrades immediately. Consumers pay the bill," Zhu Danpeng further analyzed in Bullet Finance.
In addition to solid milk tea, liquid milk tea and juice tea, Xiangpiaopiao has also entered the light food track to plan for new changes. In 2019, Xiangpiaopiao launched "Joyko" meal replacement cereal; on September 9 this year, Xiangpiaopiao launched the "One Light Meal" meal replacement milkshake product.
"Bullet Finance" visited many offline supermarkets in Beijing and found no Xiangpiaopiao cereal and milkshake products. No cereal products were found in the Xiangpiaopiao Tmall flagship store. The sales volume of milkshake products is not high. As of October 7, the price of milkshake products after coupons for 8 cups was 69.9 yuan, with monthly sales of only 225 orders.
It is worth noting that Xiangpiaopiao once pointed out in its financial report that when launching some new products, it will first test sales through e-commerce channels, collect evaluations and opinions from target consumer groups, and combine product development directions Improve the product, and then distribute it offline for trial sales after the product is finalized.
It can be seen that Xiangpiaopiao may also adopt the same operation method for the launch of new products such as milkshakes.
However, online channels are not Xiangpiaopiao’s strong point. It is a good thing to be cautious when launching new products. However, the products do not have much special features. They are promoted through channels that they are not good at and lack innovative marketing methods. I am afraid it will be difficult to attract too much attention in the industry. Lots of water splashes.
Regarding Bullet Finance’s many questions about the progress and future plans of its new solid milk tea products, cereals, milkshakes and other products, Xiangpiaopiao remained tight-lipped and only said: “Relevant new category expansion plans are currently unavailable. There is no information to be disclosed to the public. ”
The competition in Qingshi is even more fierce. In the end, whether Xiang Piaopiao will continue firmly or give up after just testing the waters, the answer is a mystery.
Regarding the development prospects of Xiangpiaopiao in the field of light food, Zhu Danpeng said bluntly that light food will definitely be a hot spot in the future, but the key problem is that heavy consumers of light food are very particular about brand tone. If the brand tone, service system and customer stickiness are not done well, then entering new categories will not be of much help to Xiangpiaopiao. "Although many companies want to deploy when they see the trend, the most critical thing is whether they have the strength to realize the trend." He said.
"In recent years, the Internet celebrity brands that have been able to develop, whether it is Jiang Xiaobai, Yuanqi Forest or Zhong Xuegao, basically rely on new communication." Bao Yuezhong gave an example, "So when it comes to new products, To develop, we must make some adjustments in the brand communication system. Then we need to identify new channels and new users. If these are not available, it will be difficult to create new products. ”
Liquid milk tea. , juice tea, light meals... In just over three years, Xiangpiaopiao has made new attempts that had not been seen in more than ten years before, which shows his eagerness to make breakthroughs.
However, Xiangpiaopiao started out by inventing the first cup-filled milk tea, and created differentiated competition from the beginning. However, the new categories launched in the past few years are all the core hinterland of "Biejia". And in these new categories, it is difficult to find products that are eye-catching, and it is even harder to find the courage to break through the fire.
Xiang Piaopiao wants to create a new situation, but is awkwardly stuck at a crossroads.
Many cases of the decline of old brands reveal a pattern: if you just stick to the past glory and only try new things, you will eventually be abandoned by the times. Especially in the food industry, where consumer preferences are changing with each passing day and competition is fierce, such elimination may come faster than imagined.
*The title picture in the article comes from: "Bullet Finance" gallery, photographed by Xu Yun.