Xiangpiaopiao Milk Tea, which once advertised with the slogan "Xiangpiaopiao Milk Tea sells more than 300 million cups a year, can circle the earth, and has led the country in sales for seven consecutive years" has achieved sales in recent years. Recently, Xiangpiaopiao milk tea has once again entered the public eye due to financial losses.
Xiangpiaopiao is a cup-filled milk tea brand owned by Xiangpiaopiao Food Co., Ltd. It was established in 2005 and specializes in the research and development, production and sales of milk tea products. Its business covers two major sectors: brewing and ready-to-drink, and has formed a diversified product matrix of solid brewed milk tea, liquid milk tea, and juice tea. The production base has four factories in Huzhou, Chengdu, Tianjin and Jiangmen, and the sales network covers more than 80% of retail terminals in all provinces, cities, counties and districts across the country.
In April 2012, the "Xiangpiaopiao" trademark was recognized as a "China Well-known Trademark" by the State Administration for Industry and Commerce. Xiangpiaopiao has sold more than 13 billion cups, and the cups can circle the earth 40 times together. From 2012 to 2019, Xiangpiaopiao has maintained the first market share for 8 consecutive years. As of 2019, the market share reached 63.1%.
Based on the continuous improvement of the company's production scale, market share, brand awareness and reputation, the company was listed on the Shanghai Stock Exchange on November 30, 2017, becoming the first listed company in the domestic milk tea industry.
According to news on August 24, Xiangpiaopiao released its 2022 semi-annual report a few days ago. The financial report shows that in the first half of this year, Xiangpiaopiao’s revenue was 859 million yuan, a year-on-year decrease of 21.05%; the net loss attributable to the parent company was 129 million yuan, compared with a net loss of 62.256 million yuan in the same period last year, and the loss expanded 108% year-on-year. It is worth noting that this is the largest loss in recent years for Xiangpiaopiao, the "first milk tea stock". Why did the once glorious Xiangpiaopiao Milk Tea end up in such a predicament?
With the emergence of the concept of sugar control, sucrose-free zero-calorie drinks have grown rapidly at the same time. Sugar-free has become a new trend in the beverage industry. Behind it is the new demand for "it must be delicious and enjoyable, but also healthy and not fat." The public's preference has changed from delicious and sweet drinks to healthy drinks with zero sugar and fat. According to the "Global Diabetes Report" released by the World Health Organization, there are more than 400 million people with diabetes worldwide, and the main reason is undoubtedly sugar. Seeing the grim figures, some governments have accelerated the introduction of sugar control measures, and some beverage companies have quickly adjusted product formulas and embarked on the development path of sugar reduction. The concept of quitting and cutting out sugar has led some consumers to consciously reduce their sugar intake, and sugar-free drinks have also taken advantage of this trend to occupy many people's refrigerators and taste buds. The non-dairy creamer and white sugar contained in the Xiangpiaopiao milk tea formula make many young consumers shy away.
In addition, the milk tea market has transformed from the fast-moving consumer goods industry to the catering service industry. The concepts and preferences of young people have already changed, which is the fatal key to making milk tea. The cup milk tea market has long been taken over by ready-made milk tea, and brewed milk tea is gradually being replaced by milk tea shops dotted all over the streets. The younger generation seems to prefer buying freshly made milk tea in milk tea shops, rather than needing hot water to brew it. Made milk tea.
New brands represented by new tea drinks have poured into the milk tea market since 2015, impacting the milk tea market led by Xiangpiaopiao and Youlemei, and new tea brands represented by Yixi Tea and Naixue. There are long queues at offline drinking stores and it is favored by consumers. Coupled with the convenience of Meituan and Ele.me’s delivery platforms, the market share of new tea drinks has been expanded. The marketing of Xiangpiaopiao milk tea has taken a hit. The convenience advantage of Xiangpiaopiao is replaced by the speed and convenience of the takeout platform. Everyone places orders through the takeout app and can enjoy drinks without leaving home. Summary
In short, Xiang Piaopiao’s krypton gold-style marketing strategy coupled with the continued rise in raw material, labor, transportation, energy and other costs, coupled with the shrinking market share, plus the brewing category in the second quarter The product has entered the off-season for sales, which resulted in Xiangpiaopiao's financial report for the first half of the year being unable to make ends meet and experiencing continued losses.
In fact, in the final analysis, Xiangpiaopiao’s current predicament stems from being complacent and failing to keep up with the development of the times, resulting in problems with the competitiveness of its products. In the face of consumer innovation and changes in the general environment, despite attempts at innovation, little success has been achieved. If we can focus on product upgrading and research and development, switch to healthy raw materials, and improve product quality, we will no longer follow the trend of blind krypton gold marketing and develop products in other fields, focus on our true intentions, and create dazzling and irreplaceable products. Product, maybe Xiangpiaopiao can survive the cold winter and usher in spring.
Where do you think Xiangpiaopiao’s way out?