Jasmine Milk Tea co-founder Gao Yunxi: In the stock game, the counter-trend growth path of the new tea beverage industry | WISE2024 King of Business
From November 28 to 29, the two-day 36Kr WISE2024 Business King Conference was grandly held in Beijing. As an all-star event in the Chinese business field, the WISE Conference has reached its twelfth session this year, witnessing the resilience and potential of Chinese business in an era of constant change.
2024 is a year that is somewhat ambiguous and with more changes than stability. Compared to the past decade, people's pace is slowing down, and development is becoming more rational. 2024 is also a year of seeking new economic momentum, and the new industrial changes have put forward higher requirements for the adaptability of each subject. This year's WISE Conference takes "Hard But Right Thing" as its theme. In 2024, what is the right thing has become a topic we want to discuss more.
In the afternoon of the 29th at the main venue, Gao Yunxi, the co-founder and CFO of Molly Tea, delivered an excellent speech with the theme of "Stock Game: The Counter-Trend Growth Path of New Tea Drinks". Gao Yunxi stated that we are at a critical moment of changing consumer concepts. Consumers are paying more and more attention to quality and health, and the consumption mode has also shifted from quantitative growth to qualitative improvement. This is a positive signal, indicating that the market is moving towards a more mature and higher-quality development direction.
Gao Yunxi said that a more differentiated market is forming, and there are more and more sub-segments in the catering industry. Brands need to find their own differentiated positioning and competitive advantages in their respective sub-markets. This trend is particularly obvious in the tea drink field. It is expected that the chain rate in the entire tea drink industry will exceed 50% this year, and the brand's scale is becoming more and more obvious. In 2023, the scale of freshly made tea drinks was close to 250 billion yuan, with a compound annual growth rate of 25.2%. In 2028, this market will be close to 500 billion yuan, and freshly made tea drinks are still a trillion-yuan-level track with a large volume and high growth.
In Gao Yunxi's view, new tea drinks still have great appeal and vitality. This year, my feeling in the entire industry is that catering or tea drinks have become more rational, more extensive, and more differentiated. A more rational attitude is prevalent in the industry, and brands are exploring their own development paths, such as opening franchises, lightweight stores, exploring the sinking market and overseas markets. Consumers are also more mature in their purchasing decisions, no longer simply pursuing price, but comprehensively considering quality, performance, price, after-sales service, and meeting personalized and diversified needs.
Therefore, Molly Tea uses "Creativity and Heart" to create products, "Emotion" to connect customers, and "Small Beauty" to build the brand. It takes the meaning of Eastern modernity, integrates the ingenuity of cultural micro-innovation, conveys a beautiful life attitude, connects the world with a cup of good tea, shows a continuous growth posture, and wins the power of lasting competition.
Gao Yunxi, Co-founder and CFO of Molly Tea
The following is the verbatim record of Gao Yunxi's speech:
Dear guests, hello! After lunch, everyone should be sleepy. There is our milk tea over there. You can have a cup to refresh yourself.
I am Gao Yunxi, the co-founder of Molly Tea. Molly Tea is an emerging tea drink brand, and maybe some friends don't know it yet. We opened our first store in 2021 and have developed for more than 3 years. We have opened nearly 900 stores in 29 provinces and 159 cities across the country, adopting an operation model that combines direct operation and franchise chain, and focusing on the floral fresh milk tea track. You may say that in the red ocean market of the tea drink industry, why are there still so many brand entrepreneurs flocking in. Even in such a severe market environment, there are still new entrants constantly seeking survival and growth in the cracks. Therefore, the theme I bring to you today is the counter-trend growth path of new tea drinks in the stock game.
Let me first share a set of data with you. From January to October this year, the total retail sales of consumer goods achieved a year-on-year growth of 3.5%. Among them, the catering industry performed particularly outstanding, with a year-on-year growth of 5.9%, which is 2.4% faster than the growth rate of the total retail sales of consumer goods. The catering industry is recovering strongly. We are at a critical moment of changing consumer concepts. Consumers are paying more and more attention to quality and health, and the consumption mode has also shifted from quantitative growth to qualitative improvement. This is a positive signal, indicating that the market is moving towards a more mature and higher-quality development direction.
We can see that in fact, new tea drinks still have great appeal and vitality. This year, my feeling in the entire industry is that catering or tea drinks have become more rational, more extensive, and more differentiated. A more rational attitude is prevalent in the industry, and brands are exploring their own development paths, such as opening franchises, lightweight stores, exploring the sinking market and overseas markets. Consumers are also more mature in their purchasing decisions, no longer simply pursuing price, but comprehensively considering quality, performance, price, after-sales service to meet personalized and diversified needs. And more extensive services are changing our consumption experience. For example, the popularization of mobile payment and online takeout has made catering services more convenient. The application of AI and data has also improved the in-depth exploration of enterprises in operational efficiency and customer experience. The integration of the catering industry with other industries, such as cross-border combinations with the retail, entertainment, and beauty industries, has also expanded the boundaries of the entire service.
A more differentiated market is forming, and there are more and more sub-segments in the catering industry. Brands need to find their own differentiated positioning and competitive advantages in their respective sub-markets. This trend is particularly obvious in the tea drink field. It is expected that the chain rate in the entire tea drink industry will exceed 50% this year, and the brand's scale is becoming more and more obvious. In 2023, the scale of freshly made tea drinks was close to 250 billion yuan, with a compound annual growth rate of 25.2%. In 2028, this market will be close to 500 billion yuan, and freshly made tea drinks are still a trillion-yuan-level track with a large volume and high growth.
Gao Yunxi, Co-founder and CFO of Molly Tea
The tea drink industry has transitioned from the earliest powder era to the new tea drink era with continuous iterations and prominent health attributes. The consumption scenarios have become more and more diversified. Especially the afternoon tea time has become the golden time for everyone to enjoy tea drinks. As the industry moves from wild development to a new stage of refined operation, the entry threshold of the industry is increasing, and the consumption mode has also shifted from experiential consumption to daily consumption. In this era of stock game, the key for a brand to stand out lies in a deep understanding of the core needs of consumers. This requires us to precisely optimize every detail from site selection, store construction, supply chain management to daily operation.
At the same time, we also need to invest heavily in product research and development, create mental products, and develop more development scenarios to increase the consumption frequency and get out of homogeneous competition. More than 90% of consumers are willing to try new products, especially fruit tea and light milk tea. The composition of consumers is also worthy of our attention. Among tea drink consumers, women and the Generation Z group have become the main consumers. In addition to price, they pay more attention to quality, health, and personalization. In this context, brands choose high-quality raw materials, such as fresh milk, real fruits, and original leaf tea, and use diversified combinations such as tea + milk, tea + fruit, etc., to meet the diverse needs of consumers. Brands need to calm down and do a good job in every link in order to win more lasting competitiveness.
Molly Tea set sail in the "Rolling City" of Shenzhen and has experienced a journey from direct operation to franchise, to national expansion, and to embracing the global business. This year is a year of our vigorous running and has become a representative of floral fresh milk tea. On the one hand, it is our "similar but different" differentiated strategy. "Similar" means that like many tea drink brands, we adhere to nature and original flavor. The difference is that we entered the market with oriental jasmine. There was no such sub-category in the market before. We are the first new tea drink brand with jasmine as the sub-category. This scarcity determines that we will take a unique path. We combine the wide audience base and adaptability of jasmine tea, and skillfully integrate traditional Eastern culture with modern aesthetics to become the brand that best understands jasmine. In addition to jasmine, we have also extended to all floral-scented milk teas, such as gardenia, osmanthus, and orchid, becoming the tea drink brand that "best understands fragrance", and continuously conducting product research and development on the road of pursuing fragrance.
We believe that Molly Tea has three keywords: 1) Creativity and Heart. Creativity means creation, and Heart means intention. This is for the product. 2) Emotion. 3) Small Beauty.
Let's first talk about how to achieve "Creativity and Heart". Following the product strategy of not only being "new" but also "intentional", as a model worker of fresh milk tea, we basically launch a new series of products every month. In the first ten months of this year, we have launched more than 20 series, including many festival-limited editions, constantly bringing consumers a sense of surprise. We focus on the research and development of floral tea bases, integrating different elements such as fruits and chocolate to form our very rich product matrix. The success of each product is the best proof of our R & D strength and consumer insight.
The second keyword is "Small Beauty". What we pursue in brand expression is the unique Eastern modern aesthetics, the undefined Eastern color, and the undefined Molly Tea. Whether it is poster design, product packaging, store decoration, etc., it shows a sense of high-end, fashion, and youth. At the same time, through the joint marketing strategy, we combine with brands in different fields, combine tea drinks with home furnishing, fashion, beauty, etc., and conduct micro-innovation of traditional Chinese cultural elements to attract consumers' attention and trigger topics to build our brand power. This also constitutes part of our product barrier. What we mean by "Small Beauty" is not a grand expression of Chinese culture, but more of a digging out of our young people's thoughts and viewpoints on past culture from the precipitation of the past culture, and then making some micro-innovations to organically combine the East and the modern, so that traditional culture can radiate a continuous growth vitality; this is the pursuit of showing our "Small Beauty" and "Exquisite and Elegant" life.
Gao Yunxi, Co-founder and CFO of Molly Tea
Emotion, how do we create it? Emotion is a neutral word. We create a link with consumers through fragrance. Fragrance can bring consumers a unique and self-pleasing feeling, and even a therapeutic function. Through a cup of good tea, a delicious floral Chinese tea, consumers can feel very delicate beauty in a short tea break time, and extend to our various fragrant peripheral products, creating a happy time of a cup of tea for them with the smallest unit of aesthetics, thereby strengthening the recognition and uniqueness of our brand. That is what we call "One flower, one tea, one fragrance, one color, smelling the fragrance and drinking the tea experience".
In terms of store expansion, we adopt a prudent and meticulous strategy. Currently, we focus on new first-tier and first-tier cities. In more than three years, we have entered 29 provinces and 159 cities across the country, with nearly 900 stores. At the same time, we also pay attention to the potential of the sinking market and expand steadily. This year is also our first year of going overseas. This process is really full of challenges and gains. Our first store in Flushing, New York, USA opened in April, and now we have opened stores in San Francisco, USA, Sydney, Australia, Bangkok, Thailand, and Toronto, Canada. Our overseas stores have performed very well. For example, the New York store has been climbing in performance every month since its opening in April, and now the monthly sales have reached 570,000 US dollars, close to 4.2 million RMB in single-store sales, even though it is just a very small store.
Each store is a new entrepreneurial journey that requires our all-out efforts. Fortunately, our overseas stores have performed well. Through precise positioning and the continuous efforts of the team, we have also achieved initial success in the international market, which has injected confidence into our next global expansion. Molly Tea not only represents a high-quality lifestyle, but also represents a new aesthetic trend, carrying the essence of Eastern culture, convey a unique Eastern "Exquisite and Elegant" life attitude, and carrying a young and continuous growth vitality. In the future, we hope to use a cup of good tea as a medium to allow young people from all over the world to come into contact with and love Eastern floral fragrance. This is also a proposition that Molly Tea continues to think about.
This is the end of my sharing today. Thank you all!