Will the contrarian price reduction of Xi tea trigger a new round of reshuffle of new tea drinks?
At the beginning of 2022, a new round of "price scuffle" of new tea began quietly.
On February 24, Xi tea announced the completion of the product price adjustment carried out since January this year. It will no longer launch new drinks with more than 29 yuan this year, and promised that the price of existing products will not rise this year. It is understood that after the price adjustment, in addition to limited products in individual cities, surrounding areas, and a small number of products in lab stores and handmade stores, the product prices of mainstream stores of Xi tea have been comprehensively lower than 30 yuan, and the price is 15-25 yuan, and the products have accounted for more than 60% of all products of Xi tea.
The next day after Xi tea announced the completion of the price adjustment, the 21st Century Business Herald reporter visited many Xi tea stores in Guangzhou and found that the stores were replaced with a new "Xi tea menu". A clerk at Xi Cha Tianhe Renfeng building store told reporters, "on the morning of the 25th, the passenger flow of the store is relatively rare, and there are relatively few takeout orders. Generally, takeout orders will be concentrated around 2 p.m." In addition, the reporter noted that the product price on the happy tea applet has been reduced.
contrarian price reduction
It is understood that as early as January 2022, Xi tea began to reduce the price. The price adjustment at that time covered the vast majority of products in the whole category of cheese tea, fruit tea, milk tea, pure tea and coffee sold by Xi tea. The price adjustment range ranged from 1 to 10 yuan, and the price adjustment range of a single product was up to 10 yuan.
This time, in addition to comprehensively reducing the price, Xi tea also made an overall adjustment to the product matrix to let consumers see a new "Xi tea menu". According to Xi tea, this is to "better meet the diversified and personalized needs of consumers". On the 25th, the reporter saw on the tea loving applet that the adjusted menu is divided into different columns such as "seasonal fresh fruit", "refreshing but not greasy", "more meat", "rich", "simple", "affordable" and "hot drink recommendation".
(Photo by Liang raochuan)
In recent years, the prices of grapefruit, pineapple, condensed milk, lemon, milk and other raw materials have risen sharply, and the "straw plastic ban order" has made many beverage brands worse. Since last year, under the pressure of rising raw material prices in the upstream, many middle and low-end tea brands such as chabaidao, Yidian, yihetang and coco have collectively started the "price rise tide".
On January 5 this year, tea Yan Yuese also joined in the price increase, announcing that most milk tea products of the brand increased by 1-2 yuan. Chayan Yuese explained that the reason for the price rise was that the raw materials and other costs in the market were rising year by year, and the dividends accumulated before could not bear a series of superimposed costs.
Not only new tea drinks, but also coffee chains can't bear the cost pressure. Not long ago, Starbucks, a chain coffee brand, raised the prices of various drinks by 1-2 yuan. In response, Starbucks responded that the pricing was made after comprehensive evaluation and consideration of various factors such as operating costs.
In the case of tea Yan Yuese and Starbucks rising prices one after another, Xi tea openly "sings the opposite tune" and reduces the product price. What kind of chess is it going to play? In this regard, Xi tea said that this price reduction is a normal adjustment in the mainstream price band of products, thanks to the advantages of brand, scale and continuous accumulation in the supply chain.
kick off the shuffle?
In fact, after the rapid expansion in recent years, the market competition of new tea drinks has become increasingly fierce. The characteristics of low industry barriers and high interest rates have attracted a large number of entrants. However, with more and more contestants, new tea drinks began to bid farewell to the era of high growth. AI media consulting showed that the growth rate of new tea began to slow down in the first and second tier cities, and showed a downward trend to the third and fourth tier cities.
Zhu danpeng, an analyst of China's food industry, believes that the price reduction behavior of Xi tea matches the current Chinese economic trend, meets the needs of the new generation for high quality and high cost performance, and is also in line with the development strategy of Xi tea.
In his view, the price reduction of Xicha is a "dimensionality reduction blow" to the whole industry. "This is a very good strategy, and it is also a common way for new Chinese tea to enter the mature stage." It is generally believed in the industry that the price reduction of hi tea, as the leader of new tea drinks, will further squeeze the living space of second and third tier brands and is expected to accelerate the reshuffle of the industry.
It is worth noting that in January, after Xi tea lowered the prices of some products, Naixue's tea also followed. The reporter landed in Naixue applet on the 25th and found that its newly launched "Naixue easy purchase" series of affordable products not only reduce the capacity or save cheese and cream, but also reduce the price by 5 yuan to 7 yuan. Among them, the lowest price of tea and coffee is only 9 yuan.
In the rising voice of the tea and coffee industry, Xi tea first played the price reduction card. Will it set off a wave of price reduction of new tea?
In this regard, Zhu danpeng pointed out that in the case of price reduction of head enterprises such as Xi tea and Naixue tea, other new tea brands are likely to choose to reduce prices. "However, once a price war is launched, the overall profits of small and medium-sized brands are often difficult to guarantee due to the inability to reduce the existing costs." In his view, the price reduction of hi tea not only means the opening of the great differentiation of the new tea industry, but also opens the prelude to the reshuffle of the industry.
