In 2014, when New Year's Eve, Lenovo announced that it would buy Motorola Mobile's smartphone business from Alphabet Inc-CL C for $2.9 billion, and JD.com Mall submitted an IPO prospectus, the industry was buzzing.New Year's Eve in 2021, "Nai Xue's Tea", which had repeatedly refused to comment on the listing rumors, announced its prospectus in Hong Kong Exchanges and Clearing.However, this "impact on the first share of tea" news did not make many people stop to pay attention.

In the past year of the Rat, the new consumer company can be said to have earned enough attention in the capital market-Pop Mart International exceeded the market capitalization of HK $100 billion on the first day of listing, and perfect Diary (Yatsen) exceeded US $12.2 billion on the first day of listing. Recently, there is also news that the latest valuation of Yuanqi Forest is close to 30 billion yuan (the news comes from China.com).

Strike while the iron is hot, this is the peak of the valuation of the consumer track, how can there be a lack of "new tea" in the capital feast?

So far, Naixue's tea has completed several rounds of financing, and its valuation is close to $2 billion (about 13 billion yuan) after round C at the beginning of this year, according to Bloomberg.

And Nai Xue's teammates have also shown the strength of attracting money-Xi Tea has experienced four rounds of financing, with a cumulative financing of more than 500 million yuan and a post-investment valuation of 16 billion yuan, behind which there are many stars such as IDG Capital, Sequoia Capital, Hillhouse Capital, Meituan's Dragon Ball Capital and so on.

According to data, in 2020, tea brands raised a total of 18 financing, revealing a total amount of 1.743 billion yuan, an increase of about 700% over the same period last year, accounting for 36% of the total financing for food / health products in that year.

Is the rise of new consumption and new tea a light or a bubble? This prospectus for Nai Xue's tea gives some answers.

The net profit margin is only 0.2%, and the sales of individual stores are declining rapidly.

Let's take a closer look at the data in the prospectus:

According to the prospectus, the operating income of Nai Xue's tea was 1.09 billion yuan in 2018, 2.5 billion yuan in 2019 and 2.11 billion yuan in the first nine months of 2020, up 130.2 per cent and 20.8 per cent respectively from a year earlier.

Among them, affected by the epidemic in 2020, offline business was greatly affected during the epidemic, and the revenue growth in the first nine months showed a sharp slowdown compared with the same period last year.

In the case of rapid growth at the income end, the performance of Naxue's tea at the profit end is much lower.

The net loss of Naxue Tea in 2018 and 2019 was 56.58 million yuan and 11.735 million yuan respectively under non-international financial reporting standards. Although the company made a net profit of 4.484 million yuan in 2020, the company made a net profit of 4.484 million yuan.The overall net profit margin is only 0.2%.The profit level of the company is too thin.

The main reason for the thin profit level is the high operating costs at the store level of the company.The main costs include raw material costs, staff costs, rent and related store operating expenses, as well as depreciation costs of fixed assets.

In terms of operating data, the number of tea stores in Nai Xue as of 2018, 2019 and September 30, 2020 was 155, 327 and 422 respectively, with a net increase of 172 and 95 stores respectively compared with the previous reporting period on September 30, 2019 and 2020.

Although the number of tea stores in Nai Xue is still expanding rapidly, it is clear that the growth rate of its stores is declining.

While the number of stores continues to increaseThe daily sales of Nai Xue's tea order store and the average daily order volume of the single store have shown a continuous downward trend.

Its average daily sales per store in 2018, 2019 and January-September 2020 were 30700 yuan, 27700 yuan and 20100 yuan respectively, showing a continuous downward trend, especially in 2020, the company's average per-store sales decreased rapidly.

This is largely due to the decline in the number of orders per store-as the number of tea stores in Naixue increases, the density of stores increases in the core cities, and the number of orders per store continues to decline. Due to the decline in individual store turnover, but the overall cost at the store level remains unchanged, the profit margin at the store level continues to decline.The profit margin of Naixue's tea store in the first nine months of 2020 was just 12.6%, down from 24.9% in 2018 and 25.3% in 2019.

The continuous decline in business performance at the tea order store level of Nai Xue also brings a certain degree of hidden trouble to the company's continued expansion.

As we all know, under the single-store model of the retail industry, the operating profit of single-store can be improved only when the average number of orders and customer unit price continue to increase and the operating cost of single-store remains stable. Only with the improvement of the profits of individual stores, can the costs of the middle and backstage be shared equally to achieve the overall profit of the company.

And Nai Xue's tea has seen a rapid decline in the operating efficiency of individual stores at this stage, which will largely limit the overall expansion speed of the company.

Where is the "new"?

According to the 2020 New Tea White Paper issued by Nai Xue, the total size of China's tea market will reach 442 billion yuan by the end of 2020, and the total size of China's coffee market will reach 215.5 billion yuan, and the tea market will still be more than twice the size of the coffee market. The size of the new tea market will exceed 100 billion yuan in 2020 and is expected to exceed 110 billion by 2021.

However, no matter how big the market is, it is only paper data. Lucky's lesson is still ringing in our ears. If we replace the word coffee with tea, will the outcome be very different?

Products are highly homogenized but not standardized enough-this is a common problem in the new tea industry.

On the one hand, the product lacks effective barriers, the threshold is low, and the formula is easy to be imitated, so the phenomenon of homogenization is becoming more and more serious.

On the other hand, the problem of "standardization", which is particularly valued by the consumer industry, is difficult to solve.

Because in terms of tea, for suppliers, selling tea with high unit price to high-end business people is enough to support themselves, raw material processing and production does not need large-scale, large-scale industrial production. The upstream system of China's tea industry has not been structured, so it can not solve the downstream problems.

The production process outside of tea is also difficult to be stable. In the process of making new tea products, almost all operations have to be done by people. Even with fructose machine, fruit slicing equipment, milk capping machine and other equipment in the new tea market, the production process of the product is still up to people. "how sweet a cup of tea is depends entirely on whether the clerk's hand with sugar is shaking or not. "

So, how does Nai Xue's tea party break through?

At present, there are mainly two kinds of "new" of new consumption:

One isNew consumer brands rising with channel iterations, such as perfect diary, Hua Xizi, etc.

Qian Kun, a partner at Wuyue Capital, has summed up three investment booms in the consumer industry in recent years:

2007-2008: PC Internet is a foregone conclusion, a large number of offline shopping malls are built, and a large amount of consumption and investment in catering brands are generated.

2012-2013: the pattern of e-commerce platform is formed, and Taobao brand is favored by capital.

2016-2017: the unprecedented prosperity of social media has led to the rapid growth of new consumer products and services.

Every consumer investment boom is at the stage when Internet platform companies are beginning to take shape. On the one hand, the investment targets of technology companies become less, on the other hand, Internet platform companies begin to realize their traffic. many new brands and services have been born in the process of consumer attention shift. consumer investment is to invest in those that can grow rapidly and form brand awareness in this process.

In short, there is no fundamental change in the product, but the channel is new, and so are the consumer brands that seize the emerging channel.

The other isProduct / service / experience updateNew tea obviously belongs to this category.

In the past, most of the milk tea was washed with powder, without milk or tea, and the area of the milk tea shop was also relatively small, mostly 3-5 square meters. After that, the raw materials were upgraded, and milk tea based on tea powder and tea residue also appeared. Now the new tea drinks are healthier and fresh, and the space in the shop is more exquisite and comfortable.

At the beginning of this year, in an exclusive interview with Peng Xin, founder of Nai Xue Tea, we can see that 36Kr Holdings's breakthrough thinking is also focused on the latter. In Peng Xin's view, the growth mainly comes from two aspects: "first, we have created a lot of customers for the category." for example, you will find that the main consumer group of the new tea is not the group of customers who drank milk tea shops on the street five years ago, but more white-collar workers and business people. Second, we can see that at present, the whole category can be divided into three dimensions. In fact, the two markets of the middle and the head are actually increasing, while the market of the tail, which is about 5 or 10 yuan, is shrinking. Whether it is the first-and second-tier market or the sinking market, they all pay more and more attention to quality and gradually go to high-end consumption. "

That is to say,Through the "new" tea to harvest new consumer groups, and through high-end products, to seize the low-end product market in the process of the stock market.

The prospectus sums up Nai Xue's tea growth strategy into five points:

Consolidate its leadership position in existing markets and expand its business scope in new markets

Further digitize overall operations to improve efficiency

Strengthen the capability of supply chain

Increase customer participation to build lasting relationships

Launch new and innovative hot products, expand product range and sales channels to unleash the brand potential of Naxue tea.

It is worth mentioning here that the first point is clearly settled on "Nai Xue Pro". Naxue tea plans to open about 300,350 tea shops in first-tier cities and new first-tier cities respectively in 2021 and 2022, of which about 70 per cent will be planned to be PRO tea shops.

Naxue Pro is its store model launched in November last year, which divides the product business model into four modules: coffee, tea, light baking and snack retail. According to the tea-related person in charge of Naxue, unlike the previous Naxue stores are mostly located in the high-end business district, Naxue PRO will focus on first-tier cities and move into business office areas and high-density communities.

But such actions seem to run counter to the general trend--Xi Cha opens Xi Xiao Tea, Rui Xing opens a self-pick-up shop, and even Starbucks Corp is pushing the "brown fast" that can be picked up immediately at the store. Will the value of "third Space" be great in the future?. Will this further reduce the turf efficiency of Nai Xue?

Naxue Pro Coffee Product Line menu

There is actually a romantic love story behind Nai Xue's tea: founder Peng Xin, whose online name is "Nai Xue", claims that starting from her own experience and proofing according to the grip size of her hand, she has designed a "Nai Xue cup" that meets the feeling of a woman's slim and easy grip. When she had the idea of making tea, she sought partners and finally found Zhao Lin, who had been immersed in the catering industry in Shenzhen for many years. Met in March and engaged in May. Thanks to the joint efforts of Peng Xin and Zhao Lin, Nai Xuezu Tea was born.

Now, when the dream shines into reality, when the feelings fall to the ground, when the career needs capital, when the cold data of the prospectus is in front of us, the story becomes more and more complicated.