This article is from the WeChat public account: Dining View Bureau (ID: Can_guanju), author: Zhang Ze, header picture from: Visual China
"What's the use of interviews, we have to change it early, and breaking out will only accelerate the collapse." Some of the franchisees have lost hope for a change in the status quo, but they are still struggling to support it.
Some franchisees complain in the group just to have fun in the tough business, and they don't want the brand to go out of business – at least until they get their money back or get their deposit back.
There are also some franchisees who can't stand it anymore and feel that it is meaningless to continue to operate, so they finally choose to transfer the whole store for 20,000 yuan, and the higher price is not cared for, and the equipment cannot be sold at a good price.
When did business start to go bad? Is it the brand upgrade in 2022, the inaction after 315 exposed the brand, or is it sometime earlier?
The road to being left behind
"First, the previous positioning was very good, and there were differentiated products with the market; Second, the decoration style of Shuyi is very good, the bookish style, it looks very conspicuous at night, and third, the product cost ratio of Shuyi can also be used, and the basic high gross profit and low gross profit can be equaled." Xiuling recalled Shuyi's glory days and sighed, "But now these advantages have been lost."
The biggest problem with books is the product.
"Which one is a hit will be removed from the shelves", Xiuling guessed: "Because the company's materials don't make money." She feels that the book actually has a fan base, but the inferior product hurts the hearts of customers. If a customer finds it unpleasant once and finds it unpleasant once, he won't come again. "I don't drink it myself later."
"Those who stayed, they kept changing the formula, and the more they changed, the more difficult it became," said Yahan, a franchisee in Zhejiang, "Strawberry milk cloud mochi, avocado, and brown sugar pearls were all from last year, and this year, the formula has been changed." So what are they doing? Isn't it just to keep old customers? ”
Franchisees say that the new product also seems to be illogical. "In the winter, there are yogurt shakes and smoothies, and when it is hot, the milk is baked. It's the season to remove mulberries from the shelves." They questioned that "I really can't figure out the research and development, the main thing is that it can still pass the audit and be executed". "It seems that it's not a traitor's business, it's a matter of shorting yourself"
The transformation and upgrading of the brand's "self-abolition martial arts" also interrupted the momentum of brand growth.
The predecessor of Shuyi was an 85°C Tea tea shop, and the best-selling product was the Roasted Fairy Grass product, which was renamed as Shuyi Burning Fairy Grass in 2017 and focused on the Burnt Fairy Grass product line. The slogan of "half a cup is a material" has strengthened its cost-effective advantage and captured many consumers.
In February 2022, Shu also won the first round of financing, with funders behind Juewei Food, Qiaqia Food, Tencent Investment, Keming Food, etc. According to the estimation of Hunan Shudaicao's total investment of 200 million yuan and the shareholding ratio of 2% after the completion of financing, the post-investment valuation of Shuyi Xiancao has reached 10 billion yuan, and it has been promoted to a new tea unicorn.
After getting the first round of financing, the book also began to change, abandoning the slogan of "half a cup is a material", rolling up the concept of health, aiming at the "plant-based new tea drink" market.
The creamer was replaced with fresh milk and oat milk, the price of materials rose further, and the cost of franchisees was once again raised, but the product was not as good as the previous creamer.
At the same time, the book also changed the logo and door design. The traditional bookish Chinese characters were replaced by the little red rabbit, and the image of the store was upgraded from the original red and green color scheme to a large area of tender grass green.
But this rabbit did not gain the favor of young consumers, but was complained about its cheap aesthetics. A regional expansion also complained: "It's not that it's not ugly, it's really ugly."
At the same time, the slogan of "fairy grass plant-based, refreshing and low burden" conflicts with the cognition of Shuyi's previous multi-ingredient tea drink of "half a cup is material", which is equivalent to giving up the original advantageous track and value positioning.
At this time, it was clear that the book was starting to decline, and with the product problems, the stores gradually stagnated, while other tea brands ran at full speed.
In September 2021, the book also claimed to have more than 7,000 stores, ranking second in the industry, second only to Mixue Bingcheng. At the beginning of 2024, Gu Ming submitted a prospectus showing that according to the CIC Consulting report, as of September 30, 2023, Shuyi Store has fallen behind to rank fifth.
A Honey Snow Ice City, B Tea Baidao, C Shanghai Auntie, E Shuyi. Source: CIC Consulting Report
It's hard to get back on the ground
At the end of 2023, the book will also begin to build 4.0 light Chinese stores, returning to the earliest national style and oriental image. A new slogan of "zero creamer in the whole system, good ingredients are healthier" was launched.
Before the new image of Shuyi could be discussed, the 315 incident brought two more blows to franchisees.
One is the Shanghai Consumer Protection Committee's evaluation of "strawberry bobo yogurt", which triggered a discussion about where to go for yogurt. The book also responded that it was really just a "yogurt-flavored drink".
The other is that the Hubei Consumer Protection Committee found that there were employees in a store in Wuhan who frequently changed the expiration date label of ingredients and used their mouths to judge whether the ingredients were expired. The book also apologized and closed the store.
Shuyi's final treatment measure is to change the name of the named "Strawberry Bobo Yogurt" to "Strawberry Yogurt Fruit Tea", and issued the "Notice on the Optimization of the Shelf Life of Store Materials" in terms of expiration management, extending the shelf life of some products from 4 hours to 6 hours, 6 hours to 8 hours, and some products with a shelf life of 12~16 hours are discarded on the same day.
Some franchisees said that after the exposure of 315, brand public relations did not take enough action, but waited for hot spots to overshadow negative public opinion.
"Before 315, I made a few hundred more per day, and after 315, I lost more than 1,000 per day."
"After 315, the turnover of the store generally fell by 30 to 40 percent."
In April, Shuyi's brand upgrade continued to advance, and on April 16, Shuyi also made a notice of slogan change, and all the staff echoed it and returned to "half a cup is material". Some cities have also begun to continuously lower product prices and test products with lower prices in an attempt to regain "cost performance".
The source book is also an internal document
On the new menu, the products of 6, 7 and 8 yuan are more prominent, and the price band has moved down significantly. The regional development staff said, "We are benchmarking against Mixue Bingcheng in lower-tier cities." The price of a single cup has dropped, but low-priced products are still on sale: 9.9 for mini programs, 9.5 for Douyin, and 7.5% off for takeaways.
However, the price change has not significantly increased the sales volume of the store, and the price reduction of materials is not in place.
The book also lowered the price of materials, mainly focusing on packaging materials. The adjustment of core materials such as dairy products, sugar, and tea is not in place. In the most recent material price reduction, the two models with the largest decline rate were "Double Cup Bag" and "2024 Khaki Berets", with a decrease of 19.1% and 15.6% respectively.
At the end of April, the "Light Spring" book also burned fairy grass for a special live broadcast, 12 yuan for two cups. Internal documents show that there is no subsidy for this live broadcast. A few days ago, the book also co-branded with a traffic star, a cup of kumquat lemonade and a cup of mint milk green, only 10 yuan.
Some franchisees jokingly said that I helped Wang sell materials, but they were not fast enough. "The book has always put the research of franchisees in the first place, and the research and development has been centered on the company's profits and consumption inventory," concluded one franchisee.
Urgently looking for a new franchisee
At the beginning of 2024, the book also announced the "store opening fee is free" activity, with a brand usage fee of 30,000 yuan, a comprehensive service fee of 15,000 yuan for opening a store, and a deposit reduction of 5,000. The total franchise cost is 10,000 yuan, plus the decoration cost is 75,000 yuan, and the equipment cost is 80,005, and the total budget is 130,000 yuan.
The source book is also a brochure for investment promotion
However, according to the data of Narrow Door Restaurant, as of June 10, there were 6,294 Shuyi stores. Still not back to the top.
The combination of returning to the national style, reducing prices, and lowering franchise fees has made people see that the book is also in a hurry.
"In the past two years, we have done a good job in the market, consolidated the market, and screened franchisees. Before the customer called me, he directly asked if he had a bachelor's degree and whether he had 500,000 yuan in the account.
This is how the regional development staff explained the stagnation of the number of stores. "Now that the general environment is not good, my advice is that no matter what you do, you still have to reduce costs, because the investment is small, the risk is small," he said, and their gross profit is around 60%.
The real situation is that the core of whether the franchisee can make money is not in the early investment, the franchisee reduces the franchise fee, and the profit can also be made up from the material price difference. In terms of gross profit, some franchisees said that coupled with the large loss of materials, the actual gross profit of products is 45%~50%.
Regional expansion also said that the number of inquiries after the threshold for joining was lowered was not much. He revealed that there was only one single entry line on average in the provinces and cities he was responsible for.
"Our company is not like other companies, where half of the money our boss earns every year is subsidized to the market, such as some renovations to be renovated, and other activities," added the regional developer.
Subsidize the market, and the franchisees do not feel deeply. Instead, they are more focused on Shuye's investment in DOC Coffee and Neon Tea Dance – which Shuyi also invests in these new drinks rather than strengthening its main business.
Figure: Source network
The decline in product quality, the frequent changes in brand positioning, the stagnation of store growth, and the blow of the 315 incident have weakened the potential energy of Shuyi.
The stalk of "The Other Party in the Eyes of Major Tea Brands", which was popular before, includes Hey Tea, Nai Xue, Gu Ming, Tea Baidao, Tea Yan Yuese, Honey Snow Bingcheng, and Bawang Tea Ji...... But there is no book in the shadows.
"People don't even bring books to play, haha", a franchisee joked.
This article is from the WeChat public account: Meal View Bureau (ID: Can_guanju), author: Zhang Ze
This content is the author's independent view and does not represent the position of Tiger Sniff. May not be reproduced without permission, please contact [email protected] for authorization
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