Written by Li Jiaman
Editor|Yang Yong
Source | Produced by hydrogen consumption
ID | HQingXiaoFei
Recently, the topic of "sudden liquidation withdrawal of many old shareholders of Chayan Yuese" has set off a lot of waves in the industry. This change has undoubtedly cast a veil of mystery over the brand, which has emerged in the field of new tea drinks in recent years.
The capital situation has changed, the red-chip structure has surfaced, and the change of shareholders has led to the conjecture of listing. Where is the capital wind of the new tea drink track going? Perspective tea and pleasant color, a glimpse of the changes in the industry.
Tea and joy were "shuffled" by capital
Recently, the industrial and commercial change information of Hunan Chayue Cultural Industry Development Group Co., Ltd., an affiliated company of Chayan Yuese, has aroused widespread attention in the industry. Tianyancha data shows that many well-known investment institutions, including Shunwei Capital, Wuyuan Capital, Source Code Capital, Yuansheng Capital, and Tiantu Investment, have withdrawn from the ranks of shareholders.
The reporter conducted an in-depth investigation through the Tianyancha platform, and in the industrial and commercial change information of Hunan Chayue Cultural Industry Development Group Co., Ltd., an affiliated company of Chayan Yuese, it was impressively shown that Chengdu Yuancheng Venture Capital Center (Limited Partnership), Nanjing Wuyuan Qixing Venture Capital Center (Limited Partnership) and other 7 shareholders collectively withdrew their capital, which directly led to the reduction of the company's registered capital from about 7.0103 million yuan to about 5.0672 million yuan. The large withdrawal of capital has undoubtedly triggered a lot of speculation about the future development path of Chayan Yuese. At the same time, Xu Liang, the founding partner of Yuansheng Capital, also stepped down as a director of the company.
This series of changes has undoubtedly added more uncertainty to the future development path of Chayan Yuese. Especially in the report of the Financial Associated Press on June 16, a person close to Chayan Yuese revealed that this shareholder change is actually part of Chayan Yuese's "normal red chips". Does the red-chip structure, which is often used for overseas listings, mean that Chayan Yuese is paving the way for future overseas listings?
Looking back at the financing process of Chayan Yuese, from the completion of the first round of financing in January 2018 to the latest round of financing in December 2021, this new tea beverage brand has completed a total of 4 rounds of financing, with investors including Tiantu Investment, Wuyuan Capital and other well-known institutions. However, with the withdrawal of a number of capitals, the list of shareholders has basically returned to the state before the financing, mainly based on the shareholding platform of the founding team. After the change, there are only 4 shareholders left, including Changsha Ju Yingliang Brand Management Co., Ltd. and Changsha Youlan Management Consulting Partnership (Limited Partnership).
Jiang Han, a senior researcher at Pangu Think Tank, pointed out that in the modern business environment, venture capital (VC) is an important force for start-ups, especially those fast-growing "unicorn" companies, to move from budding to maturity. However, the entry and exit of venture capital is a double-edged sword, which can not only accelerate the pace of development of enterprises, but also bring significant challenges and uncertainties. The withdrawal of a number of shareholders has undoubtedly added a veil of mystery to the future development of Chayan Yuese.
In fact, the rumors about the listing of Chayan Yuese are not groundless. As early as March this year, it was reported that Chayan Yuese had selected CICC and Morgan Stanley to be responsible for its IPO in Hong Kong. In April, the addition of Pan Pan, the managing partner of Yuantiantu Capital VC Fund, made this rumor more credible. After all, Pan Pan has previously participated in the investment of brands such as Baiguoyuan and Naixue's tea, and both have successfully landed in the capital market.
However, in the face of all kinds of speculation from the outside world, the tea and pleasant color have always remained low-key. In response to the media, Cha Yan Yue Se made it clear: "The company has no IPO plans at this time. This statement undoubtedly disappointed those observers who were expecting tea and joy to further grow with the help of the capital market.
However, from the perspective of the entire new tea beverage industry, it has become a common choice to land in the capital market to seek new increments. Just two months ago, Chabaidao successfully landed on the Hong Kong stock market, becoming the second stock of New Tea Drink, and setting a record for the largest IPO of Hong Kong stocks in 2024. At present, brands such as Gu Ming, Mixue Bingcheng, and Shanghai Auntie have also submitted listing applications. The capital competition in the new tea beverage track is becoming increasingly fierce.
However, Shen Meng, executive director of Xiangsong Capital, said that the performance of the previously listed new tea brands was not satisfactory, which also made investors more cautious in their investment in this field. For Chayan Yuese, although the withdrawal of a number of capitals has triggered speculation about listing, it will take time to verify whether it will really choose to land in the capital market in the future.
So, has Chayan Yuese been abandoned by capital? Apparently not. From a more macro point of view, this change of shareholders is more like a re-layout of Chayan Yuese at the capital level. Under the new consumer capital vane, Chayan Yuese may be looking for a more suitable development path for itself. Whether you choose to list domestically or overseas, or continue to maintain the steady development of the current direct sales model, you need to find the best balance between capital and the market.
multi-track layout,
Find another way to expand
At a time when new tea brands are sprinting to the scale of 10,000 stores, Chayan Yuese has always chosen a different expansion path - opening taverns and selling sugar water, in order to seek new growth points. Behind this strategy is the continuous pursuit of brand freshness, as well as the in-depth consideration of popular risk sharing, expansion of the number of SKUs, sales increase and overall traffic pull.
In May 2023, Chayan Yuese launched the "Sugar Water Shop" in the form of a shop-in-shop, officially trying to enter the sugar water market. Prior to this, the sub-brand family of Tea Yan Yue Se has been quite rich, including the bistro sub-brands Day and Night Poetry Wine Tea, Yuanyang Coffee, Gude Mo Lemon, and Xiaoshenxian Teahouse, which correspond to the four subdivisions of tavern, coffee, lemon tea, and pure tea, covering almost all day drinking scenes of consumers.
According to the Chayan Yuese Mini Program, the current number of stores of Yuanyang Coffee, Goodmo Lemon, and Xiaoshenxian Teahouse is 106, 70, and 15 respectively. In addition, according to the data of Narrow Door Catering, the number of main brand stores of Chayan Yuese is currently 560. If you don't consider the shop-in-shop format, the total number of stores in the Chayan Yuese brand family is approaching 700. Although this figure is far from the 10,000 store size of some competitors, it reflects the unique choice of Chayan Yuese in its expansion strategy.
In the context of Gu Ming, Tea Baidao and other brands sprinting to 10,000 stores, Hey Tea and Bawang Tea Ji have exceeded 3,000, and the pace of expansion of Tea and Joy is particularly slow. One of the important reasons is that Chayan Yuese has never been open to join and adheres to the direct sales model. The founder Lu Liang has said many times, "It's not that I don't want to do it, it's that I think I may not be able to do it", and he also believes that the root of tea and beauty is the service industry.
This strategy of sticking to the direct sales model may be difficult to meet the high growth required by the capital market. Especially in the case that the new tea drink track as a whole is in a relatively saturated state, the choice of tea and pleasant color is particularly unique.
As mentioned above, in the face of such fierce market competition and a saturated market environment, tea and beauty are also frequent. In addition to launching sub-brands such as Day and Night Poetry Wine Tea and Art and Culture Bistro, it has also strengthened the layout of subdivisions such as taverns, coffee, lemon tea, and pure tea. This series of actions undoubtedly shows that Chayan Yuese is seeking to find new growth points in the saturated market through a multi-brand and multi-track layout.
Many industry experts agree that every brand has its own unique selling point and target audience. The "national style" characteristics and high-quality positioning of tea and beauty have won it a certain fan base. If Cha Yan Yue Se can continue to innovate its products and enhance the customer experience, while effectively managing its expansion cadence, it is possible to maintain its competitive edge even in a highly competitive market. As Zhan Junhao said, "The success of a brand depends not only on the number of stores, but also on brand value, customer loyalty and profitability. ”
The new tea drink track is crowded, the tea is pleasant, and the multi-brand layout is changing. Behind the slow expansion, how to balance the direct sales model with the high growth expected by the capital market?
Listing rumors and capital games
In March 2024, Bloomberg reported that Chayan Yuese had selected CICC and Morgan Stanley as IPO sponsors to be responsible for its listing in Hong Kong, and was expected to list in Hong Kong in 2024. However, the tea face did not respond to this, and the capital market's confidence in the new tea drink track is no longer as firm as before. With the listing of Tea Baidao and the share price of Nai Xue's tea shrinking from 18.98 yuan at the beginning of the listing to less than 3 yuan, the challenges of the new tea drink track have become increasingly prominent.
From a business perspective, the tea track is already very crowded. Although Changsha is the main market and has achieved some success, it may have missed the opportunity to become a truly national brand.
However, the withdrawal of capital from the ranks of shareholders does not mean that there is no possibility of listing in the future. Capital institutions that have exited the tea and are happy may also obtain investment returns in the form of red chips or VIEs (Variable Interest Entities).
From a financial point of view, turning red chips means that the return on investment exceeds that of the domestic market by investing in overseas listed Chinese companies, while the VIE structure is a form of agreement control, which is mainly used to circumvent the restrictions on the proportion of foreign investment in specific industries under domestic laws and regulations, so as to maximize financing. Both of these approaches offer capital institutions the possibility to reap returns after their future listing.
At present, in the shareholder structure of Chayan Yuese, Changsha Juyingliang Brand Management Company, Changsha Youlan Management Consulting Partnership, and Changsha Zhengzheng Management Consulting Partnership hold 52.84%, 36.58%, and 9.2% of the shares respectively, and the actual controllers are all Lu Liang, the founder of Chayan Yuese, and family members.
In addition, a Hong Kong company named Rose Xanadu HK Limited became a new shareholder of Cha Yan Yue Se in February 2024 with a shareholding ratio of 1.38%.
The company did not give a clear response to the question of why several investment institutions withdrew from Chayan Yuese. However, some industry insiders said that the change in the company's shareholding structure may be related to the company's subsequent listing arrangements in Hong Kong. Some professionals also analyzed that the withdrawal of several investment institutions such as Shunwei Capital, Wuyuan Capital, Source Code Capital, Yuansheng Capital, and Tiantu Investment is likely to be due to the fact that the investment at that time agreed that the listing must be completed at a certain point in time, otherwise it is necessary to repurchase the investor's shares. After so many years, Chayan Yuese has not yet submitted a listing application, which triggered the buyback clause.
In today's fiercely competitive and continuous "volume" scale of the new tea beverage field, Chayan Yuese still adopts a more cautious attitude towards scale expansion and still adheres to the direct sales model.
Statistics from Narrow Door Dining Eye show that up to now, Chayan Yuese has a total of 627 stores across the country, including 403 in Hunan, 117 in Hubei, 55 in Chongqing, and 52 in Jiangsu, distributed in 17 cities. This number of stores is not large compared to other national tea brands, but it also reflects the steadiness and prudence of Chayan Yuese's expansion strategy.
According to the data of the Red Meal Brand Research Institute, the market size of tea drinks in 2022 will be 142.3 billion yuan, with a year-on-year growth rate of only 0.3%. According to the "2022 Tea Beverage Development Report" issued by the China Chain Store Association and Meituan, the number of stores in the mainland tea industry in 2022 will be about 350,000, with an average of 2,571 people per ready-made tea store based on a permanent urban population of 900 million. This data shows that the competition in the new tea market has been extremely fierce.
However, despite the saturation of the market, there is still some growth potential for new tea drinks. According to the "2023 New Tea Drink Research Report" of ready-made tea drinks, after three years of dormancy, the market size of new tea drinks is expected to reach 149.8 billion yuan in 2023, with a growth rate of 44.3%. However, this high growth trend may be difficult to sustain, and the growth rate may drop to 19.7% and 12.4% in 2024 and 2025.
It has become an industry trend for tea brands to pile up IPOs. Red meal big data shows that the size of the mainland tea market has increased from 106.3 billion yuan in 2019 to 136.1 billion yuan in 2022. In 2023, the scale of the mainland tea market is expected to exceed 150 billion yuan. Although the prospects of the tea industry are promising, the competition in the industry is very fierce, and major brands are expanding stores and competing for share. Choosing to go public for financing is an important choice to become the head brand of tea drinks.
However, for Chayan Yuese, going public is not an easy task. On the one hand, it needs to face the pickiness and uncertainty of the capital market; On the other hand, it is also necessary to find a balance between maintaining the brand identity and expanding the scale. It remains to be seen whether Tea Smile can stand out in the fierce market competition and become a leader in the new tea drink track.
epilogue
Rumors of a listing in Hong Kong have resurfaced, and the attitude of the capital market is delicate. The new tea drink track is crowded, can the tea face and color break through the encirclement and become a national brand? In the face of capital withdrawal and listing rumors, Chayan Yuese remained cautious. Can the direct sales model and slow-paced expansion maintain an advantage in the fierce market competition?
The rumors of the listing and the capital game of tea and joy have revealed the challenges and opportunities of the new tea drink track. In the face of the delicate attitude of the capital market and the intensification of competition in the industry, Chayan Yuese needs to consider its listing plan and expansion strategy more carefully. Although sticking to the direct sales model and prudent expansion have maintained the uniqueness and stability of the brand to a certain extent, it is worth pondering whether this strategy is too conservative in such a competitive market and whether it will lead to a missed opportunity for further development.
So, what exactly is the new consumer capital pursuing? From the case of tea and pleasant color, we may be able to get a glimpse. In the current consumption context, in order to gain the favor of capital, new consumer brands not only need to have unique products and services, but also need to have a set of effective business models and sustainable profit paths. The capital change may be a microcosm of the re-evaluation of the brand's future development prospects by new consumer capital.