Luk's new brand failed to replicate Cudi.
Recently, the first store opened by Cudi Coffee's tea brand Tea Cat in Guangzhou was officially closed. The reporter of Nandu Bay Finance Society verified and learned that including this store, recently, there are at least 25 stores closed by Tea Cat across the country, and the closure rate is as high as 22.32%.
Tea Cat officially opened its first store in the country in February this year, and many of these closed stores only opened in April and May this year, and the business hours are only four or five months. Some tea cat franchisees revealed to the reporter of Nandu Bay Finance Society that the brand effect of tea cats is not strong, and some franchisees bluntly said, "If you lose money, you will close (the store)".
The first store of Tea Cat in Guangzhou was closed and only opened for 5 months
Tea Cat is a newly launched tea brand brewing by Cudi in November 2023, and the first test store was launched in Pingnan County, Ningde City, Fujian Province that month. According to the official statement, its first official store will open in Beijing in February 2024. Tea Cat focuses on the healthy milk tea track, focusing on raw leaf fresh milk tea, covering pure tea, fresh fruit tea and other products.
The first store of Chamao in Guangzhou was opened in the Kecun business district of Haizhu District, which had been fenced and renovated as early as the end of last year, and the opening time was in April this year. On September 6, a reporter from Nandu Bay Finance Society visited the scene and saw that the signboard of the tea cat store had been removed, and the clerk of the Cudi store next door revealed that the store was closed at the end of August. There are also merchants nearby who said that the tea cat has been closed for a few days, and it was officially withdrawn on September 5.
The Chamao Kecun store is next to the brother brand Cudi, and the reporter of Nandu Bay Finance Society learned that these two stores are operated by a franchisee. The franchisee told the reporter of Nandu Bay Finance Agency that the reason for closing the tea cat was because he did not want to operate the brand anymore, and he would not change the address to operate the tea cat again.
Prior to this, at 5 p.m. on July 8, a reporter from Nandu Bay Finance Society visited this store, and no one ordered at the tea cat store at that time. The store manager of Tea Cat told reporters that the store is still "very busy", with a daily output of two or three thousand cups, "but compared with Cudi next door, more people will still choose Cudi." The store manager, who manages both Tea Cat and Cudi, revealed that Cudi dispenses twice as many cups as Tea Cat every day, almost five or six thousand cups.
The street where the tea cat village store is located is densely populated with tea shops, and according to the reporter's statistics, there are a total of 8 tea shops. In addition, there are at least 2 coffee shops and 1 Thai bubble tea shop, there is a lucky coffee directly opposite the tea cat, and there is also a tea Baidao within 50 meters diagonally.
In addition to the Kecun store, Chamao also has two stores in Guangzhou. At 2 p.m. on July 8, the reporter visited the tea cat flower city store, the store has a lot of customer flow, more than a dozen stools placed at the door are full of waiting customers, to about 3 o'clock in the afternoon, the store has reached 781 since the bill of lading. During this time, a number of delivery workers picked up the drinks.
During the reporter's visit, the tea cat is opening the "one yuan tea cat" activity, new registered users can get a tea cat 1 yuan drink coupon, old users can also get a tea cat 1 yuan drink coupon (more invitations, more gets), free to drink after any consumption (limited to 100 pieces per day). This event is also held at the same time.
Huachenghui store is a direct store of tea cat, on September 12, the reporter asked the clerk and learned that the store has no intention of closing for the time being.
At least 25 stores have been closed across the country, and some franchisees say that tea cats are sold cheaply and cannot make money
The closure of Tea Cat in Guangzhou is not an isolated case. The reporter of Nandu Bay Finance Society learned from the official ordering applet of Tea Cat that on September 12, 24 stores, including the Kecun store, displayed "Today's store is closed" or "closed for upgrade". In addition, on Dianping.com, there are at least 4 tea cat stores that show normal business without a trace on the mini program.
On September 12, a reporter from Nandu Bay Finance Society learned by calling stores, shopping malls and surrounding merchants that 25 of these stores with abnormal business conditions have been closed recently. In addition, 2 stores were temporarily closed due to temporary staff going out, and 1 store in Chengdu could not verify the operation status, the phone number of the mall could not be connected, and the surrounding merchants did not know the existence of the store.
Tea Cat only opened its first store in the country in February this year, and many of these closed stores only opened in April and May, and the business hours are only four or five months. As of September 12, there are 108 stores on the official TeaCat mini program. In addition, there are at least 4 stores that are not included in the Mini Program, and based on this data, their store closure rate has reached 22.32%.
The owner of a tea cat store in Jiangmen, Guangdong, told a reporter from Nandu Bay Finance Agency that his tea cat store opened in May this year, and the store is currently being renovated and upgraded, ready to be replaced with the Cudi brand. "It was originally a fast store, and then it will be changed to a Cudi standard store, mainly because the tea cat is not very easy to do, the sales are not large, and the milk tea is not very easy to do.
There is a tea cat store in Maoming that has been closed for about a month, and this store also opened around May, and the store staff revealed, "If you can't do it, you won't open it, and if you sell it cheaply and the cost is high, you won't make money." Another tea cat store in Xiangtan also opened in May this year and is preparing to adjust to other brands.
A store in Chongqing, which opened in April this year, is now closed, and the clerk revealed that "it was closed because of a loss." A store in Guiyang was also opened in April, and it has been closed for more than a month, and the franchisee revealed that if the tea cat can be well-known next, it will consider reopening a tea cat. "The brand effect is not strong enough, and many people don't know what the tea cat does." Now it has changed its location to Kaicudi.
In response to the specific operation of the tea cat, the reporter of Nandu Bay Finance Society contacted the franchisee to understand the situation, but as of press time, no further reply was obtained.
The price of drinks is basically 9.9 yuan, and the tea cat continues Cudi's pricing strategy
At the beginning of its establishment, the main drink of Chamao was mainly raw leaf light milk tea, and human-machine collaboration was a major feature of its stores, which were equipped with a human-machine collaboration system in the store, and the robot and store staff served meals together. At the same time, Tea Cat continues Cudi's pricing strategy and the style of keen promotion, and often launches low-price promotional activities such as 9.9 yuan and buy one get one free.
The reporter of Nandu Bay Finance Society learned from the tea cat ordering applet that the current price of tea cat's drinks is basically 9.9 yuan. At the same time, according to the introduction of the clerk, Tea Cat will also launch more preferential activities from time to time, including the aforementioned "One Yuan Tea Cat", new users will receive a 1 yuan all-you-can-drink coupon for Tea Cat, and free drinking activities at the check-in store after any consumption.
The product line of the tea cat has also been significantly adjusted, at the beginning of its main light milk tea, light milk tea ingredients are simple, so it can be operated more with the help of robots. At present, its product line covers fruit tea, light milk tea and pure tea, and when the reporter of Nandu Bay Finance Society visited the store, he noticed that there were robots in the Guangzhou Kecun store to assist in the meal, while the Huachenghui store mainly relied on manual operation by employees.
But it is not easy to rely on low prices to fight your way out of the tea track. Compared with the coffee market, the competition in the tea field, which Cudi only entered this year, has long been white-hot. At present, including Cudi, there are only 6 coffee brands with more than 1,000 stores in China, and only Cudi and Lucky Coffee have product prices of less than 10 yuan. In addition, Luckin has also launched a long-term coffee drinking activity of 9.9 yuan a week from April 2023, but this preferential activity began to shrink in February this year. In the tea market, the top 10 brands in the industry have more than 4,000 stores, including more than 30,000 stores in Mixue Bingcheng and nearly 10,000 stores in Gu Ming. Among the top 10 brands, the drinks of Mixue Bingcheng and Tianlala are basically under 10 yuan, and it may be difficult for Chamao to take the cake from its hands based on the price alone.
Wang Zhendong, chairman of Shanghai Brown Yue Investment Management Co., Ltd., once told a reporter from Nandu Bay Finance Society that the low-price strategy adopted by Cudi on coffee is difficult to work on the tea track. The price system of tea is formed from the bottom up, and the current price system has been formed by tea brands in continuous upgrading, while coffee is just the opposite. Many coffee brands start from first-tier cities, and then slowly radiate to surrounding cities and lower-tier cities, and after meeting the consumer demand, the price slowly goes down, thus expanding the consumer group. Many tea brands develop from lower-tier cities first, and then slowly penetrate into first-tier cities.
Ge Xiantong, founder of Jingcai Capital, told the reporter of Nandu Bay Finance Society that the management team of Cudi still has a good understanding of the coffee industry and has more coffee industry resources. However, it is not familiar with the field of tea drinks, and the competition in the field of tea drinks is more intense.
Nandu Bay Finance Society has previously reported that since the beginning of this year, the store closure rate of many tea brands has also increased compared with last year.
Tea Cat Fails to Replicate Cudi Will It Be the Next Fun Noodles?
When launching the Tea Cat brand, in November 2023, Li Yingbo, chief strategy officer of Cudi Coffee, said that Cudi has established Dangtu East China Supply Chain Base and Wuhu International Supply Chain Base, with a total planned area of 360,000 square meters, which will be put into operation in early 2024. The launch of Tea Cat will give full play to the synergistic effect of the company's supply chain, intelligence, operation system and customer groups.
However, with the blessing of Cudi's supply chain, Tea Cat has not been able to replicate Cudi's rapid expansion. Since the opening of the first store in the country in February this year, as of September 12, the number of tea cats in the country is only about 112, as a comparison, on October 22, 2022, Cudi's first store in the country opened in Fuzhou, Fujian, and in less than 5 months, Cudi opened its 1,000th store, and at the end of August this year, its number of stores reached 7,500.
On September 13, the manager of the investment promotion department told the reporter of Nandu Bay Finance Society that at present, Tea Cat and Cudi are using the joint operation cooperation model, and the investment cost of Cudi is about 250,000 to 350,000 yuan according to the size of the area, and the cost mainly includes counters, cabinets, advertising equipment and deposits. The investment cost of tea cat is about 220,000 to 300,000 yuan. The manager said that Tea Cat is a new brand and is still gradually opening a store.
Although the difference in the amount of investment is not large, from the perspective of opening stores, the investment situation of tea cat is obviously not as good as that of Cudi. In this regard, Ge Xiantong told reporters that the franchisee's confidence in Cudi and Tea Cat is different, and many people who joined Cudi before really believed that Lu Zhengyao could create another Luckin.
At the same time as the tea cat slowly opened the store, Cudi was riveting enough to open the store, which lowered the threshold for opening the store and launched the convenient store that is, the store in the store model, this store type only needs less than 2 square meters of counter, and the initial start-up capital is only 60,000 yuan. Cudi has publicly revealed that it will open 50,000 convenience stores within 3 years, and "there will be Cudi within 100 meters".
As the founder of Cudi, Lu Zhengyao has started entrepreneurship again and again after being kicked out by Luckin, and the noodle restaurant brand "Quxiao Noodles" and the pre-made food brand Tongue Hero have high store opening goals. In 2021, "Qu Xiao Mian" was founded, and the first batch of stores was targeted to 106, but this goal was not completed for a long time, and later "Qu Xiao Mian" was renamed "Qu Bayu", and Qu Bayu finally fell in 2022. After the popularity of prefabricated dishes, Lu Zhengyao entered the game with a high profile and founded the "Tip of the Tongue Hero" project. The tip of the tongue hero is also high-minded, and soon after its establishment, it announced that it had signed nearly 3,000 franchisees, and also signed a contract with star Liu Yiwei, and placed a large number of advertisements on social media and office elevators. However, in less than 9 months, its offline stores ushered in a wave of large-scale store closures.
Returning to the familiar coffee track, Cudi is no longer "short-lived", and it is also the largest brand that Lu Zhengyao has done after Luckin. Backed by Cudi, Lu Zhengyao seems to have greater confidence, and 397 days after the opening of Cudi's first store, he "killed" into the tea market. This time, Lu Zhengyao did not disclose the goal of opening a store for Tea Cat, but before Tea Cat ushered in a large-scale expansion, many stores closed after only four or five months of opening, and the future direction became more uncertain.
In response to the large-scale closure of the tea cat and the future operation plan, on September 12, the reporter of Nandu Bay Finance Society asked the relevant person in charge of Cudi about the situation, but as of press time, no reply has been received.
Written by: Nandu · Bay Finance Agency reporter Zhan Danqing intern Chen Menger