The move marks the fourth round of competition for domestic milk tea brands
Chinese milk tea giant Nayuki (02150) (Chinese: 奈雪的茶) planned to invest CNY 1 billion (USD 152.244 million) in the ready-to-drink production line as bottled drink sales surge.
Nayuki didn’t disclose more information about the investment but confirmed it has been developing a bottled drink business. The brand has introduced 7 products of bottled tea since 2021.
The move came as tea drink startups jumped into the bottled beverage market. Many milk tea giants, including Heytea (Chinese: 喜茶), Lelecha (Chinese: 乐乐茶), and MXBC (Chinese: 蜜雪冰城), have started to sell bottled drinks.
The frenzy was due to the huge market size of the bottled drink sector, which also boasts low costs and high profits. According to qianzhan.com, an industry data provider, the domestic soft drink market reached CNY 600 billion, of which bottled tea represented 19.64%.
Compared to tea drinks made on the spot, bottled beverages have a gross profit of 70% to 75%.
This is not the first attempt for milk tea brands to find a new momentum for growth to survive the competition. The fight over the bottled drink market came after the initial frantic opening of stores, the launch of sub-brands, and investment in other brands.