Nayuki Takes It Slow When Luring Critic Customers
COVID-19 and China
A Nayuki shop. PHOTO: Credit to Nayuki

As the first one to launch the model of Tea with Soft Bread in China’s new tea beverage market, Naixue’s Tea(奈雪的茶) has harvested not only a bunch of adherents but also followers, which started selling tea with something like bread or cookie, for example, Heytea. It's difficult to keep its products irreplaceable for Naixue’s Tea, and even anyone in the new bubble tea industry. The hard thing lies here: hiring a professional baking cook is never difficult as long as you offer fine payment, how to keep persistent innovation and guarantee production quality.

Naixue’s Tea tends to be fast rather than slow when it comes to fundraising, while in the inverse way when luring customers. PENG Xin(彭心), founder of the company, claimed that she prefer investors who skipped fast expansion process, operation rights, distinct initial public offerings plan and Valuation Adjustment Mechanism, also known as Bet-on Agreement, which is a common protocol between private equity investor and the invested company agreeing upon some conditions (mostly the future financial performance indicator of the invested companies) in an interview with National Business Daily. Tiantu Capital (天图资本), a fund focusing on consumer goods, has invested in the company twice, the latest one has pushed the valuation to CNY 6 billion (USD 900 million) in March 2018. 

The company insists on being isolated from investors and diving into the careers. Innovations can be duplicated but the first one can build brand name. Production quality control, however, is a challenge and this is where Naixue’s Tea and Heytea(喜茶)’s core competitive edge on. 

Start from the supply chain, China’s tea has a long history and so does the industry, but it’s lack of standardized and mechanized processes and procedures. Companies must take care of each part including tea plants, tea factory, storage and logistics management. Naixue’s Tea has appointed some of main plant providing its core tea material and even opened a factory to produce its most popular tea material. This three-year-old startup has opened 150 franchise shops in Chin’s 21 main cities and the number is about to hit 200 before Spring Festival this lunar year. How to make sure every sip is the same in the 200 shops? It’s the final answer to the core competitive edge questions. Leadership and employees training contribute to the answer, to bring the perfect production, service and experience together.

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