China’s Tea Brand HeyTea to Add Social Network Function to HeyTea Go
COVID-19 and China
White ceramic mug. Photo by Charles 🇵🇭 on Unsplash

China’s leading tea-drink brand HeyTea (喜茶) sets to add social network function to HeyTea Go, the company’s WeChat mini program that allows users order drinks, HeyTea’s CTO Kelly Chan (陈霈霖) claims, China economics media National Business Daily reports.

HeyTea has a registered user base of 10 million in ten months since HeyTea Go launch in June 2018. HeyTea Go generates 50% of total orders now. The average monthly re-purchasing rate increased triple as of now, Chan says.

Chan is a former Senior Software Engineer in Kingsoft and joined HeyTea in 2017, who believes that not only IT department has the right to wield the power of data collecting and analysis and data will be everywhere.

HeyTea is different from the delivery-focused company Luckin Coffee (Nasdaq: LK)’s strategy. Luckin is gaining traction from its powerful online traffic and that’s why most of the firm’s stores are convenience stores (cheaper, faster and targeting white-collar workers), near CBD but not inside the fancy expensive buildings. HeyTea, however, opens stores in popular and ritzy shopping malls, with bright window to lure passers-by coming over. Thus, Chan claims that even Luckin and HeyTea are trying to replace cashiers with technology/online app, they are out of different business strategies.

Customer loyalty attaches great importance on today’s catering industry, as membership and high-quality operation prove a higher re-purchasing rate.

Technology is shaping how the customer chooses products and inevitably how the company acquires customers. Technology will move into the whole supply chain and that’s when it brings more changes to the catering industry, Chan claims. We’ve seen some trends in fresh-food already and did research on one of the leading foodservice distributors Meicai in China.

HeyTea has four types of shops: HeyTea Lab the flagship store, HeyTea Space, Classic shop and HeyTea Go for to-go tea-drinks, with average space square decreasing respectively. HeyTea follows Starbucks's “third-place” concept to offer customers a perfect tea-drinking experience and also adopts initiatives that fit the trend of new retail happening in today’s China. HeyTea even moved into the coffee market this March.

With its new round of funding coming close, we assume HeyTea will focus more on technology investment and offline store expansion. But what’s the core competitiveness of this kind of popular tea-drink brands like HeyTea and Nayuki? Chan implied his answers already: supply chain reform.

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