‘Either you become a super platform or you become a super brand. Products, supply chains and operations are all designed to serve the brand.’
The concept of product category is becoming blurred in consumer markets. Brands, which are built through consumer perceptions, expectations and experiences, have been a formidable driving force behind China’s consumption upgrade. These days, no one will be surprised to see a candy vendor selling candy-scented perfume or a coffee brand providing spicy noodles. Brand awareness is awakened in this country. Technology, consumers' purchasing power as well as their shopping habits have redefined a brand's capability.
HeyTea (喜茶), a leading new-style tea drink brand in China, is no longer satisfied at being hemmed in by its bubble tea business and appears poised to push the boundary. On June 13, HeyTea’s brand owner, Shenzhen Meixixi Catering Management Co., Ltd. (深圳美西西餐饮管理有限公司), established a wholly-owned subsidiary Kunming Meixing Technology Co., Ltd. According to its registration information, the new company's business spans computer software design and hardware technology development, technical services, toy development, animation design and so on
Nie Yunchen (聂云宸), founder of HeyTea, said the company had set up an IT department last year, with the goal of assisting the upgrade of physical stores as well as integrating its online and offline businesses. Take its WeChat mini-program for example. After HeyTea launched the online store that enables order placement and delivery service via mobile phone, the operation efficiency has greatly improved as costs of hardware and equipment management have dwindled. Moreover, the company could acquire user data from the mini-program, analyzing consumers’ preference to assist product development and to predict sales in each store. The accumulated data could lower the procurement cost and provide valuable information in site selection.
In addition to technology development, the newly established tech subsidiary of HeyTea will also take care of toy and animation design, developing more sidelines for the brand. In 2018, HeyTea had unveiled hundreds of branded merchandise covering cosmetics, apparel and home decor. The products, not all manufactured by itself, were the results of cooperation with other brands that match its brand essence.
For HeyTea, the co-branded products are never a major revenue generator; their most important role is to strengthen the brand image.
“Brand is the biggest ‘moat’ for HeyTea," said Nie. "It’s not up to us, but the market, to apply this strategy -- either you become a super platform or you become a super brand. Products, supply chains and operations are all designed to serve the brand."
Since the second half of 2018, HeyTea has frequently released sidelines. Some are seasonal delicacies. Examples include the moon cakes consumed on Mid-Autumn Festival and zong zi, a glutinous rice dumpling usually eaten to mark the Dragon Boat Festival. Some are released along with related new products. The debut of new drinks is often timed with the unveiling of accessories. For instance, the Bobo bag and the mobile phone case were launched around the same time as the new drink "Milk Tea Bobo Ice." Likewise, the Hong Kong-style bags and vintage cups were sold on the occasion of debuting "HeyTea Coffee." Besides new product, in order to quickly establish its brand image when entering a new city, HeyTea would also develop limited editions of sidelines to attract new consumers.
The high-frequency consumption of bubble tea and its medium price range make this market even more competitive. New entrants could gain momentum quickly while competitors are also eager to give a shot at crossover campaigns and activities.
Amid such fierce competition, it is the desire of every retail company to use the brand to differentiate itself from competitors to occupy the user's mind, improve stickiness and increase the repurchase rate. HeyTea, Luckin Coffee and several retail companies in China are early examples of this awakening of branding awareness. With product quality as the premise, companies are well-equipped with technology to create brand influence in a better and faster way
Let companies brand their way to success.