As China is recovering from the Coronavirus and returning to work, Heytea joins Freshhema and launches the ‘Youth League’ pre-sale event.
On March 13, according to information from Heytea (in Chinese), it began to expand new channels to welcome people back to work. The new channels include becoming business partners with China's fresh food delivery star Freshhema and launching on the Tmall platform (sometimes known as one of 'China's Amazons Fresh,' along with Taobao). It will not only sell and display various peripheral products but also launch a series of new products such as fruit juice, yogurt and biscuits.
HeyTea, maker of newfangled, photogenic and creative variations on traditional tea drinks, was established in 2012, erupted as a famous brand in 2017 and has since expanded its business map in China to 22 cities. Famous for its milky, foamy products at first it has explored other drinks, such as fruit tea. Adding to the selfie-friendly design are the outlets' 'covers,' styled as LAB shop, black gold shop, pink theme shop, daydream DP shop and so on. All this was calculated to attract young customers – and it succeeded.
After Coronavirus spread all over China, this welcomed milk tea brand was affected a lot, as with other business players in the restaurant industry. As a main participant in the milk tea area, Heytea has over 400 stores, 10,000 employees and three times the floor area of normal milk tea stores. With labor costs consequently much higher, Heytea had to find ways during this special period to save itself.
The brand focused on 'No touch delivery,' which means customers ordering online through the Wechat mini program or Meituan, and the setting up of cabinets to take orders or let delivery drivers put orders out to the specified locations. The whole process doesn't need to involve any contact, and online activity became their main focus, including Internet marketing. HeyTea regularly posted things like a 'new breakfast toast' on Weibo and taught users how to do milk tea at home. On March 12, it released an online video to communicate with fans on how to share new products and to show newly launched stores.
During the coronavirus epidemic, sales of hand-made milk tea and instant milk tea on Taobao increased significantly. One business owner said (in Chinese), "Sales in February increased 10-fold. The previous month's sales were around 200,000 yuan, which exceeded 2 million yuan this month." But since the decline of the Coronavirus, orders haven't skyrocketed either despite the waiting time being only 20 minutes. The return to work made the milk tea industry warm up but didn't help it reach the expected positive situation.
Apart from the big players and instant milk tea companies, some small milk tea stores were struggling before this epidemic stopped, with many likely to sink. In recent years, the milk tea industry in China experienced a golden period, and investors rushed in to create unicorns like Heytea's competitor Naixuecha. Nowadays, these companies' products are pretty similar, and customers can find milk form or fresh fruit tea just about anywhere. These milk tea players will need to put a lot of effort to retain customers from going forward.