Bawang Chaji is on the left, Chayan Yuese is on the right

Cha Yan Yue Se’s strategic map has expanded again.

Recently, focusing on the new Chinese positioning, following tea and coffee, Cha Yan Yue Se has opened 5 "Day and Night Poetry, Wine and Tea" taverns in Changsha Wuyi Business District, "using the rich flavor of wine to collide with tea to show the boundaries and more possibilities of tea". While Cha Yan Yue Se is constantly trying to integrate tea and wine, Ba Wang Cha Ji is rushing on the road of territory expansion.

At the beginning of this year, the number of Bawang Chaji stores nationwide reached 4,000, of which more than 2,300 were newly opened last year alone, more than twice the total number of stores opened in the previous five years. In the tide of the collective listing of new tea drinks, Bawang Chaji was also reported by Reuters to be listed in the United States. Although the official has not made a clear reply to this, it is certain that in the smoke-filled tea industry, whether it is Cha Yan Yue Se, which is the first mover, or Bawang Cha Ji, which is the latecomer, they are not willing to lag behind and are trying their best to find the possibility of growth.

However, as new Chinese tea drinks, Cha Yan Yue Se has long been more than satisfied with making a cup of "tea", while Ba Wang Cha Ji insists on following the "old path" of most tea drink brands. Ba Wang Cha Ji goes left, Cha Yan Yue Se goes right, but where will they go after the different paths?

From 0 to "1" Cha Yan Yue Se took 10 years to achieve the goal from 1 to 500, and Ba Wang Cha Ji only took half of it to achieve this goal. In 2013, Lv Liang, who had failed in many business ventures, opened a shop with an area of ​​less than 30 square meters on Jiefang West Road in Changsha, named "Cha Yan Yue Se". The store is well designed, featuring Chinese classical elements, and focuses on new Chinese fresh tea. At this time, Changsha citizens who passed by and took a cup of tea did not seem to realize that this seemingly "out of place" ancient style shop would become a landmark in Changsha in a few years, attracting many tourists from other places to take a "fly" to taste it.

Image source: Xiaohongshu

At first, because the store opened in the off-season for tea drinking and the founder lacked experience, Cha Yan Yue Se's business performance was not good. It was not until the following year when the Wuyi shopping district became a core hub that the situation was reversed. Later, Lu Liang mentioned the success of Cha Yan Yue Se and said with emotion that "a good dock can sell even dog shit for money." However, even so, Cha Yan Yue Se's store opening speed was not fast.

In 2015, Cha Yan Yue Se gradually entered other business districts in Changsha. By August 2017, it only had 40 stores in Changsha. Although it was not as fast as its peers in the same period, Cha Yan Yue Se, which took the advantage of early development, had already made a name for itself in the fresh milk tea market and became a well-known tea brand in Changsha, attracting the attention of investors.

In 2018, Cha Yan Yue Se received angel round financing from Tiantu Investment. After that, it successively won financing from well-known institutions such as Shunwei Capital, Source Code Capital, Yuansheng Capital, and 5Y Capital. After the capital injection, Cha Yan Yue Se began to open stores in Changsha on a large scale, and gradually developed into a street scene of "one Cha Yan every ten steps". Cha Yan Yue Se, which was born first, is ready to go, while Ba Wang Cha Ji, which was born a few years later, has already started to run.

In November 2017, Bawang Chaji was established in Kunming. Unlike Cha Yan Yue Se, which expanded steadily and conservatively, Bawang Chaji was much more radical. In just one year, Bawang Chaji opened 50 stores in Kunming. One year after opening, Bawang Chaji began to move out of Kunming and set up stores in Dali, Chengdu, Haikou, Guangzhou and other southwest and southern regions.

In 2021, Bawang Chaji already has 425 stores. That year, after receiving two rounds of financing of more than 300 million yuan from XVC, Fosun and Hecongbi Qiushi, Bawang Chaji's market valuation reached 3 billion yuan. After the financing was completed, Bawang Chaji, with a large amount of funds, entered the wilderness of large-scale expansion. Not only did the company move its headquarters from Yunnan to Chengdu in December 2021, its founder Zhang Junjie also set a bold ambition to open 1,000 stores.

In January 2023, the number of Bawang Chaji stores exceeded 1,000, and by the end of the year, the number of stores reached more than 3,000. In just 6 years, Bawang Chaji has become one of the top ten domestic freshly brewed tea shops in terms of market share, and in December last year, it entered Changsha, the base of Cha Yan Yue Se, and faced off head-on with the latter.

At the same time, since 2020, Cha Yan Yue Se has also begun to expand outward, and has deployed in cities such as Wuhan and Chongqing.

Although different strategies are used to expand their territory, the survival rule is the same - "fresh milk + tea". Cha Yan Yue Se is positioned as "healthy, fresh and delicious". It insists on using fresh milk and freshly brewed tea leaves.

To ensure product quality, the raw materials used are imported Ceylon black tea, American walnut pieces, and New Zealand Anchor whipped cream. Most importantly, Cha Yan Yue Se always reserves the "permanent right to claim a cup of fresh tea" for its customers.

Bawang Chaji, which is positioned as "original leaf fresh milk tea", is also pure tea + fresh milk that pursues health, and almost no other ingredients are added. This can also be seen from the product lines of the two brands. DT Business Observation previously reported that among the top five best-selling products of the two brands, the tea base alone "collides" twice. Of course, the similarities between the two brands are far more than that.

For example, in terms of brand positioning and style, both Cha Yan Yue Se and Ba Wang Cha Ji use "Chinese style" as their logo; in terms of product names, the two are also exactly the same; and in terms of marketing strategy, just like Cha Yan Yue Se ties its brand to Changsha, Ba Wang Cha Ji also focused on the local market in Yunnan in its early days. Therefore, some industry insiders commented that "Ba Wang Cha Ji is crossing the river by feeling the way of Cha Yan Yue Se."

Image source: Xiaohongshu

However, in the later period, both the development speed and business strategy showed that the duplication rates of the two brands decreased. Firstly, in terms of expansion strategy, although Cha Yan Yue Se has now expanded beyond Changsha and has set up shop in Wuhan, Chongqing and other regions, it has always adhered to the direct sales model, and all raw materials are regularly transported from the Changsha main warehouse to other provinces.

Bawang Cha Ji adopts the "direct sales + franchise" model, which is more conducive to large-scale expansion. According to the information previously disclosed by the brand manager to the media, the proportion of franchise stores of Bawang Cha Ji is higher than that of direct stores. In terms of marketing, co-branding, celebrity endorsements, packaging changes, short dramas and other fancy marketing are commonplace for Bawang Cha Ji. In terms of packaging design, from LV, Chanel to Gucci and Dior, every luxury brand has made some contribution to the bags and cups of Bawang Cha Ji.

In contrast, Cha Yan Yue Se is much more conservative, with few joint ventures and less activity on social platforms than Ba ​​Wang Cha Ji. On Xiaohongshu, Ba Wang Cha Ji has more than 1,600 business notes, while Cha Yan Yue Se has only more than 100.

In terms of supply chain, Cha Yan Yue Se does not have its own tea gardens, and its raw materials come from all over the world. The complexity of the supply chain not only imposes stricter requirements on quality inspection and logistics, but also creates cost pressure, which is particularly evident when going beyond the two lakes. On the other hand, Ba Wang Cha Ji not only simplifies the supply chain, but also operates 2,700 acres of tea gardens in Yunnan and Anxi, and has built tea processing plants in Lihu Town, Chaoshan, and Jiangmen City, which greatly reduces the difficulty of the supply chain. It only needs to manage milk and packaging materials.

According to Zhang Junjie, the intermediate processing and blending of tea can be standardized, and at least 90% stability can be achieved. This further promotes the standardized operation of the product. It is understood that the average efficiency of a cup of milk tea is 20 seconds, while Bawang Tea Lady's Boya Juexian can do it in 10 seconds.

During the Spring Festival this year, the Poyang store of Bawang Chaji first broke the record by making 2,400 cups a day, and then broke its own record by setting a new record of 2,500 cups. Standardized and assembly-line-style operations have made Boya Juexian a big single product with sales of 100 million cups a year. The last one was Heytea's succulent grapes. However, six years after its establishment, the founder of Chayan Yuese is still worried about production issues. The difference between the two is obvious.

Many people believe that Cha Yan Yue Se missed the opportunity to develop on a large scale, while Ba Wang Cha Ji just seized this opportunity. However, even if Ba Wang Cha Ji has gone nationwide and created a hit product, it may not be free of "anxiety".

Zhang Junjie once said, "Bawang Tea Princess never builds factories, she only focuses on brands and users"; he also said, "I don't make fruit tea, because I can't beat them and I can't afford to waste time."

However, in November last year, Bawang Chaji and Cha Baidao jointly established a supply chain; in its menus in Yunnan and Guangdong, it quietly launched a series of "energizing light fruit teas" such as lemon tea and grape fruit tea. Therefore, there is no right or wrong between Bawang Chaji and Cha Yan Yue Se, it is just a difference in the growth paths of the companies and the business philosophy of the founders and teams.

Daily People once reported that Zhang Junjie insisted that "organizational and human resource reserves come before store expansion capabilities." Among the team of 300 to 400 people in the back-end of Bawang Tea Princess, many are talents he recruited from the 3C and IT fields. For example, CFO Wan Hui was the former deputy director of global finance at Huawei, and supply chain manager Fu Xi was once the supply chain director of Heytea.

On the contrary, Cha Yan Yue Se did not slowly build a backend team until 2018-2019, introduce professional forces, and only started to develop an information management system in 2020. This undoubtedly slowed down the expansion of Cha Yan Yue Se. In this regard, Lu Liang once admitted that "the delay in leaving Changsha was due to insufficient management capabilities."

In addition, the differences in the team's business philosophy are also reflected in the differences in growth strategies. Although Bawang Chaji is trying out fruit tea, its current growth path is still to open more stores and expand on a large scale.

On the contrary, Cha Yan Yue Se is constantly deepening its product line and expanding consumption scenarios. For example, the recently opened "Day and Night Poetry, Wine and Tea" tavern, although its Yuanyang Coffee and Goodman Lemon have launched alcoholic products before, the "Day and Night Poetry, Wine and Tea" tavern still broadened the consumption scenarios. Based on this, Cha Yan Yue Se is also combining tea and wine in order to develop new product lines. So, as the Daily People said, "Ba Wang Cha Ji is a good business model, and Cha Yan Yue Se is a good story.

However, to a certain extent, whether it is the store expansion of Bawang Chaji or the opening of new brands and products of Cha Yan Yue Se, they are all extensional growth. When the tea beverage industry reaches the end, it must need internal growth, competing with the core competitiveness of enterprises in production efficiency and management. This is worth our slow anticipation.

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References:

"The industrial maniac who produces a cup in 10 seconds has turned milk tea into an assembly line"

"The money that Cha Yan Yue Se didn't make, Ba Wang Cha Ji made"

"Over 2,000 stores a year, Bawang Tea Princess has no secrets"

"Bawang Tea Princess, Crossing the River with Tea Yan Yue Se"

"Cha Yan Yue Se is caught in a dilemma and is overtaken by Ba Wang Cha Ji"