MoonFox Analysis | The era of myriad stores of new tea-based drink has arrived - The survival game for industry leaders continues

SHENZHEN, China, July 9, 2024

SHENZHEN, China, July 9, 2024 /PRNewswire/ -- In the rapidly changing consumer market, the new tea-based drink industry has quickly risen with its unique charm, becoming the new favorite among young consumers. With the sharp increase in the number of stores, new tea-based drink brands have entered the "era of myriad stores". According to data updated on May 8 by canyandata.com, the total number of milk tea-based drink stores nationwide has reached 418 thousand, with 168 thousand new stores opened in the past year. It is projected that by 2025, the market size of the national milk tea-based drink will rise to US $11 billion. However, behind this prosperity lies the intensifying internal competition within the industry. Compared to May last year, the net increase in store numbers this May was less than 30,000, indicating that over the past year, over 100,000 milk tea-based drink stores nationwide have closed. The survival game between brands has become increasingly fierce in this non-violent war. How to survive and thrive in this environment has become a challenge that every brand must face.

Monthly total changes in milk tea-based drink stores nationwide (unit: ten thousand)

Time	Number of stores
May 2023	39.5 Anzeige Aktie im Fokus Libero überrascht! Libero Copper & Gold Corp. 0,218 € +9,00% Bevorstehende News könnten diesen Kupfer-Explorer ins große Rampenlicht katapultieren Mehr zur Aktie » Kurse Aurora Mobile Ltd ADR 7,13 $ +11,8%
Jun 2023	38.1
Jul 2023	38.7
Aug 2023	38.4
Sept 2023	39.1
Oct 2023	41.1
Nov 2023	41.1
Dec 2023	41.0
Jan 2024	41.3
Feb 2024	40.6
Mar 2024	40.3
Apr 2024	41.8

Data source: www.canyandata.com; Data cycle: May 2023 to April 2024

National milk tea-based drink market size changes (unit: CNY hundred million)

Data source: Guoyuan Securities, www.canyandata.com; The data for 2021-2025 are estimated values

I. Competing in UV, focusing on the markets in lower-tier cities, and innovating gameplay, players in the new tea-based drink market have presented a comprehensive competitive stance

Data monitoring by MoonFox iApp shows that among the current mainstream tea-based drink applet in China, Mixue Ice Cream & Tea has consistently maintained a leading position in user base over the past year. In April this year, it recorded a MAU of 38.44 million, significantly outperforming other tea-based drink brands with a year-on-year growth of 77.4%. Meanwhile, competition for UV among second-tier tea-based drink brands is even fiercer. HEYTEA, Good Me, and ChaPanda have gradually surged ahead in the "battle for customers" in the tea-based drink industry. In April 2024, HEYTEA's applet had an active user base of 19.437 million, Good Me had 16.278 million, and ChaPanda had 14.804 million, with year-on-year growth rates of 241.2%, 54.9%, and 323.9% respectively. Their growth momentum is remarkable. In contrast, NAIXUE and ALittle Tea in the third tier recorded year-on-year growth rates of 0.4% and 26.5% respectively. It appears that top-tier and second-tier tea-based drink brands have already initiated their powerful UV siphoning effects.

Changes in MAU of mainstream tea-based drink applet (unit: ten thousand)

Data source: MoonFox iApp; Data cycle: April 2023 to April 2024

As first-tier city markets gradually saturate, tea-based drink brands are beginning to realize that simply pursuing user base and UV growth is no longer the only way forward. A strategy shift towards "focusing on the markets in lower-tier cities" has quietly emerged. Tea-based drink brands are beginning to turn their attention to the broader markets of second-tier and lower-tier cities, attempting to unearth new consumption potential through market penetration strategies. Taking top-tier tea-based drink as an example, data from MoonFox iApp shows that in April this year, the user proportions of Mixue Ice Cream & Tea, HEYTEA, and Good Me applet in second-tier and lower-tier cities have all increased compared to six months ago. For each brand, as they continue to expand into county-level cities, the incremental markets in lower-tier cities that brought UV dividends in the past have now transformed into another battlefield of intense UV competition.

City level distribution of Mixue Ice Cream & Tea applet users

City level	Oct 2023	Apr 2024
First-tier cities	8.56 %	7.65 %
New first-tier cities	23.52 %	22.62 %
Second-tier cities	23.25 %	22.74 %
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