Page 338 - 2022 White Paper on the Business Environment in China
P. 338
2 White Paper on the Business Environment in China
in March 2021 purchased an average of two or LeadLeo. Two or three years after 2021, a large
more cups of the beverage at brick-and-mortar number of retailers are expected to open new milk
stores and 1.5 more cups from online platforms tea stores, as the number of such stores currently
compared with the number in February, according in existence is far from reaching a saturation point
to the Alipay Spring Milk Tea Report. Hong Kong in the country. Over the long term, the business
shares the mainland's milk tea craze. And the growth potential of a milk tea store depends on its
comeback of milk tea in the special administrative core competence rather than some eye-catching
region tells a bigger story, as it is part and parcel of short-term gimmicks. Core competence relies
the city's 7.9% year-on-year increase in GDP in the on stable and standardized product quality, the
first quarter. Economic growth was up 5.4% from capability to research and develop new products,
the previous quarter. "Our business had gone up and the strength of comprehensive supply chains,
by some 30% in the first quarter of 2021, compared LeadLeo added. Opening a milk tea store requires
to the fourth quarter of 2020," said Daniel Wong, relatively low upfront costs and it can generate
marketing manager of Chicha San Chen, a Taiwan high gross profits. It can quite readily help
milk-tea brand that opened its first store in the companies create extra revenue, given the strong
SAR in October 2019. He attributed the growth demand for milk tea among young consumers in
to the early advent of summer, lower retail store China. That's a key reason why many non-beverage
rentals, and improved consumer sentiment as enterprises have expanded their business to the
the pandemic tapers off. "Young people are less beverage sector. Most consumers of milk tea
worried about COVID-19 now," Wong said. "Night- in China are females born after 1990. The age
time consumption is rising as Hong Kong people group is willing to purchase new types of foods
are more willing to stay out late for shopping and drinks that focus on healthy living, low sugar
compared to the first quarter in 2021," he said, and products that improve physical appearance.
adding that consumers linger on the streets much Still, for companies whose main business is not
longer compared with a few months ago (Xinlan). beverage retail, their operations of milk tea stores
will be limited to their original brand positioning.
As mentioned, milk tea has become somewhat Consumers are unlikely to have a deep impression
of a national obsession and a booming business of their milk tea business. As of September 2020,
in China. Its popularity has fueled many retailers China had 340,000 milk tea stores, including about
whose main activities lie elsewhere to open milk 3,200 high-end shops, according to a research
tea stores to generate extra revenue and attract report by Zhongtai Securities. Among total milk tea
more customers. China Post Drugstore, a branch of plays, more than 50 brands received funding from
China Post Hengtai Pharmaceutical Co Ltd — itself investors, and investment has often been made
a subsidiary of China Post — has opened a milk since 2016, according to Qichacha, a company that
tea store offering drinks and healthcare services tracks business registrations (Wenqian, Milk Tea
in downtown Fuzhou, Fujian province. Named Post Taking Domestic Market by Storm).
Oxygen of Tea, the store has recently gone viral
online. Many people got to know the brand through Beverages are not only spurred in growth as
social media sites like Weibo and short video app luxury items, but some have also grown as a
Douyin, as well as stamp collecting groups, as result of the new fitness incentives in China. Some
they are naturally curious about all things postal. customers cite the increase in exercise programs as
Opened late 2020, Post Oxygen of Tea provides incentivizing them to purchase healthier beverage
various drinks including traditional teas, or teas options, such as mineral water. There is a rising
flavored with milk, fruits and other varieties. The number of health-conscious younger Chinese
beverages range from 7 RMB (US$1.08) to more than consumers who have contributed to the rapid
20 RMB each. In 2020, the number of consumers growth of the carbonated water sector between
who bought bubble teas and related potables 2019 and 2021. Mintel Group Ltd's research on
exceeded 340 million, and sales exceeded 100 sparkling drinks released in September 2020
billion RMB. With a constant consumption upgrade said sparkling beverages proved their popularity
trend in China, annual sales are expected to hit 160 through the surge in sales of sparkling water.
billion RMB between 2021 and 2025, according to Their wide range of applications will allow them
338
in March 2021 purchased an average of two or LeadLeo. Two or three years after 2021, a large
more cups of the beverage at brick-and-mortar number of retailers are expected to open new milk
stores and 1.5 more cups from online platforms tea stores, as the number of such stores currently
compared with the number in February, according in existence is far from reaching a saturation point
to the Alipay Spring Milk Tea Report. Hong Kong in the country. Over the long term, the business
shares the mainland's milk tea craze. And the growth potential of a milk tea store depends on its
comeback of milk tea in the special administrative core competence rather than some eye-catching
region tells a bigger story, as it is part and parcel of short-term gimmicks. Core competence relies
the city's 7.9% year-on-year increase in GDP in the on stable and standardized product quality, the
first quarter. Economic growth was up 5.4% from capability to research and develop new products,
the previous quarter. "Our business had gone up and the strength of comprehensive supply chains,
by some 30% in the first quarter of 2021, compared LeadLeo added. Opening a milk tea store requires
to the fourth quarter of 2020," said Daniel Wong, relatively low upfront costs and it can generate
marketing manager of Chicha San Chen, a Taiwan high gross profits. It can quite readily help
milk-tea brand that opened its first store in the companies create extra revenue, given the strong
SAR in October 2019. He attributed the growth demand for milk tea among young consumers in
to the early advent of summer, lower retail store China. That's a key reason why many non-beverage
rentals, and improved consumer sentiment as enterprises have expanded their business to the
the pandemic tapers off. "Young people are less beverage sector. Most consumers of milk tea
worried about COVID-19 now," Wong said. "Night- in China are females born after 1990. The age
time consumption is rising as Hong Kong people group is willing to purchase new types of foods
are more willing to stay out late for shopping and drinks that focus on healthy living, low sugar
compared to the first quarter in 2021," he said, and products that improve physical appearance.
adding that consumers linger on the streets much Still, for companies whose main business is not
longer compared with a few months ago (Xinlan). beverage retail, their operations of milk tea stores
will be limited to their original brand positioning.
As mentioned, milk tea has become somewhat Consumers are unlikely to have a deep impression
of a national obsession and a booming business of their milk tea business. As of September 2020,
in China. Its popularity has fueled many retailers China had 340,000 milk tea stores, including about
whose main activities lie elsewhere to open milk 3,200 high-end shops, according to a research
tea stores to generate extra revenue and attract report by Zhongtai Securities. Among total milk tea
more customers. China Post Drugstore, a branch of plays, more than 50 brands received funding from
China Post Hengtai Pharmaceutical Co Ltd — itself investors, and investment has often been made
a subsidiary of China Post — has opened a milk since 2016, according to Qichacha, a company that
tea store offering drinks and healthcare services tracks business registrations (Wenqian, Milk Tea
in downtown Fuzhou, Fujian province. Named Post Taking Domestic Market by Storm).
Oxygen of Tea, the store has recently gone viral
online. Many people got to know the brand through Beverages are not only spurred in growth as
social media sites like Weibo and short video app luxury items, but some have also grown as a
Douyin, as well as stamp collecting groups, as result of the new fitness incentives in China. Some
they are naturally curious about all things postal. customers cite the increase in exercise programs as
Opened late 2020, Post Oxygen of Tea provides incentivizing them to purchase healthier beverage
various drinks including traditional teas, or teas options, such as mineral water. There is a rising
flavored with milk, fruits and other varieties. The number of health-conscious younger Chinese
beverages range from 7 RMB (US$1.08) to more than consumers who have contributed to the rapid
20 RMB each. In 2020, the number of consumers growth of the carbonated water sector between
who bought bubble teas and related potables 2019 and 2021. Mintel Group Ltd's research on
exceeded 340 million, and sales exceeded 100 sparkling drinks released in September 2020
billion RMB. With a constant consumption upgrade said sparkling beverages proved their popularity
trend in China, annual sales are expected to hit 160 through the surge in sales of sparkling water.
billion RMB between 2021 and 2025, according to Their wide range of applications will allow them
338
