JD.com, Meituan, Ele.me and other takeaway platforms have invested tens of billions of subsidies, triggering fierce competition, significantly reducing the prices of milk tea and coffee and other beverages, attracting a large number of consumers, resulting in an explosion of orders in the beverage industry and a sharp rise in orders. This subsidy war not only brings benefits to consumers, but also provides new growth opportunities for beverage brands.
April and May, which were originally the off-season for takeaways, are becoming hot because of JD.com’s entry.
On April 11, Liu Qiangdong, founder of JD.com Group, announced that JD.com Takeaway will launch a one-year 10 billion subsidy plan. On the evening of the 14th, Xue Bing, general manager of Meituan Takeaway, announced that in the next three years, Meituan Takeaway will invest 100 billion yuan in the catering industry as a whole to help catering partners grow healthily. On the last day of April, Ele.me also followed up with a 10 billion subsidy plan.
The beverage industry, which is simpler and more stable and has a simpler supply chain, has become the focus of the takeaway competition of the three major platforms. After discounting 1.9 yuan/cup of coco, 3.9 yuan/cup of Cudi coffee, and 1.9 yuan/2 cups of Mixue Bingcheng, the price far below the cost allows consumers to instantly realize the freedom of milk tea coffee, and their most distressed question has changed from “should I order a cup to drink today” to “will I get fat after drinking so much”.
In less than 3 months, the average daily order volume of JD takeaway will soon reach 20 million; In just 6 days, with 100 million milk tea free single cards, Ele.me’s single-day takeaway orders from Taobao flash sales have exceeded 10 million; As a defender, Xue Bing, general manager of Meituan Takeaway, posted a video on Xiaohongshu on May 10 recommending Meituan’s milk tea promotions.
In line with the principle of “if you have wool, you will lose money”, consumers have successfully made the milk tea/coffee industry explode. Some stores had nearly 100 orders as soon as they opened in the morning, and the order paper was more than 10 meters long, floating directly to the ground, and even cup holders, coconut water, matcha, and finally became employee blood strips……
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When more than 600,000 milk tea coffee drink stores are all over the streets and alleys, the beverage industry can no longer tell a new story, and the takeaway war has brought a new window period, which may be the best time to rewrite the qualifying.
01 200 orders in half an hour, and the clerk was so busy that he collapsed
Xiao Zhang, an employee of the Cudi Coffee store, finally ate lunch that had been cooled for 7 hours at around 10 o’clock in the evening. She just arrived at the store at 9 a.m. to nibble on a few bites of bread, and five or six orders came to the store, which is an acceptable normal rhythm. However, soon, by 10 o’clock, the store had already exploded, “more than 100 orders came all at once”.
This is just the beginning, though. In the following more than a month, the number of orders in the store increased every day, and on the most terrifying day, she and her colleagues made more than 1,000 cups of coffee, compared to only 300 cups in the past, the coffee machine was stuck, and the lunch was packed and delivered by the boss.
Even the campus stores that did not allow riders to enter got a piece of the pie. An employee of Cudi Coffee Campus said that now they have more than 500 orders a day, and these orders need to be packed by him and the store manager and handed to the takeaway boy at the door.
1.9 yuan/cup, 2.9 yuan/cup of drinks, the price of milk tea/coffee returned to 10 years ago overnight, the platform sprinkled money to subsidize, consumers frantically placed orders, seriously exceeding the ability to take orders in the store, some stores even need to queue for 1 hour to order offline, and riders who can’t wait directly enter the store to help pack.
On May 13, Tech Planet saw in an offline COCO milk tea shop that the store that could only accommodate two small tables and chairs was crowded with more than a dozen riders who came to urge orders. Due to the sudden influx of 200 orders in half an hour, the receipt card machine could not be played normally, which was almost half of the store’s daily total milk tea orders, and they had to urgently remove the store from the takeaway platform.
“Can you imagine yourself being alone in a takeaway, with more than 20 riders and a dozen dine-in customers in front of you urging you, and then you have more than 100 cups in front of you, and you can’t find it?” A milk tea shop employee said.
Not only milk tea brands distributed around the community with a unit price of about 15 yuan participated, but even milk tea brands that opened in the core business district and took the mid-to-high-end route also joined this takeaway war. In the past, these milk tea brands opened in the business district had a unit price of 20 yuan ~ 35 yuan, but now they have become milk tea that can be bought for 5 yuan or 6 yuan.
The workload caused by the skyrocketing orders to employees has increased exponentially, and if you add machine failures, then the beverage store can be called a disaster scene. Many drinks require the clerk to crank one cup after another, and each consumer has detailed requirements for ice content and sugar content, and will also add various small ingredients. If the receipt cannot be issued normally, the riders surrounding the pick-up table need to call one by one to ask the customer for the specific requirements for the drink if they want to pick up the food, and then shout loudly to the busy clerk to prevent the customer from receiving the drink and then refunding the order due to the taste does not match.
“Endless ice, endless milk, endless paper shells, endless garbage, endless coffee grounds, and non-stop riders.” A coffee brand employee described his current job as follows, “At the end of the day, my hands never stopped.” ”
The subsidies of takeaway platforms have made the best-selling item on Mother’s Day on May 11 change from carnation bouquets to milk tea. A takeaway rider who often takes orders in Chaoyang Joy City, Beijing, told Tech Planet that most of the orders he received in shopping malls in the past were from catering merchants, but now they are milk tea.
02 Cudi may become the biggest winner, and jasmine milk white has the most potential
In this takeaway war, all beverage brands have eaten dividends, even Nai Xue’s tea, which is considered to have fallen behind, during the “May Day” period, the order volume of some of its stores surged by more than 300% compared with before the holiday.
But the biggest winner is Cudi Coffee. Among the subsidized explosive products listed by JD.com, Cudi Coffee’s “raw coconut latte” ranked first with a preferential price of “12.09 yuan”.
A Cudi Coffee employee told Tech Planet that on JD Takeaway, Cudi Coffee’s total sales are increasing at an average rate of 10 million orders per week. Now Cudi Coffee has more than 50 million orders, which is the highest-selling coffee category on JD.com, while Luckin Coffee now has only 30 million orders, but the total number of Cudi stores is almost 10,000 less than Luckin’s.
Cudi’s explosive order surprised many employees, who thought that this time it was a “right bet”. A Cudi Coffee associate said that the subsidy cost is borne by JD Takeaway and Cudi headquarters, and the store does not need to pay any additional money. On average, their settlement price is still about 10 yuan combined.
More than half of the orders in some stores come from JD.com’s takeaway, and there are not a few stores that have increased the order volume by 5 times, and many stores need to complete 500, 700 or even thousands of ready-made drinks, and the employees are so tired that they have completely cured insomnia. Prior to this, many stores had just exceeded 100 daily orders. For Cudi, in addition to the increase in order volume, the subsidy also brings income from associate stores that need to purchase more raw materials due to the increase in orders.
On April 17, “Daily Economic News” quoted JD.com insiders as saying that the daily order volume of Cudi Coffee on JD.com has reached four times that of a leading takeaway platform, and its market share is still growing. An internal Cudi employee said that Cudi’s total order volume on JD.com takeaway is likely to have exceeded Meituan.
Not only on JD.com, according to Ele.me data, within 24 hours of the launch of Taobao flash sale, Cudi Coffee’s orders increased nearly 10 times.
In the milk tea track, jasmine milk white, which mainly promotes light milk tea, has more potential.
Compared with fruit tea-based brands, light milk tea has a stronger ability to undertake orders when it explodes, and a jasmine milk white clerk told Tech Planet that participating in the event is to boost sales and increase exposure. Compared with fruit tea, light milk tea raw materials are mainly fresh milk and tea, with higher standardization and higher gross profit. And compared with the many fruit tea SKUs, Jasmine Milk White mainly takes the route of large single products, and the supply chain is simpler, which can speed up its meal delivery.
A takeaway rider also told Tech Planet that last summer he received the most orders in the business district was Bawang Chaji, when this milk tea shop was the top milk tea in the C position of the business district, and under this year’s subsidy activities, he received the most jasmine milk white.
According to Ele.me’s data, 24 hours after the “Taobao Flash Sale” was fully launched, its star product “Jasmine Milk White” sold 100,000 cups.
Light milk tea is also the hottest track for new tea drinks today, and the star product “Boya Juexian” will sell more than 20 million cups per month in 2024, with a single-day sales of about 660,000 cups. However, Jasmine Milk White, which was only established in 2020, has only more than 1,000 stores, which is one-sixth of Bawang Chaji.
03 The beverage industry ushered in a short window period
It is not surprising that milk tea/coffee brands have entered the takeaway war.
According to the data of Narrow Door Dining Eye, as of November 12, 2024, the total number of milk tea beverage stores nationwide reached 412,600. As of September last year, the number of coffee stores nationwide was 191,000. In addition to Heytea, which is mainly directly operated, many brand stores have approached and exceeded the scale of 10,000 stores.
When the good points are occupied one by one, the number of stores has reached the growth ceiling, and the product taste, co-branding, and customer unit price have fallen into homogeneous competition.
Takeaway is an excellent window period. Compared with meals with complex delivery steps (except for prefabricated dishes) and limited room for order volume growth, beverages have become the best category for takeaway platforms to increase order volume by relying on a stable supply chain, a simpler serving process, higher distribution efficiency and consumption frequency.
The takeaway war is back, and the shy brands must take advantage of their strength. For example, in the light milk tea track, jasmine milk white, which often opens a store next to Bawang Chaji. The milk tea brands that were “left behind” in the past also want to gain traffic and brand voice through this takeaway war, and the national style tea drink “Tea Talk Lane”, which has almost no sense of existence, frequently appears in the “takeaway price” subsidy activity, launching drinks as low as 2.5% off.
But whether the market pattern can be reshuffled still depends on the price.
Cudi’s out-of-the-circle is the ultimate cost performance. “You can understand that Cudi is now eating tens of billions of subsidies from the platform, and Cudi himself pays part of the money,” said an industry insider. As a result, the price of Cudi coffee reached a new low. Coupled with the co-branding with Nezha at the beginning of the year, Cudi was able to explode out of the circle. The COCO milk tea and Mixue Bingcheng, which exploded on May 13, are both on the shelves with drinks as low as more than 1 yuan.
In contrast, whether it is Cudi Coffee, Coco Milk Tea, or Mixue Bingcheng, most of their customer unit prices do not exceed 15 yuan, but for higher-priced brands, it is not easy to undertake traffic.
A tea franchisee of Nai Xue told Tech Planet that the subsidy is shared by the brand and the platform, taking the subsidy activity of “25 yuan minus 20 yuan” as an example, the platform bears 12 yuan, the brand bears 8 yuan, and the platform mainly subsidizes from two aspects: commission and freight.
According to the above-mentioned franchisees, the event will be notified by the headquarters, and franchisees can choose whether to participate independently. He is the first batch of franchisees of Nai Xue, and because the price of the second batch of franchisees has been reduced by 300,000 yuan, the headquarters promised to carry out some takeaway subsidy activities for the first batch of franchisees. In his opinion, in this event, the so-called subsidies borne by the brand are actually paid for by the franchisees in the end.
According to the above-mentioned franchisee, Nai Xue’s tea gross profit is about 65%, and the products of this event are basically 50% off, approaching the break-even point, and he finally decided to participate in only one takeaway platform activity. According to franchisees, franchisees with poor location and few orders want to increase store traffic and gain new customers. Stores with better daily takeaway orders are not willing to participate, and more passive volumes, after all, within the online three-kilometer delivery range, users will turn to lower price milk tea brands.
After the takeaway war, the relevant person in charge of Nova Coffee said that the proportion of online orders in the tea industry has increased, and the profit model of many brands may change, especially many brands have broken prices, and consumers are more sensitive to prices. After this stage, everyone will pay attention to takeaway capacity building.
At present, the takeaway subsidy war is also at the peak of summer beverage demand, and it is the most voluminous node of the year for new tea drinks.
However, according to Caixin, citing Meituan executives, on the merchant side, half of JD.com’s subsidies are given to milk café chains to test the rider’s performance limit with a single volume and prepare for the battle of meals.
This also means that the subsidy focus of subsequent takeaway platforms is likely to be adjusted. It is unknown how long the beverage brands will be able to borrow their strength. It is still unknown whether the order volume and users obtained by low prices in the takeaway war will be converted into more lasting competitiveness. 、
