China Post Joins the Milk Tea Industry!
It is surprising, yet also not so surprising, to see China’s national postal service, China Post, open a milk tea store in Fujian Province. It’s not surprising because milk tea or “new tea” beverages have become such a promising market that consumers love having it and companies love investing in it. It’s surprising because even China Post, a state-owned enterprise, wants to grasp this lucrative market.
China Post is everywhere in Mainland China. It has over 9,000 spots to collect and allocate parcels, plus 54,000 post offices. If China Post let every one of its spots open a milk tea store, there is no doubt that it could soon become the NO.1 in the milk tea industry, in terms of offline footprint.
About The China Post Milk Tea Store
The store is called Youyang Decha (邮氧的茶) in Chinese or “Post Oxygen of Tea” (even though that’s what’s on the store sign its better translated as Tea Full of Oxygen). It plays a little bit with the Chinese pronunciation and characters. “Youyang” (有氧) means aerobic or full of Oxygen, however they replace the “you” character with a different you character邮 which means postal or mail.
Yellow and green are two main colors for the store’s decoration palette, which are also the iconic colors of China Post. Prices of tea rank between 7 – 23 RMB, which is very affordable compared with the average price of those new beverage tea brands: 25-35 RMB. The menu includes pure tea, milk tea, fruit tea and fruit milk.
On Little Red Book, many people already posted their visits to the store. Some are saying that they were not expecting those drinks could be tasty, but it turns out they were surprisingly good. In comments areas of related posts and articles, people are saying the milk tea store should open its takeaway service. And some are suggesting they should place a mailbox beside the store, as a fun prop for people to take photos, causing the store to become more viral on social media. There are also voices saying Xinhua Bookstore, which is the largest and only country-wide bookstore chain brand in China, should open a milk tea store as well.
China Post Is Expanding Its Business
You can see this as China Post’s strategy to reduce risks and prevent the giant from falling down. After all, it was created in 1949, and it is already 72 years old. So of course, post office is its basic business. But with people sending less mail and the rise of many very fast and affordable logistics companies, this business is not as good as before. Even with the support from the Chinese government, it still needs to find ways to increase revenue, otherwise it will only be cash-burning.
Prior to opening the tea store, it had also opened a coffee shop. At the moment, it only has one, which is located in Xiamen (厦门), Fujian Province, founded last year. The store is not big, but with very strong vintage vibe, and it has attracted many people to visit and take photos. The average price is between 20-30 RMB. Again, not as high as other mainstream coffee shops in China.
Besides its latest experiments with milk tea and coffee, China Post once tried out the supermarket business back in 2010, trying to become the “countryside Walmart” in China. It opened nearly 100 supermarkets and was expecting to have more than 10k stores by 2015. But in 2014, the dream ended because those supermarkets were not bringing profits for China Post.
The giant didn’t give up on trying. In 2019, it opened a pharmacy in Ning Xia (宁夏). So when a customer enters the store, s/he can not only buy medicine, but also mail and receive their parcels. The milk tea store in Fujian has a China Post pharmacy behind it.
China’s Beverage Industry Is Experiencing a Golden Age
Especially after I move to Shanghai and have colleagues, I can feel people’s craziness towards both milk tea or coffee. Whenever there is a new product of a beverage brand, or a store is having discounts today, or a new drinking store opening, people love trying them out. I used to be the type of person that only has one bottle of milk tea or coffee a week, but now after being in this environment, I gradually feel like having one each afternoon.
Two representatives in the new tea industry are Nayuki Tea and Hey Tea. Nayuki is filing an IPO in Hong Kong, and Hey Tea is said to be on its way too. Sexy Tea or Chayan Yuese is expanding its stores out of Changsha (长沙), which used to be its only location for 7 years.
When it comes to coffee, two players are worth noticing: Manner Coffee and Peet’s Coffee. Manner is a Shanghai-based coffee brand founded in 2015. It aims to bring coffee into people’s daily life so its prices are more affordable, between 15-20 RMB. It is also focused on sustainability, which has become increasingly important to Chinese consumers post-COVID. If customers bring their own cups, they can have 5 RMB off.
With high cost performance, white collars love Manner. In 2019, LV named the brand to be its beverage providers for its show VVV. In the early 2021, Manner received financial capital from H Capital and Coatue, making it worth 1 billion USD.
Peet’s Coffee, on the other hand, is a San Francisco brand and it entered the China market in 2017. People often compare it with Starbucks. An important reason which is also a fun fact is that, three founders of Starbucks were Alfred Peet’s apprentices, who is the founder of Peet’s Coffee. Besides this, I guess people relate these two brands together also because their prices and flavours are similar.
Well, that’s the round-up of the beverage market in China. I notice that we have yet to see a juice brand become extremely popular among Chinese consumers. Is it because the costs are too high? I am very curious to see what will happen next and if one will emerge.
Read more: 没想到，中国邮政卖奶茶，很可能当上全国第一
