Honey Snow City Viral Song Overshadows Nayuki Tea IPO
On June 30, Nayuki Tea became the first tea house in China to file an IPO (2150.HK). As one of the most popular tea brands in China, Nayuki Tea has over 562 stores nationwide. But the listing didn’t have a happy beginning. On its first day, its stock price fell 10%, which is very unusual for any company. What’s more, while Nayuki was celebrating its IPO, Chinese KOLs and consumers were preoccupied with another tea brand – Honey Snow City (蜜雪冰城).
But before we get into Honey Snow City and its viral song, a bit more about Nayuki.
Not long ago we wrote an article about what future may hold for Nayuki Tea with only 0.2% net profit margin. The main reason why the net profit margin is so low is that operating costs of its stores remain too high, and yet both the daily sales and average order amounts have been declining.
Another key reason for the lack of confidence from investors is that Nayuki Tea is facing too many competitors in the new beverage market. Its biggest opponent is Hey Tea, who is rumored to be on its way to file an IPO as well. The other is Sexy Tea or Chayan Yuese (茶颜悦色). We once mentioned the 6-hour line at Shenzhen Wenheyou, a great motivation is that the superfood court has a pop-up Sexy Tea store to attract visitors to come.
And recently another competitor has emerged. You guess right, it’s Honey Snow City. I came across the store quite often when I was having my undergraduate study in Guangzhou, but I never tried it. Until recently, when a song from the brand changed my mind…
About Honey Snow City
The brand was founded by a student in Henan Province (河南省) in 1998. In most consumers’ minds, the first word they think of when they hear Honey Snow City is cheap. According to Essence Research (安信证券研究中心), at the top of the new beverage pyramid are players such as Nayuki Tea, Hey Tea and LELECHA ( (乐乐茶). The average of the amount per order are over 30 RMB. Following this, are brands with prices between 16-20 RMB, then those with prices between 10-16 RMB. At the bottom, are Honey Snow City and Yihetang (益禾堂) etc. Their prices are extremely low, under 10 RMB.
But it’s not only about its prices. The way Honey Snow City promotes itself is also very xiachen (下沉) or lower-tier city style. For example, they will play music and have dancing in front of stores and give out leaflets.
Yet despite its low image, the brand is doing well. It uses a franchisee store model, and the number of Honey Snow City’s stores are increasing rapidly. In 2018, the number of offline stores was 4,500; in 2019, the number was 7,050; and by June 2021, the number had already reached 15,000.
Honey Snow City’s Viral Song
But despite its growth, Honey Snow City was not seen as a trendy brand, until recently, when an old jingle from 2019 was resurfaced by a KOL on Douyin and went viral.
The song has become so viral that people are joking no one can say “你爱我，我爱你，蜜雪冰城甜蜜蜜” (I love you, you love me, MIXUE ice cream & tea) in a normal way. You always end up saying it with the melody. The jingle is so catchy you just can’t stop singing it once you’ve heard it.
The melody is the same with the household song Oh! Susanna. You can see on different platforms that people are so enthusiastically translating the song into different languages and singing it with different styles.
So what made the song suddenly go viral now instead of when it first came out?
Behind The Huge Popularity of The Song
Step 1: Choose a repetitive melody
When the song was first created, there were a lot of negative reactions. Some were saying the melody was too simple and not many lyrics were in the song, which made it very low. Some of the Honey Snow City stores even received complaints from customers saying something bad about the song.
But the brand was smart to choose the melody of Oh! Susanna since the tune is familiar to almost everyone. Honey Snow City doesn’t need to spend the time having people getting familiar with it. Another good example recently is another song called 热爱105度的你. Many people are posting videos of them singing the song with cute filters. But in fact, this is a song that Watsons used to promote its distilled water.
Step 2: Starting from offline to online
Usually, brands grab attention online and guide those traffic to their offline spots. But Honey Snow City did the opposite. The team decided to start offline and then move to online.
Why? Because they have more than 15k stores nationwide, and in total, the brand is able to reach over 10M customers every day with them. Ever since the song was created, it has been constantly played in those stores, waiting for a good timing to march online.
Step 3: PGC and the use of Douyin
In fact, the marketing team behind this song never expected it to go viral. Then at the end of May 2021, they spotted a UGC post on Douyin related to the song that was played over 100k times. The team thought this was a good time to push the song online.
When it comes to promoting the song, Honey Snow City’s marketing team heavily focused on Douyin. The decision is after careful comparison among different platforms. The team felt that WeChat is more suitable to announce official information, Weibo on the other hand, it suitable for images and words, while Douyin is a short video platform, and it is a better platform to deliver Honey Snow City content to its potential customers.
Honey Snow City’s team has been developing its Douyin account since 2019 with different hashtags and activities to grow fan base. Now, it has over 2M followers on the platform, which is a solid base for the viral of this song. The brand started working with KOLs to invite them to recreate the song and visit its stores.
Bear in mind, most of Honey Snow City’s consumers don’t have high income, and they tend to have less educational background, so videos would have lower threshold for them to understand. But after the song, because it is so viral, I think even those high-income groups have started noticing this brand and trying it out.
Step 4: UGC to further develop the song
After those KOLs posted content about Honey Snow City, soon enough, netizens began having fun with the song, making their own videos.
Except this, a popular hashtag on Douyin is #蜜雪冰城社死现场# (embarrassing moments at Honey Snow City). This is very fun. Because after the song becomes viral, a rumor came out of nowhere saying that if you sing the song at the store in front of the brand’s staff, you can have a free drink.
But there is no such policy at the beginning. So it turns out that after you sing a song in front of the staff and other customers waiting in line, you are told that there is no such thing. It is really embarrassing but entertaining, so the hashtag also gets lots of attention on social media.
Honey Snow City notices this and quickly responded to it. The company notified its offline stores that if customers really sing the song, staff can give them either ice cream or coupons, encouraging people to keep visiting the store and creating content about them.
Then the brand leveraged this trend further. On Father’s Day, it sent gifts to customers who sang the song to their fathers and uploaded the video on social media.
With all these UGC promotions, Honey Snow City has been on the hot topic ranking board on Douyin at least 6 times recently. This is incredible performance for a used-to-be low-key brand known for cheap tea and xiachen marketing tactics.
As you can see, the buzz about Honey Snow City was badly timed for Nayuki’s IPO. But can Honey Snow City make this viral song turn into long-term growth? Or will the brand quickly be forgotten? We’ll have to wait and see.
Read more: 奈雪的茶上市首日破发
