While ChaYanYueSe, Luckin Coffee, and Tims Coffee Are Caught in a "Price Hike Trend", Heytea Is Actually Cutting Prices!

Recently, the food and beverage consumption sector has experienced a wave of "price hikes." It began last December when Luckin Coffee quietly increased the prices of their delivery coffee by 2-3 yuan without any external announcement. In January of this year, ChaYanYueSe announced that some of their tea drinks would be increased by 1-2 yuan; XiangPiaoPiao also issued an announcement about price increases for some products; Tims Coffee raised product prices by 1-2 yuan after the New Year, with some netizens even pointing out that they had raised prices twice in two months; and Hong Kong McDonald's also announced a 1 Hong Kong dollar increase for McCafé's main products in the Hong Kong region. However, HEYTEA chose to go against the tide during this "price hike wave," truly intensifying the competition!

Starting from January 7th, netizens on various social platforms began to notice that HEYTEA had reduced prices for some of their products. Popular items like Cheese Strawberry, Pure Grape Pulp, Pure Milk Tea, and Pure Green Tea had their prices lowered by 3-7 yuan, while the price of cheese foam was also reduced by 1 yuan. However, HEYTEA did not publicly announce this price reduction. Instead, they quietly lowered the prices of their main tea categories (about 15 products), which surprised many netizens and gave them the joy of "finding money"...

After being discovered by observant netizens, HEYTEA responded: they had indeed reduced prices for some products recently, and at the same time, they had added four personalization options in their ordering mini-program: "More Fruit Pulp," "Richer Flavor," "Simpler," and "More Affordable." These options allow consumers to quickly select their desired beverages, with the goal of making it more convenient and cost-effective for users to enjoy HEYTEA's high-quality tea drinks.

Why Could HEYTEA Lower Prices?

When other brands are increasing their drink prices due to rising costs of raw materials, labor, transportation, and energy, why could HEYTEA lower prices at this time? This is likely because their foundation is strong enough to withstand these cost increases. HEYTEA possesses scale advantages, brand advantages, and can achieve large quantities in many raw materials and resources, so their costs are naturally lower than the industry average. Against the backdrop of the industry being forced to raise prices due to cost pressures, HEYTEA can face the challenge of balancing revenue while maintaining original quality, giving them the ability to intensify competition during the "price hike wave." Alternatively, from another perspective, HEYTEA's drink prices are generally on the higher side, so lowering them slightly is neither painful nor itchy for HEYTEA at this point.

The Broader Economic Context

Some analysts point out that while other brands cite rising costs as the reason for price increases, this is only a surface-level explanation. The main reason is related to the quantitative easing monetary policies implemented by central banks globally. After the outbreak of the pandemic in 2019, central banks around the world implemented quantitative easing monetary policies such as reserve requirement ratio cuts and interest rate reductions. With more money circulating in the market, this drove up the prices of raw materials like crude oil and coal. These raw material price increases gradually transmitted to end products, ultimately leading to global inflation.

Image source: Internet

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