Nayuki Tea Closes Largest Nationwide Store: Is It the End of Dream-Building or...

Nayuki's Dream Factory: From Largest Store to Lifestyle Concept

For ordinary office workers, an afternoon rarely feels complete without milk tea and dessert to get through it. Today's coffee and tea shops have recognized that demand, offering desserts alongside drinks so customers do not have to agonize over the choice. Nayuki tapped into it perfectly, standing out in the new-style tea market with its combination of tea drinks and soft European bread. The prosperity did not last long, though. After Nayuki became the first publicly listed company in the new-style tea sector, negative news appeared frequently. Now Nayuki's largest store nationwide, the Nayuki Dream Factory, has closed.

According to a May 20 report by Jiemian News, when a reporter visited the Nayuki Dream Factory store at Shenzhen Coastal City Shopping Center, the original site was surrounded by barricades. Signs inside the mall indicated that the former Dream Factory location would be transformed into "Nayuki Life," a lifestyle concept store. Nayuki responded that the Coastal City Dream Factory store would be upgraded and renovated into "Nayuki Life," taking over the Dream Factory's role as a "super experimental field." At that point, "Nayuki Life" will offer baked goods and tea beverages, reading spaces, floral art, and light meals.

A staff member at Coastal City Shopping Center told reporters that Nayuki Dream Factory had recently begun renovations, which could take up to 2 months to complete.

The Rise and Transformation of Nayuki Dream Factory

Nayuki Dream Factory officially opened in November 2019. The store spanned 1,000 square meters and was initially Nayuki's largest store in the world. It featured 15 major sections, including bakery, tea beverages, coffee, craft beer, Western cuisine, retail, and limited edition products, bringing consumers plenty of unexpected new items. More than a milk tea shop, the Dream Factory was a multi-scenario experience venue with a bar, a gift shop, and a Western restaurant. Reportedly, the store brought in nearly one million yuan in revenue within just three days of opening.

The closure of Nayuki's largest store and its upgrade into a lifestyle concept store on the same foundation may relate to the company's broader business development in recent years. In June 2019, Nayuki entered the alcohol industry by opening "Nayuki Bar." In September 2020, it expanded into coffee with the new store format "Nayuki PRO." In October 2021, it opened "Nayuki Bookstore" near the south gate of Tsinghua University. In April 2022, as convenient, portable ready-to-drink products gained popularity, Nayuki invested 500 million to 1 billion yuan to acquire RTD production lines.

Market Challenges and Strategic Pivots

Today, tea beverage brands face severe homogenization, with intense competition inside the new-style tea industry that even spills into other sectors. As early as February this year, Nayuki's related company, Shenzhen Pindao Catering Management Co., Ltd., applied to register multiple "Nayuki Life" trademarks, with international classifications covering catering and accommodation, alcohol, clothing and footwear, and convenience foods.

As new-style tea beverages gain popularity nationwide and milk tea shops keep multiplying, brands must develop innovative products and launch trending categories to survive in such a fiercely competitive market. To stand out among so many brands, multi-format business development looks like the more advantageous way to carve out a differentiated path.

Image source: Internet

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