All Closed! HeyTea Gives Up...

HeyTea's Sub-brand HeyXiaoCha Closes All Stores After 2.5 Years

According to media reports, the last HeyXiaoCha store, in Guangzhou's City Investment Building, has shut down—just two and a half years after opening. HeyXiaoCha's mini-program is no longer searchable, and the last post on its official WeChat account went up on July 20, 2022. As of now, HeyTea has issued no official response.

HeyXiaoCha was a HeyTea sub-brand focused on the Pearl River Delta, with 22 stores across six cities: Shenzhen, Guangzhou, Dongguan, Zhongshan, Foshan, and Huizhou. The shops were tiny—roughly 3–5 square meters of space for ordering and pickup—sited in busy, value-oriented commercial districts like Huaqiangbei. The model was built on grab-and-go and delivery, with online ordering plus in-store pickup or delivery.

HeyXiaoCha opened its first store in April 2020 at Huaqiang Plaza on Huaqiang North Road, Futian District, Shenzhen, with single items priced at 8–16 yuan—about half of HeyTea's prices at the time. In the months after the debut it spread to more cities in Guangdong. The menu covered five main categories: fresh milk tea, fruit tea, coffee, ice cream, and pure tea, with four signature drinks in the "Grand Slam" series containing soy milk, fruit, and other add-ins.

According to HeyXiaoCha's "First Anniversary Report" released in 2021, the brand sold over 2.8 million drinks in its first year. At its peak it ran more than twenty stores, and reportedly most locations remained profitable right up to the closures.

Earlier this year, HeyTea trended on Weibo with "HeyTea bids farewell to 30 yuan prices," announcing reductions on select products: pure tea cut by 3–5 yuan, five fruit teas cut 2–3 yuan, cheese tea cut 1 yuan. On February 24, HeyTea went further, promising no new drinks above 29 yuan this year and no price increases on existing products—then later pledged that all new products would stay at or below 20 yuan.

Product standards at the two brands weren't very different. HeyTea's slogan is "real fruit, real tea, real milk," and HeyXiaoCha likewise insisted on authentic ingredients—leaving little room to cut costs. Facing the parent brand's price war, HeyXiaoCha followed with reductions of its own, promising no new drinks above 15 yuan. The two brands' positioning and pricing converged until they were all but identical.

Behind HeyTea's price cuts—like HeyXiaoCha's earlier playbook—was the aim of letting more consumers enjoy quality products at affordable prices, with customizable toppings, size options, and tiered pricing. As competition in new-style tea drinks intensified, the price reduction may have been HeyTea's play for a broader consumer base: small profits, fast turnover.

Reportedly, the younger HeyXiaoCha was also more popular with younger consumers. While 49.2% of HeyTea's customers were post-95s and post-00s, that share reached 61% at HeyXiaoCha—roughly 22% post-90s, 39% post-95s, and 22% post-00s, a consumer base with clear long-term potential.

When a parent brand and its sub-brand attack the same market the same way, the sub-brand's mission may simply be complete—a graceful exit. Or HeyTea's price cuts may have collided directly with HeyXiaoCha's price band, becoming one of the reasons its stores closed.

Image source: Internet

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