Multiple Tea Brands Jointly Boycott Delivery Platform Discounts, Sparking Widespread Online Criticism

According to media reports, several tea beverage brands jointly boycotted discount promotions on food delivery platforms, including well-known names such as Heytea, Nayuki, Chabaidao, Guming, Mixue Bingcheng and Shuyi. The delivery platform discounts have all been changed to 50-1 and 70-1, or cancelled outright.

The news sparked heated discussion online. The topic "#MultipleTeaBrandsBoycottDeliveryDiscounts" quickly topped trending lists on Weibo, Baidu and other platforms. As of now, the topic has reached 180 million views on Weibo.

In a short video, a merchant confirmed the situation was real. "Starting November 1st, it was a company-wide requirement, and well-known brands like Heytea, Nayuki and Guming all unified." The shop owner said: "Business is difficult now, with very little profit." Meanwhile, netizens commented: "Here's a joke: milk tea sellers have no profit."

Many netizens complained: "A cup of milk tea costs thirty to forty yuan, and they're still not making a profit?" "I suggest this industry just shut down." "A cup of milk tea costs over 20 yuan, but my monthly electricity bill is only 50 yuan." "Many delivery orders are already more expensive than in-store purchases, and now they're boycotting discounts — how shameless." "10 yuan in-store, 12 yuan for delivery, minimum order 20 yuan, forced to order two cups and still complaining about low profits — are the merchants okay?"

Some netizens, however, believe the fundamental reason is that merchants are not making profits while platforms keep offering coupons and discounts. They point out: "The delivery platform commissions are too harsh, making it extremely difficult for merchants during the pandemic." Some merchants also shared screenshots in the comments showing their frustration: after customers used coupons, the expected revenue for the order came out to zero yuan.

The Changing Tea Beverage Market

As the new tea beverage market "cools down," many new tea brands have begun attracting consumers through price cuts. In early 2022, Heytea led the way on price reductions, followed closely by Nayuki, while Lele Tea also adjusted its products. Although price cuts can draw in consumers, they may have further compressed the profit margins of new tea beverages.

In April this year, Nayuki released its 2021 fiscal year annual report, showing that the brand lost 4.525 billion yuan in 2021, an increase of 2141.27% year on year. Mixue Bingcheng, another brand, makes a profit every year, but according to its prospectus its main revenue sources are selling ingredients and collecting franchise fees. Heytea, which has always insisted on self-operation, has begun to relax its stance and will launch business partnership operations in non-first-tier cities with suitable store formats, and it also completely closed its sub-brand "Heytea Go."

Consumer vs. Merchant Perspectives

Honestly, from a consumer's perspective, although many brands have cut prices, it still feels as though they went from making 15 yuan per cup to making 10 yuan. Looking at just the ingredients and cost of a cup of milk tea, 20 yuan per cup is indeed very expensive. Making the same milk tea at home not only uses real ingredients and is healthier, but the cost per cup is far lower than buying it outside.

From a merchant's perspective, though, selling milk tea means opening a store, decorating it, paying rent, franchise fees and labor costs, procuring raw materials, and covering other miscellaneous expenses. Those costs are eventually spread across each cup and marked up by a certain amount to generate profit. For a delivery order, delivery fees and platform commissions must be calculated too. If the delivery platform commission is high, the profit left for the merchant is even smaller.

Image source: Internet

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