As ALittle Tea makes a comeback, it faces a more complex marketplace.
Photo by Fan Jianlei
By LU Yibei, ZHANG Xiaoyi
ALittle Tea, founded in 2011, was once a pioneering brand in the bubble tea industry. China’s tea drinkers and tea habits have come a very long way since then, and market dynamics shift on an almost daily basis.
The battle of beverages has many casualties, and it looks like ALittle tea will soon be one of them. Franchisees everywhere are bemoaning the dire state of operations.
In the past three months, ALittle Tea has opened 82 new stores while closing 108. There is still life in the business, but only just.
Due to its lower ingredients costs, the chain has maintained a high-profit margin of more than 60 percent, making it a popular choice among franchisees.
But ALittle Tea’s star is fading from the consumer skyline. It’s been obvious, in hindsight, since 2021, when store count peaked at 4000.
The brand has struggled to sustain interest in its products. The tea market is driven by creating a fuss: new releases, promotions, celebrities and selfies.
ALittle Tea lived down to its name from 2018 to 2021, when up came up with new products only a couple of times each year. In Heytea and Nayuki at that time, something new was happening every week, at least.
Last year, ALittle Tea began to transform its image. It introduced a staggering six new products in 2022. By 2023, ALittle Tea a monthly (almost) product release strategy was in place, unveiling tempting products with small amounts of fresh fruit.
However, as ALittle Tea makes a comeback after conquering its inner demons, it finds itself in a complex strategic landscape populated by frenetic competitors.
A business like ALittle Tea which changes only because the world has changed around it, will never compete with brands like Heytea and Nayuki. These businesses were created to thrive in a fast-moving marketplace.
