HeyTea-Redefining Tea in China |
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The target customer group of HeyTea was the Chinese millennial who was young and single and was earning well. Yunchen said, “Young people are willing to try new things, they prefer cold drinks and fresh tastes, and we’ve tried to cater to this spirit. We want to create experiences that will make consumers feel amazed.”
One of the outlet’s most distinctive features was its menu, which was unlike that of any other tea drink store. HeyTea had two distinct product categories. Products in the first category were designed with the intention of making customers share them through social media; the other category products were expected to enhance customers’ brand recognition.
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Over the years, HeyTea grew into a phenomenon with its stores boasting long queues of customers waiting to order tea. The wait time outside a popular HeyTea store in a large Chinese city on a weekday was five hours long before 8 a.m. with another hour to go after the order was placed.
Observers pointed out that the long queues were not a result of tardiness on the part of HeyTea employees – each order took only about one minute, which meant around 360 cups in an hour – but due to the large number of people who turned up for a cup of tea. The long queues often prompted the company to hire security guards to manage them, especially at the time of new store openings. Moreover, the company placed a restriction of three cups per customer
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| HeyTea’s effective use of social media also played a major role in fueling interest in the brand. Compared to large Chinese companies that spent millions on advertising through paid advertising or celebrity endorsements, HeyTea relied on E-word-of-mouth marketing from its millennial customers...
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| There were several media reports that claimed that HeyTea was creating a false hype around its products and hiring people to queue up outside its stores. There were also instances of unscrupulous elements becoming scalpers , lining up in the queues to sell their drinks to other customers in the queue for a higher price. These incidents created a negative image of the brand in customers’ mind...
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| As of 2017, there were 100 HeyTea stores in China, spread across major cities such as Guangzhou, Shenzhen, Zhongshan, and Dongguan. Some reports stated that in a week, some individual stores of HeyTea easily made as much money as the Starbucks Reserve Roastery in Shanghai..
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Exhibit I: China’s Non-traditional Tea Drink Market
Exhibit II: Information on Chinese Beverage Companies
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