Under the fire of the takeaway war, how long can the 0 yuan milk tea last?

"After experiencing the madness in mid to late July, the food delivery war seems to have cooled down recently, and our stores have returned to their previous state," Huang Yi said from behind the counter, her tone carrying a hint of relief after fatigue.

She operates two MIXUE ice city stores in a third-tier city in southern China, marking her fifth year in business. The most chaotic days of the food delivery war are still fresh in Huang Yi's memory: the order machine incessantly "spitting out" orders, riders crowding around the pickup counter, and cups of milk tea hurriedly handed out with "0 yuan" and "1 yuan" labels.

There are now over 380,000 tea beverage franchisees like her across the country. Since July, the food delivery war has reignited, with the subsidy battle among the "three giants"—Meituan, Taobao, and JD.com—once again pushing the tea beverage industry to the forefront of the "battlefield."

On July 12, the "three giants" announced that their daily order volume for instant retail business exceeded 250 million. Taobao Flash Sale, which launched less than a month ago in partnership with Ele.me, announced that its daily order count had surpassed 40 million, with tea beverage orders accounting for about 25%. Media reports also indicated that nearly half of JD.com's daily orders were for beverages. These figures highlight the central role of tea beverages in this round of food delivery subsidy wars.

Affected by the food delivery war, on the capital side, the stock prices of ChaBaiDao, GuMing, MIXUE Ice City, AUNTEA JENNY, and NAYUKI have collectively risen; on the consumer side, posts about "stocking up on milk tea" have flooded social media platforms. Only the franchisees caught in the middle are unable to smile—while order volumes have doubled, profits have deflated like a balloon that has lost air. "We can make money, but it's far from what it used to be," Huang Yi complained.

On July 18, the State Administration for Market Regulation summoned Ele.me, Meituan, and JD.com, urging the relevant platform companies to strictly comply with laws and regulations, further standardize promotional activities, participate in competition rationally, and build a good ecosystem for consumers, merchants, delivery riders, and platform companies to achieve a win-win situation.

It is understood that tea beverage brands deeply involved in platform promotional activities like "0 yuan purchase" experienced a decline in both order volume and sales after being summoned by the platform. Additionally, on the morning of August 1, Meituan, Ele.me, JD.com, and other platforms successively issued statements on their official websites, promising to "standardize promotions" and proposing several measures to limit subsidy activities.

For a time, the food delivery war seemed to have been pressed on the "pause button." However, whether this is the final chapter or just a halftime break remains to be seen...

Behind the surge in orders: some employees cut their hands and stopped working, and raw materials were limited and cut off

Multiple tea beverage franchise store managers or employees confirmed to the author that this round of "surge in orders" began in early July.

The platforms quickly launched large-scale actions: on July 2, Taobao Flash Sale initiated a 50 billion yuan subsidy to boost instant retail; on July 5, Meituan announced that instant retail orders surpassed 120 million, setting a new record; on July 15, Meituan's daily orders surged to 150 million, while Taobao Flash Sale's daily active users increased by 15%.

At the same time, social media platforms were flooded with posts like "0 yuan milk tea has arrived" and "won 18 yuan off when spending 18." According to the Beijing Business Daily, it has become common for beverage stores to sell thousands of cups daily and generate revenue exceeding ten thousand, with riders' daily income soaring by 111% This summer vacation, sophomore student Mai Mai took a part-time job at a franchise store of a tea beverage brand. What she didn't expect was that the store's business was exceptionally booming. The store manager privately revealed that the order volume in the first half of July was close to the total for the entire month of June; two years ago, when Mai Mai worked part-time at the same store during the summer, the customer flow was far less than today.

"The daily takeaway order volume is very large, mostly customers stacking coupons to place orders. There are all kinds of ways like zero-yuan purchase and group buying," Mai Mai mentioned. In the past, the store only had five employees, but now, with the manager and two new part-timers, there are a total of eight people working each day.

Since this tea beverage brand specializes in fruit tea, the original store only needed one person to "cut fruit," but now at peak times, at least two to three people are needed to handle the demand; the watermelon supply has also increased from three to four boxes a day to six or seven boxes—watermelon-containing beverages participate in the zero-yuan purchase activity, so the demand has directly doubled. Before the weekend, the store also prepares more ingredients in advance to meet the crazier "explosive orders." Occasionally, when there is a shortage, the manager will temporarily allocate from other stores.

Facing this wave of "explosive orders," Mai Mai is already used to it, "It's guaranteed to explode at two o'clock in the afternoon and around five or six in the evening on weekends, and it has frequently been like this on weekdays recently."

With the surge in orders, everyone can only speed up. To avoid keeping the delivery riders waiting, the staff first take the takeaway orders and then make the dine-in orders, which is also the practice in most stores. If the takeaway orders are delayed, it inevitably leads to verbal conflicts with the riders. Mai Mai said, "When it gets really busy, the manager will temporarily close the takeaway platform for 15 to 30 minutes, and then go back online once the current orders are mostly cleared. I can't imagine shutting down for the whole day, fearing it would affect revenue."

What worries her the most is that a colleague who was cutting fruit recently accidentally cut his palm while trying to speed up, bleeding profusely, and his entire hand was heavily bandaged, and he still hasn't been able to return to work.

In the store where Huang Yi works at Mixue Ice City, the sales champion has always been lemon water. However, after the "takeaway war" broke out, raw materials frequently ran low. Huang Yi explained that all raw materials must be ordered from the headquarters, and recently, each store has been set a purchase limit. She speculated that due to some stores hoarding excessively, other stores could not replenish their supplies in time even when they were out of stock, which led the headquarters to implement this regulation.

"When we occasionally run out of stock, we will try to get supplies from nearby stores, but this is actually prohibited," Huang Yi added.

A supplier of the tea beverage brand stated that due to the impact of the "takeaway war," although the order volume has increased in line with the franchisees, profits have declined. The profit squeeze comes from the brand's strong price cuts: the factory price of raw materials has been forced down by about 10%; suppliers with weaker bargaining power can only passively "join the battle."

However, Huang Yi stated that the prices of the raw materials supplied to them by the brand have not been reduced. She speculated that the brand is either trying to force suppliers to lower prices or aiming to increase its own supply chain profits.

Before closing, dump 20 cups of "ghost milk tea," "joining the battle means losing money and gaining publicity"

Li Rui has been working at Mixue Ice City for six months. Although the surge in orders is manageable, what bothers her the most is that after closing, it takes another half hour to lock the door. After the takeaway war broke out, there are always about twenty cups of milk tea left unclaimed each day: it's painful to dump them, and the dumping process itself is time-consuming The same scene also appears in the stores of Huang Yi and Mai Mai. Huang Yi complained that the profit from self-pickup orders is already thin, and it's a pity to throw them away. If customers come to pick them up the next day, they need to be remade, and the losses are borne by the store. She added that if no one picks them up after closing, these milk teas are occasionally given to delivery riders or people from nearby stores, but close to midnight, there are very few people who want to drink milk tea.

This reminded Mai Mai of the "milk dumping" incident in the 20th century—companies actively destroyed their own products to maintain high prices; now it is "passive destruction": products that have been produced but are unclaimed, rooted in the inefficiency brought about by the platform subsidy war.

In addition, several tea drink franchise store managers admitted: the "surge in orders" brought about by the delivery war is just a superficial hustle, with actual revenue not increasing profits, and stores are "losing money while making noise."

Li Rui recalled that before the war began, she never received any advance notice from the platform and could only passively accept orders. "The subsidies for promotional orders have to be borne by the merchants together, and some orders directly lose money. The more you sell, the more you lose, and the thinner the profit." She smiled bitterly, "The turnover looks good, but how much is left after deducting costs?"

Media reports also confirmed the chill: since the delivery war broke out, both the average transaction value and actual revenue rate of tea drink stores have declined. The so-called actual revenue rate refers to the proportion of actual income to turnover, serving as a barometer of profitability. For example, in a store near a campus, the actual revenue rate could reach 80% during the summer when dine-in orders were high, but it plummeted to 62% in early July.

The store where Mai Mai is located is even more intuitive. In the past, offline orders through mini-programs far exceeded delivery orders, and most of the explosive orders were made on-site via scanning; now, offline orders have sharply decreased, and the proportion of delivery orders has risen to 70%. The two Mi Xue Bing Cheng stores operated by Huang Yi have also seen a reversal in the proportion of in-store sales to delivery orders: delivery orders now account for 60% to 70%.

She calculated the numbers: selling a cup of lemonade priced at 4 yuan on-site means the full amount is received; if it goes through a delivery platform, after the platform's commission and subsidies, only 2.8 to 3.2 yuan can actually be received. In terms of costs, raw materials account for half—lemons, syrup, cups, sealing film, etc., costing 2 yuan, leaving a gross profit of only 2 yuan.

Then, fixed expenses such as rent, labor, and utilities, which account for about 20% to 25% of the selling price, need to be deducted from the received amount, which is about 0.8 to 1 yuan. Based on this calculation, the net profit per delivery order is minimal, and it may even result in a loss. In an optimistic scenario (actual revenue of 3.2 yuan), only about 0.2 yuan remains.

What can be confirmed is that currently, delivery subsidies are jointly borne by the platform and merchants, but the respective proportions remain opaque. Many merchants report that the cost rules for discounted orders are not transparent, and platform subsidies are often bundled with merchant discounts, making it difficult to separate. It is understood that stores joining delivery platforms need to bear three types of costs: technical service fees (such as transaction, customer service, etc.), fulfillment service fees (delivery), and costs related to promotions.

Reports indicate that, taking Ele.me's "explosive red envelope" as an example, regardless of the value of the coupon consumers receive, merchants bear at least 5 yuan, and only the excess is subsidized by the platform. Zhao Pengfei, founding partner of Chengchi Capital, has also pointed out that Meituan employs a similar skewed mechanism: if a single order has a subsidy of 6 yuan, the platform may only contribute 2 yuan, with the remaining 4 yuan borne by the brand, and the brand's burden often increases over time

0 Yuan Milk Tea, How Much Longer Can It Be Drunk?

Why did the takeaway war first break out in the tea beverage industry?

Economist Song Qinghui stated: Tea beverages are high-frequency, everyday consumer goods for young consumers, meeting the demand for the immediacy and convenience of takeaway. Based on this, tea beverages have become one of the most effective means for platforms to attract and retain users. At the same time, compared to full meals, the production process of tea beverages is relatively standardized, and packaging and delivery are more convenient, making it less likely to encounter quality issues during delivery, which helps reduce operational costs and risks for both platforms and merchants.

Among them, chain milk tea brands primarily based on franchising are particularly proactive. This is because these brands profit mainly by selling raw materials and packaging to franchisees. The surge in orders brought about by takeaway subsidies has objectively increased the revenue of the supply chain business.

Some believe that freshly made tea beverages are highly reliant on online channels. Participating in the subsidy war can enhance brand exposure and sales, deepen cooperation with platforms, and quickly seize and consolidate market share, responding to investors' expectations for growth. Zhao Pengfei, founding partner of Chengchi Capital, noted: "Those companies that were originally at a disadvantage in the tea beverage competition and had aggressive management styles are now embracing the platform subsidy war with a more proactive attitude."

Some brands had already planned to subsidize franchisees, and the "timely rain" from takeaway platforms resonates with this. It is understood that Lucky Coffee under Mixue Ice City settles with franchisees based on the store group purchase price for "0 Yuan Purchase" takeout; Auntea Jenny settles with some franchisees at 3.9 Yuan/cup for jasmine iced tea participating in specific takeaway activities.

However, for most merchants like Huang Yi, the biggest demand right now is: hoping the takeaway war ends soon.

Wang Puzhong, CEO of Meituan's core local business, previously stated in an interview: China's tea beverage production capacity is excessive; as long as one dares to subsidize tea beverages, the order volume can increase, but the number of orders and valuable GTV are two different things. If the takeaway melee continues, leading to a sustained decline in store revenue, it will force many franchisees who are still struggling to close their stores early, and even profitable super franchisees will turn to other food categories with higher profits.

The end time is difficult to predict accurately. Economist Song Qinghui believes that it is unlikely to completely end in the short term, but in the medium to long term, its intensity and scope may gradually converge and weaken. Overall, it is expected that within the next 6 to 12 months, as regulatory pressures continue to increase and platforms face greater profit pressures, the intensity of subsidies may become more rational, and future competition may shift more towards service, efficiency, and innovation.

Ultimately, the takeaway war is a "burning money" capital game that requires huge capital support. As the market enters a phase of stock competition, if platforms cannot see a profit outlook for a long time, investors may reduce their investments, forcing platforms to adjust their strategies, gradually shifting from "burning money to seize the market" to "refined operations" to seek the profit margins necessary for survival.

And once the takeaway war ends, will consumers accustomed to low-priced tea beverages still accept the original prices...? "Currently, consumers only focus on price tags and are almost indifferent to brand symbols or product differences. As soon as a cheaper alternative appears, they will turn away without hesitation, and brand loyalty will quickly diminish. In the long run, the inertia of 'the low-priced wins' not only erodes brand equity but also traps the entire industry in a quagmire of thin profits or even losses; when capital sees no returns, it will tighten its purse strings, and the health and overall valuation of the industry will be adversely affected," said a consumer investor.

Author: Hu Shixin, Source: Tencent News, Original Title: "Under the Fire of Takeout Wars, How Long Can 0 Yuan Milk Tea Last?"

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