This is the first public shot of the “tea drinking giant” Xicha.
Recently, the specialty coffee brand Seesaw completed the A+ round of financing of more than 100 million yuan. This round was led by Hey Tea and the old shareholder Hony Pak Fook co- invested. The funds will be used for national store expansion, supply chain construction and digital construction.
There are several important points about the collaboration of the two: First, this is the first investment shot announced by Hey Tea, and it has also entered the coffee track for the first time. Second, Seesaw Coffee’s re-financing after a lapse of 4 years-2017 Seesaw received 45 million A round of financing from Hony Pfaff.
In the “New Year of Consumption”, chain coffee is a big hit, and Seesaw’s current round of financing is also very popular. Investors close to Seesaw revealed that many first-line capitals are watching Seesaw, and some have entered substantive negotiations. HeyTea found Seesaw, and the two sides quickly negotiated. The A+ round quota was not large, and it was finally released to HeyTea and old shareholders.
“There are still many families lining up.”
With sufficient ammunition, Seesaw will also speed up the pace of scale. It is reported that Seesaw’s current number of stores is 30+, and the target for the number of stores by the end of this year is 100+.
The “business card” of the coffee capital
For the first time, the “tea drinking giant” Heycha made its debut publicly, and the subject turned out to be a coffee brand-what is Seesaw’s origin?
In 2012, after inspecting coffee chains in South Korea and Japan, the founding team saw the huge potential of coffee localization, and returned to China to establish a specialty coffee brand in Shanghai, the “Coffee Capital”, named Seesaw, which means Seesaw in Chinese. “Seesaw” means “sweet, sour, bitter and mellow” with a balance of five flavors.
At that time, domestic consumers had just passed the market baptism of Nestlé and Starbucks , and the concept of “specialty coffee” had not yet entered the field of public consumption. Seesaw was one of the representative brands of “local first-generation specialty coffee”.
But Seesaw’s development speed is not fast. Five years before its founding, Seesaw only opened 7 stores. “Slow” is mainly due to the characteristics of specialty coffee-small customer base, high barriers to entry, and immature profit model-which largely affects commercialization and scale.
Subsequently, Seesaw went to the “breaking circle” of specialty coffee-breaking the site selection convention of small street shops, grabbing commercial complexes and urban landmarks with high passenger flow and strong customer shopping ability, and at the same time opened the store area to 200 Square meters, and a lot of effort in space design, which makes Seesaw have the potential of “net celebrity”.
In addition, there are two things that have changed the development trend of Seesaw and even domestic specialty coffee.
One is the drastic changes in the coffee market.
Internet coffee, represented by Ruixing, quickly injected a “cardiotonic agent” into the coffee market with its “blitz expansion”, and the popularization of coffee beverages has gradually become a new business proposition. Coupled with the rise of online specialty coffee such as Sandton, Yongpu, Sumidachuan, etc., the entire coffee market is accelerating its maturity.
The second is the rise of new teas.
The new-style tea, represented by Heytea, has emerged in the consumer market with its renovated taste and appearance. At the same time, the new-style tea has also cultivated the consumer’s “nothing to drink” drinking habit.
On this basis, Seesaw, who is obsessed with quality and store experience, has found a new answer-Chinese taste. In 2021, Seesaw’s brand proposition changed from “a good cup of coffee” to “a cup of delicious coffee”, and found a new entry point-creative coffee, which is based on coffee, combined with tea, juice, sparkling water, and dried fruits Coffee drinks with other elements.
Then the strategy began to work. From September 2020 to March 2021, the sales share of Seesaw creative coffee increased from 10% to 40%. By May of this year, it even surpassed traditional coffee. The repurchase rate was as high as 40%. The customer base of Generation Z accounted for The ratio has risen from 5% to 17%.
Seesaw has achieved sustained growth in the past 12 months, with more than 90% of its stores continuing to be profitable, and brand members and fans exceeding 1.5 million.
Now Seesaw is not only aiming at the coffee market, but the market potential behind the “coffee-drinking”. The result is a larger market and wider competition. Seesaw’s opponents are not only Starbucks, Tim Hortons and other coffee brands, but also popular new tea brands.
A phone call, Hi Tea Investment
The two new consumer brands have some connections before. An example is that both parties have hired the same space and brand designers.
This premise determines the efficiency of communication between the two parties. Nie Yunchen, the founder of HiTea, is a typical “productist”. Decided to invest in Seesaw. What he fancyed was Seesaw’s brand tonality, product capabilities and space building capabilities-you can understand it as a broad product user interface.
According to people familiar with the matter, the decision-making efficiency of HiTea’s investment in Seesaw is very efficient-a phone call is just a decision.
After the two parties join forces, HiTea and Seesaw will collaborate and share on multiple levels , including brand building, product development and supply chain, digitalization and organization building.
Despite the blessing of Hey Tea, Seesaw’s “coffee localization” has a long way to go.
Seesaw has always regarded Starbucks’ localization in the American market as a successful model, and made coffee from Italy into a coffee that suits American tastes. It has created new coffee drinks such as American, latte, and Frappuccino, and created a socially based The “third space” of demand, and this process took nearly 40 years.
According to this logic, Seesaw’s strategy is similar. In addition to researching and developing creative coffees such as “Midsummer Fig Cold Brew”, they are also working hard on the quality of specialty coffee and the creation of creative spaces.
In the supply chain, Seesaw currently has a global procurement team and has signed cooperation with five major estates. On the one hand, you can obtain raw materials that are about 20% cheaper than the same industry. On the other hand, you can also customize the flavor of coffee beans. Next, we will use digital means to further improve supply capacity and reduce costs, iteratively use WeChat applets, and combine private domains. The flow is for membership operations.
At the same time, Seesaw is also making new business attempts. Including the opening of “more flexible” mini stores in the business district, the development of online retail, and the trial operation of the “Japanese coffee + night wine” model.
In addition, the scale and rhythm of Seesaw will also accelerate. At present, it is planned to cover the top 10 new first-tier cities in the country’s GDP. Beijing and Shanghai will focus on the layout, especially the “base camp” Shanghai will focus on expansion. Currently, Seesaw has about 30+ stores nationwide, and it is expected to exceed 100 by the end of the year.
Seesaw believes that coffee has a more three-dimensional and diversified scene. In addition to beverage needs, there are also social needs, space experience needs, etc., which will make coffee have a greater market prospect than tea.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/hitea-enters-the-coffee-track-teamed-up-with-baifu-to-invest-more-than-100-million-yuan-in-seesaw-coffee/ Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.