The competition of coffee business has been getting white-hot in China, between the large incumbents and surging startups. We talked about the digital creativeness of the coffee promotion in the country(see link here). But in the traditional land of tea, the scene has been moving and shaking even more rapidly.
For a long time, the modern tea drinks were dominated by two major categories in China:
-Bubble milk tea originated from Taiwan
Then starting in 2012, new concept like HeyTea, founded in a 3rd tier city in Guangdong province, which specializes in cheese-topped tea, took the market by storm. It stirred a whirlwind in WeChat Moments due to its hunger marketing tactics, and the minimum two hours of queuing line outside its stores even created business opportunities for scalpers. The fame soon helped the startup rake in RMB 500 million from investors like IDG capital.
Last year, another revolutionary tea concept came into the center of the spotlight: AnswerTea, and the wide fire of popularity, selling at the rate of over 120, 000 cups per day with a price around RMB 15, was ignited from a 3rd tier city Zhengzhou, in Henan Province. The founder said the viral effect of AnswerTea is primarily leveraging the distribution channel of short video Douyin (AnswerTea demo has already been viewed by 55 million, liked by 1.1 million) because Douyin’s user profiles coincidentally match AnswerTea’s targeted customers who are 80% female between the age of 15-32.
Drinking AnswerTea actually works in a 3 steps ritual like below, while turning the teacup into an oracle to answer the puzzles of your life.
The playbook behind such mysterious divination is constructed as follows:
- The image recognition technology scans the question from the teacup
- Then the AI algorithms would work on the sentiment analysis (not keywords extraction according to the founder interview) to understand the contextual meaning
- Next, the algorithms would try to match the question with certain answer selected from the database curated from knowledge such as jokes, astrology, Tarot cards, philosophy etc (the founder emphasized that the answer should be highly personalized)
- Finally, it prints the answer on the cream of the tea via 3D printer technology
- Additionally, the startup has built up a centralized Saas platform to collect Question&Answer data, product data, customer data, sales data etc in order to facilitate each store’s daily operation.
AnswerTea now has 7 flagship stores and around 523 franchise stores.
However many critics throw doubts on the high-technology AnswerTea claimed to develop. Some are even disparaging its low-quality tea taste and high-flying marketing stunt.
At the end of the day, we are not surprised that the sustainability of many new-born tea brands fueled by the booming internet culture in China remains just a fad and often fades away quickly like froth.
By: Cecilia Wu