---
title: "A Discussion on Xiang Piao Piao's Strategic Missteps"
description: "Xiang Piao Piao, once the leader and pioneer in the milk tea industry, has made strategic errors in expanding its product category, missing out on bottled formats and summer sales, deviating from consumer needs, and failing to upgrade the category, threatening its growth."
author: "林树林"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-10-29"
language: "en"
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# A Discussion on Xiang Piao Piao's Strategic Missteps

> Xiang Piao Piao, once the leader and pioneer in the milk tea industry, has made strategic errors in expanding its product category, missing out on bottled formats and summer sales, deviating from consumer needs, and failing to upgrade the category, threatening its growth.

Wrapping around the earth once, twice, three times, leading national sales, the leader and pioneer of the milk tea industry—these have become classic advertising slogans for Xiang Piao Piao. But has Xiang Piao Piao truly secured its position as the leader? NO! As a leader, Xiang Piao Piao has made strategic missteps in expanding the category, and the milk tea category is facing threats!

Missing the Bottled Format, Losing the Summer Beverage Market

Currently, milk tea comes in three formats: cup, bag, and bottle. These three formats cater to different consumer needs. The cup format, as the typical packaging for packaged milk tea, meets the need for a convenient drinking tool in scenarios without a container, such as while shopping, in classrooms, or during travel. The bag format is introduced to provide an alternative specification for scenarios where a container is available. For instance, instant coffee is mostly bagged because offices have cups, eliminating the need for a paper cup.

Packaged milk tea is typically a hot drink for winter, occupying the winter consumption season. Bottled milk tea, as a summer beverage, extends the sales season of packaged milk tea from winter to summer. After 2013, bottled milk tea became a best-selling summer drink, driven by brands like Uni-President Assam and Master Kong Classic Milk Tea. By the time Xiang Piao Piao launched its Kung Fu Milk Tea, the market opportunity had already been missed.

Missing the Category Attributes, Deviating from Consumer Needs

From 2005 to 2008, during its survival phase, Xiang Piao Piao emphasized "fragrance." After 2009, its advertising focused on brand leadership. In 2014, it returned to the product itself but emphasized "good taste." This has seriously deviated from consumers' category needs for milk tea.

First, there are too many tasty foods and drinks, lacking significant competitive differentiation. Second, "good taste" is neither a core attribute of milk tea nor a significant consumer perception of the product.

Milk tea, a product made by blending "milk and tea," has the rich aroma of milk powder and the fragrance of tea. As a leisure beverage, consumers perceive the distinctive features of milk tea as the combined "fragrant taste" of milk and tea. Xiang Piao Piao's initial "fragrance" was replaced by "good taste," blurring the value concept and seriously deviating from consumers' category needs.

Missing Category Upgrades, Threatening Category Growth

It has been a full decade since milk tea exploded in 2005. During these ten years, consumers have experienced food safety incidents and information technology changes, shifting their consumption concepts and desires toward "health, safety, and convenience." Over the decade, the essence of milk tea has remained unchanged, and the industry's growth space is nearing its ceiling. This is a strategic issue that Xiang Piao Piao, as the representative brand, should consider. However, the biggest change Xiang Piao Piao has made in recent years is the flavor, launching red bean milk tea. We believe Xiang Piao Piao will miss the opportunity for category growth.

Milk tea, a beverage formed by blending "milk and tea," has milk and tea as the root and foundation of the category. Currently, the industry uses unhealthy non-dairy creamer instead of milk powder, which does not align with the health consumption trend. To truly expand milk tea, upgrading milk powder and tea sources, and appealing from a health perspective, is the way to grow the category. Adding "red beans" or "grains" is not enough. Missing the category upgrade is Xiang Piao Piao's real misstep!

In the milk tea category, the competitive landscape is stable, and the category is developing slowly. As a leading brand in sales, Xiang Piao Piao must strategically focus on enhancing and expanding the category space to ensure the milk tea category continues to grow. The key strategy is to innovate the milk tea category from the perspective of consumer needs, using healthy and safe ingredients to establish healthy milk tea, thereby driving the category to be popular again.

**-END-**

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