Source | Dao Fa Research Institute On one hand, Mixue Bingcheng, the king of franchising, spent nearly 300 million yuan to acquire a 53% stake in the draft beer brand Fujia, expanding its business from affordable tea and coffee to affordable beer. On the other hand, Chayanyuese, the largest fully direct-operated star, launched alcoholic tea products through its sub-brand Yuanyang Coffee in 2022, and in 2024 officially spun off its alcohol business into a separate sub-brand, selling alcohol-containing products all day. The essence of the tipsy business is largely about selling emotional value. Its core is to bring psychological and emotional satisfaction to consumers, so rather than selling alcohol, it is more like selling a low-burden, controllable, and highly suitable emotional solution for modern young people. This is the result of social pressure, social needs, and changing consumption concepts. As a mild, controllable, and brief escape, being tipsy is a just-right form of self-comfort. It allows people to temporarily forget social pressure without getting drunk and affecting the next day's work. It is also a rebellion against traditional drinking culture. Traditional drinking culture, which emphasizes urging others to drink and competing in drinking, especially in business settings, often carries obvious purpose and utilitarianism. But young people drink more to please themselves and enjoy the moment, whether it's watching a show alone at home after work with a drink, or gathering with friends. Relaxation, comfort, and happiness are the highest standards. For young people, drinking has become an enjoyment again. The sustained growth of Rio, the rapid expansion of Helen's Bar, and the popularity of convenience store cocktail mixing all show that "tipsy" has become an important lifestyle for young people. Back to Mixue and Chayan. From a business perspective, whether it's Mixue Group, which is showing initial growth pressure, or Chayanyuese, which missed the window for scaling and hasn't fully expanded beyond Hunan, seizing the "tipsy" consumption trend has become a relatively low-barrier option to replicate their existing tea and coffee experience. Although both aim to cover a broader population and extend consumption scenarios from afternoon tea to all-day, their paths are completely different. Mixue Bingcheng's success lies in efficiency, while Chayanyuese's success lies in culture. Their cross-industry expansion is essentially transferring their core capabilities to the new track of tipsy. But can creating a "beer version of Mixue Bingcheng" and Chayanyuese selling alcohol in milk tea shops meet young people's imagination of tipsy moments? Let's look at what these two brands have done. Mixue Bingcheng: Fast and Wide Starting from a small cold drink shop in Zhengzhou, Henan, to now having 58,000 stores globally, Mixue Bingcheng's success lies in the cost barrier built by extreme supply chain and scale. Its stores are franchised to tens of thousands of franchisees, and it earns revenue by selling ingredients, equipment, and packaging to franchisees. From the interim results released by Mixue Group in August this year, it can be seen that 97.4% of Mixue Bingcheng's 14.875 billion yuan revenue came from selling ingredients, packaging, and equipment to franchisees. [1] The more stores franchisees open, the lower the procurement and production costs, which maintains and consolidates "extreme affordability," and the more Mixue Group earns. However, this growth model also has hidden concerns. As of now, Mixue Bingcheng has opened 53,000 stores globally, with 48,000 in mainland China. In some cities, it's not uncommon to see two or even three Mixue Bingcheng stores on the same street. Mixue Bingcheng once invited experts to study how many stores it could open in China. Based on population calculations, the answer was 45,000. [2] The result of saturation is that store growth is slowing year by year, store closures are increasing year-on-year, and average daily sales per store are declining. According to the post-hearing information pack disclosed before Mixue Bingcheng's listing, in the first nine months of 2024, the average terminal sales per franchise store decreased by 4.63% year-on-year to 1.0827 million yuan. Average daily terminal retail sales and beverage cup sales per store also faced pressure, declining by 5.25% and 3.67%, respectively. Meanwhile, the number of franchise store closures has been accelerating year by year, from 557 in 2021 to 1,609 in the first nine months of 2024. Under such circumstances, opening more stores globally and creating another Mixue Bingcheng has become an inevitable choice for Mixue Group. "Milk tea for adults," Fujia, is a perfect fit. With a steadily growing draft beer track, a friendly price range of 6-10 yuan per 500mL, and a speed of opening 1,200 stores in 28 provinces in four years, it has the potential to become the affordable king in the draft beer track like Mixue Bingcheng. But if Fujia wants to reach Mixue Bingcheng's scale, it will be quite difficult. First, compared with milk tea and coffee, the alcohol beverage track has higher barriers and lower consumption frequency. The market capacity ceiling for Fujia is lower than that of Mixue Bingcheng. Since alcohol consumption scenarios are mostly concentrated at night and on weekends, requiring social and nighttime foot traffic, Fujia is also more restricted in site selection than Mixue Bingcheng, making it difficult to open multiple stores on the same street. Second, the core competitors of draft beer are traditional canned beer and affordable chain bars represented by Helen's. The tea market is fragmented, so Mixue Bingcheng was able to quickly dominate with low prices. But the beer market is highly concentrated, with giants like Budweiser, Tsingtao, and Snow making significant investments in craft and draft channels, making competition for Fujia more intense. For Fujia, the opportunity lies in seizing the chance brought by the change in drinking culture, standardizing and scaling draft beer like tea drinks, and becoming synonymous with affordable draft beer in China, to open a new blue ocean of low-priced fresh-made beer in a market dominated by giants. Chayanyuese: Slow and Deep As a regional myth, Chayanyuese's growth model is completely opposite to Mixue Bingcheng's, built on slowness and depth. It insists on direct operation, excels at creating cultural symbols and emotional experiences, and achieves deep growth based on brand momentum and user experience, bringing higher per-store profits and member repurchase. As of June 30, 2024, Chayan Group's revenue was 1.59 billion yuan, a 29.1% increase compared with the first half of last year, with more than one-third of revenue coming from peripheral product sales rather than milk tea itself. Another noteworthy figure is that member consumption accounted for 78.9% [3] Peripheral product sales usually depend on consumers' recognition of brand culture and emotional attachment. Such a high proportion indicates that Chayanyuese has transcended being a functional beverage in consumers' minds and has become a cultural symbol worth buying peripheral products from. The 78.9% member consumption ratio can be simply understood as for every five cups of tea sold, four are bought by members. This means Chayanyuese has a very stable and high-frequency consumer base, greatly reducing dependence on new customer acquisition. Unique brand culture and highly loyal users have become two barriers for Chayanyuese, effectively resisting the impact of price wars and homogenized competition, supporting its differentiation and sustained growth in the highly competitive tea market. When exploring the new consumption scenario of "tipsy," the Chayan family continued this approach, adopting a multi-brand matrix and all-day coverage strategy. Currently, its four sub-brands have all launched tea-alcohol products around their core positioning. Since all four brands allow member balance/points to be used interchangeably, new products, new brands, and new scenarios can quickly be accepted and tried by the large, high-value existing customer base. Among them, the sub-brand Day and Night Poetry Tea and Wine, launched last year, maintains Chayanyuese's literary tone, focusing on creating cultural symbols and providing emotional experiences. It directly binds the drinking scenario with poetry and Chinese aesthetics, catering to young people's emotional needs for relaxation, literary atmosphere, and high aesthetics, differentiating from traditional bars. At the same time, it continues to demonstrate strong innovation in products, developing forms like cocktail tea and nitrogen tea wine, integrating tea and alcohol innovation, in line with young people's trend of diversified and low-alcohol drinking tastes. Chayanyuese's biggest challenge is how to take this growth model out of Hunan. Specifically, how to solve the cost, operation, and efficiency issues brought by scale expansion while maintaining direct-operated quality and cultural tone. It is also these difficulties that caused it to miss the best window for scaling in the past five years, allowing Bawang Chaji to overtake it in the national-style light milk tea track. Chayanyuese's founder, Lü Liang, has also considered franchising. But in his view, direct operation and franchising solve two different problems: "one solves the problem of how franchisees make money and build reputation, and the other solves the problem of C-end customer experience." He is better at the latter. [4] Over the past year, there have been repeated rumors that Chayanyuese would go public on the secondary market. Actions such as the collective exit of old shareholders and the introduction of Pan Pan, managing partner of Tiantu Investment, as the new strategic head, have been interpreted by the market and media as preparations for listing. Facing listing pressure and competition from rivals, Chayanyuese is trying to use the deep growth story of "all-day, multi-category, high-value members" to respond to market doubts about scaling. The "tipsy" business may not be a means of scaling, but rather a support for high valuation. Even if it is slow, Chayanyuese can continue to incubate new cultural symbols, expand consumption scenarios, and achieve quality growth. References: [1] Hong Kong Stock Exchange: Mixue Group 2025 Interim Results Report; [2] LatePost: The Difficult and Extreme Tea Business, 13 Charts on Mixue Bingcheng's IPO; [3] Yao Lan Yvonne: Exclusive | MANNER COFFEE and Chayanyuese 2024 Net Profits Approximately 300 Million and 450 Million Yuan Respectively; [4] CMO Training Camp: Dialogue with Chayanyuese CEO Lü Liang: As Milk Tea Industry Competition Intensifies, How Has Chayanyuese Survived for 10 Years.