After launching new packaging, Wang Laoji is challenging 'Heytea' and 'Sang Tea' by opening offline stores selling freshly brewed herbal tea. According to Southern Metropolis Daily, sourced from Guangzhou Wang Laoji Catering Management Development Co., Ltd. (hereinafter 'Wang Laoji Catering'), a subsidiary of Guangzhou Pharmaceutical Holdings, Wang Laoji herbal tea will officially announce its entry into the ready-to-drink tea market mid-month. Its first batch of offline physical stores will open four at a time, with plans to open 3,000 to 5,000 stores nationwide within four years. In its test store, the Wang Laoji 1828 Freshly Brewed Herbal Tea concept store has a 'modern' style. Besides traditional ancient-method freshly brewed herbal tea, fruit tea and cheese tea also appear in the recommended product catalog, and the packaging is strikingly similar to 'Heytea'. Industry experts analyze that Guangzhou Pharmaceutical Holdings aims to use the youthful stance of freshly brewed tea to narrow the distance with young consumers. In the future, it is expected to have a certain impact on the ready-to-drink tea market and physical herbal tea shops. Open 5,000 stores in 4 years, creating another Wang Laoji? According to information disclosed by Wang Laoji Catering on the 13th, Guangzhou Pharmaceutical Holdings is planning to create another Wang Laoji in the ready-to-drink tea market. According to the plan, by the fourth quarter of next year, Wang Laoji Catering's freshly brewed herbal tea physical stores should complete a layout of 200-300 stores, including 100 in Guangzhou and 100-200 in other parts of Guangdong. Additionally, in the fourth quarter of next year, Wang Laoji Catering will also enter the East China market, with an initial goal of opening 20-50 stores. By 2021, four years later, it aims to open 3,000-5,000 stores. "In the future, we will open more 'black card stores' in university towns and communities," said Huo Liren, deputy general manager of Wang Laoji Catering. He revealed that compared to Wang Laoji Health Company, Wang Laoji Catering Management Company takes on more of the task of expanding the herbal tea category. To achieve the above expansion goals, Wang Laoji Catering will adopt three store-opening models: direct operation, franchising, and regional operation cooperation. Laying out emerging channels, behind it is the anxiety of the FMCG industry Huo Liren introduced: "In fact, as early as two years ago, we were already researching how Wang Laoji should lay out emerging channels and new retail." According to Huo Liren, Wang Laoji Catering was officially registered and established on September 13 last year, holding the right to use the Wang Laoji brand. From company establishment to official public announcement, it went through a preparation period of more than half a year. Guangzhou Pharmaceutical Holdings' purpose in establishing this company is to hope that traditional herbal tea can occupy sufficient market share outside traditional FMCG. Although some of Wang Laoji's freshly brewed herbal tea products look quite similar to 'Heytea' in appearance, Wang Laoji stated: 'Heytea' and other ready-to-drink teas, or internet-famous teas, have very fast product cycles, while Wang Laoji's freshly brewed herbal tea will adhere to the basic attributes of herbal tea. Wang Laoji's accelerated layout of emerging channels and new retail is actually driven by the anxiety of the traditional FMCG industry. Bain's recent report, "Double-Speed Growth in China's FMCG Market - 2017 China Shopper Report," shows the opportunities and challenges FMCG is facing. From the overall industry environment, the situation still hasn't improved. In 2016, the sales growth rate of China's FMCG market was only 3%, a decrease of 0.6 percentage points compared to the previous year, and far from the 11.8% growth rate in 2012. The culprit is sluggish FMCG sales volume, which grew only 0.6% compared to the previous year. Average selling prices also showed weakness; in 2015, price growth was 4.4%, but in 2016, it shrank to 2.4%, slightly above the inflation rate. Currently, the FMCG market, especially the beverage market, is slowing down, and companies need innovative measures to cater to the market. This foray into the ready-to-drink tea market is a bold attempt to get closer to consumers. Once Wang Laoji sets a precedent for beverage companies opening offline stores, will Xiang Piao Piao and Six Walnuts follow? (Source: Southern Metropolis Daily) Text source: Food Business Observation -END-