The share price of Nai Xue's tea fell to the lowest point after being fined 28000. How to solve the problem of food safety?

On December 1st, Beijing Nai Xue Food and Beverage Management Co., Ltd. was fined 28000 yuan by Beijing Xicheng District Statistics Bureau for providing false "total wage index for employees in 2020" in violation of the Statistics Law of the people's Republic of China. After the punishment, Naxue's share price fell slightly, from HK $9.35 to HK $9.25. As of December 3, Naxue's share price had fallen to HK $8.84, the lowest since it went public.

On June 30 this year, Nai Xue was listed on the Hong Kong Stock Exchange. As the first share in the new tea industry, the share price broke on the first day of listing, falling as much as 13.54 per cent to HK $17.12 on the day. Since then, Naixue's share price has been falling because of frequent food safety problems and insufficient profits, falling by as much as 26.8% on July 27. Today, the share price of Naxue is almost halved compared with when it opened, and the company expects a full-year loss in 2021.

Looking at the "tragic situation" since the listing of Nai Xue, Xi Cha is also on the edge of "temptation". Xicha, which has repeatedly heard the news of listing, has been slow to start, because the new tea, which was once sought after by investors, is now being tested and questioned. The main reason for questioning lies in food safety. Since the launch of Naxue's tea, there have been frequent consumer complaints about Naixue on third-party platforms, including the presence of foreign bodies (hair, plastic, paper scraps) in drinks. In the process of making drinks, the bar is sanitary and messy, the food sold is moldy, and so on.

In August 2021, Xinhua News Agency even reported that there were problems such as the preparation of raw materials and messy sanitary environment in some Nai Xue stores, which aroused public opinion and concern. It is reported that there are some problems in these stores, such as cockroach crawling, unwashed rags, false label time and so on. After the appearance of the report, the company only dealt with it in private and did not give an "explanation" to the consumers. So the Xinhua News Agency continued to "explode the melon", pointing out the problem that the staff continued to use it after the fruit had been cut off in some stores. As soon as the news came out, netizens fried directly! The company also immediately investigated and rectified the stores involved overnight, invited market regulators to door-to-door inspection, and announced the inspection results as soon as possible.

After the melon explosion incident, Naixue's food safety problems still occur frequently, and the brand reputation is also greatly reduced, which also reduces consumers' willingness to spend, thus affecting the stock price. The second is the volume of the industry, Nai Xue's own tea does not have many advantages. In the case of the "new tea giants" Xi Tea, Le Le Tea and Nai Xue Tea, apart from making it easy for women to hold on to the take-out cup, Nai Xue is not as fast as Happy Tea and Happy Tea in terms of renewal speed, uniqueness and attractiveness. Even with the launch of new products, the taste is similar to that of Happy Tea and Lele Tea, but the shape of the drink and the way it is sold are not as attractive as the two of them.

Although Nai Xue first launched the sales model of "tea + soft European bag", it did not attract consumers' desire to buy, and then Lele Tea also launched the same sales model, because the product and price are more attractive. Immediately after the launch, it grabbed a lot of Naxue's market. And Xi Tea is one after another co-signed with other brands, the launch of milk tea, surrounding products, brand awareness is also higher than Nai Xue's tea.

In the business model, the stores of Happy Tea and Lele Tea are relatively small, which can effectively control operating costs. Because of the need for freshly baked European bags, Naixue's tea has no way to reduce costs through prefabrication in the central kitchen and reducing the size of the store, and is worried that it will not be able to meet users who like a larger social area after reducing the size of the store. Generally speaking, as long as Nai Xue's tea does not solve the problems of food safety and profitability, the stock price will only remain depressed, or even fall even more.

Photo Source: Internet

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