China Coffee Market: Scale 70 Billion Industry Distorts Off Commercial Track
According to the popular statistics in the market, the size of China's coffee consumption market reached 70 billion in 2015, and it is breaking out at an annual growth rate of 15%, reaching a trillion yuan by 2025.
Paradoxically, why is capital dismissive of a "thriving" industry with a market size of 70 billion and a market growth rate of 15 per cent?
To this end, Nei Shenjun specifically sought advice from several senior "capitalists".
01
Why does capital look down on the coffee industry?
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The industry is distorted and deviated from the commercial track
"at present, there is no particularly sexy object in the category of coffee." Zeng Fanhua, vice president of Tiantu Capital, told Neisenjun. Tiantu Capital focuses on consumer investment and has invested in Ganqi Food, Tangcheng Chef, Zhou's Black Duck and other catering brands.
What is the sexy object?
In Zeng Fanhua's view, there are differentiated brands. "Brand tonality, target audience and other aspects of differentiation and innovation can be."
No survival without difference, no survival without innovation.
Carving time coffee once entered the capital field of vision with "differentiation". In 2011 and 2012, Trustbridge Partners injected 2 funds into carving time Coffee.
Zheng Qingsheng, director of Trustbridge Partners, who decided to invest in sculpture time, has now joined Sequoia Capital. At that time, his main consideration was the difference between the carving time and Starbucks. "there are business opportunities for its maverick."
Obviously, in the eyes of the capital side, the reason why the coffee industry is left out has a lot to do with the overall quality of the coffee people themselves in business. It is mainly shown in these aspects:
Indulge in coffee technology and worship the almost abnormal flavor. Blindly believe in technical indicators such as SCAA, but ignore the coffee taste that local consumers are willing to accept in the market. Look next door, the decline of traditional tea, the so-called "tea culture" is to blame.
Too much respect for niche markets. The rise of boutique coffee should have evolved from the mass market of coffee. As a result, the whole industry is pursuing niche boutiques and even cursing instant products. If we treat coffee as a luxury and read coffee culture as the Bible, the road can only get narrower and narrower.
The worship of rival craftsmanship and the rejection of new technologies. In the eyes of investors, these distorted behaviors have been led into the atmosphere of the whole industry, taking self-feelings as a treasure, and have long deviated far from the track of commercial capital.
"the unicorn that the capital expects, hasn't appeared yet."
In addition to the paradox of the business atmosphere in the industry, the lack of pioneering talents in the coffee industry has also deterred capital.
When deciding to invest in a certain field, Tiantu Capital pays more attention to "people"-a good product manager, great ambition and excellent leadership.
Coffee unicorn enterprises will attract the attention of capital.
"if there is a great entrepreneur in the coffee industry, I will certainly pay attention to it." Zeng Fanhua said.
Wang Caihua, founder of the Cafe Industrial Fund, said that the coffee unicorn enterprises that the capital is looking forward to have not yet appeared in the view of the capital side.
"in fact, Capital has been expecting the emergence of a coffee unicorn for the past two years. We have been paying attention to the innovative model of the coffee industry, the breakthrough of the coffee shop brand, and the renewal of the coffee business model. However, the atmosphere of the coffee industry, everyone amuses themselves, self-comfort, there has not been a dark horse-type enterprises or innovative technology-based benchmark enterprises, has not been outstanding. "
"it's just that there is a lack of pioneering talent in the coffee field right now." Zeng Fanhua sighed.
There is a bubble in coffee data, and the scale of the industry has not yet reached.
At present, the Chinese mainland coffee market is about 70 billion yuan in size-a far cry from neighboring South Korea and Japan, and only the same size as Taiwan-and there is still huge market space.
Most of the data in the coffee industry are bubbly and lack of professional industry data.
Although the consumption data is rising, this volume is not enough to attract the attention of industrial capital.
Wang Caihua said that capital is highly concerned about the volume of the market. Generally speaking, the stage of 100 billion-150 billion is the best time for capital intervention. You know, profit-seeking capital is the easiest to calculate the timing to get a better return, and they tend to be only half a step ahead of the market.
"the domestic coffee market is still a relatively weak and small niche market, with tens of billions of dollars, which is really not worth mentioning."
In addition, many people in the industry believe that there are a lot of bubbles in the data we see at present.
The figures we have seen over the years are actually an indicator of imports and exports. The real data should include three aspects: import and export data; electronic transaction data of e-commerce such as Taobao; business and tax data of cafes and consumption data of instant channels such as Nestl é and Maxwell.
"generally speaking, coffee industry data are still lack of standards, professionalism and authority. I dare not compliment the current analysis of the coffee market. "
Therefore, cafe owners should not get too excited. The rising industry data does not mean that the number of people who go to cafes for coffee is on the rise compared with the same period last year.
Overall, the data are unclear, making the coffee industry look like rain, fog and wind. If the industrial capital does not understand, it is difficult to enter hastily.
Non-standard management
In the view of the capital side, there is no opportunity in the field of instant coffee, while the cafe has a low threshold, low industrialization, excessive assets, poor profitability, and
The management is not standard.
Coffee industry has great potential, but a lot of management is not in place.
This makes the coffee industry a contradiction: the potential is huge but the industry is complicated, which makes the capital both love and fear.
"We know very clearly that the reason why it is really difficult to form a time node for intervention in the coffee industry is:
There are some problems in the coffee shop market that can be competed for, such as unstable operation, opacity, high personnel cost and so on. " Wang Caihua said.
For example, financial opacity, no invoices for coffee, no audit basis for income; no social security for employees, large staff mobility; low degree of standardization, especially boutique coffee, low input-output ratio.
02
Coffee brands embraced by capital
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In fact, capital has not abandoned the coffee industry. As far as coffee brands are concerned, at least some of them have been invested. Neishenjun briefly combed it and roughly divided it into two stages.
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