Nayuki Dream Factory Closure and the Old Street Coffee House Lesson
Nayuki's largest store, the Dream Factory at Shenzhen Coastal City, has closed and will be rebuilt as Nayuki Life, a lifestyle concept store. The roughly thousand-square-meter flagship once took in close to a million in revenue within three days of opening and tested formats from tea drinks to coffee, craft beer, Western food, and retail.
The renovation reflects pressure across new-style tea drinks, where similar menus make differentiation hard. Nayuki has already tried a tavern concept, Nayuki PRO, a bookstore, and ready-to-drink production lines. Whether multi-format stores can carry the brand is still open. The shift mirrors what an old street coffee house and international coffee brands face when drinks alone no longer hold customers.
Nayuki quickly rose to fame with its combination of tea drinks and soft European bread, becoming a leading brand in the new-style tea beverage sector. However, its largest store nationwide—Nayuki Dream Factory in Shenzhen Coastal City—recently closed quietly, and the site will be upgraded to "Nayuki Life," a lifestyle concept store. This thousand-square-meter flagship, which once generated nearly a million in revenue within three days of opening, embodied Nayuki's ambition to experiment across multiple business formats, from tea drinks to coffee, craft beer, Western cuisine, and retail. From Nayuki Tavern to Nayuki PRO, and then to Nayuki Bookstore and ready-to-drink production lines, Nayuki has continuously tried to break the boundaries of tea drinks. This renovation of its largest store reflects the collective anxiety of brands seeking differentiation amid intensifying homogenized competition in the new-style tea beverage industry. This article traces the rise and fall of Nayuki Dream Factory and explores whether multi-format development can truly be the breakthrough path for tea beverage brands.
For office workers toiling away every day, a cup of milk tea and a dessert is often the standard way to pass a busy afternoon. Many cafes and milk tea shops have seized on this consumer psychology, selling desserts alongside drinks to save customers the trouble of choosing. Nayuki precisely tapped into this demand, breaking through in the new-style tea beverage sector with its combination of tea drinks and soft European bread. But the good times did not last long. Ever since Nayuki claimed the title of the first publicly listed new-style tea beverage brand, various unfavorable news has followed one after another. Now, Nayuki's largest store—Nayuki Dream Factory—has officially ceased operations.
A May 20 report by Jiemian News noted that a reporter visited Nayuki Dream Factory inside Shenzhen Coastal City shopping mall and found the space blocked off by construction hoarding. Information on the hoarding inside the mall indicated that the former Nayuki Dream Factory location will be converted into "Nayuki Life," a lifestyle concept store. Nayuki explained that the Coastal City Nayuki Dream Factory store will be upgraded to "Nayuki Life," continuing Dream Factory's positioning as a "super experimental field." Once the renovation is complete, "Nayuki Life" will offer bakery and tea drinks, reading spaces, floral art, and light meals, among other services.
A staff member at Coastal City shopping mall told the reporter that renovation work at Nayuki Dream Factory had recently begun and the entire project is expected to take about two months.
Nayuki Dream Factory officially opened in November 2019 with a business area of 1,000 square meters, making it Nayuki's largest store worldwide at the time. The store was laid out with fifteen functional sections, including bakery, tea drinks, coffee, craft beer, Western cuisine, retail, and limited-edition products, offering customers a large selection of new products beyond expectations. Rather than calling Nayuki Dream Factory a milk tea shop, it is better described as an experience space blending multiple scenarios: it housed a bistro, a gift area, and a Western restaurant. It is understood that within just three days of opening, the store's revenue approached one million yuan.
The closure and renovation of Nayuki's largest store into a lifestyle concept store may be closely tied to Nayuki's business expansion strategy in recent years. In June 2019, Nayuki entered the alcoholic beverage sector by opening "Nayuki Tavern"; in September 2020, Nayuki moved into the coffee sector, launching a new store format called "Nayuki Tea PRO"; in October 2021, it opened "Nayuki Bookstore" at the south gate of Tsinghua University; and by April 2022, as ready-to-drink products gained market favor for their convenience and portability, Nayuki invested 500 million to 1 billion yuan to acquire RTD (Ready To Drink) production lines.
At present, homogenization among tea beverage brands is a prominent problem, competition in the new-style tea beverage industry keeps intensifying, and this involution has even spread to other fields. As early as February this year, Nayuki's affiliated company, Shenzhen Pindao Catering Management Co., Ltd., submitted registration applications for multiple "Nayuki Life" trademarks, with international classifications covering catering and accommodation, alcohol, clothing, footwear and headwear, and instant foods.
New-style tea drinks continue to heat up nationwide, and the number of milk tea stores keeps climbing. If a brand wants to gain a foothold in this fiercely competitive red ocean, it must constantly develop new products and create hit categories. To stand out among numerous tea beverage brands, a strategy of parallel multi-format development seems more conducive to helping a brand forge a path with differentiated characteristics.
Image source: Internet
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The above content is compiled by CoffeeHunters, a coffee news website.
