What Heytea's store closure says about tea brand coffee growth

Heytea's first Chongqing store, open since 2018 in Beicheng district, has closed suddenly. Customer service said it will not reopen. The closure came alongside an internal email suspending business partnership applications, halting franchise expansion. Stores in Zibo, Xuecheng and Binhu also closed or paused.

That store was a landmark for the brand's Chongqing entry, drawing long lines for its grape with cheese drink. One commenter noted high rent and said the site served brand image more than profit, suggesting the lease expiry triggered a cost review. The moves raise questions about brand strategy and coffee growth in a crowded market.

The first Heytea store in Chongqing's Beicheng district has suddenly closed recently. This store, which had been highly popular since its opening in 2018, was once regarded as a landmark presence for the brand in the Chongqing market. The closure surprised many loyal consumers, and the internal email Heytea subsequently released announcing the suspension of business partnership applications stirred up waves in the tea beverage industry. From the fall of the Chongqing flagship store to the successive closures or suspensions of stores in Zibo, Xuecheng, Binhu, and other places, and then to the official主动 halting of franchise expansion, Heytea's series of moves have triggered widespread discussion about brand strategy adjustments, store quality control, and the competitive landscape of the industry.

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Recently, passersby noticed that the Heytea store located in Chongqing's Beicheng district had stopped operating.

According to local residents, this Heytea store opened in 2018 and was the first store Heytea opened in the Chongqing market. In its early days, it caused quite a sensation among milk tea lovers across the city, with many people making special trips to line up and check in, just to taste a cup of the then highly popular "Duo Rou Pu Tao" (grape with cheese).

In the impression of Heytea fans, this store's products had always been stable, its image well maintained, and its business had long been in good shape. No one expected it to suddenly close in recent days, catching many regular customers off guard. Some netizens took the initiative to contact Heytea customer service to inquire about the situation and received the reply that "the person in charge informed us that the store is currently closed and will not reopen," leaving fans who had still held out hope deeply disappointed.

Regarding the reason for the closure, a user in the comments section analyzed that the store's location was rather special, with high rent levels, and that the significance of Chongqing's first store lay more in brand image display than in profitability—"it's basically very hard to make money; the purpose of keeping it open was for advertising." Therefore, the user speculated that after the lease expired, the brand may have comprehensively considered operating costs and profitability and ultimately decided not to renew.

However, some nearby residents also mentioned that the KFC next door closed at the same time as Heytea, suggesting that in addition to rent factors, it might also be related to the mall's upcoming renovation, "because of the Beicheng renovation." Another user said that although the Chongqing flagship store has closed, a new store has already opened nearby, so fans can still buy Heytea products in the surrounding area.

It is worth noting that searching for terms related to "Heytea store closures" on social platforms reveals that stores in Zibo, Shandong; Xuecheng, Shandong; Binhu, Anhui; and other places have also closed or are about to suspend operations. One store that had been open for only about a year is already selling off its equipment, prompting many passersby to sigh.

On Monday of this week, Heytea released an internal all-staff email titled "Not Participating in Digital Games and Scale Involution, Returning to Users and the Brand." The email mentioned that the brand "refuses store-scale involution, temporarily stops accepting business partnership applications, and joins hands with and supports existing business partners to better serve users."

This internal email quickly triggered a chain reaction in the tea beverage industry, pushing Heytea onto Weibo's trending topics and making it the focus of public attention. Some analyses pointed out that although Heytea's store growth has not been slow in the past two years, it is far behind brands such as Mixue Bingcheng and Goodme in the tea beverage track, and it does not have an advantage in numbers. Therefore, the official主动 suspension of franchising without any warning shows that Heytea is unwilling to continue involution and realizes that there is limited room for further competition.

For consumers, they do not think Heytea's suspension of franchise expansion is a bad thing. Some longtime Heytea fans said that since the brand opened franchising, there have been differences in management between directly operated stores and franchise stores, leading to inconsistent product quality. More and more consumers are willing to order from directly operated stores, while somewhat "avoiding" franchise stores.

Based on this, some netizens speculate that after stopping expansion, Heytea may focus on improving quality control at offline stores and adjust the market layout of existing stores. In the short term, the total number of stores may decrease rather than increase.

Image source: Internet

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The above content is compiled by CoffeeHunters, a coffee news website.