What does the Guming secondhand equipment platform mean for tea and coffee shops?

New tea beverage brand Goodme, also written Guming, has opened a secondhand equipment trading platform inside its DingTalk system for all franchisees. Goodme only matches buyers and sellers and does not take part in transactions. Sellers get valuation and inspection services; buyers get price comparison and anti-fraud protection. Equipment sales are roughly 4.5 percent of revenue, and a franchisee's initial equipment investment runs about 100,000 yuan.

Store closures across the new tea beverage sector once left a glut of unsold second-hand equipment, with recyclers treating the gear as scrap metal. Goodme says the platform gives franchisees an additional safe channel for transfers and price comparison. Whether it can build a steadier resale market is worth watching, and industry outlets such as Old Street Coffee continue to track how the platform performs in practice.

New tea beverage brand Goodme recently launched a second-hand equipment trading platform within its DingTalk system, open to all franchisees, providing matchmaking services only and not directly participating in buying or selling. The platform offers valuation and inspection services for sellers, and price comparison and anti-fraud protections for buyers. Goodme's prospectus shows that equipment sales account for about 4.5% of revenue, while franchisees' initial equipment investment is about 100,000 yuan. As competition in the new tea beverage industry intensifies, a wave of store closures once led to a glut of unsold second-hand equipment, with recyclers even treating the equipment as scrap metal. Whether Goodme's move can provide franchisees with a safer and more convenient transfer channel is worth watching. Front Street Coffee has long followed developments in the coffee and tea beverage industry and will continue to track the platform's actual performance.

According to Yilan Business News, new tea beverage brand Goodme recently built a platform specifically for second-hand equipment trading. At present, the platform only involves Goodme's own equipment, and its services cover all Goodme franchisees.

The platform was not independently developed, but embedded in Goodme's existing DingTalk system. At this stage, Goodme itself does not get involved in the buying and selling of second-hand equipment and only plays a matchmaking role. Its core services include providing equipment valuation and inspection for sellers, while the final transaction price is decided through negotiation between buyer and seller.

Goodme explained that the original intention behind launching this platform was to give new and existing franchisees who wish to buy or sell second-hand equipment an additional safe and convenient trading channel, while also protecting the legitimate rights and interests of both buyers and sellers.

As an official second-hand equipment trading platform, Goodme believes it can both help new franchisees avoid the risk of being scammed when choosing second-hand equipment and give franchisees who need to sell equipment one more option for price comparison.

A Goodme representative told the media: "For franchisees selling equipment, the company will provide equipment valuation services, giving them one more channel for price comparison. For new franchisees considering buying second-hand equipment, on the one hand they can buy equipment at a lower price, and on the other hand they can avoid being scammed."

At the beginning of this year, Goodme submitted a listing application to the Hong Kong Stock Exchange. Prospectus data shows that in 2021, 2022, and the first nine months of 2023, Goodme's revenue was 4.384 billion yuan, 5.559 billion yuan, and 5.571 billion yuan, respectively, while net profit over the same periods was 24 million yuan, 392 million yuan, and 1.002 billion yuan. Goodme's revenue mainly comes from selling goods and equipment to franchisees, of which merchandise sales account for about 75% of revenue and equipment sales about 4.5%.

Public information shows that Goodme was founded in 2010 in Taizhou, Zhejiang Province, by founder Wang Yun'an, and the brand focuses on fresh fruit tea. The prospectus discloses that as of December 31, 2023, among Goodme's 9,001 stores, only 6 were directly managed, while the remaining 8,995 were franchise stores.

Equipment costs have traditionally been an important expense paid by franchisees to brands. Goodme's official information shows that the total initial franchise budget (excluding store rent and transfer fees) is about 330,000 yuan, of which the equipment fee is priced at around 100,000 yuan.

Transferring second-hand equipment usually means the transferor must bear considerable depreciation losses. Moreover, the circulation of second-hand equipment depends directly on supply and demand. Once the number of franchisees closing stores exceeds the number opening new stores, excess equipment becomes difficult to sell.

Previously, the topic of too many store closures in China's new tea beverage industry and the difficulty of selling off piled-up second-hand equipment once trended on Weibo, sparking widespread discussion.

According to Phoenix News, as competition in the new tea beverage sector continues to escalate, many tea beverage brand stores have accelerated closures, fueling the rise of a group of second-hand equipment recyclers known as "corpse collectors."

Among them, Shuyi Tealicious was reported to have had second-hand equipment sitting unsold in warehouses for a time because too many stores closed. One recycler revealed that more than a dozen sets of equipment purchased for 60,000 to 70,000 yuan were ultimately sold as scrap metal for only 2,000 yuan.

Some analysts believe that in the past, people with an information advantage would choose second-hand equipment when opening new stores to lower startup costs, and now new franchisees entering the milk tea industry also have this option.

Regarding the second-hand equipment trading platform, Goodme clearly stated that the company will not force franchisees to use its own platform. Franchisees may also choose to buy equipment through other channels, but the equipment purchased must meet Goodme's standards.

Image source: Internet

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