Summary of Key Points
Ba Wang Cha Ji recently faced a controversy over "free purchases" due to a pricing error in its mini-program, but some consumers were uninterested because the new drinks didn't taste good. The frequent failure of its new products is linked to the rapid increase in new releases, which is a result of declining performance and shrinking market value. The industry of freshly brewed tea drinks is currently at a creative stalemate, with other brands finding innovative ways to stand out through collaborations or customer-created options. Ba Wang Cha Ji needs to adjust its development strategy to cope with this competitive landscape.
1. Are Free Purchases Really Attractive? Free Drinks Don't Appeal to Young Consumers
The Ba Wang Cha Ji mini-program in Hubei mistakenly set the price of the "Yuan Shan Xian Qi" drink at 0 yuan, leading to a frenzy of orders from bargain hunters (some even placed orders for 999 cups, with customers traveling from other regions to buy them). However, some aware users were unimpressed—the reason wasn't moral integrity; rather, the drink simply didn't taste good. "Yuan Shan Xian Qi" is a plain tea without milk or additives, and young consumers, accustomed to Ba Wang Cha Ji's signature drinks like "Bo Ya Jue Xian" (which contain milk foam or fresh milk), found the plain tea to be more suitable for older adults. The brand later canceled the orders and issued coupons worth 0.01 yuan, but this incident highlighted a disconnect between new product flavors and customer preferences.
2. Why Do New Products Keep Failing?
In addition to "Yuan Shan Xian Qi," many of Ba Wang Cha Ji's new products have received negative feedback from consumers:
- Qing Qing Nuo Shan: The drink initially tasted like regular milk tea but then developed a sour, astringent flavor reminiscent of fermented dog paws, which was particularly unpleasant. The brand used Long Zhu green tea with glutinous rice aroma in the recipe, and some customers found it unpalatable on their first try.
- Feng Li/Qing Mei Yao Yao Sha: These drinks included hops (alcohol-free) and had flavors reminiscent of pineapple beer or sweet Gaseau.
- Yun Meng Qi You: It tasted like corn silk water and was even described as being as unpleasant as "dishwashing liquid."
- Jin Wu Fu Yao: Adding cassia seeds gave the drink a bitter taste that made it seem even more stressful for working people.
The root of these failures lies in the rapid pace of new product releases. The R&D department is under pressure, and the screening process for new flavors has become less stringent, leading to a series of unappealing innovations.
3. Why the Rush to Release New Products?
Ba Wang Cha Ji used to be much more cautious with its new releases, only launching 4 products in the first half of 2025 and a total of 8 products for the year (2 of which were improved versions of classic ones). In contrast, Gu Ming and Cha Bai Dao launched 32 and 37 new products during the same period. However, with declining performance and market value, the brand had to speed up its releases:
- Performance Decline: Revenue growth in the first quarter of 2026 was only 4.5%, while net profit decreased by 33.6% (for four consecutive quarters).
- Shrinking Market Value: The stock price has plummeted since the company went public, and its current market value is less than two-thirds of its peak.
- Decreasing Number of Stores: The number of franchise stores decreased by 97 compared to the previous quarter, due to higher costs for larger stores. To attract customers and improve performance, Ba Wang Cha Ji has increased new releases, but this hasn't been effective—GMV (sales per store) even dropped by 16.1%.
4. What New Tactics Are Other Brands Using?
The industry of freshly brewed tea drinks is facing innovation challenges, so brands are trying different approaches:
- Collaborations with IPs: For example, the "Mo Li Na Bai" drink collaborated with the game "Yi You Lian Yu Shen Kong," selling 5 million cups in 7 days. Another collaboration with the horror IP Ito Jun and "Zhi Jia Yi" attracted niche enthusiasts.
- Customer-Created Products: Brands like Xi Cha allow customers to choose their own ingredients, creating unique drinks that enhance the interactive experience.
These strategies are more effective in capturing consumer attention because they either engage consumers emotionally (through collaborations) or provide a sense of participation (with DIY options).
5. What's Ba Wang Cha Ji's Future Direction?
Relying solely on frequent new releases won't solve its performance issues. The brand needs to find a new approach:
- Balancing Speed and Quality: It should avoid sacrificing flavor for quantity and conduct more user testing before launching new products.
- Learning from Others: Ba Wang Cha Ji could consider collaborating with popular IPs or allowing customers to customize their drinks to make them more appealing.
- Enhancing Classic Products: While introducing new products, it should also focus on refining its best-selling items (like "Bo Ya Jue Xian") to retain loyal customers.
In summary, simply increasing the number of new releases won't boost performance. The brand needs to find a balance that meets customer preferences and distinguishes it from its competitors.