Introduction:New tea beverage brands venturing into the coffee sector may appear to be seeking a second growth curve, but in reality, they face significant challenges. This article delves into the reasons behind the closure of Crow Coffee’s first Shenzhen store—invested in by Heytea’s founder—with only its Dachong branch remaining operational, as well as AOKKA—backed by Nayuki—announcing a full withdrawal from the Shenzhen market by the end of August. It also reviews the current status of other invested brands such as Seesaw and Minority, helping readers understand the difficulties and competitive realities tea brands face when entering the coffee industry.
The attempts of new tea beverage brands to enter the coffee market are facing real tests. Among them, Crow Coffee, invested in by Heytea’s founder, has quietly closed its flagship store at Tianli Central Plaza in Shenzhen and put up a rental notice. Currently, only its Dachong outlet remains in operation. Many consumers have expressed surprise, with some recalling: “I still have a bunch of vouchers they gave me,” “I ordered from them just last month, and now it’s gone,” and “I used to meet clients there every time I went to Tianli—I haven’t been in two months.”
At its peak, Crow Coffee once achieved monthly sales of 6,000 orders and even topped Shenzhen’s coffee delivery rankings for consecutive periods, demonstrating certain market potential. Its unique style also caught the eye of Heytea’s founder, enabling it to expand from a single location to five outlets in Shenzhen and one in Dongguan. However, as the brand moved toward chain expansion, consumers began to raise questions about quality control and brand consistency, with increasing complaints about declining quality. The reality proves that even with capital backing, brand transformation and scale expansion are no easy feats.
It is worth mentioning that after the closure of Crow Coffee’s Huangting Plaza store last November, it was briefly renamed “Magpie Café,” while maintaining its capital ties to Heytea. However, according to information on the Dianping platform, that store has also ceased operations, with some consumers noting that it actually closed around the end of July.
Meanwhile, AOKKA Coffee, backed by Nayuki, announced on social media platforms that it will completely shut down all its Shenzhen outlets by the end of August. It is understood that AOKKA previously had five stores in Shenzhen, but some netizens pointed out that three of them had already closed earlier. The official release of this “farewell letter” left many loyal customers feeling disappointed.
Looking back to 2022, new tea beverage brands turned their attention to the coffee market in search of new growth momentum. Brands like Cha Yan Yue Se and Mixue Ice Cream & Tea opted to launch their own coffee sub-brands, while Heytea and Nayuki adopted investment strategies to enter the coffee arena more quickly. According to statistics from Tech Planet at the time, Heytea and its founder invested in multiple brands including Seesaw, Minority, Crow Coffee, and KUDDO, while Nayuki chose AOKKA and Monster Kanle.
However, this wave of investments did not yield the expected results. Crow Coffee now has only one outlet struggling to stay afloat; Seesaw, which once secured over 100 million RMB in funding, is also facing store reductions. According to data from Zhaomen Canyan, it currently has only 71 operating stores. Minority currently operates three stores, and KUDDO has 22. As for Nayuki’s investment in AOKKA, if all its Shenzhen stores close as expected by the end of August, its nationwide presence will be reduced to just three outlets in Shanghai, while Monster Kanle currently operates six stores.
As the overall tea beverage market sees slowing growth, leading brands are increasingly seeking to expand their footprint through cross-category investments. The coffee sector, with its high-frequency consumption and young customer base, has become a popular target. However, in a fiercely competitive market with numerous players, the investment strategies of Heytea and Nayuki have failed to successfully establish competitive coffee brands. Most have chosen to downsize or even exit the market. This serves as a reminder to the industry that cross-sector operations require an in-depth understanding of the target market, along with the patience and strategy for long-term development, in order to gain a solid foothold in the highly competitive coffee industry.
The above content is compiled by CoffeeHunters, a coffee news website.
