Introduction:Shu Yi Burnt Taro Pudding has experienced a significant decline in its number of stores, leading to a surplus of high-end tea beverage equipment that remains unsold. Some machines have even been reduced to scrap metal. This article delves into the reasons behind the brand’s decline, the operational challenges faced by franchisees, and explores how the broader trend of store closures in the new tea beverage industry is impacting the equipment market, offering practical insights and industry analysis.
Recently, the mass closure of Shu Yi Burnt Taro Pudding outlets has resulted in a severe oversupply of second-hand equipment. Some professional machines originally worth tens of thousands of yuan have ultimately been sold for scrap metal prices (around 2,000 yuan), much to the dismay of equipment dealers. This tea beverage brand, which once gained popularity with its slogan "half of the cup is filling," peaked at nearly 7,000 stores in 2021. However, within just two years, it shrank by more than 1,000 outlets, and its current total number of stores has fallen below 6,000.
In April this year, Shu Yi Burnt Taro Pudding followed the market price war by reducing the prices of its main products across the board to below 10 yuan, whereas most products were previously priced around the 15-yuan range. Although this strategy attracted some consumers, it placed greater cost pressures on franchisees. According to some franchisees, while product prices were lowered, the cost of raw material procurement remained unchanged, further squeezing the already slim profit margins. Daily revenue dropped from several thousand yuan at opening to around one thousand yuan, and the resulting operational difficulties have forced many to transfer their stores or shut down completely.
In fact, Shu Yi Burnt Taro Pudding’s difficulties did not come out of the blue. The brand was founded in 2007 under the original name 85°Tea, and was renamed Shu Yi Burnt Taro Pudding in the 2010s. It rose to prominence quickly with its innovative combination of burnt taro drinks and milk tea. 2021 was the brand’s most glorious year, with 7,000 stores nationwide, second only to Mixue Ice Cream & Tea, firmly holding the second spot in the industry. However, as competitors such as Gu Ming, Cha Bai Dao, and Hu Shang Ayi rapidly expanded, Shu Yi’s market share and store scale were gradually eroded.
To attract more franchisees, Shu Yi has also lowered its franchise threshold in recent years. In early 2022, the initial investment and first batch of materials required to open a Shu Yi Burnt Taro Pudding store were at least 310,000 yuan. By 2023–2024, the overall investment had been reduced to less than 180,000 yuan—almost halved—indicating that the brand had to adjust its strategy to maintain expansion speed. Nevertheless, even with the lower barrier, it still could not withstand the double blow of an overall sluggish market and declining consumer purchasing power.
Notably, the unsold equipment situation at Shu Yi Burnt Taro Pudding is just one part of the broader adjustment happening across the new tea beverage industry. According to reports from various second-hand equipment recyclers, not only Shu Yi, but also eliminated equipment from well-known brands such as Cha Bai Dao, Gu Ming, and Hu Shang Ayi have been entering the market, with some models being relatively new. However, compared to Shu Yi, these brands still maintain a certain level of market acceptance and a base of franchisees, giving their second-hand equipment some degree of circulation—unlike some of Shu Yi’s machines, which have ended up as scrap metal.
According to industry statistics, nearly 165,000 new tea beverage stores were opened nationwide in the past year, but net growth amounted to only 46,000, meaning over 120,000 stores closed down. Looking at data from the last two months, although 167,000 new stores were opened, net growth fell to just 35,000, indicating that approximately another 10,000 stores closed within just two months. This shows that the tea beverage sector has entered a period of intense competition and bubble adjustment.
Faced with such a harsh market environment, many franchisees encounter difficulties in disposing of equipment after shutting down. Professional recyclers point out that some high-end extraction machines, refrigerated display cabinets, and ice makers, if not resold in time, not only take up storage space but can ultimately only be sold at extremely low prices or even treated as scrap metal, resulting in huge waste. For aspiring entrepreneurs looking to enter the tea beverage industry, choosing equipment involves not only considering initial investment but also evaluating brand stability and market survivability to avoid losing their entire equipment investment due to store closures.
The case of Shu Yi Burnt Taro Pudding is not just the rise and fall of a single brand, but a microcosm of the intense competition and market reshuffling faced by the entire new tea beverage industry. For practitioners and prospective investors, understanding the operational logic behind the wave of store closures and the current state of the equipment market will help make more informed decisions.
The above content is compiled by CoffeeHunters, a coffee news website.
