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Heytea founder Neo Nie on the ingredients to the brand’s success

A stringent focus on quality, an understanding of youth, and a robust supply chain are Heytea’s core business pillars.

When Neo Nie was 19, he opened a store selling smartphones, at a time when the world was still only tapping on the immense potential of the device. “I was interested in the intelligence and technology of smartphones, but I realised that running a store selling smartphones was very different from learning more about the ecosystem. Beyond sales, I was just helping customers troubleshoot their technical issues,” Neo shared.

This wasn’t the life he desired, so he closed down the store and sought for another way to make an impact on the world. Tea intrigued him. While traditionally a big part of Chinese culture, the younger generations didn’t really drink tea in its base form, preferring instead to blend it with other ingredients; milk tea’s incredible popularity after all these years is testament to that.

So, after spending half a year trying out all the different teas and doing his own research, Neo Nie found a gap in the market. “Many milk teas were made with powdered milk and powdered tea, instead of fresh milk and tea leaves. So I decided to create premium tea drinks using high-quality tea leaves and fresh milk.”

In 2012, he started his first store in Jiangmen, Guangdong province, beginning his journey. Today, Heytea has over 450 stores in China, Singapore and Hong Kong, with plans for further expansion in the region.

The Peak chats with the 29-year-old entrepreneur and founder of Heytea on the secrets to building a successful forward-looking brand using a traditional product.

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Neo Nie Yunchen, the founder of Heytea.

Neo Nie Yunchen, the founder of Heytea.

A Good Product Is Key
“We launched a promotion three days before the store’s opening, which initially succeeded in attracting new customers to try our drinks. However, in the days after the promotion, we received very little customers. So, we continued to experiment and refine the flavour profiles of the drinks to find the best balance of flavours of profile tastes. We also focused on meeting customers’ tastes and preferences. After half a year, business got better. To this day, we firmly believe that having good products is the core of our brand’s success and competitiveness.”

Optimising the Supply Chain
“Good products are the result of good ingredients. Since the beginning, we decided strictly against the use of any tea powder, creamer or milk powder, and replaced such artificial additives with premium-quality tea leaves, fresh milk and real fruits. We had to source for suppliers across a variety of different places while searching for the best-quality ingredients.

“When Heytea first started, there was no existing supply chain that was optimised to the production of tea-based beverages. Since fresh and natural ingredients tend to be vulnerable to factors such as climate, location, season, batch and transportation, we developed a unique supply chain that takes all these factors into account to ensure freshness and quality. As we were unable to find an ideal tea supplier from the market, we decided to make our own tea, managing every step of tea production from soil cultivation, tea tree planting, growing and harvesting, to tea blending. We have also employed information systems, cold chain logistics and real-time GPS monitoring to minimise any negative impact as our ingredients move along the supply chain.”

Heytea's tea plantation.

Heytea’s tea plantation.

Building a Brand
“Before we were known as Heytea, our brand was called Royal Tea. Half a year after our first store opened, many pirated copies of Royal Tea appeared. We’ve always paid great attention to trademarks and copyright, and have submitted trademark applications from the beginning. Unfortunately, our initial trademark application was ultimately rejected. Therefore, in 2016, we bought the trademark for Heytea and took advantage of this name change to revitalise and upgrade our brand. We designed a new logo with the aim of building a brand image that is cool, synonymous with quality, and focused on inspiration. We focused on curating a modern and design-forward brand image, and also opened new stores in areas that were commonly frequented by youth.

“In terms of store design, we focused on building enriched experiential spaces that blend heritage with modern aesthetic elements to refresh the public’s perception of tea culture. To me, brand positioning is about differentiation – about holding a unique and valuable place in consumers’ minds. Just like how Starbucks has created a culture around coffee, Heytea aims to revitalise tea culture by shaping the image of tea into one that is more youthful and appealing.”

Understanding the Consumer
“I am very much inspired by Gmail’s motto of being ‘forever beta’. We constantly reference customer feedback on all our products so that we can continue to upgrade them and provide our consumers with better versions each time. For example, in response to the healthy lifestyle trend, we launched a low-calorie sweetener for consumers. Even though it is simply another type of sugar, the R&D process took nearly two years because we wanted to provide the best-possible taste while minimising the difference in how our tea tasted in combination with low-calorie sugar versus ordinary sugar.

“Also, when we discovered that younger girls preferred refreshing drinks compared to those with stronger flavours, we invented a special blend of tea leaves finished with a roasting process to minimise bitterness while retaining freshness. On top of that, we keep innovating and coming up with new and seasonal products, such as the salted egg yolk ice cream launched in Singapore.”

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The Heytea King Fone Cheezo drink.

The Heytea King Fone Cheezo drink.

Selling in a Covid-19 World
“When brick-and-mortar stores were allowed to reopen, we immediately conducted safety training for our employees, to ensure the safety of our consumers, employees and partners. We have also implemented safe-distancing measures throughout our operations, such as online ordering via our Heytea Go application and other food delivery applications, as well as contactless delivery. Certain stores have also been equipped with a smart tea locker which can be unlocked via customers’ mobile phones, enabling self-service collection of drinks without having any human contact. The smart tea locker was implemented in the second half of 2019 and has proven to be especially advantageous during the pandemic. In China, we rolled out a multi-channel strategy, which includes the launch of a Heytea flagship store on Tmall to sell drinks, food and other new products.”