By DING Dang
For China’s coffee shop entrepreneurs, expansion matters at least as much as coffee. It is no news anymore that a start-up has hundreds of stores and is well on its way to another few hundred. M Stand (founded in 2017) will reach 160 this year. Nowwa (founded in 2019) already has 1500. Manner (founded in 2015) opened 200 in March alone. Foreign chains, including Peet’s Coffee and Tim Hortons, have also come to the table, both aiming for around 3,000 locations by 2026. The idea is that location = attention = customers, thus the battleground is prime real estate.
Seesaw Coffee has raised a lot of money, the market seemingly oblivious to how small the chain was. After nine years in business, it has only 90 stores. But BA Capital and Costone Capital, and even bubble-tea chain Hey Tea, have been quite happy to throw money Seesaw’s way.
Until about two years ago, Seesaw was expensive, at least for China, known for its large spaces and US$7 “gourmet” coffee. This had to change, when everyone else, led by the now-disgraced (-but-still-going-strong) Luckin, began to offer “quality coffee to go at affordable prices.”
The ordinary range of coffees is still available, but Seesaw is now known for its seasonal fruit-flavored brews. On the menu this spring: nectarine blossom honey latte and foamy peach americano. Founder ZONG Xinkuang told reporters that these specials are more popular and more profitable than traditional coffee. Its alliance with Hey Tea, which aspires to a beverage empire, will intensify the fusion between coffee and other types of drinks.
Seesaw has a lot to learn from Hey Tea in terms of IT, data analytics, and operations. And real estate. All fifty-two Seesaws in Shanghai are next to Hey Tea stores. Seesaw is reducing the number of large stores to grid out more sales per square meter.
The money infusion from Hey Tea elevated the profile of Seesaw and made it more attractive to other investors. Its small size was seen as a strength that indicated stability, said BA Capital, also an early investor of Hey Tea.
