By LU Yibei
Ah Ma Hand Made, a bubble tea startup, has received a much welcome cash injection from coffeehouse chain Manner. Manner’s parent company and its CEO hold 1.7 percent of Ah Ma Hand Made now.
Before this, Ah Ma Hand Made went through at least three rounds of financing from Shunwei Capital, Maison Capital, and Greater Bay Area Homeland Development Fund. Ah Ma Hand Made has 21 stores in China, 11 in Shenzhen, 9 in Guangxi Zhuang Autonomous Region where it was founded in 2018, and one in Shanghai.
With the bubble tea market booming in 2018, and Hey Tea and Nayuki expanding unrestrainedly across China, Ah Ma Hand Made chose another path. As its name suggests, the chain hires Ah Mas (aunties in their 40s or 50s) to hand make tea. At the window of each store, one can watch one’s tea being made. When it opened the first store in Shanghai this year, more than 3,000 orders crashed its server.
But handmade brings as many problems as advantages. The largest is efficiency. For most bubble tea chains, making a cup of smashed taro milk tea is simply pouring milk tea into pre-made frozen taro. But Ah Ma Hand Made steam fresh taros and mash them. It may make the tea taste better, but it consumes more time and costs a lot more.
Efficiency problem is shared by all bubble tea chains, Nayuki is promoting tea-making machines and standardizing all products with machines. Sanitation is another issue, handmaking everything has a higher hygiene requirement.
Finally, there is price: the average price of Ah Ma Hand Made products is 30 yuan (US$4.50). Hey Tea and Nayuki have both lowered prices since this yea. Many of their new drinks are priced at 18 yuan. A new Ah Ma Hand Made store is expensive because the brand’s heavy and complicated interior style aims to “make customers feel at home”.
It is not clear what will happen since Manner, obsessed with efficiency and standardization, entered the game. But this is a business where ruthless competition is squeezing margins. Ah Ma Hand Made must offer more than just a name.
