Chinese milktea brand Nayuki to deploy automated machines that replace manpower

Nayuki, a Chinese milktea brand widely popular in country, has recently began testing its self-developed automated milktea making machine in hundreds of stores located in Guangzhou and Shenzhen, two southern cities in China.

The machine is “completely self-developed by Nayuki’s own digitalization team,” and is estimated to be implemented in all Nayuki stores in the country in the third quarter of 2022, according to Ynet report.

Nayuki‘s milktea maker is one of the first large-scale applications of automated machines in the retail tea-flavored drinks industry.

The equipment connects to buckets of tea and juices, with an electronic screen and a QR code scanning port in the middle. Customer’s orders would be printed out by staff in the form of a QR code, which when scanned by the machine, will initiate the milktea-making process. The making will only take about 10 seconds, according to the report.

“The result of our latest comparison shows that the production capacity of a single person per hour can be increased by 40%,” according to Nayuki.

The implementation of the automated machine will largely benefit front-line staff as they no longer have to memorize hundreds of SOPs. The training period for new recruits would also be significantly shortened from the previous 3 months.

But why is a milktea company developing automated machines?

For Nayuki, the company who incurred a net loss of 145 million yuan in 2021, labor costs might be slowing it down. According to its 2021 financial report, labor costs reached 1.425 billion yuan, which increased 55% year-on-year, accounting for 33.2% of its total cost.

In the past years, Nayuki has yet to make a profit. It’s loss widened as it’s revenue increased, given the rapid expansion of the company. By the end of 2021, Nayuki owns 817 stores in over 80 cities in China, 326 of which were opened in 2021. Despite losses, the milktea brand plans to open 350 more stores in 2022, in first tier and new first tier cities only, according to its financial report.

Nayuki’s stocks has fallen over 65% comparing to its initial launch in June 2021, making its market capitalization drop to 1.77 billion USD comparing to the previous valuation of 3.8 billion USD.

Photo by Frank Zhang on Unsplash