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ChaPanda: The 2026 Survival Strategy of a 10,000-Store Franchise Milk Tea Empire Caught Between Mixue and Heytea

Founded: Wang Huan, Wang Xiaosheng · Sichuan Baicha Baidao Industrial Co., Ltd.

JOURNEY

Key Fields

FIELD STAMPS
IndustryFood & Beverage
RegionChina
ScaleGiant
ChannelOther

Origin

In 2008 in Wenjiang District, Chengdu, the founding couple started with a milk tea shop of less than 20 square meters. At that time, the concept of freshly made tea beverages had not yet taken shape, and the domestic market was divided between Taiwan-style pearl milk tea chains and street-side mom-and-pop shops. Spotting the demand window among young consumers for differentiated taste that was both delicious and affordable, the founders chose to densely deploy stores in Tier 2 and Tier 3 cities in Chengdu for staggered competition. The original intention was not to build a national chain brand, but rather to first run through the single-store profit model in the regional market before being proactively approached by franchisees asking to join. Propelled by franchise demand, they embarked on the path from a small regional brand to a 10,000-store franchise empire.

Milestones

2008
Chengdu Startup Turning Point
In 2008, the founders opened the first ChaPanda store in Wenjiang District, Chengdu. Initially mimicking the traditional Taiwan-style pearl milk tea model with heavily homogenized products, the daily output was less than 100 cups and monthly revenue was only a few thousand RMB. After quitting their original jobs to commit fully, the founding couple spent about two years polishing differentiated signature drinks like Soy Milk Jade Qilin, gradually building word-of-mouth among young local consumers in Chengdu, accumulating primitive operational experience and a single-store profit model.
2018
Franchise Expansion Failure
After opening up for franchising, the number of stores rapidly increased from just over 100 to nearly 1,000. However, around 2018, because supply chain management failed to keep pace with the speed of franchising, multiple incidents of inconsistent raw material quality and food safety complaints occurred, leading to a temporary reprimand and rectification order from local regulatory authorities. The company was forced to mandate that all franchisees purchase headquarters-designated raw materials and equipment to unify standardized operating procedures, and significantly increased rejection rates during franchisee screening to ensure product quality control was not dragged down by the speed of expansion.
2022
Pandemic Counter-Trend Expansion PMF
In 2022, leveraging the advantage of dense deployment in Tier 2 and Tier 3 cities and the subsidy dividends of food delivery platforms during the pandemic, store counts grew against the trend to break past 5,000. Full-year revenue in 2021 exceeded 2 billion RMB, and the store closure rate was controlled at around 1%, well below the industry average. During this period, the company established a headquarters-dispatched supervisor store-visiting system and a standardized operating procedure manual to ensure consistent taste for single-cup products under 7 RMB across thousands of franchise stores, completing product-market fit validation.
2023
Scale Sprint Growth
By the end of 2023, the store count reached 7,117, with annual revenue of 4.2 billion RMB and net profit of about 820 million RMB, while first-half net profit was about 400 million RMB. The founding couple entered the ranks of Chengdu's wealthy with a combined stock market value exceeding 15 billion RMB. In the same year, they submitted a prospectus to the Hong Kong Stock Exchange to prepare for a run at the second new tea beverage stock, and initiated supply chain digital upgrades and self-built raw material bases in preparation for larger-scale expansion post-IPO.
2024
HKEX Listing Failure
ChaPanda listed on the Hong Kong Stock Exchange with an offering price of about 10 HKD per share, breaking issue price on its very first day of trading with a drop exceeding 10%. Thereafter, the stock price continued a unilateral decline to a cumulative drop of about 70%, vaporizing its market capitalization to less than 15 billion HKD. Prior to the listing, two stores were exposed for unauthorized alterations of product shelf-life, triggering intense market skepticism regarding the quality control capabilities of its franchise network, as the capital market voted with its feet, severely lacking confidence in the growth narrative of franchise tea drinks.
2026
Survival Under Squeeze Turning Point
Mixue Bingcheng surpassed 30,000 stores and enforced a blockade on the lower-tier market with a 4 RMB average price, while Heytea fully opened franchising to enter the mid-range price segment, squeezing ChaPanda's core price band from above. Around 1,000 franchisees voluntarily closed and exited after suffering losses or unprofitability under this dual-direction squeeze. The company was forced to accelerate the introduction of new single products targeting youth and supply chain cost-reduction solutions. Founder Wang Huan publicly stated in a media interview in April 2026 that the new tea beverage industry still needs 10 to 20 years to produce a global brand.

Turning Points

  • Started in 2008 from a small shop of less than 20 square meters in Wenjiang, Chengdu, choosing a staggered competitive direction in the 5 to 15 RMB price band completely different from high-end tea drinks.
  • Around 2016, after fully opening up for franchising, the founder shifted core energy from hands-on operations to franchisee screening, control, and supply chain standardization system construction.
  • In April 2024, breaking issue price on the first day of listing on the HKEX with a drop exceeding 10%, marking a severe lack of confidence in the capital market toward the franchise tea beverage growth model and expansion ceiling.
  • From 2025 to 2026, about 1,000 franchisees closed down and exited successively after suffering losses under the dual-direction squeeze of Mixue Bingcheng and Heytea, exposing the diminishing marginal returns of the franchise model once scale exceeds 7,000 stores.

Failures & Pitfalls

  • Breaking issue price immediately on the first day of listing with a drop exceeding 10%, followed by a cumulative stock crash of about 70%, with the capital market voting with its feet to question the imaginative scope of the franchise tea beverage growth narrative.
  • About 1,000 franchisees closed down and exited successively after suffering losses under the dual squeeze of Mixue Bingcheng and Heytea; although the closure rate was only 1%, the absolute number was staggering, exposing the fragility of the franchise network.
  • Before the listing, two stores were exposed for arbitrarily modifying product shelf life, exposing systemic loopholes remaining in the execution of quality control standards and supervisor store-visiting systems under a 10,000-store franchise network.
  • Listing fundraising of about 2.6 billion HKD saw subsequent financing leverage and capital usage forced into contraction after the stock price heavily plunged below the issuance price, forcing investments in supply chain digital upgrades to slow down.

关键成功要素

  • Standardized operating procedure manuals and headquarters-dispatched supervisor store-visiting systems are the baseline and core bedrock preventing a 10,000-store franchise from collapsing.
  • Dense deployment in Tier 2 lower-tier cities and food delivery platform subsidy dividends during the pandemic were key accelerators that drove store counts from 1,000 to break past 5,000.
  • Differentiated hit products represented by Soy Milk Jade Qilin helped ChaPanda establish irreplaceable user taste recognition in the early Chengdu regional market.
  • The depth of supply chain cold-chain logistics and self-built raw material bases determine the scaling ceiling of franchise tea drinks, serving as the core barrier for long-term company competition.
  • Mixue Bingcheng with its 4 RMB average price and Heytea opening full franchising to lower prices to the mid-range formed a dual-direction pincer attack from above and below on ChaPanda's 7 to 15 RMB price band.

Lessons

  • Franchise expansion in itself is not the ultimate moat; when store density is too high, internal friction among franchisees and rising closure rates will eventually erode the entire brand network effect.
  • Valuation expectations at the time of listing need to match the true ceiling of the business model, as a net profit margin of about 30% for franchise tea drinks is difficult to sustain high growth in the eyes of the capital market.
  • The path for a brand to transform toward greater youthfulness and premiumization after succeeding in lower-tier markets is extremely difficult, because its original brand positioning has already solidified into a low-price tea drink identity tag.
  • Under the scale crushing of Mixue Bingcheng's over 30,000 stores, mid-tier brands wanting to survive must achieve ultimate efficiency in their supply chain rather than relying solely on brand power and store counts.
  • The founding couple's combined stock market value exceeded 15 billion RMB, yet they faced equity pledge risks and subsequent financing distress caused by breaking issue price on listing day; listing timing is more critical than valuation.

Core Data

  • 门店总数2023年底：7,117 stores (based on public data disclosures, independent review unverified)
  • 全年营收2023年：4.2 billion RMB (based on public data disclosures, independent review unverified)
  • 净利润2023年：About 820 million RMB (based on public data disclosures, independent review unverified)
  • 上半年净利润2023年上半年：About 400 million RMB (based on public data disclosures, independent review unverified)
  • 闭店率：About 1% (based on public data disclosures, independent review unverified)
  • 创始人夫妇持股市值上市时：Over 15 billion RMB (based on public data disclosures, independent review unverified)
  • 上市募资额：About 2.6 billion HKD (based on public data disclosures, independent review unverified)
  • 上市后股价累计跌幅截至2025年：About 70% (based on public data disclosures, independent review unverified)
  • 上市后市值蒸发至：Less than 15 billion HKD (based on public data disclosures, independent review unverified)
  • 2026年离场加盟商数量：About 1,000 stores (based on public data disclosures, independent review unverified)

Competitors / Peers

Mixue Bingcheng implemented a dimensional blockade on the entire lower-tier freshly made tea beverage market with over 30,000 stores and an average price of 4 RMB, forming a crushing posture with a market cap far exceeding ChaPanda after its 2004 HKEX listing; Heytea actively lowered prices in 2022 and then fully opened franchising in 2023 to pivot to mid-range pricing, squeezing ChaPanda's core 7 to 15 RMB price band from above; Guming, centered on cold-chain supply chains in East China Tier 3 and Tier 4 cities as its core barrier with over 9,000 stores, filed for a HKEX listing in 2024 to directly compete for franchisees and prime location resources; Auntea Jenny achieved differentiated layout in northern lower-tier markets, and after surpassing 10,000 stores also sprinted for an IPO, validating the intensifying white-hot competition in the franchise tea beverage track.

Sources

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⚠️ This entry draws on self-reported accounts and public reporting, not independently verified, and is not investment, startup, or legal advice; revenue figures are case-specific and not representative of typical results.