E-commerce / RetailMulti-region
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JOURNEY · DETAIL
CHAGEE: A new-generation tea brand bringing Eastern loose-leaf tea to the global market through industrial standardization
Founded: Zhang Junjie · CHAGEE
JOURNEY
Key Fields
FIELD STAMPSIndustryE-commerce / Retail
RegionMulti-region
ScaleGiant
ChannelOther
Origin
Founder Zhang Junjie experienced divorced parents during his childhood, lived on the streets from the age of ten, and started working in the milk tea industry at seventeen. After operating tea beverage franchise stores in Yunnan for many years, he observed that traditional Chinese tea drinks lacked standardization and suffered from inconsistent quality. He resolved to reinvent Eastern loose-leaf tea through industrial methods. Starting from Yunnan and avoiding the highly competitive tier-one city battlegrounds, he focused on fresh loose-leaf milk tea as its core category, aiming to build a world-class tea brand on par with Starbucks. The core driving force during the early entrepreneurial days was an obsession with internationalizing Chinese tea culture and the foresight regarding industrialization standards for milk tea.
Milestones
2017
Inception & Startup Turning Point
Founded CHAGEE in Kunming, Yunnan, positioning it as a Yunnan loose-leaf tea brand. The founder had spent over a decade grinding in the milk tea industry, working his way up from an apprentice to a regional manager and then a franchisee, accumulating comprehensive supply chain experience. During the initial opening of the first store, customer traffic was sparse, the team consisted of only a few people, the product model was unformed, and there were over thirty SKUs but a lack of signature items; both customer unit price and repeat purchase rates were less than ideal. Choosing to start from Yunnan rather than tier-one cities was the most crucial early differentiation decision, avoiding direct competition with Heytea and Nayuki.
2019
Setbacks in Out-of-Province Expansion Failure
Faced widespread failures when expanding from Yunnan to out-of-province cities like Chengdu and Chongqing. High franchise store closure rates and a lagging supply chain led to inconsistent product output. The team was forced to retreat to Yunnan to refine operations, streamlining more than thirty SKUs down to a dozen and establishing a single-product strategy centered around Boya Juxian Jasmine Milk Tea. This failure made the team realize that standardization capability is the foundation of expansion, after which they invested heavily in developing automated tea-making equipment and digital management systems, laying the industrial foundation for subsequent rapid expansion.
2021
Financing & Category Positioning PMF
Introduced the concept of fresh loose-leaf milk tea, shifting the beverage from the milk tea track to the tea track, with the differentiated positioning recognized by the market. In the same year, secured over 100 million RMB in Series A financing co-led by XVC and Fosun Group, surpassing 500 stores and beginning entry into the East China and South China markets. The customer unit price stabilized in the 15 to 20 RMB range, capturing the blank space in the mid-range tea pricing band. The core signal of product-market fit (PMF) was that Boya Juxian's repeat purchase rate far exceeded the industry average, and consumer perception began shifting from drinking milk tea to drinking tea.
2023
Single-Product Explosion & Going Global Growth
Annual sales of the single product Boya Juxian exceeded 200 million cups, becoming a phenomenal blockbuster in the tea beverage industry, with the store count surpassing 3,000. Initiated large-scale overseas layout in the same year, opening stores in Southeast Asian countries such as Malaysia, Thailand, and Singapore, reaching about 100 overseas stores. However, overseas supply chain and standardization challenges far exceeded expectations, and stores in multiple locations experienced localization friction; local consumer preferences for sweetness and tea concentration differed significantly from domestic ones, resulting in long-term losses for some overseas stores and indicating that the overseas model still required multiple rounds of iteration.
2024
Pre-Listing Crisis Turning Point
Submitted an IPO prospectus to the US Securities and Exchange Commission aiming for a NASDAQ listing, with full-year GMV exceeding 10 billion RMB and stores surpassing 6,000. However, on the eve of the listing, the brand encountered a severe public relations crisis due to food safety public opinion and franchisee profit disputes, leading to a wave of store closures in tier-one cities and a decline in same-store sales. Management shortcomings were heavily exposed behind rapid expansion, and franchisee dissatisfaction with profit-sharing and material pricing became public, revealing the core contradiction of declining control under the franchise model as scale expands.
2025
NASDAQ Listing Transition
Successfully listed on NASDAQ, becoming the first domestic new-style tea beverage stock to go public in the US, with annual revenue of approximately 2.5 billion RMB. However, the first post-listing annual report showed a sharp decline in net profit, and high-speed overseas expansion put severe pressure on profit margins, marking a general entry into a strategic adjustment period. Post-listing stock price volatility tested investor confidence, and the focus in 2026 shifted to a dual-track promotion of new overseas markets and lower-tier domestic markets, with the team beginning to pilot direct-run stores in the North American market while densifying the franchise network in domestic tier-three and tier-four cities.
Turning Points
- Retreating to Yunnan after the 2019 out-of-province expansion failure, streamlining over 30 SKUs to a dozen, and establishing Boya Juxian as the core single product, becoming a key decision in defining the brand's tone
- Securing over 100 million RMB in Series A financing co-led by XVC and Fosun Group in 2021, leaping from a regional brand to a national tea beverage new force
- Surpassing 200 million cups in annual sales for the single product Boya Juxian in 2023, validating market acceptance of the fresh loose-leaf milk tea category positioning
- Successfully listing on NASDAQ in 2025 as the first domestic new-style tea stock to go public in the US, while a sharp decline in net profit in the first post-listing annual report prompted strategic adjustments
Failures & Pitfalls
- Large-scale closures of franchise stores in Chengdu, Chongqing, and other regions during the 2019 out-of-province expansion, where a lagging supply chain led to unstable product output, forcing a retreat and readjustment
- Localization friction in overseas markets such as Malaysia and Thailand, where local consumer taste preferences differed significantly from domestic ones, leading to long-term losses for some stores
- Facing a dual PR crisis on the eve of the listing due to food safety public opinion and franchisee profit disputes, triggering store closures and same-store sales declines in tier-one cities
- Declining management control after the expansion of the franchise model, with public dissatisfaction among franchisees regarding profit splits and material pricing, exposing core contradictions in the franchise system
关键成功要素
- Transforming non-standardized Eastern tea beverages into replicable and scalable products using industrial standards, with automated tea-making equipment and digital management systems serving as core barriers
- A single-product strategy centered around Boya Juxian, which reduces supply chain complexity while building brand recognition; annual sales of 200 million cups for a single item validate its effectiveness
- Pricing that captures the blank space in the 15-20 RMB mid-range pricing band, avoiding direct competition with the high-end tier of Heytea and Nayuki and the low-end tier of Mixue Ice Cream & Tea
- Starting from Yunnan to avoid the red ocean of tier-one cities, using low-competition regions to hone the model before expanding nationwide
- A pixel-level benchmarking of Starbucks' global expansion path, comprehensively learning from and localizing brand design, in-store experience, and supply chain management
Lessons
- Standardization capability is the foundation of chain brand expansion; franchise expansion without industrial and digital support inevitably leads to loss of control
- Failure in out-of-province expansion is not terrifying; what is terrifying is the unwillingness to retreat and re-hone. CHAGEE's retreat to Yunnan to streamline SKUs was the prerequisite for its later rise
- The single-product strategy is proven viable in the tea beverage industry, but requires continuous iteration of new products to prevent single-product dependency risks; over-reliance on Boya Juxian remains a hidden danger
- Overseas expansion cannot simply replicate the domestic model; localized adaptation takes time and trial-and-error costs, and long-term losses in overseas stores are an inevitable phase
- Growing a franchise model is easy while controlling it is difficult; post-listing profit pressures will magnify franchisee conflicts, requiring a balance between scale and management capability
Core Data
- 门店总数：Over 6,000 (as of the end of 2024)
- 全年GMV：29.5 billion RMB (2024, prospectus figures)
- 年营收：12.406 billion RMB (2024, prospectus figures)
- 核心单品年销量：Boya Juxian surpassed 200 million cups (2023)
- 海外门店数：Approximately 100 (end of 2023, primarily in Southeast Asia)
- A轮融资额：Over 100 million RMB (2021, co-led by XVC and Fosun Group)
- 上市净利润：Sharp decline in net profit in the first post-listing annual report (2025)
- 客单价区间：15-20 RMB
Competitors / Peers
CHAGEE's main competitors in the mid-range tea beverage pricing band include Heytea, Nayuki, and ChaPanda. Heytea is positioned slightly higher and has recently been exerting efforts in the mid-range price segment, while Nayuki relies primarily on a direct-run model and faces heavy pressures on unit-space efficiency management and cost structures. ChaPanda and Mixue Ice Cream & Tea have deeper network density in the franchise model and lower-tier markets, with Mixue occupying the bottom market through extreme low pricing and having already achieved a global layout. In overseas markets, CHAGEE faces competition from local tea brands and Starbucks; Starbucks holds a dual moat of channel pathways and brand awareness in Southeast Asia and North America, while the biggest uncertainty remains whether CHAGEE's Eastern tea differentiation narrative can be accepted by overseas consumers.
Sources
- https://36kr.com/p/3834631914386057
- https://finance.sina.com.cn/roll/2026-06-02/doc-inhzysxv1769910.shtml
- https://news.qq.com/rain/a/20260122A03YEA00
- https://news.qq.com/rain/a/20260331A027D200
- https://36kr.com/p/3806111764094467
- https://www.woshipm.com/marketing/6337037.html
- https://news.qq.com/rain/a/20250327A08MOK00
- https://36kr.com/p/3531965481868421