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CHAGEE: From Homeless Teenager to US-Listed Tea Giant—How Guo Feng Fresh Milk Tea Broke Out of Cha Yan Yue Se's Shadow

Founded: Zhang Junjie · CHAGEE Holdings Limited

JOURNEY

Key Fields

FIELD STAMPS
IndustryFood & Beverage
RegionChina
ScaleGiant
ChannelOther

Origin

Founder Zhang Junjie's starting point was lower than that of almost any other new-style tea founder. While his peers were preparing for the gaokao, he was homeless for nearly seven years until he was seventeen, when he finally found a job as a clerk at Dawei Milk Tea, a chain brand in Yunnan. Through strong performance, he worked his way up to Yunnan regional operations manager. Later, he took over a failing franchised store of Dawei, turning it around through intensive marketing and delivery services. This experience not only earned him his first pot of gold in entrepreneurship, but also gave him an intuitive understanding of franchise store operations and turnaround logic. In 2015, he left the milk tea industry to join a Shanghai-based robotics tech startup for overseas sales, eventually rising to Asia-Pacific regional marketing director. Around 2017, the new-style tea boom erupted, with Heytea, Nayuki, and Cha Yan Yue Se rapidly emerging. Unwilling to miss this window, Zhang Junjie founded CHAGEE in June 2017 and opened its first store on Wuyi Road in Kunming in November of the same year. The brand name was inspired by the Peking Opera piece Farewell My Concubine, and the logo featured an ink-wash Yu Ji, leaning into Chinese aesthetic (Guo Feng) and original-leaf fresh milk tea. However, for its first five years, almost all investors viewed it as yet another copycat of Cha Yan Yue Se.

Milestones

2017
Inception PMF
The first store opened on Wuyi Road in Kunming, focusing on original-leaf tea with fresh milk as a Guo Feng fresh milk tea. At the time, the menu featured nearly fifty items, including fruit tea, milk tea, cheese foam, taro puree, and pure tea. Although diverse, most products were inspired by competitors, emphasizing visual gimmicks over repeat purchases. At only twenty-four years old, Zhang Junjie had neither capital nor industry background, relying solely on his local Yunnan chain-operation instincts and understanding of franchisees to slowly snowball the business.
2018
Overseas Pilot Turning Point
Even before domestic stores numbered a hundred, CHAGEE incorporated globalization into its core strategy and established an overseas business division. It opened its first overseas store in Malaysia in August 2019, followed by entries into Singapore and Thailand. Early expansion relied on franchising in Southeast Asia, but weak franchise management and a crude brand image failed to build economies of scale overseas, laying the groundwork for its forced withdrawal from Singapore in 2021. This phase lasted from 2018 to 2019.
2020
Failed Provincial Expansion Failure
CHAGEE attempted to expand beyond Southwest China, opening sporadic stores in Guangdong, Fujian, Anhui, Hunan, and Shanghai—all of which ended in failure. In 2020, it sought financing at a valuation of 1.8 billion yuan, only to be rejected by most investors who dismissed it as a direct copy of Cha Yan Yue Se. Opening stores in Changsha in 2021 proved an absolute disaster. These twin setbacks exposed two major problems: a rough brand image that led franchisees to treat it as a quick-franchise scheme, and near-zero digital management that failed to even collect basic store operational data. This phase lasted from 2020 to 2021.
2021
Chengdu Strategy Turning Point
After securing 300 million yuan in investment from XVC, Fosun Group, and Congbi Qiushi, CHAGEE relocated its headquarters from Kunming to Jinjiang District, Chengdu. It overhauled its recruitment, training, performance, and internal control systems locally, built an IT team from scratch, and developed an internal control system capable of tracking hourly efficiency for every store clerk. Franchise management was shifted from opening branches before building regional companies to building regional companies before opening branches, significantly strengthening headquarters authority. At the same time, top executives were poached from Haier (translated contextually or kept generic/correct), Huawei, and Heytea to shore up organizational shortcomings, while Zhang Junjie shifted his own focus from product development to brand marketing and organizational management.
2021
Brand Upgrade Turning Point
The national flagship store on Chunxi Road in Chengdu opened, completely abandoning the previous ink-wash Yu Ji aesthetic. It adopted the English name CHAGEE and a new logo featuring a red-and-white Peking Opera Dan facial mask, with store interiors drawing inspiration from luxury retail design and traditional Chinese mortise-and-tenon architecture. Internally, CHAGEE referred to this move as the first step in its transformation from small-town youths to urban youth, with the core objective of shedding the Cha Yan Yue Se copycat label and benchmarking against Starbucks to enter high-end shopping malls.
2022
Single-Product Focus PMF
In 2022, pressed by Bo Huoyu of XVC, Zhang Junjie made the resolute decision to cut the fruit tea product line and rebrand the Jasmine Snow Bud milk tea (launched in 2017) as 'Boyayuezheng' (Tear of Bodhidharma/Bo Ya Jue Xian) as its core blockbuster product. The menu was streamlined from nearly fifty items to a focus on fresh milk tea, with the price range lowered to 15 to 20 yuan. The logic was that milk tea is the lowest common denominator verified over forty years, features a simple and replicable supply chain, and enables scalable expansion. A tea soup content higher than fresh milk ensured consumers wouldn't feel greasy while receiving a caffeine boost to drive repeat purchases. Although it suffered a loss of about 48 million yuan that year, continuous spending on Douyin and Xiaohongshu laid the groundwork for subsequent explosive growth.
2023
National Explosion Growth
In 2023, Boyayuezheng sold 230 million cups in a single year, setting a sales record for a single item in the new-style tea industry, with single-product sales accounting for about 30% of the total. A total of 2,317 new stores were opened throughout the year, surpassing the total number of stores opened in the previous six years, and total store count surpassed Heytea. CHAGEE achieved close to 70% of Guming's profit with roughly one-third of its store count, putting direct pressure on Starbucks and Luckin Coffee. Luckin's Yiwu franchise store was hit so hard that it sold 70 to 80 fewer cups a day, forcing it to launch a budget alternative to Boyayuezheng called 'Qingqing Jasmine'.
2024
Overseas Restructuring Turning Point
CHAGEE converted its Singapore franchise operations into direct company-operated stores in early 2024, reopening at Orchard Gateway in August to massive queues and overwhelming demand. Product-wise, it launched four new experiential store formats: Super Tea Warehouse, 24-Hour Store, and Pet-Friendly Store. Full-year net revenue reached 12.406 billion yuan, up 167.4% year-on-year; net profit reached 2.515 billion yuan, up 213.3% year-on-year; and the net profit margin hit 20.3%. Average monthly GMV per store rose from 177,500 yuan in 2022 to 511,700 yuan. However, same-store GMV growth plummeted from 94.9% in 2023 to 2.7%, marking the first time signs of expansion peaking were officially disclosed in its prospectus.
2025
Nasdaq Listing Growth
CHAGEE went public on the US Nasdaq under the ticker symbol CHA, with Citigroup, Morgan Stanley, China International Capital Corporation (CICC), and Deutsche Bank acting as underwriters, becoming China's first US-listed fresh tea brand. Founder Zhang Junjie was thirty years old at the time, holding significant Class A and Class B ordinary shares alongside XVC's 20.3% stake. Funds raised were primarily allocated to expanding domestic and overseas stores, international supply chains, and automated R&D. The company announced plans for a net addition of 1,000 to 1,500 stores globally in 2025, while setting its sights on Starbucks by opening its first North American store in Los Angeles.
2026
Cascade of Controversies Turning Point
By February 2025, global stores had surpassed 6,275 with 177 million members, but overseas missteps surfaced successively. Originally scheduled to open its first store in Ho Chi Minh City, Vietnam, in March 2025, the brand was investigated and delisted from local app stores due to a Nine-Dash Line map display on its app, resulting in signages being removed and a boycott by Malaysian netizens, causing it to miss out on the Vietnamese market. In late 2025, reports exposed that the high repeat purchase rate of Boyayuezheng was driven by caffeine addiction, prompting Zhang Junjie to publicly acknowledge the public backlash, with Sing Tao Daily reporting that market capitalization briefly dropped by 14%. In January 2026, a staged video of hand-pounded milk tea trended on Weibo, resulting in the involved Zhangzhou store in Fujian facing indefinite suspension and rectifications. For the first time, the health narrative of original-leaf fresh milk tea experienced a widespread collapse in public opinion.

Turning Points

  • Relocating the headquarters to Chengdu in 2021 and securing 300 million yuan in financing from XVC, Fosun, and Congbi Qiushi, transforming from a regional southwest player into a national contender with headquarter organization, IT internal controls, and elite executive deployment.
  • Opening the Chengdu Chunxi Road flagship store in September 2021 and launching the CHAGEE brand upgrade, instantly shedding the Cha Yan Yue Se copycat label, entering high-end shopping malls, and establishing brand positioning to benchmark against Starbucks.
  • Cutting fruit tea in 2022, focusing on the Boyayuezheng blockbuster product, and lowering the price band to 15 to 20 yuan, applying the lowest-common-denominator logic across products, branding, and expansion, which directly catalyzed the national store explosion of 2023.
  • Listing on Nasdaq under the ticker CHA in April 2025, leaping from a regional Chinese tea brand to China's first US-listed tea stock, with capital raising and global expansion culminating in the opening of its first North American store in Los Angeles.

Failures & Pitfalls

  • Failed provincial expansion from 2020 to 2021, with storefronts in Guangdong, Fujian, Anhui, Hunan, Shanghai, and Changsha all suffering defeats; a 1.8 billion yuan valuation financing round was dismissed by investors as a Cha Yan Yue Se knockoff, and the brand was viewed by franchisees as a quick-franchise scheme.
  • Expanding Singapore via franchise to twelve stores in 2019, only to be forced into withdrawal and restructuring in early 2024 due to poor direct-management controls, exposing the vulnerabilities of the overseas franchise model for the first time.
  • Suffering a loss of roughly 48 million yuan in 2022 despite the focus on a blockbuster product, as excessive marketing spending temporarily inflated celebrity endorsement prices in the tea industry before internal conversion mechanisms were fully established, causing Zhang Junjie to experience internal single-product anxiety.
  • Consecutive missteps from 2025 to 2026: app removal and investigation over the Vietnam Nine-Dash Line map causing missed market entry, caffeine addiction remarks causing a sharp stock price decline, the hand-pounded milk tea staging incident damaging brand reputation, and the headquarters-level collapse of original-leaf fresh milk tea's health narrative.

关键成功要素

  • Executing the lowest-common-denominator logic to the end: focusing on original-leaf fresh milk tea, locking onto Boyayuezheng as the sole core product, anchoring prices between 15 and 20 yuan, and benchmarking store formats and real estate selection directly against Starbucks.
  • Extreme operational efficiency and centralized headquarters: automated tea-brewing machines compressing the tea soup and milk preparation of Boyayuezheng down to 8 seconds, hourly tracking of clerk efficiency, and stringent franchise management with red-line penalties enforcing branch establishment before opening stores.
  • Brand and marketing reinvention: upgrading from ink-wash Yu Ji to the CHAGEE Peking Opera Dan mask, leveraging luxury packaging aesthetics to quickly build a sense of high quality, and generating 12.3 billion views on Douyin topics to rival Luckin's brand volume.
  • Organizational catch-up: recruiting a complete suite of top executives—a COO from Konka/Haier equivalents, a CFO from Huawei, and legal, product, and supply-chain heads from Heytea—writing the first employee handbook from scratch, and bridging the organizational gaps most needed for a regional player to go national.
  • Early globalization and capitalization: establishing an overseas division and entering Malaysia before reaching 100 domestic stores, becoming China's first US-listed tea brand in 2025, and rolling out capital raising and overseas supply chains in parallel.

Lessons

  • The copycat label is the ceiling for a regional brand: CHAGEE was treated as a Cha Yan Yue Se imitator for its first five years, unable to raise capital or expand out of its province; it only truly broke through by smashing this shell through brand upgrading and luxury-tier visual presentation.
  • A blockbuster product requires the courage to cut: cutting nearly fifty items down to Boyayuezheng in 2022 was not a divine stroke of luck, but the combined conclusion of investor questioning, repeated business lectures by the founder, and lowest-common-denominator thinking. The more ruthless the cuts, the higher the repeat purchase rate and efficiency.
  • Going global cannot rely solely on a hands-off franchise model: early expansion via franchising in Singapore and Malaysia ultimately spun out of control, requiring restructuring and proving that overseas stores demand direct headquarters management and stationed regional branches, replicating the domestic playbook overseas.
  • The health narrative is a double-edged sword: the story of original-leaf fresh milk tea supported high repeat purchases and price premiums, but once excessive caffeine, addictiveness, and opaque ingredients were exposed, the backlash turned into a headquarters-level brand crisis. Proactive and transparent disclosure is more stable than arguing caffeine is merely theine.
  • Operational efficiency moats can be replicated: Boyayuezheng's formula has no patent, automated machines are adopted by competitors, and luxury packaging is copied by peers. CHAGEE's true barriers are early-mover brand mindset and franchise management intensity; once same-store GMV growth slows, the next growth curve must be found swiftly.

Core Data

  • 2024 Net Revenue：12.406 billion yuan (up 167.4% year-on-year) (Public data source, independent verification pending)
  • 2024 Net Profit：2.515 billion yuan (up 213.3% year-on-year, net profit margin 20.3%) (Public data source, independent verification pending)
  • Global Stores：6,440 stores (Public data source, independent verification pending)
  • Global Members：177 million (Public data source, independent verification pending)
  • Boyayuezheng Annual Sales：230 million cups (2023 new-style tea single-product record, cumulative sales exceeded 600 million cups in 2024) (Public data source, independent verification pending)
  • Average Monthly Store GMV：511,700 yuan (in 2024, nearly triple the 177,500 yuan in 2022) (Public data source, independent verification pending)
  • Second Round of Additional Financing：330 million yuan (issued 20.3746 million shares of Series B+ preferred stock in tranches in July and December 2023) (Public data source, independent verification pending)
  • Listing Ticker：CHA (Nasdaq, April 17, 2025) (Public data source, independent verification pending)

Competitors / Peers

Domestically, direct competitors include Heytea, Nayuki, Guming, ChaPanda, and Cha Yan Yue Se. Among them, Guming's net profit margin in the first three quarters of 2024 was 17.4% and Mixue Bingcheng's was 18.7%, making CHAGEE's 20.3% the highest among top players. The low-end price band is occupied by Mixue Bingcheng, scale and franchise intensity by ChaPanda, and cultural mindset by Cha Yan Yue Se. The greatest cross-category threat comes from Luckin Coffee—with its 20,000 stores and coffee business profits supporting the capacity to fight a 0.01-yuan price war, it has already launched its own 'Qingqing Jasmine' to benchmark against Boyayuezheng. Internationally, competitors include Starbucks and Manner-style aggressive location strategies deployed by Chinese fresh coffee brands expanding globally.

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.