E-commerce / RetailChina
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JOURNEY · DETAIL
Shuyi Tealicious: An affordable tea chain transformed from a Changsha-based franchisee model
Founded: Wang Bin · Shuyi Tealicious (Sichuan Shuyi Catering Management Co., Ltd.)
JOURNEY
Key Fields
FIELD STAMPSIndustryE-commerce / Retail
RegionChina
ScaleGiant
ChannelOther
Origin
Wang Bin started as a milk tea franchisee in Changsha, operating multiple brand stores, which gave him direct insight into tea beverage operations and consumer habits in lower-tier markets. Around 2007, he noticed that while 'grass jelly' (烧仙草) had stable recognition in the Sichuan-Chongqing region, it lacked standardization and branding. He repositioned this traditional dessert as a cup-based tea drink and pivoted to creating his own brand. His initial goal was not to create a high-end tea brand, but to find a niche with a simple supply chain, controllable gross margins, and a model that was easy for franchisees to replicate.
Milestones
2007
Inception Failure
After exiting the Changsha milk tea franchise system, Wang Bin attempted to transform grass jelly into a standardized cup-based drink. The early stores were not an instant hit; grass jelly had much lower recognition in Changsha compared to the Sichuan-Chongqing region. The cost of market education for the first store was high, supply chain and product stability were insufficient, and expansion was slow, leaving the brand in a trial-and-error phase.
2015
Category Reshaping Turning Point
In 2015, Shuyi Tealicious unified its brand identity, making grass jelly its signature product, and the store count began to rise. In interviews, Wang Bin emphasized that the focus during this stage was transforming grass jelly from a regional dessert into a tea SKU that could be replicated nationwide. By targeting students and lower-tier markets with low unit prices, the brand avoided direct competition with high-end players like Heytea and Nayuki.
2021
Capital Injection PMF
In 2021, Shuyi Tealicious secured over 600 million RMB in investment, reaching a post-money valuation of 10 billion RMB and becoming a significant unicorn in the new tea beverage sector. This funding round included participation from industry capital such as Juewei Food and Qiaqia Food, with funds primarily used for supply chain warehousing and digital infrastructure. At that time, the store count exceeded 7,000, second only to Mixue Bingcheng, and its scalable model was viewed by investors as a replicable sample of affordable tea.
2022
Rapid Expansion Growth
Shuyi Tealicious continued to penetrate lower-tier markets using a franchise model, with the number of stores briefly exceeding 7,000. The brand attracted student demographics with low-priced traffic-driving products like 6 RMB milk tea. However, rapid store openings led to regional saturation and cannibalization, eroding individual store revenue. Some franchisees reported that the payback period extended from 12–18 months to over 24 months, a trend that persisted from 2022 through 2023.
2024
Contraction and Adjustment Failure
In 2024, Shuyi Tealicious experienced large-scale store closures. Media reports highlighted closures in multiple cities, with second-hand equipment being sold as scrap metal. Celebrity shareholders exited, and cases of franchisee losses were widely discussed. Some franchisees reported losing 300,000 RMB after one year of operation in small cities. Both brand image and franchisee confidence suffered, leading to a significant decline in store count and a shift into a passive contraction phase.
2025
Product Return Inflection Point
In 2025, Shuyi Tealicious attempted to repair its brand by bringing back classic products, such as the 'Orange Camellia' (橙漫山茶花) which returned after a three-year hiatus. Wang Bin publicly emphasized the importance of being a 'warm' enterprise. This move appeared more like a PR strategy to rebuild trust with users and franchisees rather than a return to large-scale expansion. The core issues for the company remain the unit-store profitability model and franchisee retention rates.
Turning Points
- Transitioned from a Changsha franchisee to creating a proprietary grass jelly brand, avoiding the high-end tea market saturation by choosing an affordable, signature-product route.
- Secured over 600 million RMB in financing in 2021, pushing valuation to 10 billion RMB with over 7,000 stores at its peak.
- Faced a wave of store closures and celebrity shareholder exits in 2024, shifting from a growth narrative to a struggle for survival.
- Attempted to rebuild brand and franchisee confidence in 2025 by bringing back classic products like 'Orange Camellia'.
Failures & Pitfalls
- Early lack of recognition for grass jelly in Changsha led to high market education costs and an unproven initial store model.
- Excessive store density between 2022 and 2023 diluted individual store revenue and extended payback periods.
- Large-scale store closures in 2024, with second-hand equipment sold at a loss and franchisees reporting losses of up to 300,000 RMB.
- Celebrity shareholder exits combined with negative public sentiment turned the brand from a capital darling into a risk case for franchisees.
关键成功要素
- Entered the affordable tea market with a category (grass jelly) that features a simple supply chain and controllable margins.
- Achieved rapid market penetration through a franchise model, briefly becoming the second-largest chain in the industry.
- Leveraged industry capital to catch up on supply chain and digital infrastructure.
- Attracted student demographics with low-priced traffic-driving products, though failed to build a product moat against competitors in the same price range.
- Deteriorating unit-store economics following rapid expansion made franchisee churn the biggest operational risk.
Lessons
- If scale growth in a franchise chain outpaces unit-store profitability, the brand will eventually be cannibalized by its own franchisees.
- Product homogenization in affordable tea is severe, and the window for category innovation is very short.
- Capital valuation cannot replace store cash flow; a 10 billion RMB valuation did not prevent the wave of store closures.
- During a brand contraction phase, the priority must be restoring franchisee trust rather than continuing to sell a growth narrative.
Core Data
- Peak store count：Over 7,000 (based on public data, not independently verified)
- 2021 financing amount：Over 600 million RMB (based on public data, not independently verified)
- 2021 post-money valuation：10 billion RMB (based on public data, not independently verified)
- 2024 franchisee loss case：300,000 RMB loss in one year (based on public data, not independently verified)
- Unit price range：6 to 15 RMB (based on public data, not independently verified)
- Industry status：Store count was once second only to Mixue Bingcheng (based on public data, not independently verified)
Competitors / Peers
The main competitors of Shuyi Tealicious include Mixue Bingcheng, ChaBaiDao, GuMing, and Shanghai Auntie (沪上阿姨), among other affordable-to-mid-range tea brands. Mixue Bingcheng dominates the lower-tier market with extreme low prices and a self-built supply chain, with a store count far exceeding Shuyi. ChaBaiDao and GuMing cannibalize franchisee resources in the 15–20 RMB price range using fresh fruit tea and regional density strategies, while Shanghai Auntie differentiates itself with grain-based tea drinks. The core dilemma for Shuyi Tealicious is that after the grass jelly category recognition was diluted, it lacks the cost-control power of Mixue Bingcheng and the product update speed and franchisee support depth of ChaBaiDao and GuMing, leaving it in a passive position during the wave of store closures.
Sources
- https://m.36kr.com/p/2945800307777155
- https://www.tmtpost.com/7247595.html?rss=zaker
- https://www.chinaventure.com.cn/news/116-20240914-383019.html
- https://36kr.com/p/1604950598322944
- https://www.jiemian.com/article/5542843.html
- https://36kr.com/p/1628966201292293
- https://news.pedaily.cn/202404/532464.shtml