The sugar-water craze is ebbing, and the catering industry is entering a winter...

The catering industry has never lacked viral hits and trending opportunities.

Discerning Chinese diners always have a wealth of choices, which forces brands to continuously innovate and iterate amid the tides of the times.

From butter rice cakes to lemon milk, among the numerous growing categories and tracks in the past two years, Chinese-style sweet desserts are undoubtedly one of the fastest-growing and most eye-catching sectors.

Data from the narrow-door catering research platform shows that as of July 2025, the sweet dessert category has opened more than 70,000 new stores within a year, with its market size expanding rapidly. From consumers' intuitive perception, the number of sweet dessert brands in shopping malls has visibly increased.

Caption: Makers Milk Company, Source: Provided by the interviewee

In this track, there are established veteran players: for example, Xianyudian restarted its journey after being acquired by the CFB Group, and Honeymoon Dessert also found new opportunities through cooperation with retail channels like Sam's Club. There are also emerging brands such as Makers Milk Company and Zhao's Heritage that are advancing rapidly.

Especially for Makers Milk, the number of its stores exceeded 1,000 within ten months, bringing this category back into the mainstream vision of the industry.

Caption: Makers Milk's signature product "Makers Full Platter", Source: Provided by the interviewee

For a moment, capital flooded in, franchisees flocked to join, and everyone expected Chinese-style sweet desserts to become the next new tea drink sector, replicating its remarkable success.

However, just one year later, subtle changes began to take place in the industry landscape.

The number of stores decreased, franchisees became more cautious, and the expansion speed of leading brands slowed down. The topic discussed by many practitioners has also shifted from "which brand is the most profitable to open" to "how long can it survive".

So why did a category with a history of several decades suddenly explode today? And why did it quickly enter a reshuffling phase just as its popularity rose? For players in this track, is Chinese-style sweet dessert a good business that can be operated in the long term?

With these questions in mind, we conducted in-depth observations of the industry. Through an in-depth conversation with Xie Yongliang, CEO of Makers Milk Company, we found that the underlying business logic and survival rules of this track are far more complex and harsh than the superficial boom it shows.

Why Are Chinese-Style Sweet Desserts Trending Again Today?

If we turn back the clock five years, amid the "10,000-store battle" between coffee and new tea drinks, few people would regard sweet desserts as a new consumption track worthy of heavy investment.

This is an "ancient" category. As early as the 1920s and 1930s, sweet desserts represented by sweet potato soup and Qingbu Liang (a traditional cooling herbal dessert) were widely popular in the daily life of Guangdong, Hong Kong, Taiwan and other regions.

Honeymoon Dessert was founded in 1995, and Xianyudian was established in 2007. They marked the highlight moments of Hong Kong-style and Taiwanese-style sweet desserts, and successfully upgraded sweet desserts from street-side stalls to a chain operation model.

But unfortunately, neither of them managed to drive the sweet dessert category to achieve the nationwide explosive growth seen with milk tea and coffee.

For the recent "revival" of Chinese-style sweet desserts in the past two years, the most frequently cited reason is the change in consumers, and "emotional value" is the most commonly mentioned term among industry insiders.

Caption: Xianyudian launched a series of new summer products inspired by flower petals, Source: Xiaohongshu @Xianyudian MeetFresh

Under the pressure and downturn of the macroeconomy, the accumulated emotional stress of consumers in daily life has to be released through products that provide high emotional value, such as aesthetically pleasing items and sweet foods, triggering a compensatory surge in demand.

However, the boost from consumer psychology alone is not enough to explain this round of industry growth. What truly pushed the category back into consumers' sight is a comprehensive upgrade centered on products, brands and experiences, Xie Yongliang, the current CEO of Makers Milk, shared his views with JINGdigital.

In the past, many consumers' impression of sweet desserts remained on classic products such as Hong Kong-style mango sago with pomelo, Taiwanese taro balls, and red bean double-skin milk. The products suffered from severe homogenization, the brand image was overly traditional, and there was a lack of reasons to attract young consumers.

Caption: Makers Milk's new product "Longan Coconut Cooling Qingbu Liang", Source: Provided by the interviewee

A new generation of brands has begun to try to redefine sweet desserts. Products no longer blindly pursue high sweetness, but emphasize natural ingredients, freshly made on-site, and low sugar; store decoration and packaging materials highlight a sense of design; brand communication also focuses on emotional values such as comfort, happiness, and nature.

At the Xianyudian brand renewal experience day, JINGdigital observed that after being acquired by the CFB Group, Xianyudian has undergone earth-shaking changes in store decoration, brand concept and menu - the stores feature a Chinese style and emphasize traditional handcrafting, which is backed by a gradually clear understanding of consumer insights.

Caption: The upgraded new-generation store of Xianyudian, Source: Online

Taking Makers Milk as an example, the sweetness issues that many consumers criticized in the past actually stemmed from a high degree of industrialization, where a large number of packaged foods and industrial cans were used to streamline SOPs. Xie Yongliang stated that all Makers Milk stores use agricultural and primary agricultural products, and insist on using pressure cookers to cook on-site, creating a taste distinction from traditional sweet desserts; at the same time, it launched low-sugar and reduced-sugar versions to meet modern people's health needs for sugar control, and established a healthy and fresh brand perception in consumers' minds.

Caption: Tapioca is an important component of new Chinese-style sweet desserts, Source: Provided by the interviewee

Secondly, in the macro context of consumption downgrade, the new generation of consumers is becoming more demanding: they want both a good experience and affordable prices. In this dimension, new Chinese-style sweet desserts are adapting to consumer needs through improved product strength. For example, in terms of visual presentation and packaging, Makers Milk has created differentiation by designing a dust-proof lid for takeout scenarios, solving the pain point that consumers cannot finish their dessert in one go.

Caption: Makers Milk takeout packaging design, Source: Xiaohongshu @HHoboK^^

In terms of products and pricing, new Chinese-style sweet desserts also control the per-person consumption at around 20 yuan, using a rich combination of toppings and set meal offerings to meet diverse consumer needs with a streamlined SKU list.

Xie Yongliang summarized: "The per-person price of around 20 yuan allows consumers to experience the freshly made taste, exquisite appearance and comfortable space, while feeling a cost-performance ratio that exceeds their expectations."

Caption: The in-store environment of Makers Milk Company, Source: Provided by the interviewee

Finally, the "third space" provided by Chinese-style sweet dessert shops endows the category with stronger social attributes. In shopping malls, sweet dessert shops are natural rest and social scenarios: friends can sit down and chat for an hour, and mothers can bring their children to replenish energy. For shopping malls, a brand that can extend customers' stay time is of higher value.

Overall, it is not so much that Chinese-style sweet desserts are trending again, but that they have completed a new-style transformation.

This is also the path that many new consumer brands have always followed - instead of creating a completely new category, they re-win young consumers by upgrading products, experiences and brands within a mature category.

The Positioning Battle in a Narrow Market: How Long Can This Business Remain Popular?

When discussing Chinese-style sweet desserts, it is impossible to avoid the new tea drink sector.

This is not only because the two share similarities in product structure, business model and target audience, but also because there is a large overlap in their franchisee groups. Xie Yongliang's team is no exception: as an investment and operation team that has focused on the catering track for 15 years, they have also invested in multiple stores of brands such as Cha Baidao and Ba Wang Cha Ji.

However, unlike the new tea drink sector, where brands can easily reach 10,000 stores, the limited ceiling of the sweet dessert industry is almost a consensus within the industry.

But this ceiling is easier to reach than imagined. Since the second half of last year, many franchisees have found that business is not as easy as before. Entering 2026, Makers Milk, which has reached 1,000 stores, has also seen a significant slowdown in store growth.

Xie Yongliang is not surprised by this: "2025 is the only window period, and by 2026, it will be very difficult for the Chinese-style sweet dessert market to achieve large-scale growth."

Through further conversations with him, we can see that there are multiple underlying factors at play.

The primary limitation lies in the natural capacity ceiling of the category.

Consumers can carry a cup of milk tea around everywhere, but they cannot walk around with a bowl of sweet dessert. Sweet desserts are a category highly dependent on in-store dining: the limited scenarios lead to a naturally lower table turnover rate, and the overall demand is far less than that of new tea drinks.

Caption: Makers Milk's store in a shopping mall, Source: Provided by the interviewee

Historical data also confirms this judgment. Over the past 30 years, Honeymoon Dessert, the representative of Hong Kong-style sweet desserts, and Xianyudian, the benchmark of Taiwanese-style sweet desserts, were both highly sought-after excellent brands, but at their peak, they only had around 800 stores. Makers Milk, which has now broken through 1,000 stores, has set a historical record for a single brand in the entire category.

"The market itself is not that large," Xie Yongliang has a clear judgment on this. The entire Chinese market may accommodate three to five thousand sweet dessert shops, but these will be divided among numerous local family-run shops and niche brands, making it extremely difficult for a single brand to achieve a monopoly of thousands of stores. Players are competing for a small but definite piece of the cake.

Precisely because of the limited market capacity, sweet dessert brands are almost pathologically dependent on high-quality shopping malls.

Xie Yongliang gave a comparison: "A shopping mall may accommodate 10 milk tea shops operating at the same time, all making profits; but even having one sweet dessert shop is already very 'excessive', and if there are two (sweet dessert shops), they may both lose money."

The limited capacity of shopping malls means that competition between sweet dessert brands is a cruel zero-sum game from the very beginning: if one moves in, another has to exit.

This further determines that the development window period is very short.

"From the end of 2024 to the beginning of 2025, all kinds of brands were opening stores, and almost all shopping malls were occupied," Xie Yongliang observed, and then the turning point came: "From March this year, various sweet dessert shops have been closing one after another... Under such circumstances, do you still think people will be willing to open new ones?"

Xie Yongliang's assertion that "2025 is the only window period that determines the life and death of sweet