The collective overseas expansion of tea beverages might be the biggest misunderstanding in 2024.

Written by Yang Yafei

Edited by Qiao Qian

"Talking about going global is a common sentiment among many catering businesspeople in the past year, but the real market trend is not like this.

Recently, Guming, Shanghai Ayi, and Mixue Bingcheng have successively updated their prospectuses, and the data tells everything. According to the scale, these three brands are the "three giants of tea beverages". In the past year, they have continued to open stores: the first two are approaching 10,000 stores, and the scale of Mixue Bingcheng exceeds Starbucks, reaching 45,000.

However, going global is far from the focus of the battlefield.

Among the tea beverage brands that were the first to go global and currently have the most overseas stores, Mixue Bingcheng saw a net increase of 800 overseas stores in the year ending September 2024, accounting for less than 1/10 of the total new stores during the period.

According to 36Kr Future Consumption's understanding from industry insiders close to Mixue Bingcheng, This number has reached their overseas store expansion target, but in the past year, Mixue Bingcheng does not plan to open stores aggressively overseas, and the focus is on the operation of existing stores. As of September 2024, Mixue Bingcheng has about 4,800 stores in 11 countries overseas, of which the combined proportion of stores in Indonesia and Vietnam exceeds 80%.

Established for 14 years, in the second half of February 2024, Shanghai Ayi's overseas store finally achieved a breakthrough from zero, and the first store was opened in Malaysia, but this is the only overseas store they opened in the first half of the year, while in the same period, 647 new stores were added in the domestic market in China.

Guming, the second-largest tea beverage brand in terms of scale, still holds a wait-and-see attitude towards the overseas market. Centered on Zhejiang, it continues to densify its regional presence. Overseas stores are not their clear focus next. The development strategy includes three parts: Store densification, expansion to adjacent provinces of the already laid out provinces, and "Evaluating opportunities in the overseas market".

The domestic tea beverage market is recognized as a red ocean market. According to statistics from Zhaimen Canyan, as of December 15, 2024, the total number of milk tea beverage stores in the country is 410,600, with a net decrease of 17,800 in the past year, and the stock competition is obvious. Even so, the gold diggers are not willing to swing their shovels elsewhere.

The sinking market in third-tier and below cities is the focus of the leading brands this year.

Chabaidao opened 584 stores in the first half of 2024, but the development focus shifted downward. The proportion of stores in first to third-tier cities decreased year-on-year, while the proportion of stores in fourth-tier and below cities increased by 3.5 percentage points year-on-year.

The number of stores of Mixue Bingcheng in third-tier and below cities has also increased from 18,900 at the end of 2023 to 23,200 at the end of September 2024. The new stores from the aforementioned sinking market account for nearly 60% of the new stores in the Chinese mainland market during the period.

Shanghai Ayi, which is sprinting towards 10,000 stores, has long placed its expansion focus on the lower market and launched a sub-brand "Light Enjoyment Version" for the sinking market in 2023, with product pricing between 2 and 12 yuan, approaching the price range of Mixue Bingcheng. In March 2024, they continued to launch the Light Enjoyment Version 2.0 brand "Tea Waterfall". As of December 17, 2024, the number of stores of this sub-brand has reached 297.

When tea beverage brands are densely sinking, Mixue Bingcheng is still exploring the more sinking township market. According to 36Kr Future Consumption's understanding from industry insiders, the new stores added by Mixue from January to September 2024 are mainly township stores, with an obvious intention to deeply explore the more sinking market.

This is also an important direction for their store opening in the next step. Last month, Mixue Bingcheng adjusted its store opening policy and clarified that one of the store opening strategies for 2025 is to explore the sinking market mainly in "blank townships".

The reason why tea beverage brands intensively discussed going global in the past year is also related to the phenomenal rise of Chawangjicha. They prepared to go global in the second year of their establishment and quickly became a leading tea beverage brand in Malaysia. But as of now, the overall number of Chawangjicha's overseas stores is not large, only in the hundreds. And as of August 2024, the total number of Chawangjicha stores has exceeded 6,100.

Compared to going global, Chawangjicha, which takes a mid-to-high-end positioning, has focused on two aspects of expansion this year. One is to compete with Starbucks for the core business districts in first-tier and new first-tier cities. At the same time, it is also sharing the cake of the sinking market. According to statistics from Zhaimen Canyan, the number of Chawangjicha stores from third- to sixth-tier cities has increased from 2,278 in January 2024 to 3,686 in November.

Brand going global is not as easy as imagined. From the current perspective, the scale of going global of most tea beverage brands is limited, and they still focus on Southeast Asia and East Asia markets where the food culture is similar and there is an identity with Eastern culture. The layout in developed markets such as Europe and North America is very limited.

Also, a common concern of many catering entrepreneurs is that it is easy to go out, but it is difficult to take root overseas. The former is more of a brand behavior, but the latter is the real performance return.

The leading brands are clustered in the sinking market, which is also a practical consideration for capitalization. At the moment of intensively sprinting for IPO, compared to the uncertainty of overseas market development, although the domestic market is highly competitive, the market has been fully verified, and the performance can be directly improved by expanding the scale. However, in the tea beverage market where franchise stores account for the vast majority, the road to the sinking market ultimately needs to be traveled by both franchisees and brands together.