n the past four years. But the story brewing underneath is more than a capital markets curiosity. Founded in 2017 by Junjie Zhang, who at 30 years old now finds himself a newly minted billionaire, Chagee emerged not as another sugary bubble tea vendor but as a disruptor of that very wave.  Not your average bubble tea  According to iResearch, China’s tea drinks market by GMV grew from RMB474.8 billion in 2019 to RMB818.9 billion last year and is projected to reach RMB1.102 trillion in 2028. The consistent growth in demand for freshly made tea drinks has been driven by customers’ greater focus on health-conscious options.  Unlike traditional milk tea chains, Chagee has made a calculated choice to eschew toppings and embrace minimalism. No tapioca pearls. No jelly cubes. Instead, the company sells tea-based beverages, like ‘teapuccinos’ and ‘teaspressos’, which are brewed from premium oolong or jasmine, meant to evoke the craft of espresso but rooted in traditional Chinese teas. According to its IPO prospectus, in 2022, 2023 and 2024, approximately 79 per cent, 87 per cent and 91 per cent of Chagee’s GMV generated within China, respectively, were attributed to its signature tea latte products, with approximately 44 per cent, 57 per cent and 61 per cent of GMV generated within China derived from its top three best-selling tea lattes.  “The menu has few permutations. Choose the tea leaf, and sugar percentage, and that’s it,” Ervin Yeo, commercial management, CapitalLand Investment China, wrote in a LinkedIn post. “It’s somewhat bland, but that is a feature, not a bug. Chagee’s target customers drink daily Starbucks latte or Ya Kun Kopi.” Efficiency at its peak While the product is artisanal, the business model is ruthlessly industrial.  “We collaborate creatively with our supply chain partners to co-develop automated tea-making machines, heralding the modernisation of the century-old tea industry,” the company said in its statement.  The limited permutations on the menu also mean fewer mistakes.  “The teas are dispensed out of machines, 15 seconds per cup. You’re not counting on the barista. And 95 per cent of sales come via their online system, meaning no need for a cashier,” Yeo said.  According to the company, Chagee controls the entire backend, from packaging to marketing assets, allowing for rapid and uniform rollout. This hyper-optimised franchising model, with a break-even time as short as 5.5 months, means Chagee scales not like a brand, but like infrastructure. Global expansion and geopolitical headwinds The company is currently the largest premium freshly-made tea drinks brand in the country in terms of the number of stores in China, according to iResearch. With more than 6400 stores worldwide, mostly in China, Chagee is now setting its sights further afield. Its first US location will open this spring in Los Angeles’ Westfield Century City Mall, following its recent debut in Jakarta.  The company follows strict site selection rules. Its management team is responsible for deciding the site selection for every Chagee teahouse whether company-owned or franchised.  Yet the road to globalisation isn’t without turbulence. The company recently faced backlash in Vietnam over the inclusion of the controversial “nine-dash line” in its app map, a geopolitical faux pas that led to calls for a boycott.  “These missteps show that brands must be hyper-aware of local sensitivities and historical context. A simple design element or map can escalate into a major controversy with far-reaching consequences,” said Siraj Mohammed Sirajuddeen, managing director of growth transformation at Accenture.  In addition, the company warned of additional risks in maintaining competitive prices in overseas markets, as all of its products are manufactured in China.  While its US$344.5 million net income on US$1.7 billion in revenue in 2023 paints a picture of profitability, the longevity of its growth story hinges on international traction and investor patience. Further reading: How China’s micro-drama boom is rewriting the rules of retail marketing