Bubble tea may have begun as a playful drink, but it has become an industry worth bills.
The world market of bubble tea will grow from $ 2.83 billion in 2025 to $ 4.78 billion by 2032, according to a report by Fortune Business Insights.
This year, three Chinese bubble tea chains (Mixue Group, Guming Holdings and Jenny, which appear in Hong Kong, and raised more than $ 700 million as investors bet on the fast -growing consumption market in China.
“This is the right place at the right time,” said William Ma, Grow Investment Group investment director, he said in an interview with “CNBC explains.”
“Many global investors are trying to invest in sectors less sensitive to American tariffs. Therefore, internal consumption, the youngest generation consumption, is a more stable or less vulnerable sector,” Ma.
Mixue has become the heavyweight of the sector, operating more than 46,000 stores worldwide at the end of 2024. That makes it McDonald’s, Starbucks and subway. Its ultra low price and its high volume model are strongly inclined in the franchise.
“In 2024, they are growing in around 22% in terms of growth of the new store,” Ma said.
The franchise is essential for the bubble tea industry. Most large bubble tea chains do not run the stores themselves. Almost all points of sale are franchised. The matrices companies win by supplying ingredients and equipment, and collecting rates, while franchisees assume rental costs, labor and public services.
This model feeds the rapid growth, but comes with compensation: maintaining quality and avoiding the cannibalization of the store becomes more difficult as the outputs multiply.
“The normal recovery period for the business owner, for the franchisee, is between 18 and 24 months,” MA said, estimating the closing rates of the store by approximately 20% throughout the market.
But expansion abroad is not a guarantee of success. The CNBC China reporter, Elaine Yu, said that replicating the domestic formula abroad entails additional challenges.
“Supply chains are more difficult to control, and consumers’ tastes differ from one city to another. That is why brands are adapting to regional flavors and different store formats to win local customers,” Yu said.
The saturation of the market at home, the increase in costs and intense price wars are also testing the resilience of these brands. If they can maintain their valuations, they will depend on their ability to balance the scale with profitability, and demonstrate that they can build more than a fashion.
Look at the full explanator by clicking on the video at the top of the story.
