The encyclopedia · Strategy & Leadership · Operational decision · 2017–2025
Chagee industrialized tea like coffee — one hero drink and 6,400 stores in four years
Chagee's standardized milk tea, brewed in 8–10 seconds, expanded via super-franchisees, with supply chain earning 94% of revenue.
Chagee (霸王茶姬)
the move
Zhang Junjie opened Chagee in Kunming in 2017, targeting the 15–20 yuan gap between premium fruit teas and cheap milk tea. For three years he stayed in Yunnan, building direct tea-supplier relationships, a single-store profit model and the hero drink Baiya Juexian — tea leaf and milk, nothing else.
In 2021 he moved headquarters to Chengdu and opened franchising. The expansion ran on coffee-grade standardization: automated machines make a cup in 8–10 seconds, monthly cups per store rose from 8,981 in 2022 to 25,099 in 2024, and headquarters — not franchisees — chooses locations, opening direct stores first, then partner stores.
By end-2024 Chagee had 6,440 stores (97% franchised) and 3,195 franchisees, with 93.8% of net revenue from selling products and services to them; logistics cost less than 1% of GMV and inventory turned in 5.3 days. Net profit swung from a ¥90.7 million loss in 2022 to ¥2.5 billion in 2024.
why it works
- One hero SKU (600M+ cups sold by 2024) simplifies supply chain, training and forecasting.
- Machine-made tea gives Starbucks-like consistency without barista skill.
- Super-franchisee expansion with central site selection scales faster than rivals.
- Selling supplies, not royalties, ties franchisee growth to its own logistics.
what transfers
A fragmented, craft business scales when you industrialize the core: one SKU, machine-made consistency and capital-light partner stores let a regional brand outrun incumbents.
what came after
Chagee filed for a US IPO in March 2025 with the ticker CHA and 2024 GMV of ¥29.5 billion, publicly targeting Starbucks China's revenue. Growth then cooled: same-store sales fell for four straight quarters from late 2024 and franchisee economics tightened, prompting new formats like Super Tea Warehouse and a push into pure tea and baked goods.
references
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