Will the bubble tea bubble in China burst?
Thanks to the internet, China’s retail sales of bubble tea nearly doubled in less than five years. On average, consumers pay more than 20 yuan for a cup of new-style tea, almost the same price as an easy meal. Therefore, it is no surprise that billions of dollars were flushed into this profitable industry. In just 2019 alone, over 20 thousand bubble tea enterprises were established in China. In February 2023, 14 new-style tea companies operated over 1,000 beverage retail outlets, Mixue Ice Cream & Tea being the leading company with 23,487 outlets. Following Nayuki's IPO in 2020, six companies followed and filed for IPOs in 2023.Despite the hype, the saturated market has resulted in fewer profits for many of the market players. While there is still a positive outlook for the industry in the coming years, predictions indicate that the industry will become increasingly concentrated, with many small and medium-sized businesses at a risk of closing.