China’s tea brands want to conquer America, Starbucks-style

BACK IN CHINA Emily Chang’s job was to promote Starbucks. “We were nurturing coffee culture in a country that knows centuries of tea,” says the former chief marketing officer of the American firm in the People’s Republic. Now Ms Chang works for Chagee, a tea chain little known outside China, and is doing the opposite. Her task is to champion the Chinese brand and tea-drinking habit in coffee-centric America (and to resist a tendency to mispronounce Chagee—the letter g is soft).

Last year the chain became one of the many firms trying to gain a foothold in America. Their outlets offer bubble tea, fruit tea and fresh Chinese tea, sometimes capped with milky foam. The Chinese newcomers are taking on the long-established competition from Taiwan which helped spread the word “boba” in the first place. (It was originally a Chinese slang term meaning “busty”, as a synonym in English for bubble tea with its pearl-sized balls made of tapioca starch.) In America the coffee market is 28 times bigger than that of freshly made tea, reckons Huachuang Securities, a brokerage. This, it says, theoretically creates “vast substitution potential”.

The Chinese firms’ presence is still small. HeyTea, an upmarket brand, has led the way, opening more than 40 American shops since 2023. Just nine of Chagee’s 7,500-odd global outlets are in the States. Mixue, a giant bubble-tea and ice-cream seller, is the world’s largest food-and-beverage chain. But just five of its 60,000 outlets are in America. By comparison, Gong Cha, a Taiwanese brand, runs 2,200 outlets globally and more than 240 in America; Coco, another chain from Taiwan, has more than 5,000 franchises globally and dozens in America. The Chinese contingent wants to overtake them.

Partly this is because there is too much bubble tea brewing at home. The firms making it in China are eager to find new customers abroad, says Tom Chen of Kepler Mission Design, an American marketing agency. Some American customers see their fare, which includes low-sugar options, as healthier than dessert. “Sometimes I’m like I can’t eat ice cream right now. But I can go get myself a boba, that’s not so bad!” says Isabella Destio in New York’s Midtown. “They’re way better to have in the afternoon than coffee. They don’t give you the caffeine crash.” Down the street, Eric Li walks out of a bustling branch of Mixue, where Spring Oolong Milk Tea sells for $3.99. As a Chinese-American, he says he’s happy to see many non-Chinese enjoying his culture. “There’s some tension right now, internationally, but it’s good that everyone can get together over a drink,” he says. ■