CHAGEE Targets 100 Countries and 15 Billion Cups Annually in Global Expansion Drive
With 130 million registered members worldwide, the Chinese tea brand aims to sell 15 billion of servings annually as it pioneers modern Oriental tea in future
SHANGHAI, May 21, 2024 /PRNewswire/ -- CHAGEE, a leading tea brand in China, is aggressively expanding its global reach.
At the International Tea Day 2024 - Modern Oriental Tea Innovation Forum, held on May 21st, Junjie Zhang, Founder and CEO of CHAGEE, revealed that the brand now serves over 130 million registered members worldwide. CHAGEE has set its sights on catering to consumers across 100 countries and delivering 15 billion of modern oriental tea each year.
Since opening its first shop abroad in Malaysia in August 2019, CHAGEE has further expanded into Thailand and Singapore, and now operates over 4,500 stores globally. The expansion underscores the increasing international demand for oriental tea, with CHAGEE at the forefront of the trend.
Speaking at the forum, Zhang said, "CHAGEE is dedicated to revitalizing ancient tea-making methods that date back 900 years through the use of modern technology. The initiative not only returns us to the origins of tea but also redefines the contemporary tea-drinking experience. CHAGEE is focused on promoting the health benefits of our products while facilitating cultural exchanges between China and the global community. Our objective is to build a world-class brand in the ready-to-drink tea market, offering consumers worldwide the opportunity to enjoy the taste of contemporary Asian tea."
The Rise of Oriental Tea Brands on the Global Stage
CHAGEE, which was established just six years ago in Yunnan province—considered one of the historic origins of tea in China, —has swiftly climbed the ranks to become a leader in the competitive tea beverage sector. Specializing in raw-leaf fresh milk tea, the company melds traditional oriental culture with tea heritage and innovation. Its expansion across all major provinces and cities throughout China illustrates CHAGEE's rapid growth and significant penetration in the global market.
In 2023, CHAGEE achieved a Gross Merchandise Value (GMV) of 10.8 billion yuan in Chinese market. As of the first quarter of 2024, CHAGEE had achieved over 5.8 billion GMV and it's expected over 20 billion yuan by the end of 2024.
More importantly, the oriental tea brand is increasingly attracting a younger audience.
Diverging from the traditional tea market, which typically skews older, CHAGEE has captured the interest of consumers in the 15 to 50 age demographic. The broad appeal is significantly unifying the perception of modern oriental tea across generations.
Over the past few years, CHAGEE has fused modern technology and health-conscious values with oriental traditions to promote its innovative tea products worldwide. In 2023, the brand enhanced its product formulations by removing artificial flavorings from its tea bases, eliminating creamers from its milk, and ensuring that its beverages contain zero trans fatty acids. CHAGEE also introduced novel features such as the Product ID Card and a Health Calculator, and took the unprecedented step of publishing calorie and nutrient content reports for its products, a first in the ready-to-drink tea industry.
In early 2024, the company continued the lead in the industry by implementing the Nutritional Choice label at its Shanghai locations, introducing the first nutritional grading system specifically for tea beverages. The development ushers in a new era focused on managing sugar intake. In March, CHAGEE announced the glycemic index (GI) values for several tea beverages for the first time, providing a scientific basis for sugar management.
Today, CHAGEE's signature offering, Jasmine Green Milk Tea, enjoys robust sales, with over 230 million servings sold annually. The standout beverage not only maintains a growing repurchase rate but also demonstrates the brand's commitment to meeting consumer expectations for quality, user experience, and health benefits.
Modernized Operation Boosts Profitability
Over the past few years, CHAGEE has dramatically transformed its operational processes, crucial in its mission to become a competitive force worldwide.
The company has integrated modern management tools into its operations, establishing an online system that synchronizes the management of personnel, inventory, delivery, and store locations. This integration has led to the development of a holistic digital operations framework and a comprehensive digital management system, marking significant advancements in the industry's operational practices.
CHAGEE stands alone as the sole freshly brewed tea company in the country to have successfully implemented a decentralized local service center. The company operates according to the '1+1+9+N' model, which encompasses a central headquarters, a dedicated local team, nine directly-managed stores, and an unlimited number of franchised stores. This structure offers substantial support for its franchisees, bolstering local operational capabilities and enhancing responsiveness to market dynamics.
CHAGEE also maintains a policy of operating directly-managed stores prior to opening up a new market to franchising. When entering a new city, it first opens a flagship store to test the business model and establish a market presence. Depending on local market needs, the number of directly-managed stores may exceed nine to ensure business consistency is achieved prior to expanding the franchise network. The strategy has enabled rapid expansion and high profitability rates among CHAGEE's domestic stores over the past six years, significantly aiding its franchisees in becoming profitable.
In the critical areas of digitization and intelligent technology, CHAGEE has continued to invest and achieve significant results. The company began integrating automated tea-making equipment in select shops in 2022 as part of a pilot initiative. The subsequent year, CHAGEE unveiled the next-generation TEA BAR, featuring innovative offerings like Tea Extreme Extract and Oriental Ice Tea, modernizing the traditional tea-drinking experience with a technological twist. The period also marked the official rollout of CHAGEE's proprietary automated tea-making equipment across its stores.
To ensure a robust supply chain, CHAGEE directly sources all tea and milk for its domestic operations, managing distribution through the group's headquarters. The company has established multiple urban warehouses across the country to maintain optimal freshness of all raw materials. Internationally, tea products for CHAGEE's shops are also sourced and logistics are handled through the headquarters, adhering to all necessary international quarantine protocols. Additionally, high-quality milk and other raw materials used in each location comply with local regulations, supported by CHAGEE's local supply chains and storage solutions to facilitate procurement and distribution.
At the forum, Zhang also discussed the intrinsic appeal of tea as one of the world's primary beverages, capable of transcending age, borders, and economic cycles. He envisages the future of modern oriental tea as both a return to its roots and a means of connecting people globally. "CHAGEE is focused not on creating demand but on discerning and satisfying the expectations of tea drinkers around the world." Zhang added.
SOURCE CHAGEE
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