Xin Ou
Research expert covering Greater China
Bubble tea industry in China - statistics & facts
Founded in Taiwan in the 1980s, bubble tea, a tea-based beverage that often contains milk, juice, and chewy tapioca, soon gained widespread popularity. At the turn of the millennium, the craze for this new-style drink spread across the strait. As the Chinese middle class expanded rapidly over the past two decades, this freshly made tea beverage market has grown to a market value of over 300 billion yuan.
While the frequency of consumption remains high, Chinese consumers are more health conscious when selecting tea drinks. This presents a challenge to the industry, but more importantly, an opportunity for growth. By offering healthier products with a transparent ingredient list, authentic ingredients, controllable sugar content, etc., companies can attract loyal consumers, leading to increased consumption.
Changing patterns in bubble tea retail
The landscape of the Chinese new-style tea industry has undergone profound changes over the past two decades. First, franchise chains have replaced independent bubble tea shops, with product and equipment sales becoming the main source of income for established brands. And while stylish shops with comfortable seats are still appealing, the demand for online food delivery is steadily increasing. The latter is also preferred by market players, as it allows them to collect and analyze consumer behavioral data.Will the bubble tea bubble burst?
Due to low barriers to entry, the market is highly competitive and rapidly revolving. Every year, tens of thousands of bubble tea enterprises are established in China. In 2024, Mixue Ice Cream & Tea leads the market with nearly 30,000 outlets. Despite the hype, the saturated market has resulted in fewer profits for many of the players. While there is still a positive outlook for the industry as a whole 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.Health concerns behind the unquenchable thirst for bubble tea
According to studies, excessive consumption of bubble tea could lead to obesity, heart disease, diabetes, and even mental health problems among Chinese consumers. Although most bubble tea companies have used fresh juice and milk to replace concentrated syrup and non-dairy creamer, there is still a common concern about the possible health threat bubble tea poses to the public, particularly children and young adults.While the frequency of consumption remains high, Chinese consumers are more health conscious when selecting tea drinks. This presents a challenge to the industry, but more importantly, an opportunity for growth. By offering healthier products with a transparent ingredient list, authentic ingredients, controllable sugar content, etc., companies can attract loyal consumers, leading to increased consumption.
