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130 million members and counting: How global tea brand reinvents tradition to woo millennials
Born out of a desire to connect people across cultures through tea, Chagee’s success boils down to quality ingredients and knowing what modern day customers seek
Each Chagee store around the world sold 24,000 cups monthly on average last year. PHOTO: CHAGEE
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Your next cup of tie guan yin could come topped with a layer of fresh vanilla cream along with bits of roasted pecan. This is just one of the ways Chagee is offering a modern take on oolong tea.
“The world will always belong to the young,” says Chagee CEO Zhang Junjie. “If young people are not drinking tea, then there will be no future for tea.”
“So how are young people drinking tea nowadays in comparison to coffee? That got me thinking on how we can make tea more accessible and attractive to more young people around the world,” adds Mr Zhang, on making tea-drinking a part of young people’s lives.
Apart from updating its menus with trendy flavours that cater to younger taste buds, Chagee has been making waves with new ways to reimagine the tea-drinking experience for millions of tea drinkers in China and the rest of the world.
On May 21, which is also International Tea Day, Mr Zhang, 31, shared his vision for the brand at a conference held in Shanghai Expo Centre. The event saw around 1,000 attendees, including Chagee’s employees, business and franchise partners, and five million viewers tuning in online. A roundtable discussion was also held with a panel of experts.
President of the China Tea Marketing Association Wang Qing shared during the roundtable: “The success of these new tea beverages has effectively brought Chinese tea to the global market. Chagee has bridged the gap between traditional Chinese tea culture and our modern pace of life, and also improved the international market's understanding of the tea-drinking experience."
With over 4,500 stores worldwide since it started in Yunnan province seven years ago, Chagee is one of China’s leading tea brands. "In 2023, we reached a record 108 billion in sales, taking a small step towards becoming the world's largest tea company,” says the founder.
Chagee has over 100 outlets in Malaysia, and is set to make a comeback in Singapore in August, with three new stores to be located in the heart of town at Raffles City, Plaza Singapura and orchardgateway. Fans of the brand can expect soothing tea-toned Insta-worthy interiors where tea lovers can enjoy improved menu offerings, including cakes made from Chagee's very own teas.
A company trip to Kuala Lumpur years back ignited Mr Zhang’s passion for bringing Chinese tea to the rest of the world. He observed local milk tea businesses thriving at a shopping centre during the trip, his first out of mainland China.
The experience planted a seed in his mind – the possibility of creating a global tea brand that could connect people across cultures, just as tea had done through ancient trade routes, which ran from Yunnan to North Asia and subsequently to India, Europe, North America and the rest of the world.
"The vast reach of Chinese tea is what we need to consider today: How can Chinese tea brands achieve a global presence?" Mr Zhang muses.
A focus on health, convenience and longevity
Despite facing numerous challenges and scepticism from investors in Chagee’s early days, the management team's business acumen and strategic decisions, the support of Chagee’s investors and the hard work of its employees underpinned and propelled the brand’s success.
From the start, Mr Zhang’s key focus areas have always been on high-quality ingredients and innovative brewing techniques to create unique products that keep up with fast-changing consumer demands in a highly competitive F&B industry. This includes ordering drinks on the go and customised loyalty programmes. There are over 130 million registered members on the Chagee mini programme in WeChat.
While the concept of bubble tea has taken the world by storm in recent years, he wants tea to be the main character for Chagee’s drinks – not the tapioca balls or the fruit syrup.
Chagee’s drinks are brewed using freshly picked tea leaves, instead of powdered tea, and blended with silky milk for authentic, full-bodied flavour. The brand no longer uses non-dairy creamer.
Its best-selling flavour is its signature jasmine green milk tea – around 438 cups are sold every minute worldwide.
However, to be able to churn out cup after cup of milk tea, while ensuring its consistency, is something that requires clockwork precision – and this was what the company’s fully automated production process was capable of.
Technological advancements like this played a crucial role in Chagee's success, even if this meant that Mr Zhang had to go back to basics and explore what he used to do in his first job at age 17 at a milk tea chain. He rose through the ranks of store manager, regional manager and then franchisee to eventually become the founder of Chagee.
Having been at the frontline helped him to identify pain points faced by different stakeholders and come up with more efficient processes, eventually leading to the implementation of automated equipment and modern management and supply chain tools.
Such innovations helped improve efficiency and product consistency without compromising on their standards – Chagee’s product consistency has a variance of just 0.2 per cent, which ensures that every new cup tastes as good as the last one.
These improved processes also addressed common issues such as food safety and operational efficiency, giving consumers a greater level of trust in the consistency and quality of Chagee's tea products.
A winning formula based on consumer trends
While embracing technology allowed the brand to prosper, Mr Zhang made sure that other aspects of the business did not take a backseat. Chagee took on social responsibility by providing better employment conditions and contributing to social causes.
The company launched initiatives such as its first “silent” concept store in Hangzhou, Zhejiang, which utilised modern technology and equipment to simplify communication for employees with hearing impairment.
The outlet creates an opportunity for the rest of the crew and clientele to work with and learn from those living with these conditions. With illustrated sign language guides and blackboards for writing down requests and questions strewn across the shop, as well as ordering through its WeChat mini programme, the “silent” Chagee branch provides a space that champions inclusivity for all visitors.
Chagee also worked to eliminate unhealthy ingredients such as trans-fatty acids from its products. In 2023, the brand introduced detailed nutritional “identity cards” for every drink on its menu, indicating the calories, protein, carbohydrates and fat content. According to the company, it was one of the first beverage brands in China to adopt this practice. This was in accordance with the Shanghai government’s pilot launch of its nutrition labelling scheme for sugar-sweetened beverages, which is similar to Singapore’s Nutri-Grade and the United Kingdom’s Nutri-Score.
A calorie calculator was also introduced on the Chagee app to help its consumers with better decision-making.
“This innovation is not ours alone; it arose because our consumers expressed a need and voiced concerns, which we addressed,” adds Mr Zhang.
Not only did these efforts benefit the community, but they also set a positive example in the industry, making Chagee a rising star to watch.
Taking the business global
As Chagee grew, Mr Zhang implemented a franchise model that allowed for controlled expansion.
“In order to bring oriental tea onto the global stage and encourage more people, including the youth, to drink and know about tea, we need to transform and modernise the overall experience, with scalability in mind,” stresses Mr Zhang.
The CEO’s first step in this franchise model is to establish fully-owned subsidiaries in new markets, ensuring product viability and organisational readiness before allowing franchisees to open stores. This measured approach laid a strong foundation for sustainable growth, which allowed Chagee to expand steadily both within and beyond China, without compromising on the quality of its tea products.
As Chagee continues to achieve significant milestones under Mr Zhang’s leadership, the founder concurrently seeks to explore other avenues to promote Chinese tea globally, such as collaborations with museums and cultural institutions.
The brand’s recent collaboration, the Tea World of the Forbidden City exhibition with the Palace Museum in the Forbidden City in Beijing, allowed the company to tour various locations in China. Mr Zhang aims to bring this experience to other museums in cities such as New York, London and Paris.
“The push for the globalisation and modernisation of tea is not something Chagee can accomplish alone. It requires a joint effort from industry partners, competitors, government agencies and consumers alike, paving the way for a new generation of tea drinkers and a fresh take on what it means to enjoy a cup of good tea,” says Mr Zhang.
With his sights set on expanding the reach of Chinese tea culture globally, Mr Zhang is making strides not just in modernising it but also paving the way for a new generation of tea-drinkers.
Brewing success in every cup
With Chagee coming back to Singapore with chic tea bars and refreshed menus, here are some things that you may want to know about the brand:
- Chagee currently has over 4,500 stores worldwide.
- Over 230 million cups of their signature jasmine green milk tea was sold in 2023.
- Each store around the world averaged 24,000 cups in monthly sales last year.
- Their fully-automated tea-making equipment is capable of preparing a single order in just eight seconds.
- There are over 130 million registered members on the Chagee mini programme in WeChat.
- Chagee plans to purchase around 15,000,000kg of tea leaves in 2024 – that's around one-and-a-half times as heavy as the Eiffel Tower.
- During the first quarter of 2024, Chagee saw impressive sales with its Gross Merchandise Value (GMV) hitting 5.8 billion yuan (S$1.08 billion). The full-year GMV is expected to exceed 20 billion yuan.
- Malaysia and Singapore are the first two countries in which Chagee opened stores outside of China. There are currently over 100 stores across Malaysia, including at Mid Valley Southkey and City Square in Johor Bahru.
Keep a lookout for exciting promotions and freebies from now till August by following Chagee’s Instagram (@chagee.sg) and Facebook (chagee.sg) pages.
