Sweet, milky and colourful – bubble tea is wildly popular in China, where people sipping through straws from large plastic cups is a common sight in high streets and shopping malls across the country.
But there’s fresh competition brewing in the vast market, characterised by ultra-cheap products that are striking a chord with China’s increasingly frugal young consumers.
Bubble tea has gained huge popularity in China, coinciding with an economic boom in recent decades that propelled living standards upwards.
Post-pandemic headwinds, however, have hit the economy hard, with consumers reluctant to dip into their pockets and Chinese authorities struggling to get people spending.
Many of today’s biggest bubble tea chains once built followings with premium products priced around 25 to 40 yuan (RM15 to RM24) and flashy branding that made them status symbols of contemporary urban life in China.
But the sector has been jolted by a new wave of low-cost disruptors, some offering drinks for US$1 or less.
“The existing market is saturated,” Stacy Chen, a bubble tea vlogger based in the eastern city of Hangzhou, said.
“Reducing prices is the only feasible way (for companies) to highlight their market competitiveness.”
Chen has forged an online following of bubble tea enthusiasts who watch her videos on lifestyle app Xiaohongshu and Douyin, the Chinese version of TikTok, where she has about 180,000 followers.
In her videos, she sits in front of a row of beverages, testing them and comparing them before offering her viewers a frank assessment of their appearance, taste and cost.
China’s bubble tea industry has flourished in recent years, with countless brands now accounting for an estimated half million shops across the country.
Chief among the budget upstarts is Mixue Bingcheng, founded by a pair of brothers in 1997 as a humble shaved ice shop in the hinterland province of Henan.
The company – whose name translates as “honey snow ice city” – has expanded rapidly, with its smiling snowman mascot and bright red signs adorning about 32,000 stores in China and around 4,000 more in 11 other nations as of last year.
“Current consumer sentiment (in China) is seeing many restaurants and cafes lower their prices to match spending behaviour,” Evelyne Chang, market analyst at China Skinny, said.
For many young professionals looking to pinch pennies while working in China’s top-tier cities, new companies such as Mixue have become more attractive.
“Other milk teas are too expensive,” 21-year-old Guo Jun told AFP outside a Mixue shop in Beijing.
“Work stress is high, the current economic environment is not good, things like salary are not great, so (young people) may choose to be more practical,” said Guo. — AFP
