Introduction:In recent years, the tea beverage industry may appear to be thriving, but it is actually facing serious challenges. The latest statistics show that approximately 130,000 milk tea shops across the country closed down in the past year, affecting numerous entrepreneurs and franchisees. What exactly is causing this wave of "closures"? From market saturation and price competition to brand trust crises, this article provides an in-depth analysis of the current state of the tea beverage industry, helping readers understand the industry’s challenges and possible future directions for transformation.
Once upon a time, milk tea was an indispensable part of many young people’s lives, and the tea beverage market became a popular field favored by many entrepreneurs. However, the market boom is no more. According to recent statistical data, about 130,000 milk tea shops across the country have closed their doors over the past year, equivalent to more than 350 stores shutting down on average each day. Even well-known chain brands that were once hugely popular, such as Heytea and Nayuki, couldn’t escape closure fates—even their first outlets in some cities had to shut down.
Despite seemingly being in a peak season on the surface, the tea beverage market is revealing subtle signs of chill. Even when topics such as “the first cup of milk tea in autumn” garnered attention, many independent brands and chain stores still faced the dilemma of having few or no customers. In fact, according to multiple sources, as of early August this year, the total number of milk tea shops nationwide was around 431,000. Although over 167,000 new stores opened in the past year, the net increase was only 35,000, meaning that as many as 130,000 stores have quietly exited the market.
Within this wave of closures, many aspiring entrepreneurs who once had dreams chose to create their own brands, investing substantial savings in hopes of establishing uniquely personal tea beverage shops. However, faced with continuously rising fixed costs such as rent, raw materials, and equipment, coupled with an overall downward trend in market pricing, many independent stores struggle to compete with large chain brands. Amid the trend of “milk tea returning to the 10-yuan era,” these small shops often lose customers due to a lack of price competitiveness and are ultimately forced to cease operations.
The franchise model has not been spared from this market reshuffle either. One franchisee revealed that even after choosing a milk tea brand with a specific theme—like a Chinese-style concept—their store still suffered from low dine-in and delivery order volumes due to insufficient brand recognition, forcing them to close after just one year of operation. Even relatively well-known brands like Cha Bai Dao, according to brand monitoring data, opened 614 new stores within 90 days as of mid-August, but simultaneously closed 905 stores, showing negative growth. Additionally, another brand, Moly Yogurt, was reported to have closed 142 stores within six months, highlighting the significant market pressure.
Intensified market competition is one of the key drivers behind this wave of closures. To seize market share, numerous brands have rolled out low-price strategies, resulting in a flood of milk tea products priced as low as just a dozen or even a few yuan, which has drastically compressed overall profit margins.In this kind of environment where “the gods fight and the mortals suffer”, many small and medium-sized tea beverage shops find it difficult to withstand the impact of price wars and can only choose to exit the market.
Moreover, consumer trust in brands is also changing. In the past, chain brands attracted customers with their fame and unified image, but with frequent reports of food safety issues and employee rights concerns, the public’s blind admiration for brands is gradually fading. Consumers are now placing more emphasis on product quality and their own needs, making choices more rationally. At the same time, franchisees are also becoming more cautious when selecting partner brands, wary of those with poor management or potential risks.
Even during short-term sales booms brought about by holidays like the Start of Autumn, many stores may experience a temporary spike in sales, but once the enthusiasm fades, they still face ongoing pressure from continuous losses. For many operators, this market adjustment is not only a challenge but also an opportunity to rethink their business models and market positioning. As the market gradually returns to rationality, the tea beverage industry may soon undergo a wave of transformation and restructuring. Only those brands that truly possess core competitiveness and customer trust will be able to stand firm in this tide.
The above content is compiled by CoffeeHunters, a coffee news website.
