Chinese tea beverage brands are increasingly expanding overseas as they face fierce competition and price wars within their home market. They are also benefiting from higher demand abroad, allowing them to set premium prices based on local supply and demand factors.
These brands hold notable advantages in international markets, according to Tong Jianlei, vice president for the Asia-Pacific region and head of global consumer business at a leading digital trade platform that facilitates cross-border payments for Chinese tea brands. Their product innovation, supply chain management, store operations, and digital capabilities have been refined through intense domestic competition, giving them an edge overseas.
By the end of 2025, China is expected to have around 478,000 milk tea shops, averaging one for every 3,000 people. The price cutting wars seem to be easing, with some products from a prominent brand falling below 7 yuan (around $1) and in-store prices nearly matching levels seen in 2015. One rival brand’s net profit margin has declined from 18% to 12%, and the number of new store openings in the third quarter has decreased by 64% compared to the previous year.
This harsh domestic environment has driven companies to look abroad for growth. More than 44 Chinese tea brands have established international outlets, totaling close to 15,000 stores. In the United States, the average price for a product from a well-known brand is nearly 40 yuan ($5.90) higher than in China. Mixue Ice Cream & Tea sells lemonade for $1.99, which is three to four times the domestic price. Although the overseas presence of some brands is relatively small, they have seen impressive growth—Chagee, for example, has only 345 stores abroad but has experienced over 75% annual growth in gross merchandise volume for three consecutive quarters, far surpassing its domestic expansion.
Consumers have responded positively to the higher prices, affirming the internationalization potential of Chinese tea brands. Amanda Wang, founder of Ningji Lemon Tea, believes the US is emerging as a significant market for milk tea, emphasizing that there remains substantial growth potential there.
A report from a US-based point-of-sale provider highlights that the ready-to-drink tea market in the US is growing at an annual rate of 9.1%, with potential for expansion by five to ten times. Currently, no single brand commands more than 5% market share, indicating an industry still in its early stages and open for growth.
The overseas push is driven by competition in products and services, but it also tests the stability of supply chains. “Previously, it was mostly about exporting products and experimenting with individual stores. Now, brands are exporting entire supply chains, store operation systems, franchise models, and digital platforms,” explained Tong.
The paths to international growth are becoming more layered. Southeast Asia is seen as a practical first step due to its proximity, familiar consumption habits, significant Chinese communities, and well-developed franchise networks. The US and Europe are viewed as long-term strategic markets, primarily as ways for brands to demonstrate their global capabilities and build an international presence. “The US may not be the quickest market for expansion, but it’s crucial for establishing brand credibility and a global outlook,” Tong added.
Wang noted that companies can’t rely solely on their Chinese supply chains—they must also develop a global supply system that ensures consistent quality while leveraging local resources.