The Chinese milk tea brand "Bawang Chaji(霸王茶姬·CHAGEE)" has confirmed the establishment of its Korean branch on the 1st. Following the entries of Mixuebingcheng(密雪氷城·mixue), Xicha(喜茶·HeyTea), and Chabaidao(茶百道·ChaPanda), a wave of Chinese milk tea brands is expected to intensify.
According to the Supreme Court, Bawang Chaji established its Korean corporation under the name "CHAGEE Korea Co., Ltd." in mid-June. The registered headquarters is in Gwancheol-dong, Jongno-gu, Seoul, and the representative director is a Chinese national born in 1983, Fu Xi. The business purpose includes operating restaurants, cafes, and other food and beverage facilities. In March, Bawang Chaji opened a Korean account on Instagram and hinted at its domestic entry.
Bawang Chaji, launched in November 2017 in Kunming, Yunnan Province, China, benchmarked Starbucks Reserve. It gained popularity with its "new tea drink" concept that adds fruits, milk, and cheese to traditional Chinese teas like green tea and oolong tea. As of the end of last year, the number of stores, including overseas locations, exceeded 6,700. Sales and net profit recorded 12.4 billion yuan (approximately 2.3591 trillion won) and 2.5 billion yuan (approximately 475.6 billion won), respectively.
In April, the company went public on the Nasdaq stock market, raising $400 million (approximately 570 billion won). This year, 30-year-old founder Zhang Junjie, who at one point experienced homelessness, has seen his personal assets swell to $2.1 billion (approximately 3 trillion won) as a result of the IPO.
According to industry sources, Chinese food and beverage franchises are gaining popularity in the domestic market. Spicy and sweet dishes like mala tang and tanghulu are captivating young people with their unique stimulating tastes. The increase in opportunities to experience various Chinese food cultures due to the visa-free travel policy is also cited as a reason.
Haidilao(海底捞), a hot pot franchise that entered the domestic market in 2014, reported a total sales figure of 78.1 billion won from eight directly-operated stores last year, a 34% increase compared to the previous year. During the same period, operating profit rose by 29% to 11 billion won.
The Chinese food craze, which began with malatang and tanghulu, is now spreading to milk tea. Starting with Mixuebingcheng in 2022, Chinese milk tea brands like Chabaidao and HeyTea have entered the domestic market.
These Chinese milk tea brands have also registered their franchise business disclosure documents with the Fair Trade Commission. According to the current Fair Trade Commission franchise business law, to establish a franchise, direct stores must be operated for over one year.
A beverage industry official noted, "Unlike the stimulating flavors of malatang and tanghulu, Chinese milk tea brands are attracting the younger generation by pursuing a healthy taste based on tea," adding that "It is expected that in about 1-2 years, the domestic franchise business of milk tea companies will become fully launched."