On 29 June, the leading Chinese tea chain Heytea announced that it will open its latest overseas branch in Paris, in time for the 2024 Summer Olympics in the French capital. The announcement comes days after Heytea posted on its Instagram accounts as well as Xiaohongshu handles that are directed at UK & US audiences, that the brand had reached 4,000 branches worldwide.
Interestingly, in the Instagram posts, Heytea refers to itself as a “New Asian Tea brand”, a more inclusive translation of its “new-style” tea, or the buzzword “new Chinese style” which is a key phrase of the guochao 3.0 wave.
Heytea has been accelerating its expansion globally while growth back home has slowed down. On 2 January, the tea chain published in its 2023 annual report that by the end of last year, the brand’s locations had reached 3,200, 2,300 of which were franchised branches. This means that Heytea has opened 800 new locations in the first half of 2024, a low number compared to the 2,350 new stores opened in 2023.
Globally, the brand is now focusing on the United States and the UK. The brand opened overseas franchising in March 2023 and launched its first UK location in August. Currently, there are 7 Heytea branches in the UK with 5 more in the pipeline. The US, on the other hand, currently has 2 locations with plans for 22 more.
Back in China, Heytea is entering the battlefield for Tier 3 cities and below as the brand sees saturation in Tier 1 and 2 cities. The leading chain faces stiff competition, especially from CHAGEE, who has already overtaken Heytea in terms of branch numbers. As CHAGEE has focused on lower-tier cities and towns since its start, Heytea’s move can mean even more direct competition between the brands.
Latest data shows the performance of the freshly-made tea market could drop to 19.7% in 2024 and 12.4% in 2025, from 44.3% in 2023. Expansion in China might soon see limitations. For Heytea, “going overseas” (出海), might just be the ticket to keep growing.
