Brewed milk tea isn't selling well; Xiangpiaopiao has opened 5 offline tea shops and plans to build a factory in Thailand.

Ask AI · How do offline bubble tea shops respond to competition from fresh-made brands?

21st Century Business Herald Reporter Zhu Yiyi

With the rise of fresh-made tea brands like Mixue Bingcheng, Bawang Chaji, and Guming, the leading domestic brewed milk tea company Xiangpiaopiao (603711.SH) is facing challenges in performance growth.

According to Xiangpiaopiao’s recently disclosed 2025 annual report, the company achieved revenue of 2.93B yuan, down 11% year-on-year, with a net profit attributable to the parent of 95.24 million yuan, down 62.38% year-on-year.

This is the first time since the company’s listing in 2017 that both revenue and net profit have declined by double digits.

Specifically, the basic brewed tea business revenue decreased by 17.2% to 1.88B yuan, while the “second growth curve,” the ready-to-drink business, grew by 3.27% to 1.01B yuan, but this could not fully offset the decline in the brewed tea segment.

However, in the first quarter of 2026, Xiangpiaopiao’s performance rebounded strongly, with revenue reaching 878 million yuan, a year-on-year increase of 51.41%, and net profit attributable to the parent of 93.39 million yuan, turning from loss to profit year-on-year.

Brewed tea business down 17.2%, ready-to-drink business up 3.27%

Xiangpiaopiao’s products can be divided into two main categories: brewed and ready-to-drink. The brewed segment mainly includes the “Xiangpiaopiao” classic series, good ingredients series, and other series; the ready-to-drink segment mainly includes “Meco” cup fruit tea, “Lanfangyuan” Hong Kong-style tea drinks, and “Xiangpiaopiao” ready-to-drink milk tea products.

Among these, the basic brewed tea segment, affected by the narrowing of peak sales periods during high seasons in 2025, generated revenue of 1.88B yuan, down 17.2% year-on-year.

In response, on May 6, Xiangpiaopiao explained on an investor interaction platform that the seasonality of product sales is due to the attributes of “hot drinks” and “gifts,” with peak sales closely related to the Chinese New Year period, and annual sales concentrated in certain periods of the fourth quarter and the first quarter of the following year.

During an institutional research call on May 7, the company further mentioned, “The 2025 Chinese New Year was in January, and the 2026 Chinese New Year in February, which shortened the peak season periods in the first and fourth quarters of 2025 and extended the peak season in the first quarter of 2026.”

Although Xiangpiaopiao has maintained the No. 1 market share in cup-brewed milk tea for 14 consecutive years from 2012 to 2025, sales data shows that the fresh-made tea market has still brought significant impact to its brewed business.

The 2025 financial report shows that Xiangpiaopiao sold a total of 27.1873 million standard boxes of brewed milk tea. Based on the common market standard of 30 cups per standard box, this is equivalent to about 816 million cups sold. Compared to 2024’s 32.7854 million standard boxes (about 984 million cups), it means nearly 168 million fewer cups sold in one year.

Looking at the longer timeline, the revenue from this brewed segment was 8B yuan in 2021, 2.455 billion yuan in 2022, 2.686 billion yuan in 2023, and 2.78B yuan in 2024, with growth rates of -9.49%, -11.55%, +9.37%, and -15.42%, respectively, facing growth challenges.

To break through the seasonal sales bottleneck of brewed products, in 2025, Xiangpiaopiao partnered with Zhejiang University of Traditional Chinese Medicine to establish the “Healthy Wellness Beverage Research Institute,” and launched a new brewed product, “Gufang Wuhong” warm milk tea, at the end of the third quarter of 2025.

In the first quarter of 2026, Xiangpiaopiao also launched “Gufang Baxu,” a functional brewed milk tea to aid sleep.

Although these new brewed products received positive market feedback, the company also admitted during the May 7 research call that “two products from the Gufang health series are still in market testing and online promotion stages.”

For Xiangpiaopiao, the key to breaking through lies in the ready-to-drink category.

The ready-to-drink business, regarded as the “second growth curve” by the company, contributed 2.46B yuan in revenue in 2025, a 3.27% increase, accounting for about 34.35% of total revenue.

However, Xiangpiaopiao’s ready-to-drink revenue grew by as much as 41% in 2023, slowed to 8% in 2024, and further decreased to 3.27% in 2025.

It should be noted that Meco fruit tea performed well in the ready-to-drink segment, with sales of 883 million yuan in 2025, a 13.16% increase, outpacing the overall 3.27% growth of the ready-to-drink sector. However, a nearly 9 billion yuan volume is still far from supporting the company’s basic business of 2.69B yuan.

Regarding Meco fruit juice tea, Xiangpiaopiao mentioned that in 2025, on top of its main flavors like “Peach Red Grapefruit,” “Thai Lime,” “Cherry Berry,” “Pomegranate White Grape,” “Lychee Passion Fruit,” and “Mango Guava,” it added new flavors such as “Orange Jasmine” and “Mulberry Jasmine” to further enrich the product line.

Five offline tea shops opened

Facing performance growth challenges, Xiangpiaopiao has also begun to explore the offline tea market.

In its 2025 annual report, Xiangpiaopiao mentioned that, based on previous brand marketing activities—such as pop-up stores in Hangzhou and Chengdu—the company started opening offline tea shops in Hangzhou from the fourth quarter of 2025, extending into offline experiential retail.

Recently, a reporter from 21st Century Business Herald visited and found that Xiangpiaopiao has opened five offline tea shops in Hangzhou, including Xiangpiaopiao Original Leaf Fresh Brewed Tea (Xintiandi Store), Xiangpiaopiao Original Leaf Fresh Brewed Tea (Joy City Store), Xiangpiaopiao Original Leaf Fresh Brewed Tea (Chengxi Yintai Store), Xiangpiaopiao Original Leaf Fresh Brewed Tea (Sijiqing Store), and Xiangpiaopiao Original Leaf Fresh Brewed Tea (Wufu Tianhong Shopping Center), located in various key areas of Hangzhou city center, north, west, and south.

Notably, the Xiangpiaopiao Original Leaf Fresh Brewed Tea (Sijiqing Store) is located opposite Sijiqing Jiutian International Garment City and Landy International Men’s Wear Base, close to competitors like Guming, Mixue Bingcheng, Dian Dian, etc.

A staff member at this Sijiqing store told 21st Century Business Herald that “the store opened at the end of November last year.”

（Xiangpiaopiao Original Leaf Fresh Brewed Tea (Wufu Tianhong Shopping Center)）

On May 11, the reporter also saw that the Xiangpiaopiao Original Leaf Fresh Brewed Tea (Wufu Tianhong Shopping Center) had a “Grand Opening” poster display, with promotional activities from May 8 to 10. The floor where this store is located also features other fresh-made tea shops like霸王茶姬,煲珠公,树夏, and林里.

In terms of product categories, Xiangpiaopiao’s offline tea shops offer mainstream tea types such as original leaf fresh milk tea, original leaf special brewed tea, original leaf fresh fruit tea, and original leaf pure tea, with prices mainly ranging from 5.9 to 15.9 yuan.

“Our initial goal in opening stores is to interact with consumers through a physical space and recreate Xiangpiaopiao with freshly brewed tea,” said Jiang Xiaoying, general manager of the brand innovation center, who is from the second generation of the company. She has repeatedly expressed cautious exploration of offline channels in media interviews since 2025.

How effective Xiangpiaopiao’s offline tea trial will be remains to be seen.

Additionally, Xiangpiaopiao disclosed in its 2025 annual report that it plans to invest in building an ready-to-drink product manufacturing base in Thailand, with the project expected to start construction in 2026, seeking incremental overseas market opportunities.

“The product will be positioned as high-end cup fruit tea, differentiated by exotic tropical flavors, real fruit juice, low sugar and zero fat, and high-end transparent cup packaging, setting it apart from bottled competitors. The company will also actively utilize high-quality tropical fruits from Thailand to maintain cost and supply stability, and create a ‘Thailand origin’ selling point,” the company mentioned during the May 7 research call.