By LU Yibei

Bubble tea chain Chayan Yuese - once almost a subculture icon of the central city of Changsha with up to four Chayan Yuese shops at any given crossroad downtown– is quietly expanding in other cities.

According to its WeChat account, among its 546 stores nationwide, 115 are outside its basecamp Hunan Province by the end of 2022, with a prominent presence in Nanjing, Wuhan and Chongqing.

Founded in 2013, Chayan Yuese was reluctant to leave Changsha for the first seven years. With a low price of 17 yuan (US$2.50) and Chinese-culture-oriented publicity, the brand was all over social media. In 2020, before it opened its first shop outside Changsha, people hundreds of kilometers away were willing to pay hundreds of yuan to have a cup of Chayan Yuese delivered to their cities.

Flat Chayan Yuese leaped forward despite the pandemic. In June 2020, it had only 230 shops, all in Changsa. Less than two years later, there were 560 of them in Changsha and 60 elsewhere.

As the number of tourists collapsed and logistics were disrupted, Chayan Yuese closed 87 shops in Changsha in 2021. Its founder LU Liang said the company lost 20 million yuan (US$3 million) every month. Lu admitted his strategy was too aggressive and asked staff to accept a pay cut so that the company didn’t have to lay them off.

Chayan Yuese is also diversifying its product range. In May last year, it started a Chinese tea franchise. Three months later, it launched coffee house Yuanyang.

The three years of Covid have completely changed the bubble tea market. Leading players Haytea and Naixue have both lowered prices and frequently invested in other brands.

With behind them, Chayan Yuese and its competitors are back at the starting line of another round of scrapping for market share.