For months, the streets of China’s major cities were flooded with 'zero-yuan' bubble tea as delivery platforms and competing brands engaged in a scorched-earth price war. While consumers enjoyed the fleeting thrill of 'wool-gathering'—collecting nearly free drinks—the reality behind the counter was far more grim. The frenzy served as a mirror for the industry’s six major listed players, revealing a sector where the high-growth narrative of 'blitzscaling' has finally met its match in a saturated market.
As the subsidies retreat and consumer rationality returns, the era of telling growth stories through aggressive storefront expansion is coming to a close. The focus has shifted from who can open stores the fastest to who can survive the longest through operational efficiency and meticulous management. Recent financial disclosures from heavyweights like Mixue Bingcheng and Chagee show a widening gap between those who can weather the 'involution' and those being hollowed out by it.
Mixue Bingcheng remains the undisputed revenue leader, yet its performance hides a strategic pivot. While its main brand faces slowing growth, its coffee-focused sub-brand, Lucky Cup, exploded from 4,600 stores to over 10,000 in less than a year. However, even this 'flash expansion' is showing cracks, as executives admit to a slowdown in fourth-quarter turnover. The group’s reliance on a standardized, low-cost model is struggling to adapt to a consumer base increasingly demanding fresh, premium winter offerings.
Conversely, Chagee, the industry’s erstwhile darling of 'brand premium,' is facing a full-blown identity crisis. The company saw its adjusted net profit plummet by over 20% in 2025, with average monthly GMV per store dropping by a staggering 25.5%. Chagee’s refusal to participate in the delivery price wars preserved its brand prestige but at a catastrophic cost to its market share. A bungled transition in its business model, moving from raw material sales to a GMV-sharing commission, further strained its relationship with franchisees during the downturn.
High-end brands like Nayuki have been forced to treat delivery platforms as a lifeline, with delivery orders now accounting for half of total revenue. However, this dependence comes with a heavy price tag: delivery service fees are eating up over 10% of total earnings. This shift has effectively rendered Nayuki’s signature 'third space'—the large, expensive physical lounges designed for social gathering—an albatross of high rent and low foot traffic. Closing unprofitable stores has stemmed the bleeding, but it has not restored a viable path to growth.
With the domestic market nearing saturation, tea brands are desperately seeking a 'second growth curve' in the coffee sector. Virtually every major player, from Guming to Shuxiaoyi, is now equipping stores with espresso machines to capture the morning caffeine crowd. Yet, they are entering a 'Red Ocean' where price wars between giants like Luckin and Cotti have already anchored consumer price expectations at 9.9 RMB. In a market where growth has slowed to a mere 5-7%, the future of China's tea drink industry will be defined not by the number of signs on the street, but by the slim margins of operational survival.