In the past, people used to go to coffee shops to chat with friends. Now, bubble tea shops are becoming alternatives.
To cool off on hot summer days in Beijing, China, Noppawan Sereesuntiwong often stops by a milk tea shop near Dongdaqiao subway station in Chaoyang, according to China Daily.
This Thai woman is a “follower” of pearl milk tea, a drink that is very popular with young people in the Golden Temple and many other countries in Southeast Asia.
When he came to China to study abroad, Sereesuntiwong tried many different brands of milk tea before finding his favorite.
“The weather in Thailand is hot and people like sweet, cool drinks. We like carbonated drinks, juices and also bubble milk tea. In China, I like mango flavored tea, because it feels fresh and not too sweet,” she said.
Many young Asians love drinking bubble tea. Photo: Stephen Chung/Alamy.
Over the years, bubble tea shops have sprung up like mushrooms in Malaysia, Singapore, Vietnam, Indonesia, and Thailand. Research by Momentum Works and qlub shows that Southeast Asian consumers spend $3.66 billion a year on bubble tea.
Talking about Southeast Asian people’s love for milk tea, writer Zat Astha (Singapore) once wrote: “For some people, this is not just a drink from tea or milk with pearls at the bottom of the glass, it has even become a kind of personality, a way of life.”
100% increase in revenue
On 11/11 last year, Singles’ Day, Chinese milk tea brand CHAGEE achieved record sales in the Malaysian market.
Peng Xianggui, the company’s head of overseas sales, said: “At each of our stores in Malaysia, dozens of motorcyclists wait for delivery. We don’t offer discounts but 26 stores sold more than 30,000 cups of milk tea to go.”
In 2018, CHAGEE launched its “going global” plan, just one year after gaining a foothold in China’s Yunnan province. In October 2018, the company established an overseas sales department, focusing mainly on the Southeast Asian market.
In August 2019, the company opened its first overseas store in Kuala Lumpur, Malaysia. The brand grew rapidly and now has more than 30 stores in Malaysia.
“Cold drinks are a must-have in Southeast Asia. The average annual temperature in this region is close to 30 degrees Celsius and demand for cooling drinks is huge, throughout the year,” Peng said.
Milk tea brands achieve great revenue in the Southeast Asian market. Photo: Eater.
Many of CHAGEE’s stores in Malaysia are located in shopping malls, close to major brands such as Starbucks and McDonald’s. On July 22, the brand opened its 37th store in Malaysia, while last year, the highest single-day sales of a store reached more than $5,635.
“This year, our revenue in Malaysia is up 100% from last year, with monthly sales reaching 74,000-88,000 USD,” the company said.
CHAGEE is just one of the Chinese milk tea brands that have gained immense popularity in Southeast Asia in recent years.
At the end of 2018, hundreds of people waited in line when Heytea opened to sell its products at the ION Orchard shopping complex in Singapore. Local media reports described the gathering as “unbelievable”.
According to Heytea, the store sold an average of 2,000-3,000 cups of milk tea every day in the first week of business, recording a daily net profit of up to $8,800.
Expensive but not make buyers regret money
According to Professor Leonard Lee of the National University of Singapore Business School, drinking bubble milk tea is considered an enjoyable experience, especially given the variety of teas with creative names and colorful looks.
“Some consumers also see drinking milk tea as a cool social activity to do with their friends,” he said.
In addition, customers can also customize the amount of sugar, ice, topping according to personal preferences. It’s like a new drink “make yourself” experience.
With the variety of flavors and ingredients available, bubble tea allows buyers to express themselves when it comes to creating a beverage that matches their taste and identity. Another reason for the appeal is the ability of customers to decide how healthy the drink is.
Professor Lee, who studies consumer psychology, explains: “For example, when asking for a lower percentage of sugar in a drink, consumers feel that drinking bubble milk tea is healthier than drinking regular carbonated soft drinks”.
Singaporean consumers have the strongest purchasing power in Southeast Asia. Photo: Ann Wang/Reuters.
Dr. Emily Ortega, head of the Psychology Program at the Singapore University of Social Sciences, said bubble tea was “a social experience for many”.
A lover of the drink herself, Dr. Ortega explains that eating and drinking with others allows people to bond and this is magnified through social media.
“People not only share their milk tea experience with friends and colleagues, they also post photos and status on social networks, making personal assessments,” Ms. Ortega said.
Psychologically, many people see bubble tea as a combination of dessert and cooling drink. So, even though it’s not cheap, it doesn’t make buyers feel like they’re losing money.
“This drink also allows people to make their own. Guests can change the ingredients and flavors to match their mood or even help alleviate temporary negative emotions,” added Dr.
From a biological perspective, Ortega said bubble tea is addictive because it contains caffeine and sugar.