Chagee’s foray in the U.S. has been a success, at least initially.
The tea chain, which is based in Shanghai, opened its first location in Los Angeles a year ago and now has nine such locations.
The company, which is publicly traded on the Nasdaq Stock Exchange, called out the performance of those locations in its first-quarter earnings report last week.
Chagee said that its “cross-market appeal and operational replicability in one of the world’s most competitive and sophisticated markets is clear. This demonstrates that Chagee’s premium positioning, product quality and operational capabilities can successfully translate across diverse cultural and economic environments, providing confidence in the company’s long-term international growth trajectory.”
Chagee is one of the world’s largest beverage chains. It operates more than 7,500 shops, the vast majority of which are in China.
But the company in recent years has been making an international push, opening more than 200 locations in various markets, including Malaysia, Singapore, Indonesia, Thailand and Vietnam.
Its U.S. foray was the riskiest, given the competitiveness of the U.S. market and the general struggles of tea-focused concepts.
The market is dominated by brands like Starbucks and Dunkin’, while brands like 7 Brew and Dutch Bros are growing rapidly with drive-thru-only locations around the country.
And Chagee isn’t the only Chinese-based chain making a U.S. push. Luckin Coffee, the fast-growing chain, opened its first locations in New York last year, as did the ice cream and drink chain Mixue—which operates more shops than any other restaurant chain in the world.
Chagee sells a selection of extracted and brewed teas, such as Peach Oolong Lemon Tea or a Roasted Black Tea Latte.
The company’s revenue last quarter grew 4.5% to 3.5 billion Chinese yuan, or $524 million U.S. Net income declined 25% to 507 Chinese yuan, or $75 million U.S., but that was an improvement over recent quarters when the company’s profitability declined.
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