According to AFP reports on the 1st (local time), it was easy to see people sticking straws in large-capacity, colorful bubble tea disposable cups in downtown streets and shopping malls across China in recent decades, which was a sight of China’s economic growth.
Many bubble tea chains then flourished by launching premium products worth between 25 and 40 yuan, and numerous brands operate about 500,000 stores across China, it added.
Amid the widespread popularity of bubble tea, Internet bubble tea influencers have also emerged to rate the taste of various bubble teas.
However, AFP said, “Due to China’s economic slowdown after the COVID-19 pandemic, the bubble tea industry is now competing for ultra-low prices, offering products worth less than $1.” Consumers are now looking for low-cost brands such as ‘Miche Bingchen’ amid price-cutting competition.
Guo Jun, who works in Beijing, told AFP in front of the Miche Bingcheng store that “other products are too expensive” and that he used an Internet discount to purchase a 2.8 yuan (about 530 won) drink.
“The labor stress is high, the current economic environment is not good, and salaries are not high, so young people should be a little more practical,” he said.
Stacey Chen, a bubble tea influencer with about 180,000 followers on social media platforms Douyin and Xiaohongsu, pointed out that Chinese coffee brands’ offering of premium products from more luxurious foreign coffee brands such as Starbucks at low prices also had at least some impact on the decline in bubble tea’s popularity.
“Previously, we basically regarded coffee as an import or luxury item,” he told AFP, but analyzed that the launch of low-cost products by Chinese coffee brands affected consumers.
“Now I can buy a premium coffee drink for 9.9 yuan or 8.8 yuan,” he said. “Why do I have to pay more than 20 yuan for a cup of bubble tea?” Earlier, VOA reported that 1 million food and beverage stores, including 30,000 noodle restaurants, closed in China in the first half of the year, citing the Chinese restaurant industry media, Chan Kwan-ji. At the same time, he said that the size of such closures was close to the total size of last year.
Against this backdrop, restaurant chains such as KFC, McDonald’s, and Haidilao are trying to overcome China’s sluggish consumption by promoting small-scale store models, Hong Kong’s South China Morning Post (SCMP) reported on the 1st.
According to SCMP, photos of these companies placing kiosks and food carts in subway stations, streets, and parks are being posted on Chinese social media.
In front of a small KFC store in Shenzhen, there is a long line of people who want to buy a breakfast menu that costs 15 yuan for work hours, and the emergence of such small stores shows intensifying competition among fast food companies.
The newspaper explained that small stores have small sales, but they have high operating cost-effectiveness in the Chinese market, which has become fierce as consumers begin to look for products with high cost-effectiveness.
Yum China, which operates KFC in China, said in its second-quarter earnings report that “innovative new store models will drive the group’s long-term growth” and that it will set up more small stores in provincial cities.
Last month, McDonald also announced plans to quickly expand its small stores, saying it would increase its stores in China from about 6,000 now to 10,000 by the end of 2028.
Haidilao, a Chinese-style shabu-shabu, also said it currently operates about 200 small stores, with sales of these stores up 15% in the second quarter from the same period last year.
SOPHIA KIM
US ASIA JOURNAL
