HeyTea freezes expansion amid price war, fierce competition

China’s popular tea drink chain HeyTea has suspended accepting applications for new franchises amid a price war brought on by fierce competition, according to mainland media.

HeyTea is understood to have issued an internal letter, noting that the new tea drinks market is still “in its early stages” and that the pause is to avoid damaging consumer loyalty, the Star Market Daily reported.

China’s fresh drinks and bubble tea makers have been caught in a price war in the past two years in a bid to attract budget-conscious consumers amid the slower-than-expected economic recovery and fierce competition.

HeyTea, which once dominated the market with drinks priced above 30 yuan (HK$31.97) per cup, was among the first brands to lower prices to as low as 8 yuan.

Mixue Bingcheng, which sells ice cream for 3 yuan and lemonade for 7 yuan, has the most expansive global network among fresh drinks makers with 40,510 stores in China and 11 other countries as of September 2024.

THEMIS QI