Global marketing · Chinese tea brands
Chagee’s overseas test is the second cup
By Prof. Alessandro Buffoli, PhD
Before opening another store, I want to know who returns at full price—and which drink they have stopped buying.
If I were assessing Chagee’s next overseas store, I’d ask a customer what they would have bought if the shop had been closed.
“A coffee” gives me a purchase occasion and a competitor. “A drink from the tea shop next door” gives me a different comparison. “Nothing—I came for the opening” tells me the launch attracted attention. I still need to find out whether there is a regular purchase behind it.
That distinction matters when a Chinese brand enters a market where many customers have never heard of it. People who already know the brand can help a launch. A newcomer needs a reason to spend money on a drink they cannot yet picture.
Chagee’s US menu includes “Tea Lattes,” “Pure Teas,” and “Matcha.” I like the practical work “tea latte” does. It gives the customer a category they can recognise before asking them to learn a particular tea’s name or origin.
For a first order, I’d make one recommendation clear: this drink, this taste, this price, prepared this way. Keep the original name and explain it. Sweetness and ice options can remain available, but a newcomer should be able to order confidently without making several decisions about something they have never tasted.
Localisation has to reach the price and the location
A translated menu cannot compensate for a shop in the wrong place for the occasion it wants to serve. If the target is an afternoon coffee purchase, opening hours, walking distance, waiting time, and price all belong in the comparison.
This is why I’m cautious about making flavour changes the first response to weak demand. An unfamiliar tea may be the reason to visit. Before changing it, check whether the customer understands the offer and can fit the purchase into a normal day.
My proposed test would follow first-time customers beyond the opening promotion. Separate those already familiar with the brand from newcomers. Look at how many return at full price, what they order, and what they would otherwise have bought. Those answers give the next store a much clearer target.
If the repeat customers are replacing afternoon coffee, build around that occasion. If most visits depend on a launch discount, find out what is missing before signing another lease. The second cup deserves its own numbers in the expansion plan.
Prof. Alessandro Buffoli, PhD
Assistant Professor of Marketing at The Hang Seng University of Hong Kong.