Chagee Global Expansion: Can Nasdaq Capital Turn Chinese Tea Culture Into a Worldwide Brand?
- 6 hours ago
- 6 min read
Key Takeaways
Chagee raised about US$411 million on Nasdaq in April 2025 on the promise of a global tea-culture brand, yet only about 345 of its 7,453 stores sit outside Greater China, under 5% of the network.
The overseas business is growing fast off a tiny base, with fourth-quarter overseas GMV up about 85% year on year, while the home market that funds it is cracking: fourth-quarter same-store GMV fell 25.5%.
Chagee's premium modern tea house positioning is harder to export than Mixue's price-led model. Its nine US stores cluster in Southern California, closer to diaspora demand than a mainstream breakthrough.
Full-year revenue grew just 4% to RMB 12.91 billion and net profit roughly halved, pushing management to reset 2026 around same-store recovery rather than store-count growth.
For operators, Chagee is a case study in the gap between a capital-markets narrative and an operating footprint. The global story is real, but for now it is mostly an ambition.
On 17 April 2025, Chagee's founder Junjie Zhang rang the opening bell at Nasdaq's Times Square MarketSite. The pitch to investors was not a Chinese tea chain. It was a global brand in the making. Zhang said the company had envisioned a global brand since its founding in 2017, by which point it already ran more than 6,400 stores. The market liked the story, and the listing turned a regional tea phenomenon into a US-traded equity overnight.
A year later, the distance between that narrative and the operating reality is the most interesting thing about the company. Chagee is a genuine giant at home and a newcomer almost everywhere else. Reading Chagee global expansion honestly means separating what the capital markets bought from what the store map actually shows.
The IPO Sold a Global Story
The mechanics were a China growth story dressed for a US audience. Chagee sold 14.7 million American depositary shares at US$28 each, raising roughly US$411 million and watching the stock surge 21% on its first day to a US$6.2 billion valuation. Listing on a US exchange was itself the message. A Chinese consumer brand did not need American capital to fund domestic stores. It chose Nasdaq because the audience it wanted to convince, and the brand equity it wanted to build, were global. The timing made the statement louder: Chagee went public in the middle of escalating US-China trade tension, when most Chinese companies were retreating from American markets rather than courting them.
The product narrative reinforced it. Chagee positions itself as the “Starbucks of tea”: brewed from original Yunnan tea leaves rather than powders, served in minimalist “modern tea house” spaces designed for lingering, and wrapped in a guofeng (national-style) aesthetic that frames the brand as an ambassador for Chinese tea culture. Where Mixue exports affordability and Luckin exports convenience, Chagee set out to export a ritual. That is a far more ambitious claim, and a far harder one to deliver at scale abroad.
It also fits a broader pattern of Chinese consumer companies reaching for global relevance through brand rather than price. Anta has bought its way into global premium sportswear, and Pop Mart has turned a Chinese IP into a cross-border phenomenon. Chagee belongs to the same cohort: companies betting that culture, not discounting, is the durable export.
What Chagee Global Expansion Looks Like Today
The footprint tells a more sober story than the ticker. By the end of 2025 Chagee operated 7,453 teahouses, up 15.7% year on year. Of those, 345 sat outside Greater China, while fourth-quarter overseas GMV rose 84.6% year on year. That still puts the overseas network at under 5% of the total. The global brand, measured in stores, is a small fraction of the China base.
The United States, the market the IPO was built to impress, is the clearest example. Chagee opened its first US modern tea house at Westfield Century City in Los Angeles in May 2025, complete with a celebrity-studded ribbon-cutting. A year on, it ran nine US locations by June 2026, a year after its Los Angeles debut. The expansion is deliberate and well-capitalised, but every one of those stores sits in California, clustered around Los Angeles, many in areas with large Asian-American communities.
The momentum is real where it exists. That 84.6% jump in overseas GMV far outpaces the home market. But roughly 85% growth on a base of just 345 stores is a different proposition from building a worldwide brand. The overseas business is early-stage and promising, not yet proven. Diaspora demand can validate a concept. It does not, on its own, make a brand global.
Chagee's most mature overseas presence is not in the United States at all, but in Southeast Asia, where it has operated since 2019 across Malaysia, Singapore, Thailand and Indonesia. That matters for how to read the US push. Southeast Asia is culturally closer, has large ethnic-Chinese populations, and is already a proven tea-drinking region, which makes it the natural first step abroad. The harder, more strategically important question is whether the brand can repeat that success in markets with no built-in familiarity. The US is the test case precisely because it offers the least cultural tailwind and the most brand-building upside.
The Home Market That Funds the Dream Is Cracking
The global build-out is paid for by China, and China wobbled in 2025. Full-year revenue grew just 4% to RMB 12.91 billion while GAAP net income fell to RMB 1.19 billion, roughly half the prior year, as operating margin compressed to about 10%. For a brand that listed on a hyper-growth narrative, single-digit revenue growth and halved profit are a jarring reset.
The operating detail is worse than the headline. In the fourth quarter, same-store GMV fell 25.5%, and management admitted it had underestimated the impact of China's delivery-platform price wars, signalling a slowdown in domestic expansion. When the cheapest milk tea is one tap away on a subsidised delivery app, a premium teahouse that sells atmosphere and ritual is structurally exposed.
There are early signs of stabilisation. In the first quarter of 2026, the same-store decline narrowed to about 16%, and the company announced a US$150 million share buyback. That is a sequential improvement, not a turnaround. The point for the global story is structural: the China engine is the cash that funds overseas growth. A cracking core does not stop expansion, but it does shrink the margin for error. The parallel is Lululemon's premium bet in China, another case where a high-end positioning ran into the limits of a single market faster than the narrative assumed.
Does the Premium Tea Playbook Travel?
China now exports two very different beverage models. The first is volume and price: both Mixue and Luckin are pushing into the United States, having learned mass-market playbooks from Starbucks and McDonald's. The second is brand and experience, which is Chagee's bet. The price-led model is mechanically easier to export: a cheap, familiar product needs little cultural translation. A premium third space built on a specific tea ritual needs the consumer to adopt a new habit, not just try a new drink.
That is why Starbucks is the right comparison and the cautionary one. Starbucks spent decades, and enormous capital, teaching the world to treat a coffeehouse as a daily destination. Chagee is attempting the same feat with Chinese tea, on a far shorter timeline, and with a brand identity rooted in guofeng aesthetics that read as premium-cultural at home but can read as niche-ethnic abroad without heavy localisation. The very thing that differentiates the brand in China is also what makes it harder to scale to a mainstream Western consumer.
The clustering of US stores in Asian-dense Southern California is the tell. It is a smart, low-risk way to enter, anchoring on consumers who already know the brand from China or social media. The real test is whether Chagee can cross from that base into general-market demand, the way bubble tea itself eventually did. That crossing, not the store count, is what will decide whether this is a global brand or a successful export to the diaspora. Compared with Luckin's convenience-and-tech approach, Chagee is making the slower, more expensive bet, and betting that the slower one builds something more durable.
What to Watch
The numbers behind Chagee global expansion point to a company that is a maturing China champion making an early, genuine overseas bet, not yet a global brand. Three things will tell us which way it breaks. First, whether US and Southeast Asian stores can move beyond diaspora clusters into general-market demand. Second, whether the home market stabilises, because the first-quarter improvement is a signal, not a confirmed recovery. Third, whether the brand localises the ritual for new markets or insists on exporting it unchanged.
It is too early for a verdict, and the base effects are large enough that one or two strong years could change the read entirely. Capital buys runway, and Chagee has runway. But runway is not the same as product-market fit abroad. The IPO sold a finished global brand. What exists today is a very strong Chinese company that has earned the right, and the funding, to try to become one. That is a meaningful distinction, and it is the one operators and investors should keep in view.
Double V is a cross-border operating partner and intelligence house for emerging consumer brands, based in Hong Kong and Shenzhen. We help brands connect China and the world through three businesses: Brand Operation (marketing and distribution for brands on retainer), Brand Incubation (sister company Glam Infinite and our own-built brands), and Industry Intelligence (cross-border research and reports). Talk to our team.