The Six Little Dragons of Tea Drinks: Who is Making a Fortune, Who is Slowing Down, and Who is Still Losing Money?

Text | Dingjiao One Wang Lù

Editor | Wei Jia

The 2025 annual reports of the six major new tea beverage brands landed at the same time, but they show vastly different survival statuses.

Mixue Bingcheng relies on “affordable prices” and “own factories” to open nearly 60k stores, building a scale barrier that peers find hard to surpass in the short term. Guming and Shanghai Auntie expand through franchising, opening stores in counties and towns, finding new growth points in sinking markets. Tea Baidao takes a steady approach—testing coffee while optimizing procurement and production efficiency.

But not all brands hit the right rhythm.

Bawang Chaji is stuck in the middle ground; its mid-to-high-end positioning makes it difficult to extend into sinking markets, so it has bet on overseas markets, but this is a long-term road that takes time to see results.

Currently, the most challenging situation is Naixue’s Tea. As the first stock in the new tea beverage sector, it insists on direct-operated stores and large outlets, but when new products no longer impress, and brand collaborations are always a step behind, it seems to have lost its strategic direction. Its once-proud high-end image has now become a heavy burden on cost structure.

The six annual reports together reflect not only the performance of six companies but also the full picture of the new tea beverage industry over the past year: sinking markets have turned from blue ocean to red ocean, franchise expansion has shifted from scale competition to stock game, and coffee layout has degenerated from differentiation attempts to standard internal competition.

The industry is redefining the standards of victory and defeat—scale is no longer the only safe card; single-store profitability and supply chain efficiency are becoming new dividing lines.

2025 New Tea Beverage PK: Some expand, some slow down

In 2025, the revenues and profits of the six new tea brands show a clear polarization.

Mixue Bingcheng ranks first with 33.56 billion yuan in revenue (up 35.2% YoY) and 5.93 billion yuan in net profit (up 33.1% YoY), already pulling ahead of the other five in size. Guming follows closely with 12.91 billion yuan in revenue (up 46.9%) and 3.11 billion yuan in net profit (up 110.3%), with profit growth even surpassing Mixue, mainly due to its lower base in 2024.

Tea Baidao’s total revenue is 5.4 billion yuan (up 9.7%), with modest growth, but cost control is good, and net profit of 820 million yuan corresponds to a 71.2% YoY increase. Shanghai Auntie’s revenue is 4.47 billion yuan (up 36%), and net profit is 500 million yuan (up 52.4%), closely related to its store count exceeding 10,000.

The other two brands are slowing down.

Bawang Chaji’s revenue is 12.91 billion yuan, a slight increase of 4%, but profit plummeted 52.8%, a typical “revenue growth but profit decline.” Naixue’s Tea is even more severe, being the only brand among the six to see revenue decline, with 4.33 billion yuan, down 12% YoY. Despite a significant loss reduction of 73.8%, it still posted a net loss of 240 million yuan.

One root cause of these differences is the fundamental difference in business models.

Among the six brands, Naixue’s Tea is the only one mainly relying on direct-operated stores. Most of its revenue comes from each cup of milk tea and bread sold in its own stores. Money flows directly in, but rent, labor, and operating costs are also borne by itself, making it impossible to dilute fixed expenses through rapid store expansion.

The other five rely on franchising; they don’t sell milk tea directly but sell raw materials, equipment, packaging, and brand services to franchisees. The more franchisees and stores, the higher the income. Opening stores is itself a way to make money.

This is most intuitively reflected in the number of stores each company expands.

By the end of 2025, Mixue Bingcheng’s global store count approaches 60k, an increase of over 13k in one year. Its store size is almost equivalent to the total of the other five brands.

Two brands have crossed the 10,000-store mark. Guming’s total stores surged to 13,554, an increase of over 3,600 in a year; Shanghai Auntie surpassed 11,449 stores, up more than 2,200.

Tea Baidao, although not yet surpassing 10,000, is close with 8,621 stores. Bawang Chaji’s global store count reached 7,453, a 15.7% increase.

Only Naixue’s Tea is an exception. While competitors are expanding rapidly, it has chosen to shrink, with a net decrease of 152 stores to 1,646.

Notably, the main battlefield for new tea beverage expansion has shifted from first- and second-tier cities to sinking markets. Guming’s stores in second-tier and below cities account for 82%, and Shanghai Auntie’s stores in third-tier and below cities account for 52.7%.

How long can the reliance on opening new stores to drive revenue growth last? It’s still uncertain, as there’s a limit to how many milk tea shops a county can accommodate. The financial reports show that Guming’s average daily GMV per store in 2025 is 7,800 yuan (up from 6,500 in 2024), and Tea Baidao’s YoY growth is 10%, still increasing. But Bawang Chaji’s average monthly GMV per store has fallen 26% YoY, and to compete for limited franchisees, brands like Tea Baidao and Bawang Chaji have lowered investment thresholds, indicating a shift from scale competition to stock game, making rapid growth through franchising difficult to sustain.

Long-term investor Neil, who focuses on consumer tracks, told Dingjiao One, “The early product dividend period of the new tea industry is over. Now, leading brands must build systematic capabilities in efficient supply chains, extreme single-store models, precise brand marketing, and the development of secondary growth curves.”

He pointed out that Naixue’s Tea falling behind and Bawang Chaji’s pain points can be explained by this logic. “Naixue’s Tea has not built a deep moat in product iteration, brand heat, or operational efficiency, making it unable to cover the high costs of the direct-operated model; Bawang Chaji chooses to bet on the long-term space of overseas markets, but is currently under short-term profit pressure.”

The truth about profitability: gross margin, delivery wars, and marketing internal competition

Aside from scale, looking purely at profitability efficiency, the ranking of the six new tea brands is completely different.

Focusing on gross margin, Naixue’s Tea has the highest among the six. Its gross margin, calculated after deducting raw material costs from revenue, is about 66%, far exceeding peers. But this figure has limitations due to statistical scope and needs further breakdown.

Naixue’s adopts a direct-operated model; the gross margin above only deducts raw materials, excluding store rent, labor, and other operating expenses, which naturally overestimates actual profitability. Coupled with its higher-than-industry-average product pricing, these factors support its high gross margin on paper. But even so, its net profit remains negative—high gross margin does not fundamentally solve profitability issues.

Bawang Chaji is at the other extreme. It has not disclosed its 2025 full-year gross margin, but based on its high-end positioning and 2024’s 51.5% gross margin, it ranks second after Naixue’s Tea. However, high gross margin is backed by high investment; its direct stores surged from 169 to 615, and overseas expansion is still in the burn phase, with rapidly expanding expenses eroding profitability.

Guming, Shanghai Auntie, and Tea Baidao’s gross margins in 2025 are 33%, 31.4%, and 32.5%, respectively, with slight YoY increases. This is due to the scale effect of expanding franchisees: more franchisees mean stronger bargaining power with upstream suppliers, lowering unit raw material costs; at the same time, fixed costs like warehousing, logistics, and R&D are spread over more stores, reducing overall expense ratios and improving gross margins. Scale effect is most directly reflected in these three brands.

Mixue Bingcheng’s gross margin is the lowest at 31.1% (down from 32% in 2024), with declines in product and equipment sales gross margin (from 31.2% to 29.9%). This shows the profit pressure under a cost-effective strategy, where with a customer unit price compressed to 6-8 yuan, every penny of gross profit must be squeezed from supply chain efficiency. But this thin-margin, high-volume model sustains the industry’s highest net profit scale.

Gross margin is only superficial; true profitability depends on whether costs can be controlled. The 2025 delivery wars provide a real-world test.

Platforms like Taobao, Meituan, and JD.com offer high subsidies, impacting industry patterns in the short term. In 2025, Guming’s average daily sales per store jumped from 384 cups in 2024 to 456 cups; Naixue’s delivery order revenue grew 11.2% YoY, with over half of orders from delivery; Shanghai Auntie even experienced extreme cases of booming orders leading to store closures. Mixue Bingcheng also benefited, but management said on the earnings call that after subsidies recede, store revenue growth slows.

Bawang Chaji chose to abstain. “It does not participate in subsidy wars. On one hand, it maintains a mid-to-high-end positioning and does not want to dilute brand image with subsidies; on the other hand, it has sufficient funds and does not need to pander to investors for short-term GMV,” Neil explained.

But this strategy comes with a cost. As competitors leverage subsidies to expand sales and boost brand exposure, Bawang Chaji’s delivery orders fell over 30% YoY.

Sales and distribution expenses for new tea brands are generally higher than R&D investments, which is also worth noting.

Neil believes, “Top brands in the new tea industry find it hard to create a decisive gap in core product R&D and supply chain capabilities. Currently, the main way to quickly boost sales is through continuous brand and IP collaborations, driving consumer purchase demand,” similar to the coffee industry, where Luckin Coffee has about 180 brand collaborations annually.

But this approach is becoming increasingly competitive. When all brands chase the same star or IP, the marginal effect of collaborations diminishes, while marketing costs keep rising. “The delivery wars are a concentrated outbreak of this anxiety. Since brand building takes too long and IP collaborations yield diminishing returns, it’s better to use subsidies for immediate sales,” he said.

Ultimately, the brand with the highest gross margin, Naixue’s Tea, is not the most profitable. In terms of efficiency, franchise models outperform direct operation thanks to scale effects, but even the largest scale, Mixue Bingcheng, has the lowest gross margin, and the delivery wars reveal unsustainable marketing internal competition and subsidy-driven growth. No brand has yet achieved the perfect balance of supply chain efficiency, cost control, and brand premium.

Growth stories of new tea brands: Going overseas and coffee

The performance in capital markets has already ranked the six brands.

As of the report, Mixue’s market cap is about HKD 107.4 billion, leading by a large margin, followed by Guming at about HKD 68.3 billion, Bawang Chaji at HKD 15.1 billion, Tea Baidao and Shanghai Auntie at HKD 8.3 billion and HKD 8 billion respectively, and Naixue’s Tea has fallen to HKD 1.4 billion, less than Mixue’s 60k.

The stock price trends are also vastly different. Since listing, Guming’s stock has roughly doubled, Mixue’s increased by nearly 40%, while Naixue’s Tea has plummeted 96%.

Market cap reflects the present; everyone is betting more on overseas expansion. As domestic market growth slows, going abroad has become a must for all top tea brands, but their approaches differ.

Neil told Dingjiao One, “Most new tea brands’ overseas expansion mainly follows a local partnership model (joint ventures with local capital), Mixue adopts a franchise model, and Bawang Chaji chooses direct operation.”

He believes that partnering with local firms allows the fastest entry into local channels, securing prime store locations, expanding rapidly, and leveraging local corporate status to avoid some policy risks.

The actual progress varies significantly. By December 31, 2025, Mixue had 4,467 overseas stores outside mainland China, a decrease of 428 from 2024, mainly due to operational adjustments in Indonesia and Vietnam. It has entered over ten countries and plans to open its first stores in Mexico and Brazil by 2026. Bawang Chaji’s direct high-end route has 345 overseas stores, with overseas GMV up 84.6% YoY in Q4 2025, a major highlight.

Shanghai Auntie has opened 45 stores overseas, covering the US, Korea, and Malaysia. Guming states it will “continue to evaluate opportunities to enter overseas markets,” but currently has no overseas stores. Tea Baidao’s overseas layout is cautious, and Naixue’s Tea has not disclosed specific overseas store data.

Neil straightforwardly said, “Most new tea brands are not doing well overseas; only a few stand out.”

He summarized, “Tea brand going abroad is like playing Go—key is to develop a region intensively, not scatter across many. The best strategy is to concentrate in one area, firmly occupy the market, and build a real scale barrier. Since tea products have low entry barriers, brands can quickly follow new product launches, but when competitors only have a few scattered new stores while your own have thousands, they are no match in scale and supply chain.”

But the reality is, most new tea brands are currently “casting a wide net,” opening three or four stores in each country to test the waters. The problem is, fewer overseas stores mean higher supply chain costs; markets like Europe, Singapore, Japan, and Korea have high labor costs, and if a store cannot generate enough revenue, losses are almost inevitable.

For example, opening a store in the US costs 3-5 million yuan, so the store’s monthly revenue must be high. Naixue’s Tea, Jasmine Milk White, and Heytea need monthly sales of 600,000 to 800k USD per store to break even.

Besides going abroad, coffee is another direction that many tea brands are betting on.

Guming has over 12k stores equipped with coffee machines, launching 27 new coffee products throughout the year. Tea Baidao is accelerating its coffee business model, releasing 17 new coffee items, planning to cover 2,000 stores by 2026. Shanghai Auntie has laid out the coffee track through its “Hu Coffee” brand. Mixue Bingcheng’s Lucky Coffee stores have exceeded 10,000.

But this seems more like a natural category extension; whether it can bring significant incremental growth to new tea brands remains uncertain.

Looking back at 2025, the game rules for new tea beverages have changed completely. The era where a single blockbuster product and a round of financing could sweep the market is gone forever.

The six annual reports ultimately point to the same question: as the ceiling of the domestic market lowers and the floor of overseas markets rises, the second half of new tea beverage growth is no longer about who runs faster, but about who can afford losses and endure.