Net profit drops by 24%, Ba Wang Tea Princess was "delayed for half a year" by Zhang Junjie

Ask AI · How does Zhang Junjie reflect on organizational restructuring mistakes?

On the evening of March 31st, Bawang Chaji announced its Q4 and full-year 2025 performance data. After experiencing explosive growth in the previous two years, this “report card” shows a significant divergence trend: overseas business continues to soar, but domestic operations face obvious pressure, with net profit experiencing a substantial decline.

The financial report shows that in 2025, Bawang Chaji’s total gross merchandise volume (GMV) reached 31.58 billion yuan, a year-on-year increase of 7.2%; total revenue for the year was 12.91 billion yuan, up 4% year-on-year. In terms of profitability, the company’s adjusted net profit for the full year was 1.91 billion yuan, compared to 2.51 billion yuan in the same period last year, a decrease of 23.9%.

The overseas market became the biggest highlight in Bawang Chaji’s 2025 financial report. Data shows that in Q4 2025, Bawang Chaji’s overseas GMV reached 370 million yuan, a year-on-year increase of 84.6%, and a quarter-on-quarter growth of 23.9%, achieving over 75% year-on-year growth for three consecutive quarters. By the end of 2025, Bawang Chaji had 345 overseas stores outside China, covering seven countries in Southeast Asia and North America. Throughout 2025, the company also expanded into four new markets: Indonesia, the United States, the Philippines, and Vietnam.

In stark contrast to the rapid progress of overseas business, Bawang Chaji faces severe challenges in the domestic market. In Q4 2025, same-store GMV growth in Greater China was -25.5%, with a significant decline in performance.

In response to this situation, Zhang Junjie conducted a deep reflection during the earnings call. He admitted, “We underestimated the complexity and timeliness of organizational adjustments for Bawang Chaji as a large company. Honestly, I want to tell everyone that in 2025, we basically delayed about half a year, and I want to apologize for that. The internal competition in the (new tea beverage) market in 2025 exceeded expectations, and we also seriously underestimated the impact of price wars on offline stores by delivery platforms.”

It is noteworthy that, despite facing price wars from delivery platforms, Bawang Chaji did not choose to follow suit with price cuts. Zhang Junjie emphasized that the company still adheres to long-termism, maintaining the high-value “price anchor,” and did not resort to price reductions to gain short-term traffic.

To cope with the challenges, the company began implementing a series of internal adjustments starting in the second half of 2025, including organizational restructuring and a shift in business models. Yindengfeng, COO of Bawang Chaji, introduced that the company is transitioning from a traditional raw material supply and sales model to a risk-sharing, profit-sharing franchise model based on brand commission (GMV sharing). Under this new model, the company’s revenue is deeply linked to store sales.

Regarding development in 2026, Zhang Junjie stated that the company will no longer pursue rapid growth solely but will focus on high-quality development. He will prioritize the recovery of same-store sales as the company’s primary KPI and expects that in 2026, the company’s revenue and profit will be roughly the same as in 2025.