Single-store GMV declines for eight consecutive periods, wealth evaporates by 7.7 billion yuan, Bawang Tea Princess Zhang Junjie: The takeout battle underestimated the opponent

Why does AI · Zhang Junjie insist on not lowering prices in the takeout battle?

Image source: Visual China

Text | Rao Fuying

Editor | Ye Jinyan

Produced by | Deep Web · Tencent News Xiaoman Studio

BaWang Tea Princess is facing its darkest moment since going public.

2025 financial reports show that BaWang Tea Princess’s net profit in the fourth quarter plummeted by 94.7%, with annual net profit halved, and GMV per store has declined for eight consecutive quarters. Meanwhile, Gu Ming, Cha Baidao, and Shanghai Auntie all achieved double growth in revenue and profit.

Zhang Junjie admitted during the conference call that he underestimated the impact of the takeout price war on the offline market. He set 2026 as “a year focused on high-quality development,” but industry insiders believe this more resembles a “forced defensive stance.”

Founded in 2017, BaWang Tea Princess avoided the then-popular fruit tea track, relying on “whole leaf fresh milk tea” and a flagship product strategy to quickly open up the tea beverage market and become a leading brand. In 2024 alone, BaWang Tea Princess expanded to 6,440 stores, adding 2,929 new ones, averaging eight new stores per day.

Last April, BaWang Tea Princess, after eight years, was listed on the US stock market. Its market value soared to $7.5 billion (about 54 billion RMB). Now, less than a year after listing, the stock price has fallen from $41.8 to $9.61, evaporating nearly $5.7 billion in market value (about 41.2 billion RMB).

This sharp decline in market value has also shrunk the personal wealth of founder Zhang Junjie.

According to the prospectus at the time of listing, Zhang Junjie held about 18.7% of the company’s shares. When the stock price was at a high of $41.8 in 2024, his holdings were worth up to $1.4 billion (about 10 billion RMB), making him one of the most prominent founders in the new tea drink sector.

However, with the performance crashing and the stock price dropping to $9.61, the value of his holdings shrank to about $320 million (roughly 2.3 billion RMB). In less than a year, his personal paper wealth evaporated by over 7.7 billion RMB.

This cliff-like decline in market value and the shrinking of the founder’s personal wealth are not solely due to macroeconomic fluctuations. The root cause lies in the capital market’s reassessment of the “moat” of new tea beverage companies. When BaWang Tea Princess’s proud “thousand-store scale” collided with increasingly severe homogenization competition, investors began to realize that the user loyalty once regarded as a myth was vulnerable to price wars.

“There are too many brands, everyone is fighting over ‘one stomach’ and ‘one wallet’. You come out with ‘Boya’s String’, and he comes out with ‘Qingqing Jasmine’. What’s the fundamental difference? The barriers are too low,” a investor commented on the current tea beverage competition.

Some analysts point out that if BaWang Tea Princess cannot make substantial changes in product innovation (especially breaking its reliance on “Boya’s String”) and in profit-sharing with franchisees, it is very likely to slip from the top tier of the industry.

Continuous Decline in GMV per Store and the “Downward Spiral”

On March 31, BaWang Tea Princess announced its financial results for Q4 and the full year of 2025. The report shows that the company’s quarterly revenue was 5.7B RMB, down 10.8% from 2.98B RMB in the same period in 2024.

Net profit declined even more sharply. In Q4, net profit was 33.9 million RMB, a collapse of 94.7% from 644.1 million RMB in the same period in 2024. The net profit margin was only 1.1%; excluding share-based compensation, non-GAAP net profit was 1.00 billion RMB, down 84.5% year-on-year, with a non-GAAP net profit margin of 3.4%.

For the full year of 2025, BaWang Tea Princess’s total revenue was 12.91 billion RMB, up 4.0%, but the growth rate significantly slowed. Net profit for the year was 3.33B RMB, down 52.8%. This sluggish performance is particularly conspicuous in the industry—Gu Ming, Shanghai Auntie, and Cha Baidao all achieved double growth in revenue and profit during the same period.

The continued slowdown in store performance has become a Damocles sword hanging over BaWang Tea Princess. The financial report shows that in Q4 2025, GMV in Greater China dropped to 100M RMB, a 12.9% decrease year-on-year, marking the eighth consecutive quarter of decline.

Faced with weak per-store output, Zhang Junjie reflected deeply on the past year’s competitive strategies during the earnings call. He admitted that the intensity of the takeout war far exceeded expectations.

Looking back at Q2 and Q3 2025, when the new tea sector was embroiled in a price war, Zhang Junjie once stated firmly that BaWang Tea Princess would not blindly follow the subsidy battles on delivery platforms. His logic at the time was that short-term price cuts to increase orders were akin to drinking poison to quench thirst, severely contradicting the brand’s “high-quality development” goal.

However, this stance of maintaining brand integrity evolved into a costly gamble in the brutal stock market.

“BaWang Tea Princess’s strategic choice in 2025 actually fell into the trap of ‘brand arrogance,’” said Ge Xian Tong, founder of Jingcai Capital. He pointed out that Zhang Junjie’s insistence on not participating in price wars theoretically protected the premium, but in a market where “extreme cost performance” has become the main battleground, this strategy is equivalent to handing over the traffic entrance.

Ge Xian Tong believes that when competitors like Luckin and Heytea use strategies like “9.9 yuan” to capture core customer minds, BaWang Tea Princess’s high-ticket model loses its survival ground. This strategic misjudgment has long-term side effects: it not only causes short-term order loss but also undermines the bottom-layer customer acquisition efficiency of each store, leaving the brand in a highly passive defensive position in the stock game.

The “Dusk” of the Single-Product Myth

Apart from not participating in the takeout war, BaWang Tea Princess’s reliance on a single flagship product also led it into trouble.

Data shows that among the only 14 SKUs of BaWang Tea Princess, the top three products (Boya’s String, Flower Field Oolong, Qingqing Glutinous Rice Mountain) contributed 65% of the company’s total revenue. The core “Boya’s String” alone accounted for 38% of GMV. This highly concentrated revenue structure means the brand has extremely weak risk resistance.

Liu Hui, who specializes in tea industry development and manages the Liu Bang store community, said: “There’s no real technological barrier in the milk tea industry. Once you strip away the initial ‘Chinese style’ emotional value, the difference between fresh milk teas is often just price. When competitors like Luckin launch homogenized jasmine milk green at 9.9 yuan, BaWang Tea Princess’s high-ticket model is instantly shaken.”

This shake-up is especially evident in sales data. Reviewing the growth curve of “Boya’s String,” 2024 was undoubtedly its “legendary year,” with an average monthly sales of about 25 million cups, and a per-store monthly average of 3,882 cups, achieving nationwide mind share through a single flagship.

However, after entering 2025, the growth momentum sharply declined. Although the total sales in the first half reached 650 million cups, considering that BaWang Tea Princess added nearly 600 stores during the same period, the average cups per store for “Boya’s String” plummeted to just 1,608 cups per month. This shrinking per-store output directly shattered the illusion that the flagship could sustain high returns.

Meanwhile, slow R&D pace further worsened user loss. While competitors launched around 50 new products annually, BaWang Tea Princess only released 9 last year.

A set of data shared by Zhang Junjie during the earnings call is alarming: before the December “Return to Yunnan” series was launched, a significant proportion of old customers had not visited the store for over a month. This passive “old customer reactivation” pattern exposed serious aesthetic fatigue among loyal users toward a single flagship.

In addition, the overall slowdown of the new tea industry has become an external pressure for BaWang Tea Princess.

A white paper jointly released by Zhuo Shi Consulting and the China New Tea Industry Alliance shows that in the past year, the net increase of chain new tea stores was negative 29,434, with store closures intensifying, indicating a process of survival of the fittest. The white paper states that China’s new tea industry has shifted from rapid expansion to a stage emphasizing value-for-money, scale, and stock deepening.

Franchisees’ “Uncertain Return,” BaWang Tea Princess Forced to “Slow Down”

This pressure directly affects franchisees. Industry insiders say that super franchisees who entered after the second half of 2024, especially those securing prime high-rent locations in city centers, are in particularly difficult situations. The payback period has extended from half a year to a year and a half or longer, with some franchisees even incurring losses, leading many to withdraw.

Store density issues have also worsened franchisee difficulties. The financial report shows that by the end of 2025, BaWang Tea Princess’s global store count reached 7,453, a 15.7% increase year-on-year. However, this scale expansion has not brought per-store benefits but has instead sparked serious “density” disputes.

“The most frightening thing is the ‘self-competition’ through density,” complained a franchisee deeply involved in popular commercial districts. Under the dense deployment by the brand, the service radius of each store is severely compressed, leading to serious customer flow diversion.

A certain anonymous expert from the China Chain Store & Franchise Association (CCFA) said that this “land-grabbing movement” is essentially a common tactic used by brands to block competitors and increase market share, but its cost is the sacrifice of existing franchisees’ interests. When the GMV of a single store declines for eight consecutive quarters, it indicates that regional demand has hit a ceiling, and new stores no longer bring incremental growth but instead cannibalize existing stores.

Faced with negative emotions and operational pressures among franchisees, BaWang Tea Princess made an emergency adjustment to its partnership model in November 2025. COO Yin Dengfeng stated during the earnings call that under the dual pressures of price wars and rising costs, the traditional supply model had lost its buffer and could no longer ensure franchisees’ profitability. Therefore, BaWang Tea Princess shifted to a “revenue sharing model” based on GMV, attempting to build a risk-sharing community through profit linkage.

However, experts believe this transformation is more of a “stopgap measure.” Although the profit-sharing model nominally shares risks, in the context of thinned profit margins and persistently low customer acquisition at each store, this shift is merely superficial. Without solving the structural contradictions of “more people, less porridge,” the trust crisis among franchisees will remain difficult to resolve.

Under industry trends and internal performance pressures, Zhang Junjie revealed during the earnings call that BaWang Tea Princess plans to slow down store openings in the coming year, aiming to add 300 new stores domestically.

Unlike the pressure faced domestically, overseas business has maintained rapid growth. The report shows that in Q4 2025, overseas GMV reached 370 million RMB, up 84.6% year-on-year, with three consecutive quarters of over 75% YoY growth. As of December 31, 2025, BaWang Tea Princess had 345 stores outside mainland China, covering seven countries in Southeast Asia and North America.

An investor once said: “New tea brands can learn from McDonald’s—early on, they relied on processes—that’s hard technology; later, they played real estate; ultimately, they exported culture.”

But now, with the “Boya’s String” myth fading, franchisees are voting with their feet. Perhaps it’s time to seriously reconsider: besides “Chinese style” and “big flagship,” what else can this company rely on to retain consumers?