Chagee Charts a New Course: Embracing Evolution and Excellence
Chagee, a young company that has experienced significant growth in recent years, recently held its fourth quarter 2025 earnings conference call. The call provided valuable insights into the company's journey, highlighting both triumphs and challenges.
In his opening remarks, CEO Junjie Zhang acknowledged the complexities of the market, citing significant volatility and increased competition. He reflected on the company's experience in 2023-2024, during which time Chagee underwent rapid expansion in Greater China markets through a strategy focused on quality tea house expansion and securing prime locations across major commercial districts nationwide.
Notably, this strategy delivered substantial results, with the company now boasting over 7,000 core tea house locations across mainland China. The success of BOYA Tea Latte, Chagee's blockbuster product, also led to the pioneering of the fresh tea leaf category and accumulation of nearly 240 million members registered with their membership program.
However, as the market entered a new phase, consumers showed a K-shaped divergence in spending habits. While some chased extreme value, others sought premium experiences through superior products and service. Chagee's strong foundation in premium experiences became even more evident, with over 90% of revenue driven by their core fresh tea leaf product line and loyal membership base.
The company recognized that its past approach to organizational inertia was no longer sufficient for refined management and operational excellence. From the second half of 2025 onwards, Chagee initiated a series of internal adjustments, including organizational restructuring and business-model transition. This led to a measurable impact on revenue due to slowed new product launches and underestimated effects of delivery platform price wars on offline sales.
CEO Zhang emphasized the importance of staying true to their long-term strategy and maintaining strategic discipline. He expressed the company's commitment to embracing evolution, refining management practices, and unlocking operational excellence in 2026 and beyond."
