Southeast Asia’s bubble tea spending reaches $3.66b annually
Indonesia and Thailand were the biggest bubble tea markets in the region.
Spending on bubble tea and similar “new tea” drinks in Southeast Asia amounted to $3.66b annually, according to a study by Momentum Works and qlub.
The Bubble Tea in Southeast Asia report found Indonesia as the largest bubble tea market in the region with around $1.6b annual turnover, followed by Thailand with yearly spending of $749m through its over 31,000 bubble tea stores, and other retail channels.
“Many young people in Southeast Asia want to open a bubble tea shop someday. Though there are high margins, bubble tea is a low-differentiation game with easily replicable products and a challenging supply chain,” qclub COO Sik Hoe Yong said in the statement.
“The pandemic served as a natural selection process as many stores shut down. However, consumers’ love for bubble tea won’t change anytime soon, but they will vote their favourite brands with their wallets,” Sik added.
The report identified Singapore, which has over 60 active brands, as a great entry point for premium brands as the average price of there is double compared to other countries in the region.
Whilst Taiwanese ang homegrown brands dominated the bubble tea market in the region, many Chinese brands have entered the region recently. China’s bubble tea market has an annual turnover of $20b.
Momentum Works Founder and CEO Jianggan Li said the bubble tea market is fragmented adn there is space for larger and smaller bubble tea players to grow.
“The emergence of Chinese players who are good at branding, product/supply chain and cost management could pose an increasing challenge to existing local players. It’s not difficult to observe and learn their play and strategy, but what’s more important is to ensure positive unit economics and good return on investment,” he said.