Bubble tea market valuation exceeds an all-time high across the Southeast Asian region, its growing craze for the drink has increased the industry’s turnover to a whopping US$3.7 billion.
Taiwan’s bubble tea was quick to acquire global fame and is now ranked among the top drink choices in the Asia Pacific region. Its craze has swept across Southeast Asia, with consumers spending an increasing sum on the chewy tapioca drinks on a daily basis. This has significantly helped the scale and growth of bubble tea businesses in the region, the market valuation of the industry stands at a grand US$3.7 billion in SEA alone.
According to a recent study conducted jointly by the venture outfit, Momentum Works, and contactless payment solution provider, Qlub, it ranked Singapore as the fourth highest spender, yielding an annual turnover of US$342 million, and despite being among the smaller nations, it showcased a significant purchasing power within the region. Vietnam secured the third spot with a total spending of US$362 million.
Indonesia led at the first place, with an annual gross revenue of US$1.6 billion, followed by Thailand’s thriving bubble tea industry, housing over 31,000 tea stores and retail spaces in 2021, its market valuation since grown to US$749 million.
Sik Hoe Yong, the Chief Operating Officer of Qlub stated “Many young people in South-east 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.”
SEA’s consumers have shown great liking for the tapioca drink, and other new variations of bubble tea, which has led to the acceleration of innovative tea concepts in the region.
The report further highlighted Singapore’s actively expansive network of over 60 tea brands, dedicated to the diverse consumer tastes, as well as product and price range, attributing to the high purchasing power of the consumers in the region. The industry, although, primarily dominated by Taiwanese and other homegrown brands, has caught attention of many notable Chinese players.
Founder and Chief Executive of Singapore-based Momentum Works, Jianggan Li, anticipates a rise in competition for existing local players in those regions as some of the key Chinese brands are looking to embark on the attractive marketplace, coming up with better branding, product and supply chains, as well as a more competitive cost strategies.
Li added, “It’s not difficult to observe and learn their play and strategy, but what’s more important is to ensure positive unit economics and a good return on investment.”
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