Chinese bubble tea chain Sichuan Baicha Baidao, also known as Chabaidao, experienced a significant drop in its stock price on its first day of trading on the Hong Kong Stock Exchange. The shares fell by more than 26%, reflecting the challenges faced by the city in attracting investment. Chabaidao's market debut was the largest IPO in Hong Kong this year. The company raised approximately $330 million in the IPO, with plans to use half of the funds to upgrade operations and strengthen the supply chain. Rival bubble tea chains Mixue, Guming, and Auntea Jenny are also preparing to sell shares in Hong Kong [c80dc02a].
In another setback for the Hong Kong market, Chinese distiller Kweichow Moutai's recent price drop has sparked concerns among investors. The wholesale price of Kweichow Moutai's Moutai Flying Fairy has fallen from CNY2,510 to CNY2,430 per bottle. This decline in price is mainly seen in bulk Moutai Flying Fairy, and it is attributed to a wave of subsidies and traffic-driven promotions by e-commerce platforms. The weak demand for high-end liquor has also contributed to the decline in the market price. As a result, the wholesale price of Moutai is expected to continue fluctuating and declining. Shares of Kweichow Moutai closed up 0.2 percent at CNY1571.68 apiece in Shanghai today, after tumbling 3.1 percent yesterday [3db1638e].
Chinese distillers of baijiu are adapting the fiery grain liquid to attract more Western drinkers. Sales of baijiu in China are still rising, but top makers like Kweichow Moutai face slower growth as younger consumers opt for alternatives. To find new pockets of growth, major baijiu makers are pitching it to Western consumers outside China for the first time. Baijiu, which usually has between 40% and 60% alcohol content, is little known in the US, UK, and Europe. Chinese companies are reformulating the spirit's flavor, marketing on TikTok, and hiring influencers to appeal to non-Chinese drinkers. Shede Spirits, based in China's Sichuan province, is holding tasting sessions to test tweaks to the flavor of its products. Sichuan Yibin Wuliangye has teamed up with Italian drinks group Campari to promote both companies' brands in China and internationally. China is the world's largest alcohol market, largely thanks to baijiu sales. Shede aims to increase its international sales from $5 million in 2023 to $100 million within five to 10 years by marketing on platforms like TikTok, using influencers, and potentially sponsoring major events like the Olympics. Ming River, a company created by three Westerners in partnership with major Chinese distillery Luzhou Laojiao, sells its baijiu in 15 countries including the US [2eac1549].
Heytea, a Chinese brand backed by Tencent Holdings and Temasek, has opened its first pop-up store in Paris in partnership with BAO Family. The opening coincides with the 2024 Olympics. Heytea, founded in 2012, has over 4,000 stores in more than 300 cities in China and globally. It has already expanded to the US, UK, Australia, Canada, Singapore, Malaysia, and South Korea. The company aims to test local customers' preferences and fix any issues through the Paris pop-up store. The new-style tea market in China is expected to surpass 200 billion yuan in 2025. Heytea's overseas expansion faces challenges in adapting to local environments and controlling costs. However, its business model of using high-quality materials and an open kitchen has attracted Generation Z in foreign markets. Heytea's co-branding with popular companies also helps keep the brand 'young' [d83b2115].
China's economy is facing challenges with indicators like unemployment and local debt increasing, while consumption and property sales are decreasing. One indicator that has been a bellwether for China's economy is the consumption of baijiu, a specific type of liquor. This episode explores the history of baijiu and how it serves as a symbol for consumer confidence in China [5e19df4c].
Some Hongkongers have reinvented milk tea, taking the city’s traditional drink upmarket in a bid to preserve it and challenge a debate that coffee should be more expensive. Hong Kong-style milk tea has a rich flavor and is made creamy with the addition of evaporated milk. City residents indulge in 2.5 million cups of milk tea per day on average, with a cup costing roughly HK$20 (US$2.66). Gina Li Wai-shuen co-founded Sifu Good Tea, offering various milk tea products ranging from HK$30 to HK$78, including unique blends with gin, vodka, and cold brew coffee. Mt Waves charges HK$38 each for its handcrafted milk tea products on supermarket shelves. Elvin Lee Siu-kei, owner of Lung Fung Shop, crafts bottled milk tea priced between HK$25 and HK$38 with a variety of tea bases. Mark Mak Ka-chun, a graduate trainee of the Hotel and Tourism Institute, emphasizes the skill and artistry required to craft milk tea. Simon Wong Ka-wo, chairman of the Association of Coffee and Tea of Hong Kong, highlights the importance of the young generation and product evolution in preserving the heritage of Hong Kong-style milk tea culture [2f069165].