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Increased competition challenges bubble tea brands

Henry Wang, president of La Kaffa International identifies three major challenges.

Bubble tea brands are facing three major challenges in the quick-service restaurant industry: increased competition, manpower shortages, and rising costs due to supply chain shifts and geopolitical factors, Henry Wang, President of La Kaffa International said.

La Kaffa International is a publicly traded company from Taiwan. The F&B operator has several brands under its banner, the most famous of which is the bubble tea brand Chatime with over 2,500 outlets in the world.

According to Henry, Chatime has been around for 16 years. It first ventured into international markets in 2010, entering Southeast Asian and Western markets.

“Now, in 2024, the consumer base in these markets has aged to their thirties. Since our primary target market is between 15 to 30 years old, we aim to regain our youthful appeal and expand our demographic towards the younger generation. Hence, we have a refresh project underway to broaden our consumer base and appeal to the Gen-Z era. We've made many changes, including a new slogan from "Shaking Tea Up" to "Cups of Joy," to make the brand more youthful and colourful,” Henry said.

Remaining relevant for Chatime means keeping pace with the rapid changes in the digital landscape. Previously it utilised platforms like traditional media like TV and print.

“Now, we're heavily leaning towards video content, such as on Instagram, TikTok, and emerging platforms like Little Red Book, as well as local platforms. We're focusing on interactive experiences, such as live streaming in Taiwan, where customers can engage with us directly. This shift towards video and interactive content represents our major advertising strategy. Secondly, we aim for product innovation to generate buzz. For instance, our recent product, Corn Smoothie, was inspired by corn soup, which has garnered significant attention in the market,” Henry said.

Henry said La Kaffa is targeting a 20% annual growth in brand presence and store count, focusing on Western markets in the coming years.

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