Starbucks will face even more competition, as Chinese tea brand Chagee files for an initial public offering (IPO) on the NASDAQ in the United States.
This comes as the bubble tea chain prepares to open its first U.S. store in Los Angeles this spring.
If Chagee successfully goes public on Nasdaq, they will use the ticker CHA and join a decreasing number of companies that have sought U.S. listings, as relations between the U.S. and Beijing remain in turmoil. According to the U.S.-China Economic and Security Review Commission, Chinese-listed companies on U.S. exchanges fell by 5% between January 2023 and January 2024.
Chagee was founded in 2017 and has grown to have more than 6,4000 locations across China, Malaysia, Singapore and Thailand, with 97% of them in its home Chinese location.
The company said it generated a net income of US$344.5 million from a revenue of $1.7 billion in 2024.
Chagee's founder and CEO said he created the chain to modernise tea drinking after being inspired by successful coffee companies.
“In recent years, we have been exploring ways to restore tea-making techniques of 900 years ago using modern technology, thus allowing tea to return to its essence,” he said on International Tea Day.
“On the one hand, we are promoting healthier products, and on the other hand, we aim to spread Chinese culture, striving to establish a world-class Oriental tea brand.”
Investors may be wary of the new listing after previously being burned by another Chinese brand, Luckin Coffee.
Luckin Coffee went public on the Nasdaq in 2019 after outnumbering Starbucks locations in China. After revealing the company had inflated its sales, it was delisted from Nasdaq and filed for Chapter 15 bankruptcy.
It emerged from bankruptcy in 2022, and there are now reports that it could be brought to New York.
