Founder of Bawang Tea Princess (霸王茶姬) Says Internal Adjustments Were Delayed by Six Months

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It has been reported that Zhang Junjie (张俊杰), founder and CEO of Bawang Tea Princess (霸王茶姬), told investors the company underestimated how complex organizational changes would be, effectively losing about six months in 2025. For a consumer brand that recently listed in the U.S., the admission is stark: the problem was not only growth, but the speed of management catching up with scale. Can a fast-growing tea chain learn to run like a mature one before markets lose patience?

Financial strain and same-store pressure

The numbers show why management sounded contrite. At year-end 2025 the group operated 7,453 stores globally, with gross merchandise value (GMV) reportedly ¥31.58 billion (315.8 亿元, +7.2%) and net revenue of ¥12.91 billion (129.1 亿元, +4.0%). But margins slid sharply: operating profit fell to ¥1.347 billion (13.47 亿元) with an operating margin of 10.4%, down from 23.3% a year earlier, and GAAP net profit dropped to ¥1.186 billion (11.86 亿元). The more worrying signal is same-store GMV: big‑China average monthly single‑store GMV dropped to ¥337,400 in Q4 and same-store GMV declined 25.5% in the quarter, showing the issue is not just opening fewer shops but that the single-store model is under stress.

Strategy shift — franchises, products and timing

Management has responded by slowing new product rollouts and overhauling its franchise economics. It has been reported that the company is shifting from a traditional supply‑sales franchise model to a GMV‑tied revenue‑share platform, aligning headquarters’ income with store performance while promising to lower franchisees’ material costs through more precise marketing and procurement. That move will disrupt near‑term revenue recognition but aims to strengthen franchise resilience amid a tougher retail environment — one sharpened by regulators cracking down on excessive delivery subsidies and by price moves from incumbents like Starbucks in China. Product timing mattered too: Zhang conceded that mistimed SKUs and marketing missteps left the brand less responsive during a high‑velocity product era.

Overseas push and cautious outlook

Overseas offers a brighter subplot: international GMV grew strongly, and the chain ended 2025 with 345 overseas stores after entering markets including Indonesia, the U.S., Vietnam and the Philippines. It has been reported that the company plans more measured expansion in 2026 — targeting roughly +200 overseas net new stores and +300 domestically, but only if existing outlets are healthy. Management now emphasizes restoring same‑store performance over raw growth, and says globalization is a decade‑long project to make tea a daily habit abroad rather than a short‑term financial lever. For investors, 2025 may mark not just a slowdown but a forced management school exam: rebuild the basics, then reaccelerate.