How ChaPanda Moved Past Its Arabica First Store Into Korea

ChaPanda has opened a new store at Konkuk University Station in Seoul, its second in the greater Seoul area after a first location in Gangnam earlier this year. Opening day drew crowds, including customers who traveled from Busan. The brand's stock rose nearly 70 percent over six trading days, according to the report.

South Korea was ChaPanda's first overseas destination, an unusual choice when many Chinese tea brands start in Southeast Asia. Local consumers make up over 80 percent of customers, and Korea-exclusive products support the store model. The expansion shows how new tea and coffee beverage development overseas is shifting toward nearby markets with stronger purchasing power.

ChaPanda's new store at Konkuk University Station in Seoul, South Korea, has recently officially opened its doors to welcome customers. This is the brand's second store in the greater Seoul area, following its first store in Gangnam District earlier this year. At the same time, ChaPanda's stock price has recently performed impressively, with a cumulative gain of nearly 70% over the past six trading days. From choosing South Korea as its first overseas destination to launching Korea-exclusive products, and with local consumers accounting for over 80%, ChaPanda is validating its store model in the East Asian market through a differentiated strategy. This article will review ChaPanda's expansion path in South Korea, its product strategy, and the latest developments in the capital market.

ChaPanda's new store at Konkuk University Station in Seoul, South Korea, officially opened recently. It is said that the scene on opening day was quite lively, with even customers making a special trip from Busan to Konkuk University Station to participate in the event.

This is another new store ChaPanda has opened in the greater Seoul area, following the landing of its first overseas store in Gangnam District, Seoul, earlier this year.

In recent years, the new tea beverage sector has continued to expand, competition in the domestic market has become saturated, and the overall consumer environment has come under pressure. As a result, many tea beverage brands have begun shifting their focus overseas, with surrounding markets such as Southeast Asia, Japan, and South Korea becoming the preferred direction for brands seeking new growth points due to their geographical and cultural proximity.

In the Southeast Asian market, Mixue Bingcheng is currently the brand with the largest number of freshly made tea beverage chain stores. Nayuki and Chagee have also successively established a presence overseas. Compared with the intense involution in the domestic market, there are still many blank areas in the overseas tea beverage market, and local consumers generally have stronger purchasing power.

In early 2024, ChaPanda had not yet entered the capital market, but it had already set its sights overseas. Before this, most domestic new tea beverage brands chose Southeast Asia as their first overseas destination, but ChaPanda instead made South Korea its first stop—a choice that was somewhat unexpected.

Gu Jilin, co-founder of ChaPanda, once told Economic Observer reporters that South Korea is a typical representative of a developed economy within the East Asian cultural sphere. ChaPanda took it as the first stop for its Asian overseas expansion in order to validate its overseas store model in East Asian economies, hoping to refine the best practice model in the market and lay the foundation for subsequent expansion in similar markets.

On January 26, 2024, ChaPanda opened its first overseas store in the core business district of Gangnam, Seoul, South Korea. It is understood that the store's decor incorporates many panda elements. In addition to regular products such as jasmine fresh milk and yangzhi ganlu, it also launched several Korea-exclusive drinks. For example, a fruit tea made with Hallabong, a specialty of South Korea, is said to have been very popular among local consumers after its launch.

Previously, the forms of local milk tea products in South Korea were relatively limited, similar to Taiwan milk tea in the early domestic market, mostly made with pearls and non-dairy creamer. A freshly made tea beverage category combining fresh fruit and milk had not yet appeared locally. After ChaPanda entered South Korea, whether in store displays or social media communication, it emphasized the concept of "freshness" while also highlighting the health attributes of its drinks.

Regarding ChaPanda's new store in South Korea, some local netizens shared on social media that all drinks at the Konkuk University store were buy one get one free for the first three days of opening, and customers could also use their receipts to participate in a lucky draw for a chance to win a Chinese-style folding fan.

After the official opening, consumers could use their receipts to enter a lucky draw to win a half-price second cup. There were also giveaways such as limited-edition refrigerator magnets, available on a first-come, first-served basis, with the main focus being good value.

It is understood that ChaPanda Korea has also launched a Korea-exclusive product—"Purple Grape Frozen Slush"—made with hand-peeled Korean-grown Kyoho grapes plus Yunnan Summer Black grape juice, paired with a jasmine tea base and chewy jelly, as a new member of the Purple Grape series.

Wang Huan, head of ChaPanda's South Korean market, revealed that the proportion of local consumers in the brand's South Korean market has now exceeded 80%, and the user repurchase rate has reached 45%. ChaPanda will further accelerate the pace of opening stores in South Korea. Wang Huan added: "Subject to compliance with relevant rules, we will gradually open up franchising."

Zhito Finance reported that ChaPanda (02555) rose again by more than 9%, with a cumulative gain of nearly 70% over the past six trading days. It is currently up 8.68%, at HK$6.89, with a turnover of HK$8.5231 million.

Image source: Internet

The above content is compiled by CoffeeHunters, a coffee news website.