In China’s new-style tea market, most brands are racing against the clock. Every new location is a shot at market dominance, every franchise another step toward capturing fleeting consumer attention. Yet Molly Tea, a three-year-old startup known for its jasmine tea offerings, is taking an entirely different approach. Despite securing a fresh RMB 100 million (USD 14 million) in fresh funding, the brand isn’t in a hurry to blanket cities with stores at breakneck speed. Instead, Molly Tea is playing a slower game—one that might prove to be its greatest advantage or its biggest risk.
“Molly Tea never chased rapid expansion. While scale is important for building a strong brand, we’ve consistently prioritized the quality and standards of our stores,” said Zhang Bochung, founder of Molly Tea, in an interview with 36Kr. At a time when other brands have already scaled into the thousands, Molly Tea operates 785 stores, with a little over 100 more in the works. Compared to its peers, it’s a modest number—one that invites both admiration and skepticism. The company expects to hit 1,100–1,200 locations by the end of the year.
Molly Tea’s rise in China’s competitive new-style tea market, which has ballooned to nearly half a million stores nationwide, is notable for its measured pace. Since opening its first location in Shenzhen in 2021, the company has resisted the temptation to rapidly scale, a hallmark of many other chains. Zhang points out that, while growth is important, brick-and-mortar businesses need time to cultivate.
The decision to hold back on quickfire expansion aligns with the brand’s focus on mid- to high-end positioning in first- and second-tier cities. It’s a gamble in a market increasingly driven by price wars and chain homogenization, but Zhang remains confident. “Our approach has been deliberate. Growth needs to follow logic, not just happen arbitrarily.”
That logic, in part, involves prioritizing profitable franchises and maintaining a high level of operational control. Public records show that Molly Tea has completed three rounds of financing, including the latest, but the brand has been careful to scale only when it makes sense. According to Zhang, the brand received over 10,000 franchise applications last year but signed just over 100 partners, reinforcing its conservative approach.
Molly Tea’s focus on jasmine tea has helped carve out a niche in an industry saturated with offerings. Jasmine tea, once a staple in China’s tea culture, has gained renewed attention under Molly Tea’s brand. But success with a singular focus comes with its own risks, especially in a market where consumer tastes shift rapidly.
Molly Tea’s advantage is its focus on jasmine tea and floral aromas, which differentiates it from the fruit-tea-heavy menus of competitors. But it’s also a constraint, as any innovation has to be kept within that niche.
Zhang is aware of these challenges. To keep customers engaged, Molly Tea has expanded its product lineup with a series of milk teas featuring other floral scents, including gardenia, magnolia, and osmanthus. But the real test is how the brand will navigate an increasingly saturated market.
While many Chinese brands have targeted Southeast Asia for their first international expansion, Molly Tea chose the US instead, opening its first overseas store in Flushing, New York. Zhang views North America as a must-win market, with Canada and the US offering high demand and relatively less competition in the specialty tea space.
Yet, the challenges of going global are substantial. Molly Tea’s competitors have seen mixed results in their international forays. For example, Mixue Bingcheng struggled with profitability in Southeast Asian countries like Indonesia and Vietnam, despite its success on home ground. Industry insiders caution that the operational costs of overseas expansion, combined with the complexity of managing supply chains from afar, make it difficult for new-style tea brands to achieve quick wins abroad.
In his interview with 36Kr, Zhang acknowledged the risks but remains undeterred, noting that Molly Tea’s strategy will continue to focus on quality and profitability. Expanding too quickly, in his view, could harm the brand, and he prefers that Molly Tea grows at a pace that makes sense—not just to satisfy investors.
Domestically, Molly Tea’s financials are solid, according to Zhang. The company expects to post nearly 400% revenue growth this year, thanks in part to its focus on smaller, more cost-efficient stores. While the average Molly Tea location was originally around 60 square meters, the brand has since introduced stores as small as 35 square meters, which helps reduce overhead and accelerate profitability.
Still, the long-term sustainability of Molly Tea’s franchise model remains a question mark. Critics argue that franchise-based businesses often struggle with quality control, especially in an industry as dependent on fresh ingredients and precise preparation as the tea business. Some also question whether Molly Tea can maintain its premium positioning in a market where even coffee giants like Luckin Coffee and Starbucks are vying for a piece of the milk tea pie.
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For now, Molly Tea seems well-positioned to continue its cautious expansion, with Zhang eyeing both domestic and international growth. But as China’s tea market becomes increasingly saturated and the novelty of new-style tea wears off, the real challenge will be maintaining consumer interest.
In an industry dominated by constant innovation and fleeting trends, Molly Tea’s strategy is a bet on the long game. While Zhang seems willing to take the risk, whether Molly Tea can become the next breakout brand remains to be seen. For now, its steady approach and focus on quality are making it one of the more interesting players in China’s crowded tea landscape.