SINGAPORE: Bubble tea lovers in Southeast Asia spend US$3. 66 billion a year on the beverage and comparable “new tea” drinks, with Singapore having the highest spending strength despite its smallest population among the region’s six key markets.
This was found in a study which provides analyses and insights to the business dynamics behind bubble tea.
With each other conducted by endeavor outfit Momentum Functions and digital obligations solution firm qlub, the report also available that the average associated with bubble tea in Singapore is dual that of other nations in the region.
“(This makes) it a great access point for premium brand names, ” Momentum Works said in a seo press releases on Tuesday (Aug 16), adding that there are currently more than 60 active brands of bubble tea chains.
The largest market in the region is Indonesia, with an approximated US$1. 6 billion dollars annual turnover. Thailand came in second, along with US$749 million via more than 31, 1000 bubble tea stores and other retail channels.
Vietnam is ranked 3rd with US$362 mil, with Singapore fourth at US$342 mil.
Taiwanese and homegrown brand names have “long dominated” the Southeast Hard anodized cookware bubble tea market, the study found.
“In addition, recently numerous Chinese brands have entered the region, ” it added. “The bubble tea market in China is estimated to have an annual turnover of US$20 billion dollars, saturating and hyper competitive. ”
Chinese brands that have made their way into Southeast Asia consist of Mixue, Chagee plus HEYTEA, all of which have got outlets in Singapore.
HIGH MARGINS, LOW DIFFERENTIATION MARKET
However , the study found that despite the high margins, few bubble herbal tea stores are lucrative.
“The bubble green tea industry has a great product gross perimeter of 60 % to 70 %, ” the release mentioned. “Yet, few gamers have managed constant profitability at a big scale. ”
It cited Nayuki, the very first “new tea” brand to go public, in whose market cap stepped by more than 70 per cent since it on the Hong Kong stock exchange.
“There is also an industry saying nine out of 10 bubble tea shops lose money, ” this added.
The study also highlighted that prices is not the only element that affects customers’ purchasing decisions.
“Customers also decide in line with the product selection from stores, as well as the ease of access which means the amount of stores a brand provides, ” it mentioned.
Brands are also providing more health-conscious choices to cater to clients, through customisable sugars levels and “healthier” alternatives like brewed fresh fruit tea.
“While consumers in Singapore are more health mindful, it’s not the same across other markets”, this added.
Last week, it had been announced that Singapore will soon require as well as beverage outlets to include nutrition labels on their selections to indicate drinks which contain higher levels of sugar and saturated body fat. This includes bubble herbal tea outlets.
Advertising prohibitions will even apply to such beverages. These measures are usually part of efforts to help consumers to make more informed, healthier choices, Health Minister Ong Ye Kung said.