Coffee is magical: it wakes you up, sharpens your mind, can even become addictive—and as long as you don’t overdo it, it’s actually good for your health. It’s similar to tea in terms of function, yet completely different in flavor; its energizing effect is almost instantaneous, more intense physiologically than tea, and naturally fits the fast pace of urban life.

On an emotional or culture-level, it represents a kind of Western lifestyle that is quality, free, and cool. That’s probably coffee’s innate advantage in China and across much of Asia: it has a built-in appeal for young people here.

In the past few years, thanks to mainstream media coverage, the outside world’s impression of Chinese coffee has long been stuck on the “Luckin vs. Starbucks” battle. This shallow understanding stems partly from entrenched biases about the Chinese market. On the other hand, much of the content out there in the market — mine included — still looks at coffee mainly from the consumer side, and lacks an industry perspective. That inevitably leaves readers with a somewhat one‑sided understanding of the coffee market.

So, this time, I want to do something slightly different — Let’s step away, for a moment, from the stage of “storefront or consumer perspective” and move the camera a layer deeper:

Where exactly do these coffees come from? Who is actually supplying the resources behind the cup in Chinese consumer's hand?

In fact, the coffee value chain is far more complex than most people imagine—from farming, picking and processing, to roasting, logistics, and finally landing in cafés or in consumers’ hands. Beyond that, there are futures markets, industry associations, trade shows, competitions, and grassroots communities all working together to empower and reshape this industry.

Today, I’ll start from one of the least-talked-about areas in the mainstream media—the origin of coffee: Green Beans (coffee before roasting) — and use that as an entry point to keep piecing together the puzzle of “China’s coffee world.”

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I’ve mentioned many times before — the Chinese market is unique in a very specific way—you may recall this: China is very likely the only place in the world that simultaneously has ultra-large-scale coffee consumption (a market worth hundreds of billions of RMB) + significant-scale coffee cultivation (currently ranked 14th globally). This combination almost guarantees that the brands, habits, and trends that emerge on this land will look different from anywhere else.

On one hand, it has given birth to massive coffee chains that drive consumption—Luckin, Manner, and now players that have crossed over into coffee, like Mixue and Gu Ming. On the other hand, this demand has in turn fed back into local production.

“Yunnan 云南” coffee now accounts for over 35% of China’s total coffee sales. And perhaps unexpectedly, “Hainan 海南” is also a coffee-growing region, though very small, contributing about 2% of domestic coffee bean output.

Taken together, these numbers make one thing very clear: the vast majority of green coffee consumed in China still comes from overseas rather than domestic production.

Notably, China is now a major importer of green coffee beans, bringing in around 200,000 tons each year, with 13.5 % yoy growth rate in 2025. The total consumption of green coffee here already ranks among the top ten in the world, according to a report by Science and Technology Daily.

Although green coffee beans have many physical attributes, the simplest and most intuitive way to classify them is by origin. So in this article, I’m not going to dwell too much on grand narratives. Instead, I want to start from a more micro perspective—the coffee-growing origins that are popular in China—to show how these beans are actually shaping the market here 👇

Let’s start at my home (China): Yunnan & Hainan

Yunnan: between being “looked down on” and “looked forward to”

First, some context,

The coffee market can be roughly divided into commercial coffee and specialty coffee: Commercial coffee: lower-quality beans that only need to satisfy the basic function of “keeping you awake.” Specialty coffee: higher-quality beans that not only energize you, but also offer flavor, terroir stories, rarity, and other variables that support a more “premium” experience.

This is also why, when I previously categorized cafés, I personally split them into three types: Chains (commercial coffee–led) ; Specialty chains (specialty coffee–led) ; Independent cafés (specialty + distinct positioning or personality — otherwise hard to survive)

Fundamentally, this is a basic segmentation along the axis of commercial vs. specialty coffee. With this in mind, it becomes much easier to understand how different beans are used and valued in the market.

For a long time, Yunnan’s overall bean quality lagged behind traditional origins, so most of its output went into: Instant coffee products or some inferior roasted blends. The proportion that could actually enter the real specialty market used to be consistently below 5%. But as the specialty segment has boomed in China in recent years, in 2024, this number is up to 30%!!!!!!!

However, some specialty varieties—Typica 铁皮卡, Caturra 卡杜拉, Geisha 瑰夏, SL28, Bourbon 波旁 etc.—are still planted in much smaller volumes, and experience is limited, though acreage has been expanding in recent years. Now, most of the coffee planted in Yunnan is still Catimor 卡迪姆, a variety that is easy to grow but lower in cup quality.

Catimor itself is genetically predisposed to certain flavor notes—woody, smoky. In professional coffee circles, this isn’t automatically a “defect.” But for Chinese consumers—especially when Catimor is processed and roasted poorly—pulling it out as a single-origin and asking people to drink it straight is often a recipe for total rejection.

On top of that, compared with other origins, labor costs in Yunnan are high, which is another reason why Yunnan specialty beans have long been stuck in an awkward position:

In short: not that tasty, and not that cheap.

Just look at these screenshots from XHS:
on the left, a user complains that Yunnan coffee tastes flat and uninteresting;
on the right, a barista from a well-known café bluntly says that Yunnan beans are both not tasty and expensive—so most coffee shops simply choose not to use them 👇

Worse still, in order to compete with international beans, some Yunnan producers resorted to shortcuts in processing: Artificial flavoring in “fermentation” Poor technique leading to unnatural, overly perfumed flavors — so called Artificial flavored beans 香精豆; Trying to aggressively manipulate flavor to mask inherent weaknesses of the beans; Even scandals where Catimor was sold as higher-value varieties like Typica. All of this understandably angered both consumers and professionals. Confidence and trust in “Yunnan specialty coffee” went through a real low point.

To adapt to changing market demands and rebuild trust, the Yunnan government and industry players have been pushing hard on multiple fronts in recent years: Upgrading farming and processing techniques；Investing in infrastructure；Attracting more talent into Yunnan’s coffee-growing sector；Introducing new varieties；Tightening market management and improving transparency and etc…

Under these changes, more and more Yunnan coffees have clearly improved in quality.

For example: The harsh, unpleasant finish often associated with Catimor has become less pronounced in many lots. Some lots of varieties—like “Sarchimor” (萨琪姆) — have shown surprisingly Ethiopia-like profiles, with faintly clean acidity and sweetness. Certain estates and batches have even delivered flavor experiences strong enough to stand shoulder-to-shoulder with world-class coffees.

My cupping experience makes one thing very clear: Yunnan is undergoing a drastic transformation. This year’s slots are a completely different animal compared with those from even two years ago. The market just hasn’t fully caught up yet—it needs some time to react.

However, we shouldn’t celebrate too early. We still have to admit that, compared with origins like Ethiopia and Panama, Yunnan as a whole still has a big gap: quality is unstable, differences between batches and farms are huge, and corner‑cutting and mislabeling still occur.

So I don’t want—and refuse—to irresponsibly “canonize” any particular Yunnan variety or estate here. This isn’t Ethiopia or Panama; you can’t assume consistency easily. A batch I find excellent might be followed by another batch that you find mediocre or worse. For a region or estate to truly get things right, it often takes many years, if not decades, of iteration and proof.

Don’t get me wrong—I’m not trying to pour cold water on Yunnan coffee. Its progress is obvious to anyone who’s been paying attention: from disappointment and anger, to sympathy (“what a shame”), to finally those moments of surprise you get after stubbornly “sifting the sea with a spoon.” That full emotional arc is exactly what keeps people who care about Yunnan coffee curious and willing to keep trying — Here, no one genuinely wants to see it fail.

If you have professional skills, long-term ambition, or capital in this space, Yunnan is absolutely worth a long-term investment. Personally, I’m more inclined to look at it on a 5–10 year horizon rather than one or two. I do believe that one day, it will deliver a real surprise to the world.

Hainan: small and bitter, carrying “caffeine and cost” on its back

What might surprise you is that China has another coffee origin: Hainan.

The elevation there is low, and the climate is hot and humid—conditions that are suitable for growing robusta. The issue is that these beans tend to be “too intense” in aroma—put simply, they’re very bitter, often carry rubbery notes, and are very high in caffeine. For most consumers, that’s hard to enjoy on its own.

So for now, their value is mostly realized in: Instant coffee products and as a supporting component in certain blends.

The role is similar to some of the more basic-quality Yunnan beans: They take on the “bitter + strong caffeine + cost reduction” job that no one sees, but the market needs.

Of course, top-grade robusta can compete with arabica in cup quality. But Hainan’s overall output is so small that even if there are excellent lots, their market impact is still minimal. So I won’t go deeper into that here today.

Halftime recap: a rough but real “map of China’s green beans”

If we roughly divide the sources of green beans in China by function, the picture looks something like this:

Yunnan: Transitioning from “cheap base + instant material” toward “promising but unstable specialty option.” On one side, dismissed as “overpriced and underwhelming”; on the other, burdened with the hope that it might one day represent China on the specialty stage.

Hainan: Small-origin, small but bitter—mainly responsible for “bitterness and caffeine” in instant and deep-roast blends.

Alright, let’s put the domestic part on pause for now.

As mentioned earlier, imported green beans already account for a larger share of the market than locally grown ones—and in terms of both scale and overall quality, they are still ahead of domestic beans.

According to China’s 2024 customs data, the main sources of imported green coffee were Brazil in first place, followed by Colombia, Vietnam, Ethiopia, Indonesia and Uganda. By 2025, however, the ranking had shifted: Ethiopia moved into first place, followed by Vietnam, Uganda, Brazil, Indonesia and Colombia.

Among them, the standout is Ethiopia: in 2024 it was still in fourth place, but by 2025 it had jumped to first, with imports increasing by a staggering 124%.

Let me put it in this way — at least for the moment, it’s these imported green coffees that are truly working behind the scenes to shape Chinese consumers’ taste preferences. But how? 👇

Imported Beans:

Ethiopia: China’s Best‑Selling and Most Influential Origin Today

Ethiopian green coffee holds a special position in the Chinese market for several reasons.

First, policy: China offers tariff exemptions to Ethiopian imports (and is phasing in zero-tariff treatment for more African countries), which gives Ethiopian coffee a natural price advantage.

Second, flavor: Ethiopian beans usually bring - Distinct florals and fruity aromatics - Bright but approachable acidity - Smooth, layered mouthfeel — lower‑grade lots often go into blends, while higher‑grade ones are typically used as single‑origin pour‑overs.

All of which align very well with the preferences of today’s mainstream urban coffee drinkers in China. So while few professionals will say this outright in “official” contexts, my personal view is — Ethiopia has become the de facto benchmark for everyday pour-over coffee. In simple terms: If your beans are more expensive than Ethiopian, you’d better offer something truly unique.

Let’s zoom in.

One major popular category is beans from Yirgacheffe region: Under light roasting, their jasmine aromatics are unforgettable.

Another category is, unsurprisingly, Geisha: Any Geisha, from any origin, sells. Well — Ethiopian Geishas in particular tend to have very intense florals and fruitiness, bright acidity, and outstanding cleanliness. It was one of the coffees that first introduced Chinese consumers to Geisha.

Notably, there’s an interesting coffee bean in the Chinese market: Oiran (花魁, which some people simply call “China Beauty”) 👇

The bean itself is a natural-process coffee beans from the Hambela, Buku Abel Station, selected by Ethiopia’s DW Coffee Export back in 2017. It won the Taste of Harvest (TOH) competition and was brought into China by a trader in BJ, where it was rebranded as “Oiran” (literally “queen of flowers 花中之王” in Chinese).

In fact, this name doesn’t align with what it’s called abroad. Outside China, it’s usually just called Hambela.

Let me slip in an interesting story here — you’ll notice that “Oiran” on the market keeps being renamed with each new import batch: from Oiran 1.0, 2.0… all the way up to the latest 11.0.

And there’s no 10.0 in between. Why?

Because some domestic green coffee traders wanted to “pay tribute” to Apple 🍎 and copy the iPhone naming strategy, so the 10th-generation coffee was simply called Oiran X. 😂

Admittedly — just like “Geisha” and “Yirgacheffe,” the Chinese name “Oiran” is pure genius: Simple and memorable; Expresses exactly what’s special about the coffee—intense florals and a tea-like structure; Carries rich cultural imagery. That naming stroke alone helped this origin dominate Chinese specialty coffee menus for years — its market recognition level is now on par with Geisha and Yirgacheffe.

Recently, the way coffee beans are named and marketed has been quietly changing. Over the past two years in China, there’s been a growing focus on:

• Named producers (like ALO, ETLO, etc.), and

• Specific varieties (such as 74158, 74100, etc.).

These details now often appear as explicit selling points on the menus of serious specialty cafés — and this isn’t just true for Ethiopia; other origins are following the same pattern.

On one level, you can read it as increased transparency on beans supply chain. On another, a lot of it is being pushed from the marketing side — The logic is simple: if you keep selling the same old “country / processing / flavor” formula forever, people are eventually going to get bored.

Indonesia: the “dark roast king”

Indonesia’s flagship in China is Mandheling 曼特宁.

In central and southern China, Mandheling is no longer popular as a single-origin espresso or pour-over; more precisely, it had its moment, but has gradually been replaced by more floral and fruity coffees. (Of course, as a component in blends, Mandheling is still one of the most widely used and enduring recipes.)

Why?

To me, Mandheling does have some redeeming good features — cocoa, caramel and deeper body. But it also comes with herbal and woody notes, and often bitterness. Even with deep roasting to mask some defects, it can still carry off-flavors — herbal medicine vibes, muddiness—that many Chinese customers find off-putting.

Of course, even many “consensus-trained” experts are reluctant to admit something — Thoughtful deep roasting + precise brewing = can unlock a side of dark roasts most people never see: stunning sweetness and surprisingly clean cups. It’s just that very few barista + roasters can actually execute this consistently. Anyone who has really experienced good dark roasts will know what I mean.

One more interesting thing I’ve noticed about Mandheling is a kind of geographic–cultural wrinkle👇

Perhaps because northern Chinese consumers are used to stronger alcohol and bolder flavors, or maybe because the north has been more influenced by Japanese dark‑roast culture, cities like Beijing show a much higher tolerance dark roasts and straight black coffees and Mandheling is actually a star product in many cafés there. This stands in clear contrast to the south, where people generally prefer brighter, lighter‑roasted beans.

Vietnam & Uganda: the invisible backbone of instant and espresso blends

Vietnam and Uganda share a key trait: both are robusta powerhouses. In China, their main roles are: Raw material for instant coffee and Base layer in espresso blends

They contribute: Bitterness; Crema and body; And help keep overall costs under control. You rarely see “Vietnam estate X” or “Uganda micro-lot Y” on café menus. but on procurement sheets in factories and roasteries, they’re anything but invisible.

In many ways, they’re the uncredited workhorses of China’s coffee industrial complex.

Brazil: the crucial chassis

Brazil is probably the most “invisible yet crucial” origin in today’s Chinese coffee cups.

Its role is simple - Flavor-wise: nutty, chocolaty, caramelly, full bodied; Quality-wise: solid and very consistent — Operationally: ideal for large-scale, reliable sourcing

Key facts: Luckin buys about 60% of all Brazilian coffee imported into China. Many premium espresso blends also choose Brazilian beans as their base to ensure intensity and consistency.

Colombia: a love–hate relationship

Colombia is a textbook “polarizing” origin:

On one side, it produces a number of truly high-quality Geisha, Bourbon, and other great varieties.

On the other, it might the one of the most aggressive origins in experimenting with special processing in the world.

Unfortunately, Chinese consumers are particularly sensitive to this now, partly because in Yunnan, as I just mentioned, we went through a whole phase where “artificial flavored” and “over-processed” beans were used to mask poor raw material —so for many people, “special processing = cheating” became a default mental shortcut. So many cafés now treat “no artificial flavored beans” as a moral bottom line. This emotional backlash has hit good Yunan and Colombian coffees as well.

I can’t say this is the only reason, but the outcome is clear: Colombia’s green bean imports into China have been on a clear downward trend last year, and that lines up closely with what I’ve been observing in terms of changing consumer preferences on the ground.

Panama: in the high-end game, China is no longer just a spectator

When it comes to high-end coffee beans and “street cred,” Panama is almost impossible to avoid.

In the minds of most serious coffee lovers, “Panama Geisha” is no longer just an origin + variety label. It’s a whole package of symbols: Exquisite florals; Complex fruit acidity ; Layered sweetness and tea-like structure; Very high cupping scores; And, increasingly, absurd auction prices.

What many people may not realize is this:

In recent years, a large share of those record-breaking auction lots from Panama—the ones that make global headlines — have been bought by Chinese buyers.

Here is a selection of buyer information from the official website of the 2025 Panama coffee auction 👇

This sends two strong signals:

1. China is no longer a follower, but an active player in the high-end pricing game.

When you’re willing to pay the highest prices in the world for a coffee, you’re not just buying beans — you’re participating in defining - What counts as “top-tier flavor” in the coming years — Which processing methods and origins others will try to emulate

2. Panama’s industry now has to take “Chinese taste” seriously.

When one of your biggest buyers is from China, it becomes inevitable that: Chinese judges appear on juries and more professionals show up at origin.

This isn’t token representation; it’s about building Chinese consumer’s preferences directly into the auction feedback loop - impact the whole supply chain eventually.

In the end…

To wrap this up, if I had to force everything into one sentence, the current “green bean battlefield” in China roughly looks like this — Imported beans are supporting the fast-growing coffee consumption civilization we live in today; Domestic beans is quietly laying the groundwork for a future that hasn’t fully arrived yet.

No doubt, the story of green beans is far from over—what I’ve done here is only to open up the map a little. A single article can’t possibly cover every origin, nor can it do justice to all the detailed trends. In the future, I’ll probably write more pieces that dive into specific subtopics on the bean side.

Needless to say, a green bean on its own can’t go straight into your cup—it’s just raw material. To become good coffee it must pass through a whole series of steps, as discussed. The next article in this coffee series—though not finalized—will most likely focus on coffee roasting in China, a crucial link between the bean and the bar.

If this interests you, please consider sharing this piece and subscribing. Thank you.

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China now has over 400,000 freshly made tea (new-style tea) shops. From 2025 to March 2026, 120,000 new stores opened and 140,000 shut down. It’s a massive market, but it has clearly entered a phase of brutal internal competition and rapid “upgrading.” In this arena, any brand without real differentiation is destined to be eliminated.

Broadly, the tea brands that are still in a high-growth phase can be grouped into six archetypes:

1. Super chains (HeyTea, Mixue, ChaGee…)

2. Innovation labs (Sexy Tea)

3. Regional culture / unique-origin ingredients (CreaTea 去茶山)

4. Heavy hand-made operations (Ah Ma Handmade, etc.)

5. Health-oriented concepts (Naixue and Hun Juice 混果汁)

6. Tea brands that aggressively borrow from coffee (BASAO, Mamahecha, Alcalcha)

To survive and grow, all of these brands are throwing everything they’ve got at the market. But what is the real driver of growth?

In my view, it always comes back to product. Especially in a capital winter in the consumer sector, a truly distinctive, repeatedly buyable product is the only real foundation for survival. Moreover, milk tea sector has a particular structural challenge: you cannot protect a food or drink product with copyright. That means brands have no choice but to keep innovating – if you stop for a second, you invite elimination 👇

Hey Tea — “Kitchen” Upgrade (Product Quality + Operational Efficiency)

After HeyTea suspended franchising, it systematically upgraded and re-architected its store operations to address the quality degradation caused by over-expansion. Today, HeyTea insists on washing, peeling, and processing fresh fruit on-site in every store, every day, to ensure a genuinely fresh and distinctive flavor profile. This “sincere” way of making tea drinks is gradually winning back consumer trust.

The cost, however, is extreme back-of-house complexity. Different fruits require very different handling flows, and the processes are time-consuming. This places very high demands on kitchen layout, staffing, and management. Without exceptional kitchen design and operational discipline, it’s simply impossible to reconcile “complex, fresh processing” with “fast output at peak hours.”

Mixue — 100% Integrated Core Ingredient Supply Chain + Global Expansion + Multi-Brand Play

I’ve said this before – and I may have been one of the first to phrase it this way: Mixue is not really a milk-tea company; it is, at heart, a supply-chain company.

Mixue has built an integrated system that runs from raw materials (core ingredients are self-produced; other materials are procured at massive scale), to processing and warehousing, all the way through to highly efficient store-level turnover.

The key structural difference between Mixue and HeyTea is where complexity sits. HeyTea pushes complexity to the front: fruit is processed fresh in-store. Mixue pulls it to the back: the heavy lifting is done in Mixue’s own factories, while stores focus on standardized assembly and output. This dramatically lowers store-level operational difficulty – and that is one of the core reasons Mixue can open stores at such astonishing speed worldwide, while HeyTea cannot grow at the same pace.

More importantly, Mixue is now executing a multi-brand strategy: extending from tea into coffee and even beer. This is fully consistent with how Mixue has always seen itself – not as a “tea brand,” but as a fresh-made beverage platform. In earlier posts, I pointed out this detail: Mixue’s ambition is to become the world’s largest fresh-beverage company – the offline Coca-Cola, the McDonald’s of drinks – rather than just a “milk tea chain.”

ChaGee — Big Vision + Cultural Capital + A Starbucks-Style Positioning, But Severely Misaligned Product Strength

ChaGee’s challenges are extremely visible. As I mentioned in my previous post, in an intensely competitive domestic tea market, its products are not particularly strong, while its direct and indirect competitors are very, very capable.

The founder seems deeply enamored with grand narratives and “model innovation,” but shows a clear lack of depth and experience in product. The claim that ChaGee “relies too heavily on a few hero SKUs” is really a symptom of a deeper issue: it lacks a systematic capability to generate and mass-produce hit products.

In China, one or two star products are nowhere near enough. You need a repeatable mechanism to create hits over and over if you want to survive multiple cycles. If ChaGee truly tries to run a “outdated Starbucks playbook” – a handful of classics holding up the whole enterprise – in China’s tea market, it’s effectively setting itself up for failure. （ In fact, Starbucks has already gone through its own round of reflection and now clearly recognizes how critical continuous product innovation is in the Chinese market.）

And none of this can be fixed by surface-level PR and beautiful store design – the parts of the story the media like to tell. What the founding team needs is a fundamental reset on three fronts:

1. Rebuild the business around a real, coherent product system, not only narrative;

2. Redesign the store model to reflect that product logic, rather than stacking concepts;

3. Reconfigure the organization and incentives so that the company is structurally committed – and able – to invest in product strength.

Without that, all the grand cultural assets and high-level storytelling will eventually evaporate.

GuMing — Mixue-Level Supply-Chain Strength + HeyTea-Level Product Quality + Possibly the Best Coffee in Milk-Tea Land

GuMing’s supply-chain capability is second only to Mixue’s. Its self-production ratio in manufacturing is somewhat lower than Mixue’s, but structurally its supply chain is very similar – and it may even have an edge in cold-chain logistics. It operates its own refrigerated fleet, delivering to stores every two days, and in some locations daily, which gives it a very strong “freshness” advantage on ingredients.

On the product side, GuMing is, in many ways, the closest to HeyTea. It has essentially treated HeyTea as a living product library: when HeyTea launches a successful SKU, GuMing will often replicate it, then optimize it into its own version. It is not a particularly original innovator, but it is extremely good at digesting competitors’ ideas, reengineering them, and making them feel like “its own.” In a hyper-competitive market, that is a real capability.

Like most major tea brands, GuMing has also moved into coffee as food-delivery competition heats up. In 2025, GuMing officially launched coffee products, and founder Wang Yunan recently said, “Our track has shifted from milk tea to tea-coffee.” That shift from “we also sell coffee” to “we sell a different kind of coffee” is really about injecting milk-tea supply-chain advantages into coffee, using a deeper understanding of milk and dairy to rework what coffee can be.

Overall, GuMing is very grounded: its own original R&D is not outstanding, but it is extraordinarily good at absorbing competitors’ best ideas and operationalizing them. Turning other people’s strengths into your own competitive system is, in itself, a powerful survival skill.

Naixue — Great Ingredients + “Green” Formulas, But Simply Not Very Tasty

Counterintuitively, if you study Naixue’s supply chain carefully, you’ll find that its ingredient quality is likely among the best in the industry, and its formulas are among the healthiest – almost no syrup, almost no artificial flavoring.

The downside is clear: its health profile significantly outperforms the industry, but its flavor perception lags behind its key competitors. In practice, it’s the “good but not good-tasting” paradox. In a market where consumers’ palates have already been trained by high sugar, high flavorings, and strong sensory stimulation, Naixue’s restrained and “clean” approach loses in head-to-head taste tests, even if it wins on the health dimension.

Ah Ma Handmade (AMH) — High-End, Hand-Crafted, and Operationally Complex Kitchens

AMH’s “kitchen” model is, quite literally, hard to believe. It is easily an order of magnitude more complex than HeyTea’s. It doesn’t just process fresh fruit on-site; ingredients like taro, ice cream, mochi, and almost every other component you can think of are all freshly sourced and hand-prepared in the store. That leads to extremely high labor costs and a very demanding people-management challenge.

But precisely because AMH is willing to invest in, and relentlessly refine, such a complex operational system, it has built a very high, very hard-to-copy moat in an overcrowded market.

The flip side is structural: this kind of system is inherently difficult to scale. Expansion is slow by design. If store-level sales ever dip below a certain threshold, the weight of that labor cost can crash the business very quickly. That is the core risk of a “high quality + high complexity” model.

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Sexy Tea — The Undisputed Product Innovation Lab of China’s Tea Industry

Sexy Tea really needs no introduction: it is the original product innovator in China’s new-style tea segment.

Its pace of product innovation is comparable to Luckin Coffee’s, but what’s more interesting is how it innovates: it likes to redefine categories from first principles. Tea cocktails, tea-coffee hybrids, creative lemon teas, new store formats – these are not just riffs, they’re category experiments. I’ve said this more than once: Sexy Tea is, in practice, the core inspiration source for a large part of the Chinese tea industry. Many “novel” products you see across other brands are, in reality, things Sexy Tea tried first.

Beyond product itself, they’ve even begun experimenting with factory-style automation equipment inside the store to make drinks on site. By doing this, they turn an extremely complex set of procedures into something simple and efficient. If this works, we may soon see the entire industry adopt similar systems.

CreaTea 去茶山 — A “Water Brand” from Guizhou

CreaTea is very explicit about wanting to take share from specialty cafe and craft beer shops. Many of its locations use equipment that is essentially on par with premium coffee store and craft beer bars already — so wild.

This aligns with how the founder frames the business: they’re not just “a tea brand”; they’re trying to “make a truly good-tasting cup of water.” In that sense, CreaTea looks more like a premium version of Mixue – a quality-focused platform that will eventually extend into multiple beverage categories, rather than a narrow tea-only concept.

Interestingly, the brand did not lean heavily into the “Guizhou” element at the start. It was only when it expanded nationwide that it discovered how commercially powerful that regional identity could be. This was enabled by post-Covid tourism: the boom in Guizhou tourism exposed a national audience to the region’s landscapes and culture, which in turn created a window for “Guizhou-origin ingredients” to travel across the country — such as Roxburgh Rose 刺梨 and Tongren Macha 铜仁抹茶.

Alcalcha — Rebuilding Coffee’s Category Architecture in Tea, but with Very Strange Tastes

Alcalcha’s store layout is divided into three parallel sections: tea-coffee, tea-based specialty drinks, and tea pour-over. This is a direct mirroring of the three major pillars of the coffee industry.

Strategically, it’s bold and even elegant on paper. But several of its actual products don’t live up to that ambition. From my own experience, the tea-coffee drinks I tried were literally odd and, frankly, taste unpleasant. It’s hard to understand what the founder was thinking at the product level – it’s one thing to have a clever concept; it’s another to serve consumers something that, at the end of the day, just isn’t drinkable.

By contrast, within this “coffee-benchmarked” segment, I much prefer Mamahecha and BASAO: the former does an excellent job with tea-based cocktail creative drinks, and the latter delivers a truly outstanding pure-tea experience.

Conclusion: The New-Style Tea War Is Now a War of Hard Fundamentals

China’s fresh-made tea war has already moved past the stage of “who tells the better story.” We are now in the phase of “who has the harder fundamentals” – product, supply chain, and organizational execution.

• Super chains are competing on supply-chain depth, standardization, and scale efficiency;

• Innovation labs are competing on who can define the next product paradigm;

• Regional-culture brands are trying to turn local terroir into scalable product assets;

• “Freshness and Hand-made” concepts are trading extreme experience for high margins and high loyalty;

• Coffee-inspired tea brands are attempting to rebuild the coffee category architecture around tea.

In a category where products cannot be protected by copyright, any brand that stops moving will, often quietly, be left behind.

There are only two types of players that can survive this cycle:

1. Those who always have something genuinely new to offer, without breaking their operating system;

2. Those who may not tell the flashiest story, but who go extremely deep in supply chain, store operations, and product.

Everyone else will slowly be cleared out by this “fresh-made tea war.”

You can tell stories. In fact, you should. But the product has to outweigh the story’s momentum by a wide margin if the story is to sustain itself. Otherwise, the bigger the story you tell, the faster it will turn and hit you on the way down.

To learn more about China’s fresh-made tea industry, feel free to explore my earlier posts linked below 👇

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Alibaba

• Qwen AI in commerce > On January 15, 2026, Qwen integrated with Taobao Flash Sale and Alipay AI Pay, launching a natural language ordering feature (consumers can directly voice “给我点一杯奶茶” to get delivery). Chinese consumers placed over 120 million orders through Alibaba‘s Qwen app in six days. Plus, Qwen has now integrated with Amap and other Alibaba services, positioning itself as a new consumer search gateway—challenging not only e-commerce platforms but also search engines.

• Hema (Freshippo) > 2026 strategy centers on “dual-wheel synergy,” targeting “premium quality” and “downmarket penetration.” Hema Fresh positions itself for mid-to-high-end urban families, offering high-quality fresh products and 30-minute instant delivery; Super Hema NB targets community hard discount, achieving extreme value-for-money through streamlined SKUs and direct sourcing.

Meituan

• Acquisition of Dingdong Macao (叮咚买菜）> On February 5, Meituan announced it would acquire 100% of Dingdong Maicai’s China operations for an initial consideration of about USD 717 million.

• Xiaoxiang Supermarket > Opening physical stores (Beijing Dec 2025, Ningbo Jan 2026) fills online fulfillment gaps and supports Meituan Flash Sale—stores act as fulfillment nodes, enable pickup, in-store experience, and online purchase.

Taking Shanghai as an example, in the fresh food e-commerce front-warehouse and store-warehouse integrated models, Hema and Sam’s Club each hold around 30% market share, while Dingdong Maicai holds 20%, and Meituan’s Xiaoxiang Supermarket only around 10%. After the merger, their combined market share reaches approximately 30%, enabling them to compete directly with Hema and Sam’s Club, rather than “burning money” to expand market share.

Walmart > Since 2025 Walmart has piloted a community-store pivot in Shenzhen with 500 m² shops, 30% private-label mix; plans 150 new stores in 2026 focused on mature communities in Tier-1/2 cities.

ALDI > Q1 2026 store count will exceed 100 in East China

Busy Ming (physical snack chain)> IPO in Hong Kong: Listed 2026-01-28. In the first nine months of 2025, Chinese top snack retailer Busy Ming ( the giant brand formed after the merger of Busy For You and Zhao Yiming) reported rapid expansion with revenue of 46.4 billion yuan (approx. S$8.4 billion) and a net profit estimated to be at least 2.3 billion yuan for the full year 2025. Revenue surged by 75% compared to the same period in 2024, supported by a network of over 19,500 stores by September 2025. (exceeded 20,000 stores by January 2026)

Wancheng Group (physical snack chain)> According to the company’s latest financial report, Wancheng Group recorded RMB 36.56 billion (USD 5.1 billion) in revenue for the first three quarters of 2025, up 77.37% year-on-year. Net profit reached RMB 855 million (USD 119.7 million), a staggering 917.04% increase. The latest store count stands over 19,000.

Three Squirrels (the former snack king who excelled in e-commerce) > 2025 profit warning (2026-01-29): In the first three quarters of 2025, Three Squirrels reported an operating revenue of 7.759 billion yuan, marking a year-on-year increase of 8.22%. However, net profit attributable to shareholders decreased by 52.91% year-on-year to 161 million yuan.

To counter declining performance, Three Squirrels—a brand that excels in e-commerce—has embraced an omnichannel model to reach consumers more efficiently. The company is achieving full-channel coverage of “online + offline + distribution” through offline distribution network expansion, full-category lifestyle store deployment, integrated supply chain support, and organizational management optimization. The goal: balanced revenue of RMB 10 billion each for online and offline in 2026, becoming a “full-category, omnichannel, manufacturing-based private-label retailer.”

Pangdonglai > Founder Yu Donglai announced retirement from operational duties on 2026-02-11, moving to an advisory role; daily operations and strategy now run by a Pangdonglai Decision Committee—marking a move from founder-driven to institutional governance.

Yonghui > Continues struggling with a transformation—shifting from traditional format to an experience level nearly matching Pangdonglai—that brings financial strain. 2025 preliminary results (2026-01-20) show net loss to shareholders of ~RMB 2.14 billion (45.6% worse YoY) and adjusted net loss of ~RMB 2.94 billion. This marks the fifth consecutive year of losses, with cumulative five-year losses exceeding RMB 10 billion.

To learn more about grocery wars in China, please read this post👇

East Buy > After losing star anchors like Dong Yuhui, the brand accelerated a Douyin (TikTok China) account matrix, and offline stores tests. Opened a 400 m² flagship in Zhongguancun, Beijing — quick-serve cafe to create “shop + hangout + meet” experiences for well-paid crowds. Store finishing late 2025, slated to open Mar–Apr 2026.

To learn more about the drama between star anchor Dong Yuhui and East Buy, please read the following article I wrote 2 years ago 👇

Dreame × Spring Festival Gala 🇨🇳 + Super Bowl 🇺🇸

Dreame Technology (founded in 2017) is a rapidly growing global tech company specializing in high-performance smart home cleaning devices, including robot vacuums, wet/dry vacuums, and hair dryers.

The brand has become a strategic partner of the 2026 CCTV Spring Festival Gala and will also appear at the Super Bowl. It's seizing both of the biggest annual galas in China and the U.S. for maximum exposure—likely the first and only brand in the world to do so.

To me, Dreame is a company full of imagination — their products are cool. Its founder aspires to be “China’s Elon Musk” and a superhero, but many employees think he’s just dreaming and talk shit.

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Huawei

From January 29 to February 28, Huawei is running a promotion on smartphones, tablets, and wearables, with discounts of up to 4,000 RMB on certain products. This is clearly a counterattack against Apple's CNY "price war”.

Apple's aggressive pricing in China is a serious test for domestic brands. Don't assume only Chinese brands excel at price wars—Apple's global supply chain and cost control give it more flexibility and lower marginal costs.

Insta360

In an interview with Luo Yonghao (老罗), Insta360's founder said that without DJI pioneering the consumer drone category, Insta360 would not exist—DJI's strength surpasses what most people imagine. But this is a warning, not praise: "Don't encroach on our territory."

Insta360 and DJI are already competing across multiple fronts — last July DJI released a 360° camera, officially stepping into Insta360’s territory, and just 15 days later Insta360 struck back with a 360° drone aimed at DJI. (I’m not sure who truly initiated the move — it’s unlikely Insta360 developed a drone from scratch in just 15 days;

JK Liu claims he will be DJI’s competitor for the rest of his life.

TIIANLALA (甜拉拉)

TIIANLALA has over 8,000 stores nationwide, focusing on lower-tier markets as a bubble tea chain and is perhaps a rival to Mixue.

It launched two new drinks, “Juicy Fresh Orange Jasmine” and “Juicy Fresh Orange Passionfruit,” building out a “fresh fruit, fresh tea” product matrix. It seems that “freshness” and “ is the core positioning in its contest with Mixue.

HEYTEA

HEYTEA released a year-end review of its differentiated achievements: the “tea mixology” series became a best-selling product line, and the brand opened over 100 stores in 32 overseas cities.

What is the essence of tea mixology?—using a limited vessel to create unlimited possibilities—breaking through the constraints of beverage categories by endlessly incorporating different ingredients to achieve the goal of stunning the palate.

The tea mixology is just as magic as coffee mixology—perhaps this category wasn’t invented in China, but it has certainly flourished here—because in such a fiercely competitive market, without constantl innovation, survival is impossible.

Pop Mart

Pop Mart is currently testing dessert/bakery offline stores or pop-up formats centered around its proprietary IPs in select cities, with products including cakes, desserts, and beverages, emphasizing IP imagery + visual design + photo-worthy attributes, rather than traditional dessert chain logic.

What truly matters here is not “desserts” but the monetization boundaries of IP continue to expand—from blind boxes → home goods → theme parks → desserts, Pop Mart is essentially testing: can IP, like Disney, become a form of “edible emotional consumption”?

ANTA

Anta has become a strategic partner of the Hellenic Olympic Committee, creating professional competition apparel for the national sports delegation.

Bosideng (Down Jackets)

Bosideng partnered with designer Kim Jones to launch its premium line AREAL, which made its overseas debut with a pop-up store at Galeries Lafayette in Paris.

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The notorious melamine scandal severely damaged China’s dairy industry in the short term, but it did not fundamentally alter the industry’s trajectory of being pushed onto an “accelerated” path.

Under the top-down government narrative of “improving national nutrition” and “matching developed countries’ per-capita milk consumption,” upstream farms and processing capacity expanded rapidly. Massive imports of dairy cows, densely established farms, and raw milk production surged to high levels in a very short period—while actual consumer demand lagged behind expectations — the industry experienced explosive production growth starting in 2020, and in less than four years, began to decline in 2024.

The reasons are likely multi-layered: the total population has peaked, births and student populations continue to decline; lactose intolerance remains common; and in traditional dietary patterns, milk has never been a must-have on the table. The result is clear — this is an industry that theoretically “still looks like it has huge potential,” but in reality has entered a cycle of oversupply, destocking, and falling margins.

However, within this overall downward trajectory, different forces are still reorganizing value. Below I want to show readers three Chinese dairy brands I pay special attention to and somewhat admire, and how each is finding its own way to survive and grow against the headwinds 👇.

伊利 (Yili)

A Slowed Giant and a Belated Turn 😭(Yili; Yicai)

• Pressured growth: In the first three quarters of 2025, Yili reported total operating revenue of RMB 90.56 billion, a year-on-year increase of only 1.7%, while net profit attributable to the parent was RMB 10.43 billion, down 4.1% year-on-year. ( In 2024, the company achieved total operating revenue of 115.78 billion yuan, down 8.24% year-over-year; net profit attributable to shareholders was 8.453 billion yuan, down 18.94% year-over-year)

• Core engine malfunctioning: The drag on the whole was its cornerstone business: UHT milk(Yili holds ~38% share; together with Mengniu, the duopoly controls over 70% of the market.) That segment’s revenue in the first three quarters was RMB 54.94 billion, down 4.5% year-on-year. By contrast, its infant formula and cheese businesses kept growing but are not yet large enough to offset the main channel’s decline.

• Slow pace of transformation: Although the chilled fresh milk market is growing rapidly, Yili’s financial reports have never separately disclosed fresh milk sales, and the extension of its marquee ambient UHT brand “Jindian” into fresh milk has not made a big market splash.

Yili’s earnings report reads like a typical “giant turning” health check.

When the industry’s prevailing current shifts from the wide UHT (ambient) sea toward the fresh milk lane that requires cold-chain protection, this giant ship feels unprecedented resistance. Its 4.5% decline in core business is not a random quarterly blip but a snapshot of an era: the nationwide distribution network and large-scale standardized production that once delivered success are becoming liabilities in the face of consumer demand for freshness, short shelf life, and ready-to-drink formats.

The problem is not that Yili hasn’t seen the trend — it began investing in fresh milk years ago. The problem is that the transformation speed of its massive system has fallen out of sync with the pace of consumer change. A sharper contrast is that Yili has only recently significantly increased investment in ready-to-drink dairy drinks, even as ready-to-drink tea has already become a brutal red ocean. Such slowness might have been masked by scale in an up-cycle, but in a down-cycle of static demand it translates directly into painful share loss to competitors.

Perhaps an outbound story must become Yili’s second narrative. Leveraging its mature domestic supply chain and cost advantages to explore Southeast Asia, the Middle East, and other incremental markets is logically sound. But dairy is highly localized: brand recognition, taste habits, and channel barriers make it a long-term undertaking. Yili’s public globalization data remain fuzzy — whether this giant can regain speed in unfamiliar waters is still uncertain.

Its dilemma reveals a harsh truth: in a period of industry paradigm shift, the greatest risk often stems from the path dependence forged by past success.

New Hope Dairy

The Actuary of High-Value Categories 📈（New Hope Diary)

• Outstanding profit elasticity: In the first three quarters of 2025, the company’s revenue was RMB 8.434 billion, up 3.49% year-on-year; net profit attributable to the parent was RMB 623 million, up a substantial 31.48% year-on-year. Profit growth far outpaced revenue growth — the best proof of strategic quality.

• National expansion:

  • Centered on the "24-hour" series and the "Asahi" brand emphasizing quality and freshness expanding into the premium national market.

  • Localized market penetration: Replicating the success of regional brands like "Liangshan Snow" (which holds 75% market share in Xichang, Sichuan), cultivating low-tier markets.

• New model: Through a “city-factory + regional cold chain + multi-new-channels ” model, it has built an extremely efficient network of localized fresh milk supply that is hard for national brands to replicate.

If Yili’s report reflects the “pain” of transformation, New Hope Dairy’s report precisely exemplifies the “joy” of focus.

While the industry sinks into price wars, destocking, and margin erosion, its 31.48% net profit growth is like a sharp flash illuminating a completely different path: abandon the obsession with “volume,” and instead pursue “quality” and “price” deeply.

New Hope’s impressive growth shows the foresight of its strategy; fundamentally it is a precise “value segmentation” operation. It did not try to educate the whole country to drink more milk; it decisively bet on a high-value consumer segment that is insensitive to price but highly sensitive to quality and freshness.

However, this brand also faces a risk worth noting: succession.

The future leader is Liu Chang, daughter of founder Liu Yonghao—a female entrepreneur as accomplished and principled as Zong Fuli. While New Hope Dairy’s succession looks more stable than Wahaha’s, appearances can deceive. It’s hard to see what’s really happening inside. The real test will come when Liu Yonghao fully steps back: can Liu Chang establish unquestioned strategic authority and control over resources within the group’s complex industrial empire and its entrenched network of veteran executives?

I hope Liu Chang won’t repeat Zong Fuli’s tragedy.

BeFood (必如)

The “Niche King” That Defines Standards 👑

• An unlisted invisible champion: As a private company, BeFood does not disclose financials. Its influence can’t be measured by traditional reports but shows up in another dimension — category-defining power.

• Creating and owning a category: Its core product, Eisbock 冰博客 (a concentrated milk produced through freeze-distillation), intensifies milk flavor through industrial processing and has become inseparable from “Dirty,” the breakout drink in China’s specialty coffee scene.

• Securing B2B formula entry: In B2B markets, it has made “Dirty = BeFood = Eisbock” the default formula. It doesn’t advertise directly to consumers but controls consumption choices indirectly by shaping thousands of coffeeshops’ product standards.

So who is Dirty? 👇

A coffee drink built around a hot espresso shot crashing into ice‑cold milk, designed to create a strong temperature and texture contrast;

The recipe originated from a Japanese specialty café, but it was in China that Dirty became a true menu staple;

Today, Dirty is a near‑mandatory SKU in most specialty coffee shops in China.

BeFood’s case is the most strategically instructive beyond financial statements. It proves that in an industry perceived as struggled and consolidated, there remains a disruptive opportunity to “create a new game and set the rules.”

The brand smart moves was not to improve old products or chase popular new categories like fresh milk. It did something more radical: based on a uniquely Chinese growth scene (the booming specialty coffee culture), it deliberately created an industrial raw material tailored to that scene — a previously unseen standardized ingredient.

The strategy’s power is seismic.

It sidestepped head-to-head battles with giants over channels and consumer advertising, and instead went upstream to capture the key position of “formula.” When a new coffee shop opens and wants to make a market-recognized Dirty, using Eisbock becomes an almost unquestioned industry norm. That means BeFood’s moat is not brand loyalty but the product’s standardness and indispensability. It may never have Yili’s tens-of-billions revenue, but in its narrow and deep niche it enjoys near-monopoly pricing power and an unassailable position.

This reveals the ultimate survival philosophy in an over-competitive market: rather than fighting to be the biggest fish in a red ocean, find your blue ocean and become the undisputed shark.

If you want to make Eisbock at home, read the article by the American coffee champion — Morgan Eckroth — in both her piece and my commentary, you’ll see our shared appreciation for the BeFood brand 👇

Coffee For Here

How to make barista championship milk at home

I’m very lactose sensitive (I stubbornly refuse to give up cheese) but if you hand me a freeze-distilled cortado, I’ll finish the whole thing…

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a year ago · 75 likes · 9 comments · Morgan Eckroth

Summary > Three Paths, One Future — The War for Value Depth

These three markedly different “report cards” together map the clear migration of value pools in China’s dairy industry:

• Yili represents the old-continent guardian: it holds the largest terrain (channels and share), but the soil underfoot (ambient milk demand) is sinking; reclaiming new land (fresh milk, overseas markets) requires time and huge resolve.

• New Hope Dairy represents the new-continent boutique farmer: it voluntarily abandons barren land and chooses the most fertile soil (high-tier cities, chilled categories), cultivating intensively to reap rich returns (margins).

• BeFood represents the new-continent “pick-maker” or toolmaker: it doesn’t farm land or fight for territory; instead it discovers a new gold rush (specialty coffee) . Its success lies in capturing derived demand.

The core of this battle has shifted from “who has broader channels and louder voice” to “whose value anchors are deeper and more indispensable.” Whether it’s New Hope binding to freshness and scene, or BeFood binding to formula and standards, both deepen the link between their offerings and real consumer needs.

The industry’s endgame may no longer be unchecked expansion by a single giant, but a new ecosystem of “mega players plus many invisible champions” coexisting. Yili-like firms may continue to hold the basic market and mass traffic, while New Hope, BeFood and others will carve out profit-rich, defensible fiefdoms in specific niches.

For consumers, this is arguably the best era — we are no longer being lectured to “drink a kilo of milk every day,” but are served as individuals with more precise and innovative offerings.

To learn more about China's milk industry, you can check out this article I wrote two years ago 👇

Before discussing “going global,” we must clarify two often-conflated concepts: export and brand. Export measures scale and channels; brand concerns identity, legitimacy, and long-term bargaining power.

On the surface, Chinese trade remains resilient: reaching new highs in 2024, with exports still growing in 2025. However, these impressive numbers mask deeper structural pressures. Exports to the United States, Europe, and other traditional consumer markets are slowing and increasingly politicized. The ability for products to appear on foreign shelves no longer guarantees genuine acceptance. The identity of “Made in China” still provides few added value, and in many cases, it remains a liability, no matter how good the product itself is. For many Chinese companies, the real shortcoming lies not in manufacturing or design but in legitimacy, ethical foundations, and the ability to convey “meaning of production.”

Why has this happened?

For decades, China’s competitive advantage relied primarily on scale, efficiency, and low costs, while systematic brand building has lagged significantly. Even many “advertising professionals” and “brand managers” still have a superficial understanding of what a “brand” truly is. Even those trained in top multinational companies may grasp some technical skills but often unconsciously operate within the ideological framework of the West.

To this day, most Chinese companies have not managed to transform China’s historical, cultural and value resources, as well as technological advantages, into clear and differentiated propositions for specific global audiences; there is still a severe lack of brand narratives, identity construction, and value-driven communication.

This internal capability gap is further magnified by the increasingly rigid external narrative environment. The U.S.-China trade war has placed tariffs, export controls, and investment restrictions at the center of policy, and the logic of “decoupling” and “de-risking” has swiftly spread from trade to technology, data, finance, and even information and opinion warfare. In large swathes of Western political and media contexts, major Chinese enterprises are often viewed from a security perspective, regarded as “dangerous,” “risky,” or as tools of the Chinese government to exert influence.

In such an environment, many Chinese brands are forced to actively “de-value” and “de-Chinese” themselves. They no longer dare to express their positions openly but retreat to simple “product talk”: performance, quality, price and local consumer insights. Some even go as far as intentionally downplaying or concealing their Chinese identity, adopting a more “international” visual system, naming conventions, and even corporate structures to appear as if they come from elsewhere.

Tactically, this might make sense; but strategically, it is a humiliation: how come a brand that does not dare to be itself, that does not believe in its own identity and value, can genuinely lead the industry? A brand so fractured between soul, faith, execution, and expression is destined to lack lasting persuasive power.

Of course - this situation cannot be entirely blamed on Chinese branders. Because global branding is not purely an economic issue, but more fundamentally a political issue grounded in national power.

A strong brand often stems from a country’s fundamental essence and strength. They appear in groups, representing its origin’s strengths, value and proposition. French luxury, Japanese quality, and American innovation all did in this way. Such brands are actually spreading in an orderly manner under the so-called Western democracy system. This value system, led by the United States, has long been regarded as the world’s most legitimate and reasonable value system. Under the absolute military, financial, and media dominance of the United States and its allies, brands within this system amplify and disseminate these values to every corner of the world.

People, organizations, and nations that do not align with this system’s interests—including, of course, products and brands—are regarded as anomalies that should not exist, or even as enemies. When brand comes from China — a country that now challenges the United States and Western value systems in every respect, they are naturally at a disadvantage in terms of legitimacy and morality, subject to attacks from the Western democratic value system.

At present, it must be acknowledged that China’s national strength seems insufficient to protect its brands’ free access to all parts of the world, let alone support its brands in boldly exporting values labeled as Chinese. Chinese brands may still need a long time to proceed cautiously in their value propositions—otherwise they risk being labeled an “evil” or “illegal” monster and destroyed

To that end — many brands are attempting a “clever” approach — resonating with customers with a so-called “mission, vision, and values” that transcend the East-West framework — neither deliberately pandering nor deceiving. I acknowledge this is inclusive and forward-looking, but in actual practice, these brands still avoid emphasizing their Chinese identity — essentially pretending that “this vision” and “this idea” originates from somewhere else in the world, not from Chinese entrepreneurs. While this approach can indeed enhance brand power to somehow, this solution still operates within a “de-China” framework.

Since the brand’s place of origin, story, and founder’s identity fail to resonate in harmony, its influence is inevitably limited. Moreover, this deliberate concealment may still pose moral and legitimacy issues in the future. Who knows when it might be labeled as fraud and accused of misleading local consumers.

Considering everything — China might remain far from building a brand ecosystem comparable to America’s at its peak, one that can freely impact markets with its own propositions. At this moment, as a brand from China, pragmatism is essential; survival and sustainable profitability must come first. But in the long run, Chinese brands cannot forever downplay their origins, hide their values, or outsource the production of meaning to others. They need to develop their own brand theory system, lead not only in product and technology, but also in philosophy, thought, and lifestyle, and practice an identity and expression that is consistent in word and deed.

Sadly, without national strength, all of this is just empty talk.

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Nike

Nike’s China sales decline for sixth consecutive quarter — (business insider)

As I’ve mentioned thousands of times, in China, with the rise of national self-awareness and the significant weakening of past sentiments of worshipping foreign things, many Western brands have lost the values and narrative advantages they once enjoyed — Nike is no exception.

Today’s Nike China cannot influence Chinese customers through its “cult-like cultural values,” and those once-inspiring stories of typical American individualism are now being rejected by the Chinese. In this market that rejects Western values, Nike’s most crucial leverage is the product itself. consecutive sales declines have exposed their product weakness—lack of innovation, relying on past glory, mediocre design, and severely insufficient attention to segmented market needs, leaving space for competitors.

Most importantly, I think Nike fans worldwide would agree with me—Nike’s quality keeps getting worse, unable to support its premium status anymore.

Chinese consumers often joke about Nike, saying “if you buy a pair of Nikes today with great quality, those must be fake ones produced by Chinese factories. Instead, the ones that come unglued after two days of wear are the authentic Nikes.”

ANTA

ANTA accelerates globalization (Bloomberg; Vogue)

ANTA’s model now mirrors Nike’s almost in reverse — Nike abandons DTC, ANTA doubles down on DTC; Nike leaves China’s supply chain, ANTA relies on China’s supply chain; Nike maintains a single brand, ANTA deploys multiple brands to target segmented markets; Nike tells American stories, ANTA tells Chinese stories. Nike gave up signing Kyrie Irving, ANTA directly invited Irving to become Chief Creative Officer.

This should be no coincidence; ANTA’s leveraging a strategic framework benchmarking Nike, but more innovative and bold than Nike, while discovering Nike’s mistakes and immediately attacking without mercy.

Obviously, ANTA’s strategy has already achieved results — it has become the world’s third-largest sports brand, trailing only Nike and Adidas. Its global expansion will certainly allow more audiences to experience ANTA’s product appeal — I’m not bragging, but many of their shoe designs are bolder than Nike’s, and the quality is even better than Nike’s👇

However, ANTA's weaknesses are equally clear—the product line and brand matrix is overly complex and chaotic, diluting brand recognition and creating unclear positioning. To this day, I still don't understand who is ANTA and what ANTA stands for. If ANTA hasn't clarified this domestically, imagine how challenging it will be to communicate with international consumers.

lululemon

China now serves as a major growth engine for lulu, offsetting slower sales in the Americas (lululemon)

As I mentioned in my previous posts, lulu's success in the Chinese market stems from establishing a near-monopoly product experience, fitting into the outdoor sports trend, and penetrating consumers outside big cities. However, there's one key point I missed—the rise in the status of Chinese women. This shift provided lululemon with a huge and growing target customer base, purchasing power, and cultural foundation.on.

(Perhaps many could argue that there are very few women among the top leadership at national political arena or state owned enterprises, but it is undeniable that in broader social spheres, women's status has been rising rapidly)

Big picture - the rise in Chinese women’s status is uneven—in coastal areas, women’s status is already very high, but inland regions are still in a very conservative state — this gives lululemon enormous room for continued growth in China— let’s see what’s next.

Among the many investors and business icons, Duan Yongping stands out as particularly unique. What makes his thinking so compelling is not just his investment success, but the dual perspective he offers, blending the “Entrepreneur” and the “Investor.” This is the most fundamental distinction between him and most investors.

A Dual Identity, A Unique Dimen…

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In an economic environment marked by slowing growth and intensifying competition, waiting until the first curve peaks to consider change is often too late. Charles Handy’s “Second Curve” theory emphasizes that companies must courageously forge new growth paths before their primary business reaches its zenith. This post explores how three Chinese consumer brands have proactively practiced this principle, successfully leaping to their new growth curve while their core businesses remained strong, thereby achieving resilient growth 👇👇

Atour — Turning Hotel Stays into a Lifestyle Business

• According to Atour Group’s Q2 2025 financial results, its retail business accounted for 39.1% of revenue, becoming its second-largest revenue pillar. The revenue of retail segment for the quarter reached ¥965 million RMB, a year-on-year increase of approximately 80%.

• The retial business of Atour has been divided our private lables into three product lines—ATOUR PLANET, SAVHE and Z2GO&CO., covering a wide range of products from sleep-related products, personal care to travel necessities.

• The success of its “Atour Planet” home products has significantly boosted the growth. To put this in perspective, here’s how Atour Planet stacks up against leading Chinese home textile brands in 2024:

  • Revenue Comparison: Luolai Home Fashion: ¥4.56 billion; Mercury Home Textiles: ¥4.2 billion; Fuanna: ¥3 billion; Mendale: ¥1.7 billion — [Atour Planet: ¥2.2 billion]

  • Gross Margin Comparison: Luolai: 48%; Fuanna: 56%; Mercury: 41.4%; Mendale: 40.3% — [Atour Planet: 50.7%], higher than many traditional brands, and even significantly higher than its own hotel management business at 35.9%.

Atour’s model is both powerful and elegant: guests build trust through firsthand experience and then bring that experience home. This goes far beyond cross-selling; it’s a profound form of scenario-based ecosystem building. It successfully transforms one-time accommodation services into a sustained, high-margin revenue stream, embedding the brand more deeply into users’ lives.

The retail business’s gross margin is notably higher than that of the core hotel operations, validating that the second curve brings not only scale growth but also a higher-quality profit model. Atour’s practice reveals a key insight: the most sophisticated second curve often starts by turning your most potent physical space into an immersive, tangible “product catalog.”

Sexy Tea (ChaYan) — When a Tea Brand Grows Beyond Drinks

• In 2024, Sexy Tea reported approximately 3 billion RMB in revenue, with a net profit of around 450 million RMB. By the end of 2024, the total number of stores under the “Sexy Tea brand portfolio” — had surpassed 1,000. Within this total, the flagship brand “Sexy Tea” itself operated more than 780 stores (as of November 2025), all of which adhere to a directly-operated model.

• In 2024, its retail sales, including snacks and merchandise, surpasssed ¥100 million, a 12-fold year-on-year increase, accounting for 30% of total revenue.

• The brand has initiated its overseas expansion by launching snack products on North American e-commerce platforms, a strategic choice that leverages a retail model better suited to its current capabilities than the complex logistics of its innovative beverage line.

Notably, it is highly likely that Sexy Tea is now already the world’s largest fully direct-operated freshly-made tea beverage brand.

While competitors expanded aggressively, Sexy Tea’s deep focus on its home city of Changsha was often mistaken for conservatism. In reality, it was conducting a masterclass in stealth innovation within its stronghold — when milk tea store growth hit a bottleneck and faced fierce competition, it didn’t choose to follow the crowd and frantically open stores like most other brands, but instead focused on direct-operated model and invest harshly on its core regional users and core products to create more complex and novel cross-category tea beverages, even unexpectedly entering the retail sector.

It proved two unique ideas: first, a company doesn’t need a nationwide presence – dominating a single city can create a powerful, formidable brand; second, taking product innovation to the extreme builds immunity to copying.

Its global expansion strategy is particularly noteworthy. While other brands burden themselves with heavy assets to open stores overseas, Sexy Tea opted for a light-asset e-commerce model, first selling its proven-successful snacks and cultural-creative products in North America. This move not only tests international waters at minimal cost and counters the proliferation of copycat stores abroad but also cleverly sidesteps the complex supply chain and certification challenges faced by made-to-order tea beverages expanding abroad.

As for Sexy Tea’s IPO plans, I haven’t done extensive research—but the truth is, whether it goes public or not, its status in the tea drink world remains unshaken. It is, in many ways, the creative epicenter of China’s tea beverage scene. Even Chagee, which has gained significant attention on the global stage, can be seen as a simplified, standardized iteration of Sexy Tea’s original vision.

Nongfu Spring — How the “Worst-Tasting Drink” Became a Billion-Dollar Business

• In the first half of 2025, Nongfu Spring reported a total revenue of over 25.6 billion RMB, representing a 15.6% year-on-year growth. Notably, revenue from its tea beverage segment surpassed 10 billion RMB, overtaking its traditional packaged water business to become the largest revenue contributor, with growth approaching 20%.

• Its once-criticized sugar-free tea, “Oriental Leaves,” now commands a 75% share of China’s sugar-free tea market. Founder Zhong Shanshan revealed that this business segment was unprofitable for its first six years.

Nongfu Spring’s success reflects a rigorous new-category expansion strategy. It identified the health trend early, patiently invested in consumer education and R&D, and leveraged its distribution network to scale at the critical moment. In a market obsessed with quick wins, it proved that sustainable competitive advantage comes from planting seeds long before the harvest.

The journey of “Oriental Leaves” from skepticism to market dominance highlights that finding the second curve requires not only strategic vision but also the financial discipline to withstand market noise – the courage to endure years of strategic losses to secure a future position of market leadership.

In a complex macroeconomic landscape, these Chinese brands have demonstrated remarkable resilience—not merely sustaining operations but achieving profitable growth. Their outperformance stems not from commoditized price competition or undisciplined expansion, but from deepening user monetization and executing strategic plays into logically adjacent, higher-margin segments.

This disciplined approach stands in sharp contrast to peers trapped in mediocre and tedious price war cycles. Their success offers a critical investment thesis: market saturation in China acts not as a barrier, but as a filter for identifying resilient, long-term compounders with durable competitive advantages.

Ultimately, sustainable value creation depends not on counting which curve you’re on, but on a company’s ability to systematically reinvent itself—resilient brands must have the institutional capacity to evolve while preserving their core brand identity and competitive moat.

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The Revolutions Reshaping China’s Tea Industry

China’s tea culture, ancient and revered, is undergoing a modern metamorphosis. Moving beyond sugary milk teas (I’m already tired of these unhealthy, cheap drinks), a new wave of brands is driving a sophisticated transformation. They are systematically applying the logic, aesthetics, and business models of the global coffee industry to reinvent tea for a new generation. This isn’t just a trend; it’s a fundamental restructuring of the sector 👇

ChaGee — The Giant’s Double Game: Globalization & Product Pivot

Fierce competition and sliding same-store sales in its domestic market are pushing Chagee, a leading Chinese milk tea chain, to aggressively pursue a dual strategy.

• Global Expansion: The company is reporting strong international growth, particularly in Southeast Asia and North America, as it seeks new frontiers for growth.

• Domestic Innovation: In the domestic market, Chagee is accelerating R&D investment and launching new products while exploring new categories such as low-caffeine series, regional customized recipes, fruit tea and fresh-brewed tea (so-called tea espresso)—searching for a “second growth curve” beyond its signature milk tea products.

ChaGee’s strategic pivot is a logical response to a saturated domestic market, with overseas expansion serving as a crucial release valve for growth. Its venture into fresh brewed tea is particularly telling — an attempt to migrate the proven playbook of the coffee industry to the tea sector — much like Starbucks’ store and product matrix.

However, ChaGee has not meaningfully updated its foundational core offerings. I’m very much looking forward to them surprising us with their core products — though the prolonged lack of updates makes me worry whether they’ve encountered some major difficulties internally.

MĀMĀHĒCHÁ — The “Reverse Growth” Model of a Regional Challenger

• “MĀMĀHĒCHÁ” (妈妈喝茶), a boutique tea brand that started in the lower-tier city of Zhenjiang, my lovely hometown😊, has now opened a location on Shanghai’s trendy Xiangyang South Road. The brand distinguished itself by applying coffee cocktail techniques to tea, creating innovative tea-based beverages.

• Its successful expansion follows a “test in tier-2/3 cities, scale in tier-1” model reminiscent of the mass-market giant Mixue Bingcheng’s strategy, but applied to a premium context.

Mama Hecha exemplifies a shrewd “reverse growth” strategy. By developing and refining its unique and creative product proposition in a lower-cost, less-saturated market, it avoided a costly head-on fight with giants in Shanghai or Beijing from day one. This approach allows a brand to achieve product-market fit, build a confident identity, and then enter major metropolitan areas with a proven concept and a compelling story.

Of course, MAMA HECHA’s success stems from their great products. Three years ago, when I first walked into their unassuming store and tried their drinks, the flavor and creative recipes amazed me. I told their owner and staff with certainty: your products can beat most stores across the country. When I met their team again in Shanghai’s new crowded storefront, we exchanged a knowing smile—good things don’t stay hidden; they just need a chance to be seen by more people.

BASAO — The Systematic Reinvention of Pure Tea

• BASAO, a premium tea brand from Xiamen, is taking a radical approach to China’s most traditional product: pure, unadulterated tea. It is methodically rebuilding the sensory appreciation system for Chinese tea by adopting the lexicon and logic of third-wave coffee. This includes a focus on single-origin traceability, precise processing methods, and a standardized brewing methodology akin to pour-over coffee.

BASAO and many local brands are tackling the core problem of traditional tea: opaque value and subjective quality assessment. By introducing coffee’s framework of flavor wheels, standardized parameters, and traceable provenance, BASAO gives an ancient product a modern, universal language. This demystifies high-quality tea and dramatically lowers the barrier to entry for curious, younger consumers raised on specialty coffee. Its mission is the most profound of the three: it’s not just selling a beverage—it’s fundamentally reconstructing the value proposition of pure tea for the 21st century within China version.

💎 The Big Picture: The “Coffee-fication” of Tea and a Looming Supply Chain Revolution

Collectively, ChaGee’s scale, Mama Hecha’s savvy, and BASAO’s depth paint a complete picture of an industry in transition. The common thread is the strategic migration of methodologies from coffee to tea.

This “coffee-fication” is transforming tea from an artisanal “craft” reliant on vague expertise into a systematic, scalable “science.” The well-established pillars of the global coffee industry—supply chain management, sensory education, retail experience, and global brand building—are being expertly adapted.

The most significant long-term impact will be upstream. This consumer-driven revolution, demanding transparency, quality, and consistency, will inevitably force a modernization of China’s fragmented and often opaque tea supply chain. The old ways of trading and storytelling will be supplanted by data-driven, quality-focused operations. In this fiercely competitive and innovative environment, the emergence of future global tea champions is not just possible—it is inevitable.

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Chinese Barista Sun Lei Claims 2nd Place at World Barista Championships (WBC) with “Sustainability” Stories

• Historic Achievement: Sun Lei secured second place at the 2025 World Barista Championship (WBC) in Milan, setting a new record for mainland Chinese contestants in this premier competition.

• Unique Competition Narrative: Sun Lei centered his presentation on Sustainability, exploring emotional connections and environmental stewardship through coffee. He featured beans from eco-conscious estates, such as a Panamanian Geisha cultivated using low-carbon methods like biochar soil enrichment and natural cold spring processing.

The WBC — that is, the World Barista Championship for espresso coffee — is perhaps the last major competition that Chinese competitors need to conquer. In roasting, latte art, and pour-over coffee, Chinese competitors have already claimed the world champion title more than once. I believe Sun Lei’s runner-up achievement will give all Chinese coffee professionals confidence that in the realm of espresso, Chinese can reach the pinnacle of the world as well.

BLACKSHEEP ESPRESSO Goes Global: Shanghai Roaster Lands in Tokyo’s Daikanyama

• Strategic Global Entry: Chinese specialty coffee brand BLACKSHEEP ESPRESSO opened its first overseas location in Daikanyama, an upscale Tokyo neighborhood known for its refined aesthetics.

• Core Competency: Precision Roasting: As one of Shanghai’s early advocates for in-house roasting, BLACKSHEEP’s strength lies in its masterful roasting techniques. The Tokyo store features a unique menu that prices drinks by coffee flavor profiles, directly demonstrating the brand’s confidence in its beans and roasting expertise.

• Philosophy-Driven Approach: This pricing strategy aims to engage deeply with Japan’s sophisticated coffee culture, communicating a brand philosophy centered on product purity and flavor integrity.

BLACKSHEEP’s expansion represents a high-stakes endeavor in value-based positioning. By entering the demanding Japanese market—home to some of the world’s most discerning coffee drinkers—the brand is subjecting its product, specifically its roasting prowess, to the ultimate test. Its flavor-based pricing acts as a bold educational tool, training consumers to appreciate the value that expert roasting imparts to each bean. This offers a new blueprint for Chinese coffee brands going global: success begins in the cup but is ultimately built on technical craftsmanship and unwavering standards.

In fact, the global expansion of Chinese specialty coffee is not limited to independent coffee shops opening overseas—Yunnan coffee beans and the creative specialty drinks that Chinese baristas excel at have long penetrated international markets. At this point, aside from cheap chains like Luckin, China’s specialty coffee sector, after years of fierce domestic competition, is now ready to face the test of global consumers.

Of course, while China’s coffee industry has developed rapidly, some fundamental industry challenges remain unresolved—especially regarding green bean resources. Currently, the overall quality of Yunnan green beans still falls short of traditional producing regions, and the best beans from those traditional regions are not yet under the control of Chinese buyers.

Lujiazui Coffee Festival’s 10th Edition: A Global Showcase of Roasting Excellence

• Unprecedented International Participation: The “International City Tour” segment featured 48 globally renowned roasters, including industry icons such as Denmark’s La Cabra, Japan’s Apollon’s Gold, Australia’s Stitch Coffee, the Netherlands’ Dak, and Thailand’s Brewlab.

• Champion Lineup and Dedicated Segments: The event gathered five world coffee champions with their own brands and introduced a first-time “Specialty Coffee Zone” for in-depth dialogue and tasting sessions with top international names.

• Cross-Industry Integration: The festival collaborated with 58 lifestyle brands and 36 cultural creative institutions, while its global coffee forum convened supply chain experts to discuss trends from seed to cup.

The tenth Lujiazui Coffee Festival has evolved from a local event into a key hub in the Asia-Pacific coffee landscape. Its ability to attract world-class roasters demonstrates the growing influence of Chinese consumers in the global market. The addition of specialized zones and expert forums signals a strategic shift from mass appeal to deep industry engagement and professional discourse, actively shaping China’s voice in the international coffee community.

Exposure to the world’s top specialty coffee players will make China’s specialty coffee market more vibrant, diverse, and dynamic. Through this process, Chinese coffee brands will continue to evolve—growing beyond budget chains like Luckin into powerhouses that exceed everyone’s expectations.

To understand the landscape of China’s specialty coffee scene, please read my previous articles 👇

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AMap Opens Fire — the “Street Sweeping List” Empowers Local Independent Restaurants

• In late September, AMap, an Alibaba subsidiary, announced free annual entry fees for all food and beverage merchants for one year. Merchants also receive traffic subsidies, dedicated customer service, and smart cashier systems.

• This initiative follows AMap’s launch of the “AMap Street Stars” list and the small local eatery support program, designed to increase restaurant supply within AMap’s ecosystem.

• By October 3, the AMap Street Stars list had attracted over 400 million users in just 23 days. Notably, many recommended restaurants are small mom-and-pop stores that were previously hard to find on Meituan.

This move by AMap introduces an intriguing new variable to the local services market.

It’s carving out a battlefield different from Meituan: rather than relying excessively on marketing and reviews for rankings, it uses new lists generated from AMap’s data advantages based on criteria like “repeatedly visited,” “specially traveled to,” and “loved by locals,” and even encourages users to discover those hidden gem shops where “the wine’s fragrance is trapped in deep alleys.” No doubly, for small shops that focus on culinary specialties rather than marketing budgets, this is undoubtedly a valuable empowerment, and it also makes consumer choices more diverse.

“Chicken Cutlet Brother” Goes Viral: A Phenomenon Under “Anti-Pre-Made Meal” Sentiment

• A street vendor has become China’s latest internet sensation over the last week. His name is Li Junyong (李俊勇), a 48-year-old owner of a stall selling fried chicken cutlets in Jingdezhen (景德镇) in Jiangxi Province.

• Li’s humor and genuine character have made him one of the hottest internet celebrities of the moment. His emphasis on food safety and use of fresh ingredients, combined with his affordable 6-yuan pricing, have led netizens to worry he isn’t making any profit—sparking strong support and resonance from audiences.

Chicken Cutlet Brother’s business model—characterized by low profit margins, fresh procurement, and maximum on-site emotional value—stands in stark contrast to Xibei’s high profit margins, pre-made meals, and aloof attitude.

Seriously—despite having no formal education or abundant capital, Chicken Cutlet Brother understands the essence of the restaurant business: good products and good service never go out of style.

“Anti-Pre-Made Meal Alliance” seeks to amplify its voice in public discourse but faces lack of support from authorities

• A grassroots restaurant industry organization—the “Anti-Pre-Made Meal Alliance”—was established in Beijing in 2024, attracting significant attention and participation from brick-and-mortar operators.

• However, after the pre-made meal controversy escalated, the government began intervening in interviews and publications about pre-made meals, frustrating a journalist who wanted to report in-depth on this alliance.

• Mr. Guo, the founder of the alliance, once wanted to hold an “anti-pre-made meal exhibition,” but some event organizers considered the matter quite sensitive and difficult to move forward with.

From an industry perspective, pre-made meals meet societal demands for efficiency, cost-effectiveness, and standardization—a trend difficult to reverse, as China’s restaurant chain penetration rate still lags far behind developed countries. The development level of China’s pre-made meal industry directly influences the global competitiveness of Chinese restaurant brands—blindly attacking pre-made meals is not wise.

In my opinion, the real significance of this pre-made meal controversy lies in pushing the market to rebalance “efficiency” and “quality.” This upheaval reminds us all — after years of being brainwashed by standardized chain stores and their aggressive marketing, consumers are growing weary and beginning to rediscover the value of independent shops. This will make China’s food industry more diverse, prosperous, and creative — at the end of the day, much of the innovation in food and beverage comes not from clumsy big brands, but from those hidden street-side shops.

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Shangou (闪购）🛍️

Alibaba's Shangou ( flash sale) business directly challenges Meituan's core operations

• Taobao Shangou, revamped in April, delivers items in under an hour. Alibaba's "instant commerce" revenue grew 12% year-on-year to 14.8 billion yuan. The service now handles 120 million orders at peak daily volume (averaging 80 million in August), serves 300 million monthly users (triple April's figures), and employs 2 million daily couriers.

• During August's earnings call, Jiang Fan, CEO of Alibaba's E-commerce Business Group, highlighted that instant commerce enhances overall Taobao engagement through its high-frequency usage. Alibaba forecasts these operations will generate an additional 1 trillion yuan in annualized GMV within the next three years.

• Alibaba continuously challenges Meituan with a campaign bringing small merchants to its instant commerce platform, attracting over 260 Tmall brands to join the service, Alibaba announced Tuesday, reported by SCMP.

According to a friend of mine, Taobao Shangou is not operated by the Ele.me’s team but by the e-commerce team — they've integrated Ele.me's delivery capacity capabilities from the food delivery sector into the e-commerce system. This aligns with Alibaba's strategy mentioned in the earnings call: using high-frequency food delivery to drive growth in their core e-commerce business. In other words, food delivery business serves merely as a hook tool, not their ultimate goal. Needless to say — Alibaba's true ambition clearly lies in instant commerce — creating a retail empire that breaks down the boundaries between e-commerce and the physical economy.

Regarding "instant commerce," I haven't tracked or researched this topic extensively. For those interested in learning more, I recommend reading the professional analysis by The Great Wall Street.

In my memory, Alibaba has been integrating goods supply chains since the e-commerce era — given its accumulated experience across all retail segments including e-commerce, offline retail, warehousing, logistics, and even payment, it's easy to imagine how naturally and smoothly Alibaba can integrate production resources into its instant retail landscape. In short — no competitor possesses a similar full industry chain deployment like Alibaba.

However, this doesn't mean Alibaba is guaranteed to win. Several competitors have significant potential in this space — for instance, Pinduoduo, despite its low profile, possesses formidable capabilities in instant retail that shouldn't be underestimated. Meituan, currently constrained by temporary anti-monopoly "sanctions," will likely mount a powerful counteroffensive once regulatory restrictions ease. In fact, the real competitors might still be operating below the radar, waiting for the right moment to strike.

Moreover, Alibaba currently still relies on subsidies to fuel its growth. It remains to be seen whether these business segments can effectively merge and create synergies that form a sustainable business cycle — a process that will require considerable time to verify.

Amap (高德) 🗺️

Amap, Alibaba's mapping product, has also joined the ranks of those challenging Meituan

• On September 10, Amap — one of the top five apps in China by user base — launched the "Street Stars" ranking —a direct challenge to Meituan's user review service Dianping. The core feature of this ranking is that it builds an evaluation model based on real travel behavior data from Amap users (such as in-store navigation numbers, repurchase rates, travel distance specifically to visit, etc.), and incorporates Alipay Sesame Credit Scores to give additional weight to reviews from high-credit users, combating fake orders and false reviews.

• Amap officially announced — the Street Stars feature received over 40 million visits on its first day online, surpassing Dianping's user base — according to Quest Mobile, Dianping's daily active users in August 2025 were only around 30 million.

• This initiative represents "a significant step towards Alibaba's vision for a super-app strategy," JPMorgan analysts noted in a Wednesday research report. "Amap is increasingly positioned as Alibaba's primary entry point for offline local services, functioning parallel to Taobao as the online traffic gateway."

Interesting — Amap appears to have identified a rare untapped opportunity in China's saturated internet market. Unlike Google Maps, which integrates business reviews into its local search ecosystem, China lacks a comparable service. This approach differs significantly from Meituan (China's equivalent of Yelp), which filters reviews using quality-based algorithms, limiting consumer perspectives when evaluating physical businesses.

Moreover, Meituan's monopolistic position and excessive commercialization of its review ranking system have sparked widespread criticism. Industry professionals and consumers alike often joke that Meituan ratings should be interpreted inversely—establishments with scores above 4.6 have likely purchased advertising or used fake reviews, while those around 4.3 tend to be the genuinely authentic, high-quality businesses. This leaves Amap's "non-commercialized" ranking system strategically positioned to fulfill consumers' demand for authentic rankings.

Think large — Amap's location-based service capabilities give Alibaba a unique competitive edge in the instant retail war. No rival can match this advantage—Baidu Maps lacks e-commerce and food delivery integration, JD has no mapping platform, and Meituan has neither e-commerce capabilities nor mapping services.

Jiang Fan (蒋凡） 👨

Jiang Fan, CEO of the core e-commerce business, is viewed as the key person behind Alibaba's current comeback

• After losing his partnership status due to an affair scandal, Jiang was reassigned from Taobao-Tmall to overseas markets in late 2021—widely seen as an exile. Yet he transformed Alibaba's international business into its fastest-growing segment. By July 2023, he rejoined the partnership, and in November 2024 became the first executive to lead both domestic and international e-commerce operations simultaneously.

• In 2024, Alibaba restructured with a "1+6+N" model, making Local Life a major business unit. By June 2025, Ele.me and Fliggy joined the E-commerce Business Group under Jiang Fan, who quickly unified Alibaba's e-commerce operations from "distributed" to "integrated." This strategic shift countered competitors like Pinduoduo and Meituan while marking Jiang's career revival.

Although almost all local media portray Jiang Fan as a savior, this is clearly not the whole story. You cannot expect a large organization to change overnight because of one professional manager—that's unrealistic.

Let’s be real — Jiang is not the soul of Alibaba — and Alibaba's fate ultimately relates to only one person — the man who calls himself "风清扬" — only he could magically drive such decisive focus changes, invest unlimited resources in few businesses, bring back the controversial leader — Jiang Fan — without internal resistance.

In short, Alibaba hasn't really changed — it has simply returned to its normal track.

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Since recovering from gallbladder issues, I've become extremely conscious of my diet and calorie intake. This naturally sparked my interest in the grocery business — as it directly affects my daily food sources.

From my observations, China's domestic grocery chains are rapidly evolving. They're moving away from traditional large supermarkets model plagued by complex distribution channels with multiple middlemen and disorganized product management. Instead, they're entering a quality-focused era featuring streamlined store operations, emphasis on fresh and safe ingredients, higher overall quality, and supply chain control that enables more reasonable pricing.

Clearly, Walmart, Costco, Aldi, and the legendary regional enterprise PDL deserve credit for this transformation. Their presence has forced the previously stagnant domestic retail industry to reinvent itself 👇

HEMA (Freshippo) 🦛🦛🦛

HEMA NB renamed to “Super Deal (超盒算) NB”, while warehouse-style stores shutdown

• Alibaba's Freshippo is closing its warehouse-style X Member stores, ending its Costco / Sam's Club copycat strategy. This shows challenges for Chinese retailers with U.S. membership models requiring robust supply chains and loyal customers. Analysts cite cultural barriers: Chinese consumers resist membership fees and prefer shopping locally.

• On August 29, Hema NB — the budget-friendly version of Hema Fresh — was officially renamed "Super Deal NB" to reinforce its position as an affordable community grocery brand, according to a report by 36Kr.

• HEMA NB's H1 2025 turnover reached RMB 8 billion with double-digit YOY growth. Store count doubled to nearly 300 in six months, mainly in East China's urban areas. From April 2024 to March 2025, HEMA's GMV exceeded RMB 75 billion, achieving positive adjusted EBITA for the first time in a full year.

HEMA currently has two main store types: HEMA Fresh and HEMA (Super Deal) NB.

HEMA Fresh combines elements of Aldi (China version) and PDL, targeting white-collar workers with busy lifestyles. It offers high-quality, conveniently packaged ingredients while providing on-site processing of fresh items—including BBQ, fried rice, prepared foods, and seafood. Essentially, it's a restaurant-supermarket hybrid that leverages dining experiences to drive retail sales 👇.

HEMA NB is a community supermarket — focusing on low prices — the quality cannot compare with Freshippo Fresh, but it is indeed inexpensive. Moreover, these stores are located in remote areas, beneath residential buildings that mainstream commercial districts don't reach, making them popular among ordinary people and the elderly.

The renaming of HEMA NB, on one hand, is certainly aimed at making the positioning of the two store types clearer to avoid consumer confusion. On the other hand, it indicates that HEMA NB's performance must be quite good, qualifying it to become a separate sub-brand.

Happy Moneky 🐒🐒🐒

Meituan launches offline supermarket Happy Monkey to compete with HEMA

• Meituan launched its "Happy Monkey" discount supermarket in Hangzhou on August 29th, offering just over 1,000 carefully selected products targeting essential local neighborhoods needs.

• The company plans to open 1,000 stores eventually, with 2025 focused on optimizing the business model.

• A Happy Monkey spokesperson explained: "Each product undergoes multiple layers of selection and strict quality inspection, ensuring products are fresh, safe, and offer excellent value through our scientific quality control system and proprietary supply chain."

Clearly, this business is positioned to compete with HEMA — — particularly their neighborhood business. Though I haven't visited yet, based on the images, it appears to emphasize quality more than HEMA NB.

Meituan's other grocery card is Little Elephant Supermarket — it's Meituan's front-of-store warehouse operation where users order online and pick up offline — it appears their offline large store model might be launching soon.

Meituan's other grocery card is "Little Elephant Supermarket 小象超市"— it's Meituan's front warehouse business where users order online and pick up offline — well, it is reported that their physical large store model will likely be implemented soon to compete with HEMA.

Yonghui (永辉超市) 🩸🩸🩸

Yonghui continues to learn from PDL, but still struggles with store closures and ongoing losses

• Yonghui's 2025 H1 report: Revenue fell to RMB 29.95 billion (-20.73% YoY), while net profit plunged to RMB -241 million (-187.64% YoY) compared to last year's RMB 275 million yuan profit.

• Revenue declined due to 2024's strategic transformation closing loss-making stores. Despite post-restructuring stores showing significant growth, couldn't offset the revenue gap from closures.

• Net profit loss due to (1) Sales volume declined; (2) Supply chain reforms with supplier / product upgrades caused short-term gross profit decline (3) Closure of 227 unprofitable stores incurred lease compensation, inventory clearance, and asset write-off costs; (4) Advantage Solutions stock fair value change resulted in 184M yuan loss.

Personally, I'm actually optimistic about Yonghui — I've visited Yonghui in different cities like Chengdu, Chongqing, Wuhan, Nanjing, and Guiyang, and business is good everywhere, some stores are even packed, performing way better than their traditional model.

The current losses appear to be growing pains during the reform period — after all, the proportion of adjusted stores is still quite low, not enough to impact the overall performance.

Lianhua (联华超市) 😏😏😏

Lianhua Supermarket's self-revolution shows initial results

• Shanghai Lianhua Supermarket announced last year plans to renovate over 20 Century Lianhua stores by year-end, using the Zhonghuan store as a model. Through streamlining SKUs, increasing private label product ratios, and direct sourcing to reduce costs, they have already achieved significant results.

• Lianhua indicates an expected net profit of RMB25.0 million to RMB 55.0 million for the first half of 2025, a significant turnaround from a net loss of RMB 54.809 million in the same period of 2024.

Lianhua has surprised me when I shopped there — they've clearly been inspired by PDL as well as Yonghui.

RT-Mart (大润发) 📈📈📈

Just after being sold by Alibaba, RT-Mart successfully turned losses into profits

• In fiscal year 2024, RT-Mart's parent company Sun Art Retail (HK6808) reported a loss of 1.668 billion yuan, compared to a profit of RMB78 million in fiscal year 2023 – a staggering decline of over 1000%.

• In January, Alibaba sold its stake in Sun Art Retail (RT-Mart's operator) to DCP Capital for HKD13.1 billion (USD1.6 billion) – about 25% of its original investment. This divestment follows Alibaba's strategy to shed non-core assets and focus on its main business.

• Sun Art Retail's fiscal year 2025 results show revenue of RMB 71.55 billion with 386 million net profit, successfully turning previous losses into gains. Their network now spans 505 stores across 207 cities.

Interesting — from the rapid turnaround of Lianhua and RT-Mart, two seemingly "outdated" companies, we can see that supermarket transformation isn't as difficult as imagined. This is especially true since PDL already serves as a local demonstration case, providing a methodology that can be followed.

Yet why has Yonghui's transformation been so tortuous (with no positive signs in current financial reports), while RT-Mart was nearly dead before being sold?

The answer likely lies in the complex web of supply chain relationships and hidden grey interests within the industry.

Corruption may have infested procurement processes in various forms and requires time to eliminate. Reform faces strong resistance unless led by someone who intimately understands internal dynamics and commands respect.

Take Ye Guofu (叶国富) for example—though he is the founder of MINISO (Yonghui's current largest shareholder) with clear transformation goals, he still hasn't found a suitable CEO for Yonghui. This leadership vacuum shows Ye Guofu lacks sufficient talent support during the reform process — explaining why Yonghui's reform must proceed gradually, taking careful steps rather than making bold leaps.

In contrast, transformation happens much more efficiently when leaders are cultivated internally—as seen with Sun Art's new CEO coming from the original system, HEMA's CEO emerging through internal competition, or Lianhua's new CEO also being developed from within the company.

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In late June, I underwent emergency surgery to remove my gallbladder, which was packed with gallstones.

While I was profoundly grateful that China’s national health insurance covered the bulk of the cost—slashing my bill from 20,000 RMB to just over 1,000 — almost free —the searing pain and grueling recovery left a permanent mark. As someone with a low pain tolerance, I suffered intensely, and even painkillers offered little relief.

This painful experience forced a brutal introspection. I knew my recent diet, heavy on sugary drinks and fatty foods, was a primary culprit. My illness became a catalyst for change, compelling me to overhaul my eating habits for good.

Naturally, I began scrutinizing the food and beverage industry through a new, health-conscious lens. So, when a major food safety debate around milk tea erupted last week, it caught my full attention.

According to an investigation by NetEase Finance, professional lab tests on drinks from eight major brands—including giants Mixue, HeyTea, and ChaGee —revealed alarming findings: excessively high sugar content and the presence of trans fatty acids, a lipid consumers have increasingly rejected 👇.

The backlash on Chinese social media was swift. Concern and frustration erupted almost immediately on Xiaohongshu, where users flooded the site with critical comments. Here's a look at what people are saying online 👇

“Some products' sugar content exceeds the daily recommended limit. Responsible brands shouldn't make such mistakes, even if it's technically legal."

“Brands that push 'natural' and 'healthy' concepts are misleading consumers. This advertising leads people to drink these products like water, when in reality, they can't be considered 100% healthy. It's reminiscent of how 'intelligent autonomous driving' can misleadingly make drivers think they can sleep at the wheel."

Brands like ChaGee and HeyTea were quick to respond, stating that their products comply with national standards for trans fats. But NetEase fired back decisively, arguing that the cited standards apply to pre-packaged foods, not freshly-made beverages 👇.

Notably, no brand has responded the core issue of sky-high sugar levels. I guess they see little upside in investing effort on this point; although sugar-free options are available for most products now, brands can only control the amount of syrup added rather than all sugar content. When the sugar comes from other ingredients, they simply have no control over its levels 👇

In truth, such debates are not new.

The health profile of milk tea has been under a microscope for years, from the early scandals about "non-dairy creamer" to more recent controversies over ingredients like ChaGee's "Non-hydrogenated Base Milk (冰勃朗)”. This persistent scrutiny and debate has, admittedly, forced some positive changes — for instance, most brands have now reduced or eliminated traditional non-dairy creamer.

You might wonder why coffee doesn't spark much controversy—it's because the natural flavor and fat of milk and coffee beans are enough to make a cup of Americano or latte sufficiently enjoyable. Milk tea, on the other hand, tells a different story. Even though modern Chinese milk tea brands have upgraded their recipes, switching to fresh milk and whole-leaf tea as their new popular base ingredients, the reality is this: made with only tea and milk, it would still taste ultimately rather plain. Its irresistible flavor and rich mouthfeel actually come from additional elements.

This is the inherent paradox the milk tea industry cannot escape. It’s also the question we must repeatedly ask ourselves — how many cups of this concoction can we truly justify drinking per day?

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Moutai 🍶

Moutai reported its weakest six-month growth in years, said Bloomberg

• First-half revenue increased 9.2% from a year earlier to 91.09 billion yuan ($12.7 billion), while net income climbed 8.9% to 45.4 billion yuan, the company reported Tuesday. Those are the slowest semiannual increases since at least 2016.

• The wholesale price of Moutai's flagship product—Feitian—continues to decline, hitting record lows as consumer spending drops amid economic uncertainty and government restrictions on officials' drinking. (According to Bloomberg Intelligence, Feitian's 2024 and 2025 wholesale prices have fallen 16-17% year-to-date.)

• However, Moutai's earnings have actually been largely protected from wholesale price fluctuations. This is because Moutai sells its baijiu to distributors at a fixed price of 1,169 yuan per 500 milliliter bottle.

• According to baijiu expert Cai Xuefei, government consumption has plummeted from over 40% in 2012 to less than 1% in 2025. Business events, family gatherings, and personal use now dominate. Meanwhile, Moutai has increased its appeal to younger demographics, with young customers now representing 45% of their base.

While Moutai's record-slow growth and falling wholesale prices reflect very real headwinds from economic softness and official alcohol restrictions, this may not be a story of terminal decline. Instead, it could be the painful but necessary transition of a legendary brand.

The current market pressure is forcing Moutai to evolve in positive ways: the decreasing retail price is making the product more accessible and broadening its consumer base (clearly, the frequency with which I've been drinking Moutai with friends has significantly increased in the past two years), particularly among younger generations, helping to offset consumption challenges from existing customer groups.

Additionally, the official alcohol ban campaign presents a historic opportunity for Moutai—long considered essential for bribery and formal official banquets—to shed its negative political associations and reshape both its brand image and Chinese baijiu culture as a whole for a more sustainable future — just as I experienced in Guiyang, Moutai has many possibilities beyond its negative context.

HILEFIT（乐刻）🏋️

HILEFIT Fitness surpasses 2000 locations, leading all Chinese fitness brands

• Gym scams are common in China, where consumers who lack fitness knowledge are often duped into purchasing extremely long-term gym memberships or training courses. Many gyms become obsessed with this model while neglecting operational costs, leading to financial collapse. Recently, SCMP reported that a man was even inexplicably tricked into paying for 300-year gym memberships.

• In 2015, HILEFIT entered the fitness market with its "monthly payment + no sales pitch" model, boldly fighting against mainstream gyms were relying on "prepaid annual cards + personal training packages" to monetize users. Leveraging its internet attributes and lightweight operations, as of July 2025, it has over 2000 locations across 40 cities nationwide, with more than 14 million registered users, becoming China's largest fitness chain brand.

• China's fitness industry is expected to cross 100 billion yuan in 2026 (US$13.8 billion), compared with 70.6 billion in 2021, according to Statista.

HILEFIT's core advantage lies in its precise targeting of long-standing pain points in the fitness industry (excessive sales pitches and annual membership commitments), attracting massive user numbers through its disruptive "no sales pitch" and "monthly payment" model with extreme value for money. Its deeper competitive strength comes from a powerful digital middle platform system, achieving refined management and high efficiency in operations, building a scale barrier that's difficult to replicate.

Currently, HILEFIT firmly holds the position as China's market leader by size, ranking among the global first-tier chains in terms of location count alongside international giants like Anytime Fitness and Planet Fitness.

Inevitably, HILEFIT also faces threat from the peers — another brand called Zhongtian（中田) Fitness, which differentiates itself with "community-based locations + unlimited monthly personal training sessions," also targets 2000 locations this year and is closing the gap with HILEFIT .

JAM (JD, Alibaba and Meituan ) 🛵

China's tech giants' battle for instant delivery market leads to significant profit declines

• JD: Net profit halved by 50.8%, new business losses reached 14.8 billion yuan, marketing expenses surged 127.6% year-on-year to 27 billion yuan.

• Alibaba: Non-GAAP net profit decreased by 18%, sales and marketing expenses reached 53.2 billion yuan, free cash flow showed a net outflow of 18.8 billion yuan, but instant commerce drove a 25% increase in e-commerce user activity.

• Meituan: net profit plummeted 89% year-on-year, core local commerce operating profit margin dropped sharply from 25.1% to 5.7%, sales and marketing expenses reached 22.5 billion yuan, up 51.8% year-on-year.

What appears to be a brutal "World War II" in food delivery is, in reality, a new battle for the next massive increment of growth: the instant retail market. The ultimate winners and losers remain unclear, but this conflict will likely reshape the future of Chinese retail.

I envision the endgame of this war as a highly decentralized commerce landscape. Much like TikTok revolutionized the relationship between users and content through its algorithm—delivering more engaging, precisely matched videos and empowering a long tail of creators—this might also be the future of instant retail: a decentralized retail platform with TikTok-like mechanisms, dynamically connecting consumers with products and services (including countless SKUs) based on their location and real-time needs. By then, pure online retailers can distribute their goods to physical stores; omnichannel brands can place products in front warehouses; non-top-tier merchants can also reach more users by optimizing their products and promotion strategies...

Ultimately, this fierce battle may usher us into a new world of instant abundance.

Here are other notable brand updates currently on my radar 👇

Apple 📱 » In mid-August, Apple finally landed on Xiaohongshu / Xiaohongshu

In China, Apple has consistently maintained a restrained marketing approach, always being the last brand to adopt new marketing trends even amid intense competition. Will this approach still be effective this time?

Yun-Gui-Chuan Bistros » Trendy 'Yun-Gui-Chuan' Bistros under fire from experts for their fusion concept / China Daily

Seriously? Has this expert ever visited these restaurants to experience the ambiance and dishes firsthand? Has he actually spoken to the customers?

For consumers in eastern China, Yunnan, Guizhou, and Sichuan are three relatively unfamiliar regions to begin with, let alone their cuisines—especially the culinary styles of Yunnan and Guizhou. Before the cultural knowledge of these regions becomes more widely recognized, consumers simply won’t care whether the food is authentically from Yunnan, Guizhou, or Sichuan. If these dining brands can successfully combine elements from all three regions and develop a new category of cuisine that resonates with customers, consumers will undoubtedly embrace it.

LXJ 🍱(老乡鸡) » In July, LXJ submitted its prospectus to Hong Kong, initiating a new application after the previous submission expired on Jan this year / Caijing

LXJ is a fast-food enterprise operating over 1500 stores nationwide, regarded as the company with the most potential to become the "Chinese McDonald's."

Puma 👟 » Puma to be put up for sale, will Li-Ning or Anta be the buyers? / Jiemian

Let's wait and see...

Easyhome 🪑 » Wang Linpeng — The founder of China's largest home furnishing retail chain— Easyhome — died suddenly after being released from anti-corruption detention / Caixin

Public opinion on Wang's death is sharply divided👇

💀 Some view it as a fitting end for a corrupt entrepreneur who accumulated vast wealth through questionable means. They argue his suicide merely helped him escape what would likely have been a life sentence.

☀️ Others consider such harsh treatment of entrepreneurs unfair, seeing these business leaders as products of their era's corrupt environment rather than its architects. From this perspective, Wang and similar entrepreneurs made valuable contributions to China's economic progress and innovation, making his death a societal loss. These advocates believe such individuals should have the opportunity to redeem themselves by continuing to contribute to China's development.

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Yunnan CoE ☕️

Qiupo Estate's washed Batian coffee bean won Yunnan's Cup of Excellence (CoE) Pilot auction, setting a domestic price record

• On May 15th, Gems of Yunnan CoE Pilot ( 云南卓越杯试点赛) successfully concluded. From 36 competing beans, the international jury selected 19 award-winning beans scoring 87 points or higher. Finally, the top 10 specialty beans were chosen for offline auction to global buyers, with 100% of the proceeds going directly back to coffee farmers.

• Qiupo Estate's washed Batian won first place, fetching an auction price of 13,150 yuan per kilogram, setting a record for the highest auction price of domestically produced green coffee beans.

China's coffee industry has developed at an extraordinary pace. The evolution spans the entire value chain—from chain stores and independent cafes to roasting expertise and barista skills—and now includes major advances in domestic coffee agriculture. Through this comprehensive transformation, China is evolving from a coffee-naive market into a potential coffee powerhouse

( Of course, Yunnan's soil and environmental conditions aren't ideal for coffee cultivation compared to world-class growing regions — this makes improving their bean quality particularly challenging and slow).

This illustrates why some global brands can't succeed with superficial "localization" strategies anymore—by the time they understand China's rapid pace of development, it's already too late, similar to what happened in the electric vehicle industry.

PS: To better understand updated Chinese coffee dynamics, I recommend an insightful analysis of China's coffee market from The Great Wall Street regarding Starbucks' predicament 👇

The Great Wall Street - Investing in China

Why Starbucks Isn’t Even Trying to Fight the Coffee War in China

Notes from the Frontlines of China’s Coffee Price Meltdown…

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a year ago · 16 likes · 5 comments · The Great Wall Street

Auntea Jenny (沪上阿姨）🥤

Auntea Jenny, another Chinese bubble tea chain, hits $1.7 Billion on Hong Kong IPO

• Despite China's bubble tea market being saturated with competitors engaged in fierce price wars, it has produced yet another billionaire couple. In May, Auntea Jenny launched its Hong Kong IPO, raising HK$273 million ($35 million) at HK$113.12 per share — the top of its price range, according to Bloomberg.

• The company echoes some of these concerns in the prospectus, saying it faces increasingly intense competition with other leading players in various aspects of their business. However, the founder believes their product offering can help differentiate them from rivals, and venturing into markets outside China has become an inevitable choice for their further growth.

Be careful — the wave of bubble tea brands going public does not suggest a thriving industry. In fact, the bubble tea sector shows signs of growth anxiety—it faces more intense competition than coffee while experiencing significantly slower growth rates.

Among these bubble tea brands, only three currently interest me—low-end: Mixue (advantages in supply chain, cost, and scale), mid-range: Cha Gee (emphasis on culture, space, and design), and a high-end option not-yet-listed : HeyTea (product innovation and control of fresh ingredients). As for the others, in my view, their business models and product design are quite homogeneous — to stand out, they'll need to keep radical innovation in this competitive landscape.

Jiangsu Football City League （苏超联赛 / JSCL）⚽️

Jiangsu Amateur Football League Takes Off in Popularity Craze

• The JSCL kicked off on May 10th, bringing together amateur teams from 13 prefecture-level cities. According to Xinhua, over 500 players aged between 16 and 40 come from various occupations—including students, teachers, delivery workers, and programmers—with each city fielding one representative team.

• The league has gained popularity comparable to the viral Guizhou Village Super League (村超) and Village Basketball Association (村BA) from two years ago, drawing over 10,000 spectators per match—exceeding professional league attendance.

• Many fans view JSCL as a domestic alternative to the UEFA Champions League (UCL), saying "While the Chinese Professional League suffers from match-fixing and backroom dealings, the amateur league in Jiangsu represents pure city-versus-city competition for genuine glory—embedded with true sporting spirit."

Unlike provinces centered on few megacities, Jiangsu’s thirteen fiscally autonomous cities foster balanced growth, breeding intense civic pride. This ignites intercity rivalries that naturally spill onto football pitches—where matches become cathartic celebrations of local identity.

Yet such grassroots success cannot obscure Chinese professional leagues' stark gap compared to elite league brands like the UEFA Champions League or NBA. Treating these amateur competitions as substitutes for top-tier leagues is more like a comforting lie we tell ourselves.

But this does not mean that Chinese football and basketball leagues are without hope - such grassroots momentum subtly signals a larger ambition. If the authorities can strategically consolidate these fragmented grassroots programs, it will form critical nodes in a national talent development matrix—transcending mere entertainment to become engines for mass youth engagement and elite athlete identification.

20 # Midea vs Xiaomi 🏡

Midea's CEO publicly claimed that Xiaomi's expansion into home appliances is a mistake

• Following introduction of the "Human-Vehicle-Home" strategic ecosystem and MiMo LLM, Lei Jun showcased unprecedented chip breakthroughs and strongly emphasized the importance of home appliances in Xiaomi's strategic roadmap at their recent product launch event.

• Midea's CEO Fang Hongbo criticized Xiaomi's entry into all of Midea's market segments, while claiming any new competitor has already lost strategically. "Xiaomi has entered all of our segments.." Fang said, "I take Xiaomi seriously on a tactical level, but strategically, I'm not afraid of Xiaomi's entry"

Far from being a mistake, Xiaomi's strategy is completely sound. Home appliances represent a crucial touchpoint in daily life and form an essential part of Xiaomi's hardware-software ecosystem with its exceptional price-to-performance advantage. Midea's announcement seems more like a helpless complaint — they appear to have not produced any exciting innovations for a long time.

Here are other notable brand updates currently on my radar:

Momenta 🚗 🤖» Uber and Momenta announce strategic agreement for Robotaxi deployment in May / Uber

Momenta is currently recognized in the industry as a first-tier autonomous driving technology provider alongside Huawei, with its strength lying in algorithms — a company worth watching.

Quchashan (去茶山) » ⛰️🥤A regional fresh-made tea brand from Guizhou suddenly becomes a hit in Shanghai / 36Kr

Quchashan is Guizhou's signature fresh-made tea brand, which focuses on exploring local ingredients from Yunnan and Guizhou. I really like their product concept, as discovering unique materials and ingredients is crucial for standing out in a fiercely competitive market. However, with only 63 stores nationwide as of May, their scale remains small and poses limited threat to major bubble tea chains.

Moutai 🍶 » Moutai's overseas market revenue grew 37.53% YoY, according to their Q1'25 result / Yicai

To truly earn global respect, Moutai must reinvent Chinese alcohol culture.

Ludao (鹿岛) 👖🩲👕 » A brand that truly rivals UNIQLO in quality, yet costs less, has finally emerged / Genbridge

Unlike Bananin (蕉内), which has long been perceived as China's UNIQLO alternative yet offers increasingly expensive products with poor quality, Ludao truly fills this role with their T-shirts priced at ¥19.9 and reasonably good quality.

JD 🥡🛵 » Beijing summons JD, Meituan, and Eleme over excessive competition in food delivery / SCMP

As mentioned in my previous post, Meituan's monopolistic position isn't something the CCP wants to see. This is why I see the tripartite talks essentially functioned as a market share distribution meeting.

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China's coffee market has shown remarkable growth in recent years, despite economic headwinds - consumption jumped 57% from 2019 to 2023, far outpacing the 4% yearly growth in …

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The rapid development of China's coffee industry stems not only from venture capital investment, Luckin's sweet drinks model, and Yunnan's unique green beans, but also from the extraordinary contributions of industry professionals like Peng Jinyang. 

Since 2019, Chinese coffee professionals have won four prestigious championships on the global stage in the last six years —and if not for the lock-down of the pandemic, they would likely have secured even more victories.

2019 - Du Jianing (杜嘉宁), World Brewers Cup Champion

2023 - Liang Fan (梁凡), World Latte Art Champion

2024 - Liu Taiyang (刘太阳), World Coffee Roasting Champion

2025 - Peng Jinyang (彭近洋), World Brewers Cup Champion

Notably, these coffee champions all competed independently, without government support. They are either independent coffee brand founders or baristas who earned their spot on the world stage by advancing through multiple rounds of competitions in China. So, their victories represent more than personal achievements—they demonstrate the rising standards across China's entire coffee industry.

Like his predecessors, Peng Jinyang's victory will boost confidence in China's coffee industry, inspiring more talent to pursue research and elevate technical standards — a progression likely to heighten market competition, creating challenges for brands lacking both professional expertise (e.g., roasting techniques) and local market understanding (e.g., sensory preferences).

In fact, before winning the championship, Peng Jinyang had already established China's most influential specialty coffee roaster brand — Captain George — dominating Taobao's specialty coffee bean sales rankings. If you'd like to try his coffee, you can visit his stores in Guiyang or Shanghai, or buy directly through Taobao 👇.

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Peak Human 🌍

In this week's Economist, I read a review of Johan Norberg's "Peak Human"—a critique of Trump—which left a deep impression on me.

Through Norberg's historical case studies—from Song China's technological golden age fueled by meritocratic governance and global trade, to Athenian and Roman prosperity driven by open markets and intellectual diversity—he distills a timeless truth: civilizations thrive when embracing exchange, dissent, and innovation. Conversely, Ming isolationism halved living standards within generations, while Rome’s decline followed currency debasement and ideological dogmatism.

This historical perspective demands vigilance about our present circumstances. The extraordinary global prosperity that emerged after 1990 is now threatened by rising protectionism. The MAGA movement's isolationist stance, echoes one of history's most serious errors—building "walls" instead of embracing "openness" on the path to prosperity

As Norberg observes: Decline is not destiny but decision. This analysis aligns with 's concerns about Trump's ambiguous agenda—while some await his strategic vision behind the “wall”, his intentions remain opaque—one cannot help but worry about the repetition of tragic history. Yet the core challenge now transcends any single leader: Will societies heed history's warning that closed systems breed stagnation and collective pains?

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Tourism ✈️

Chinese holiday consumer spending shows modest growth

• The May Day holiday, one of China's longest, serves as a key indicator of consumer confidence. During the May Day holiday, Chinese travelers' spending increased 8% year-on-year to ¥180.27 billion ($24.92 billion). However, spending remained below pre-pandemic levels, and the country's services activity grew at its slowest pace in seven months this April, said Reuters.

• To stimulate holiday spending, Chinese localities integrated local attractions with various initiatives. These included streamlined entry procedures (such as visa-free policies) for international tourists, optimized tax refunds with "immediate refunds upon purchase," tourism subsidies through culture and tourism vouchers, and special events featuring music festivals, themed homestays, and digital experiences.

What the data cannot show is that China's travel experience is improving.

During my ongoing travels to Chengdu, Chongqing, Wuhan, and Guiyang, what impressed me most was how each city strives to cultivate its unique identity. They work diligently to uncover their local culture, resources, and distinctive assets to create authentic tourism experiences—a refreshing departure from the homogeneous, artificial, and sometimes deceptive tourist attractions of the past.

However, I don't recommend visiting popular cities during the May Day holiday. Not only are accommodation and flight prices significantly higher than usual, but the overwhelming crowds will severely diminish your experience. Unless you don't mind queuing an hour for bubble tea or spending an entire day stuck halfway up a mountain with throngs of people.

Starbucks ☕️

Starbucks' Q2'25 same-store sales plateaued, offering temporary relief from previous declines

• Starbucks China comparable store sales were flat, driven by a 4% increase in comparable transactions, offset by a 4% decline in average ticket.

• The chain, once synonymous with coffee in China, fell to 14 per cent of the market in 2024 from 34 per cent in 2019, according to Euromonitor International. Same-store sales in China dropped 8 per cent in fiscal 2024, according to the company’s financial report, said SCMP.

• According to Canyan, a food and beverage data provider, 66,920 coffee shops opened in China—the world's second-largest economy—over the past year. After accounting for closures, this resulted in a net increase of nearly 12,000 stores.

As I mentioned in my previous post, since Luckin has narrowed its price war and Starbucks' products are improving - at least some products can be considered "tasty" to me, which is reflected in their China region performance - they've finally halted their same-store sales declining trend after four consecutive quarters, though this comes at the cost of a lower average ticket price.

However, Starbucks China's challenges are far from over—halting the decline is just the first step. The company's product issues still persist, and they remain serious.

Take Starbucks' recent bizarre coffee creation — the mixed berry Americano, which is practically poison. If it weren't for kindly pointing it out, I wouldn't have believed Starbucks could make such garbage. How could such a terrible coffee end up on the menu? Don't they do consumer testing?

This reflects serious gaps in Starbucks' product quality control stability. I don't expect Starbucks to innovate like Luckin does with a new product every three days on average—as I mentioned in my previous post, because Luckin's model is almost impossible to replicate. But at least don't feed me "poison"!

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