Core Viewpoint - The article discusses the current challenges and strategies of the tea brand Bawang Chaji, highlighting its rapid expansion, declining profitability, and the need for product innovation to maintain market relevance [4][10][40]. Group 1: Financial Performance - Bawang Chaji reported a global store count of 7,338 and a quarterly GMV of 7.93 billion yuan, but faced a net profit decline of 38.5% year-on-year [4]. - The net profit margin decreased from 18.3% to 12.4%, while the operating profit margin fell from 22.4% to 14.2% [4]. - GMV in the Greater China region dropped by 6.2% to 7.63 billion yuan, with average monthly GMV per store declining by 28.3% to 378,500 yuan [5]. Group 2: Product and Innovation Strategy - Bawang Chaji launched a new product, the Boya Juexian Flower Fragrance, after a long wait, but consumer feedback was mixed [2]. - The company aims to enhance product offerings and has plans for a new menu and special tea products, while also maintaining existing popular items [6]. - The brand's reliance on the successful Boya Juexian product, which has generated over 12.5 billion cups sold, poses a challenge for future innovation [25][27]. Group 3: Franchise and Market Dynamics - Franchisees are experiencing profit pressures due to increased competition and a price war in the tea market, with some reporting longer payback periods for their investments [15][19]. - Bawang Chaji has introduced a new revenue-sharing model for franchisees, transitioning from fixed fees to a commission-based structure to improve profitability [17][19]. - The company is facing challenges in securing prime locations for new stores, leading to a competitive environment among franchisees [16]. Group 4: Organizational Changes and Leadership - The arrival of CFO Huang Hongfei marks a significant shift towards a more structured and disciplined financial approach, aiming for a public listing and improved financial models [37]. - The company is undergoing organizational adjustments to balance traditional management with modern operational practices, focusing on product innovation and team collaboration [38][39]. - Founder Zhang Junjie is adapting to the challenges of scaling the business while maintaining a strong focus on product quality and brand identity [40][41].

Core Viewpoint - The new-style tea beverage market is undergoing a new round of differentiation, with brands sacrificing profits for market share amid intense competition, while leading companies are shifting towards deeper strategic battles [1][2]. Group 1: Company Performance - Bawang Chaji, the only overseas-listed tea beverage leader, recently released its second quarterly report post-IPO. Despite a decline in revenue and net profit in Q3, the company showed solid performance in store expansion, reduced closure rates, overseas market growth, robust cash flow, and a surge in membership numbers [3]. - The overseas GMV of Bawang Chaji reached over 300 million yuan in Q3, with a continuous year-on-year growth exceeding 75% for two consecutive quarters. The company opened 54 new stores overseas and entered the Philippine and Vietnamese markets, with over 200 stores in Malaysia [5][6]. Group 2: Strategic Intent - The CFO of Bawang Chaji emphasized that the overseas market has become an "important growth engine" for the company, reflecting a strategic shift as domestic market competition intensifies [6]. - The company aims to achieve long-term value through three key factors: product localization, careful store location and density control, and patience in organizational and capital allocation [7][8][9]. Group 3: Domestic Market Challenges - In the domestic market, competition is fierce, and Bawang Chaji's revenue declined by approximately 9.4% year-on-year in Q3, with same-store GMV showing significant decline due to the company's restrained participation in the delivery subsidy war [11][12]. - The company is focusing on three defensive strategies: enhancing product quality and menu upgrades, improving store experience to convert traffic into brand loyalty, and maintaining a stable franchise ecosystem to avoid systemic collapse [13]. Group 4: Long-term Strategy - Bawang Chaji's approach is not merely to survive but to actively position itself by leveraging brand premium, overseas replication, scalability, and cash flow management for long-term sustainability [15].

Core Viewpoint - The financial report for Q3 2025 from Bawang Chaji highlights significant growth in overseas markets, with overseas GMV reaching 303 million yuan, a year-on-year increase of 75.3%. However, domestic GMV decreased to 7.6292 billion yuan compared to 8.1301 billion yuan in the same period of 2024, indicating challenges in the domestic market due to competition and slowed expansion [1]. Group 1: Market Competition and Strategy - Bawang Chaji has chosen not to participate in the ongoing food delivery wars, which has led to a unique position compared to other brands that have heavily invested in this area without clear winners emerging. The company aims to maintain stability and prepare for long-term competition by refining product development and store models [2][4]. - The company’s decision not to engage in the food delivery battle is debated among franchisees, with some believing it may lead to missed opportunities, while others argue that it protects profit margins from the high costs associated with delivery subsidies [5][6]. - The company has maintained a low store closure rate of 0.3% over three consecutive quarters, significantly lower than the industry average of 2%-10%, indicating healthy operational performance [8]. Group 2: New Business Model and Product Development - Starting January 1, 2026, Bawang Chaji will implement a new business model that includes significant discounts on raw materials and a shift from a supply chain model to a GMV revenue-sharing model, which aims to align the interests of the brand and franchisees [9][10]. - The company has been cautious in launching new products, focusing on maintaining brand integrity and operational efficiency. Recent product iterations, such as the new floral version of the popular "Boya Juexian," reflect this strategy [12][14]. - Despite a slower pace in national product launches, regional innovations have been successful, with new products gaining popularity in specific markets, indicating a strategic focus on localized offerings [15][17]. Group 3: Long-term Vision and Market Positioning - The new tea beverage market is characterized by rapid growth, with over 415,000 stores nationwide and a high chain rate of 55.2%. Bawang Chaji's strategy to remain calm and focus on long-term value rather than short-term gains positions it well for future competition [20][22]. - Franchisees have shown loyalty to Bawang Chaji, with many reporting stable or increasing sales, particularly in regions where the brand has established a strong presence. This loyalty is attributed to the brand's focus on product quality and value [22]. - The company is committed to enhancing its strategic approach across brand, product, experience, and channel dimensions, which, combined with the new business model, is expected to drive significant improvements in store performance [23].

Core Viewpoint - The article discusses the strategic decisions made by the company BaWang Tea Ji in response to market challenges, particularly its choice to avoid participating in the intense food delivery competition, focusing instead on long-term stability and product development [3][4][32]. Financial Performance - In Q3 2025, BaWang Tea Ji reported an overseas GMV of 303 million yuan, a year-on-year increase of 75.3%, while domestic GMV decreased to 7.6292 billion yuan from 8.1301 billion yuan in the same period of 2024 [3]. Market Strategy - The company opted not to engage in the food delivery battle, which has led to significant financial strain on many competitors, with major platforms spending over 44 billion yuan in Q3 without clear winners emerging [4][9]. - BaWang Tea Ji's decision to refrain from the food delivery competition is seen as a protective measure for its franchisees, ensuring their profitability amidst rising costs associated with delivery services [8][10]. Franchisee Perspective - Franchisees have mixed opinions on the company's decision not to participate in the food delivery competition, with some believing it may lead to missed opportunities, while others appreciate the focus on maintaining profitability [7][8]. - The company has communicated that engaging in the food delivery battle would directly impact franchisee earnings, as the profit model heavily relies on in-store sales rather than delivery [8][9]. New Business Model - Starting January 1, 2026, BaWang Tea Ji plans to implement a new business model that includes significant discounts on raw materials and a shift from a supply chain model to a GMV sharing model, which aims to align the interests of the brand and franchisees [11][12]. - This new model is expected to enhance collaboration with franchisees, allowing for shared risks and potentially higher overall GMV [12][13]. Product Development - The company has been cautious with new product launches, focusing on maintaining brand integrity and operational efficiency, with a notable product iteration occurring in November 2025 [15][18]. - Despite a slower pace in national product launches, regional innovations have been successful, indicating a strategic focus on localized market needs [19][21]. Long-term Vision - BaWang Tea Ji is positioning itself as a stable player in the market, emphasizing the importance of product development, supply chain strength, and long-term profitability over short-term gains [32][31]. - The company aims to enhance its strategic framework across brand, product, experience, and channel dimensions, preparing for future market challenges [33][34].