China’s Chagee is taking a profit hit to pursue quality at scale. It could pay off

After opening more than 1,000 new stores in 2025, Chagee’s move to take on rival discounters is risky, but necessary

With more than 7,500 stores globally and a Nasdaq stock exchange listing under its belt, Shanghai-based Chagee is one of the largest and most recognisable tea chains in the world. But behind rising revenues and international expansion, there are signs that trouble is brewing.

The high-end operator, which specialises in premium, fresh-leaf tea beverages, saw profits plummet 52% in 2025 due to the cost associated with opening more than 1,000 new stores.

This year, the premium chain has deliberately reined in outlet growth – opening just 78 net new stores in the first quarter to reach 7,531 locations.

However, despite curbing expansion, Chagee’s profits remain under significant pressure.