Lemony Snacks’ rise to prominence has to do with a piece of counterintuitive financing, with the ever-intensifying standardization of everything, and with the Original Leaf Fresh Milk Tea dividend period. But in the end, it is still related to the founder, John Zhang.
Author Shi Jiaxiang Editor Liu Jing
Source Dark Surge Waves
Finally, the capital market waited for the long overdue listing of Bawang Chaji. on March 6, 2025, the Securities and Exchange Commission (SEC) issued a document approving the listing of Bawang Chaji in the U.S. for the record.
Over the past eight years, this milk tea store from the southwest corner of the start, has become a 6500 stores Close to the listing of the ready-made tea drinks business, especially in the past two years, the number of stores of the king of tea Ji fully doubled several times, GMV is dozens of times to hundreds of times.
A celebrated consumer goods company is often born with an industry-changing product For example, Starbucks founder Schultz introduced the espresso latte in his 6th store Bubble Mart Wang Ning signed the exclusive rights to Molly in 2016 As for Hi-Tea, it’s the succulent grape that’s been copied by countless rivals.
This is not the case with Lemony Tea Ji. Though it also has a super hit selling 230 million cups a year of Burgundy. But judging from the product profile, it’s hardly an exclusive original of Bully.
The real meteoric rise of Bajaj Tea Ji stems from the comprehensive triumph of a modern consumer company. A consumer investor’s comment is that since ancient times, traffic and product can not be both, Nexue and Xicha wanted to catch did not catch, tea face chose not to catch. And the king is the only catch .
This may have something to do with the financing of the sky, perhaps with the strengthening of the standardization of everything, and perhaps with the original leaf fresh milk tea bonus period. But in the final analysis, it is still related to the founder, John Zhang.
The public is happy to see the hero of the enterprise, Zhang Junjie now seems to be at least the kingpin. The last consumer investor said this about him.
A good friend of Zhang Junjie said, four years ago, the king of only one hundred stores stores only 10 to ten thousand yuan, people on the Zhang Junjie to become the Eastern Starbucks statement full of contempt, 99 out of 100 people do not believe. But today, the company has knotted Starbucks as a potential rival.
A famous investor once said when comparing the business environments of China and Japan that Japan believes in “each to his own” and that innovation comes from large corporations, so there is almost no VC market, but China believes more in kings and lords, and would rather have seeds than men.
The story of the king’s concubine is one of those stories.
A decisive financing
fate was rewritten at the end of 2020.
At this time, Bawang Tea Ji has actually started to make a profit. According to relevant sources, the GMV of Bawang Tea Ji that year exceeded 200 million yuan, and the net profit exceeded ten million yuan. Every month, they call me back to Kunming to get money. A former core layer of Bawang Tea Ji recalled.
Differences occurred at this time. Zhang Junjie revealed on a private occasion years later that some shareholders thought that Bawang only needed to expand for one more year, so they could sell their shares or recruit professional managers to manage, but he insisted on investing the profits to continue to expand.
At that time, Bawang Chaji actually had four partners, the shares were equally divided, and there was no absolute controller. On the occasion mentioned above, James Zhang mentioned that the other shareholders offered $50 million in valuation to buy out his shares, while he offered more than twice as much as the other parties to recover the others’ shares. This meant tens of millions of dollars in capital exposure.
At this time, the king of tea Ji said big, said small is not small There are more than 200 stores in the country, but mainly concentrated in Yunnan, Guizhou and Sichuan, the monthly sales of a single store is less than 200,000 yuan, a far cry from the tea.
XVC appeared at this time. This is an early stage VC founded in 2016.
At this time, China’s new tea drinks financing war has been carried out to the middle and late Xicha valuation of more than 16 billion yuan Tea Yan also by the dollar fund crazy, faster people step Naixue will soon be listed in Hong Kong.
But for XVC, whether it is Xicha, Cha Yan, Gu Ming or Cha Ba Dao, these companies have exceeded the range of VCs, and Bajing is one of the few companies still in the early stages of financing.
XVC recalled in a later public material, Bawang Tea Ji in the Kunming area at that time, the recognition is already the highest. And when the density of stores increased, Bawang’s same-store sales not only did not decline, but still grew at a double-digit rate This means that its business can be replicated.
XVC held a quick vote after the study and decided to help James Zhang buy back the shares held by others and completely replace the existing management team.
According to Dark Surge Waves, Zhang expected a post-investment valuation of $700 million, and XVC didn’t return the favor. Once you want to invest, you don’t care too much. If the final rise to 70 billion yuan, then 500 million yuan or 700 million yuan makes no difference. One of the investors of the king of tea Ji said.
In the end, XVC’s investment amounted to more than $100 million, which was the largest amount invested in the first round since their establishment. xVC then raised another round of bets, and now it holds nearly 20% of the shares of Bawang. xvc founder hu boyu once said, this one company IPO, we can put all the money invested in the history of the money, and come back to 2 times or so.
Here is an episode, in the meeting with investors, Zhang Junjie even proposed to leave the king of tea Ji single dry a milk tea called Milk Tea General mobilization priced slightly higher than the honey snow ice city of low-priced milk tea brand.
One of Bawang’s early executives recalled to Dark Waves that it was a collective decision that led to John Zhang’s decision to stay. In hindsight, it may have been the best choice for the others to leave, or else we wouldn’t be where we are today.
Fosun also invested in this round. Another VC, William Baker, came in a few months later. At that time, the king of stores just a few dozen more, but the valuation is twice as expensive as the previous round.
Capital, indeed, is one of the keys to Bawang Cha Ji against all odds. In retrospect, the timing of the king’s money is full of Timeless and geographical advantage The end of 2020 is the eve of the peak of consumer investment is about to fall, and it got the last wave of money in the market when the money is still cheap. A consumer investor said.
Of course, more importantly, people and harmony Only John Zhang, who had the ambition to open in 100 countries at that time, dared to promise VCs the scale.
Expansion, expansion at all costs
Grass and food has arrived, to get more than 300 million yuan of financing, the king of tea, quickly began to expand.
The first stop was Chengdu. In June 2021, Bajaj moved from Kunming to Chengdu, taking the best location in Chengdu, Chunxi Road, at a million-dollar annual rent. The management team grew from a few people to 200.
People close to John Zhang said that during this period, there are many companies and brands with money in their hands, but none of them are expanding greatly, and all of them are mainly conservative, but he is the only one who has the most courage to spend money. In the conservative offline catering industry, this is not a common thinking.
At that time, the king of the internal repeatedly mentioned, no scale can not be on the table, no matter how to 1000, which was identified as the end of 2022 to achieve the goal.
But the process is not smooth sailing. For example, shortly after the opening of the store on Chunxi Road, sales at the old stores in Yunnan and Guangxi once declined. The first store in Xi’an was chosen in Datang Nocturnal City, but the foot traffic and display space also fell short of expectations. Song Wei, a pseudonym who served as general manager of the Shaanxi branch of Bawang Chaji, told Dark Surge Waves that Bawang had opened five stores in Xi’an in a short period of time, but the market had almost no awareness of it and had been losing money.
However, this did not let the king stop the expansion of the footsteps. 2021 around, in order to attract franchisees, the king of tea Ji to each province 100 exemption from the franchise fee brand royalties and give a set of equipment, decoration costs are only half of the current.
Headquarters to prepare the investment manual contains from the initial communication with customers to the final signing of the full details of the signing of the contract, the requirements as far as possible to take photos copy of the circle of friends, so that the intention of customers will have a sense of urgency when they see it, and If it is the old franchisee to open the store again, the copy should be prominent, only to the new customers have persuasive power.
However, a perennial mixer in the tea beverage industry emphasized to us that even in the accelerated store opening period, Lemony has not lowered the requirements for the location of the store.
A person from Bajaj cited an example For example, if two stores are only 10 meters apart, Bajaj will do whatever it takes to take the one with better exposure. An early investment brochure shows that the king asked not to open street stores affecting the brand, and not in the corners of shopping malls, underground and three or four floors above the location of the store.
The effects of the expansion were immediate. According to Dark Surge Waves, in 2021, Lemony Snacks doubled its GMV from the previous year, but went from profit to loss, with a loss of more than $10 million. Bawang attempted to raise another round of financing at that time, but was unsuccessful.
By the end of 2022, Bawang entered nine central and eastern provinces, including Zhejiang Jiangsu Guangdong, and also entered the first-tier cities of Guangzhou and Shenzhen tea drinking towns from the previous second to fifth-tier cities.
Here is a background is, tea face at this time the wind is actually more prosperous, but this company did not expand rapidly. Tea face made out of the dividends, was occupied by the bully. A person close to the tea face straight.
An investor who had seen Bajang early on said that one of his doubts was why the market would accept Bajang’s average price, which was three or four dollars higher than that of Cha Yan. Perhaps the only explanation is that consumer demand for a cup of raw leaf fresh milk tea is higher than the perception of price.
Bajaj’s aggressive strategy quickly captured the market that Tea Face had cultivated for eight years.
It can be replicated
A typical day in the life of a Bawang Cha Ji backroom clerk looks like this At 8:30 a.m., turn on the tea maker and pour in 60 grams of jasmine snow buds, press out 2,100 milliliters of hot water, and simmer the water at 80 degrees for seven and a half minutes, then pour in 750 grams of ice cubes, stirring until they melt and scraping the foam, you will get about 3 liters of jasmine snow buds tea broth. This tea broth is the biggest secret of the Lemony Snacks, the raw material used to make Bo Ya Jie Si.
According to the rough calculation of the ingredient list, one large cup of Bao Ya Jie Qin labeled with ice and light sugar uses 280ml of jasmine snow bud tea broth, and one cup of tea broth can make about 10 cups. At peak times, it will run out in three or four minutes.
The perception of a number of Bao Wang Chaji store clerks is that of the ten cups sold, at least six cups are Bao Ya Jiexian.In the year 2023, Bao Ya Jiexian sold 230 million cups of Hi-Tea’s succulent grapes bestseller for six years and sold a total of 150 million cups .
Tea drink industry has a saying that there is only three years of glory period, but a Bawang Tea Ji employees believe that Bawang has come out of this curse. Internally, Zhang Junjie often hangs on the words, we are not doing the mountains and seas, is doing the milk tea world of rice and noodles. A piece of data shows that at least after 2019, the top five SKUs of Bawang Tea Ji always accounted for more than 50 .
But the truth is that the menu of Bawang has not always been so simple. For example, they had borrowed from Naixue’s tea and made ou bao.Around 2018, Bully Tea Ji, which had just stepped out of Kunming, had used a high salary and even options to hire a master of ou bao.
The high labor cost of the European bread, the short selling cycle, the day is not sold out is loss. One of the early executives told Dark Waves that the strategy of “Ou Bao” ended up with a loss of millions of yuan. This also made him realize that there is no life in following.
Stores are also closing one after another, and finally contracted back to Yunnan, Guizhou and Guangxi, when the brand power can not, can only radiate to the next two provinces. The executive said.
Fruit tea, is accompanied by Bawang tea Ji longer products. Bawang was established in the second year, the main fruit tea tea and Nai Xue is still a popular fried chicken. But Ba Wang gradually realized that compared with the milk tea industry, the fresh fruit supply chain is too complicated. For example, in October 2019, when Bawang Tea Ji was on line with a strawberry tea, the East China and Guangxi regions delayed the on-line time due to climate reasons.
In order to solve this problem, the above early executives said that the king also tried to unify the purchase of fruits for national delivery, and later found that the loss was more than the profit This is known as the most stupid decision ever made. Under the helpless, the king of tea Ji had to allow franchisees to pick their own outside fresh fruit, but the problem is still not solved fruit sweetness and taste can not be standardized.
In order to solve a similar problem, the tea has used the production area relay method, in Anhui, Yunnan, Jiangsu and other places to purchase, to ensure that fresh strawberries can be used throughout the year. The fact that succulent grapes have sold 150 million cups is also partly related to the fact that grapes are easy to grow and there is a constant crop throughout the seasons.
In several new tea drinks in the fruit procurement scale of the largest ancient tea, is to build warehouses and then have stores, but the price is that it has not been able to expand to most northern cities, including Beijing.
Zhang Junjie has revealed in a private occasion, the first year of creation, the king of the original leaves of fresh milk tea accounted for only 30, the next year is 60, until 2020, the original leaves of fresh milk tea accounted for more than 90. But even this year, the new 20 products, still more than half of the fruit tea.
After the introduction of capital, the king of tea Ji only a small amount of fruit tea, but to cut them out completely, is still a no less difficult decision than the price of tea, although from the data has accounted for 90, but cut the fruit tea, the franchisee’s income will be less than 10, and the franchisee’s own purchases there is still room for profit, a king of investors told the dark surging Waves.
A former core layer of the King of Tea Ji memories summarize, almost all the problems occurred in the tea industry they have happened, only we did not die.
In September 2021, before the opening of the store on Chunxi Road in Chengdu, the slogans of the public number of the King of Tea Ji is tea, fruit and sweet mouth fresh, and then became the original leaves of fresh milk tea, drink out of the true flavor of tea. By the second half of 2023, James Zhang cut the fruit tea to only lemon coconut and other seasonal fruit is not prominent. Between more than two years, Lemony Snack’s single-store sales almost quadrupled.
This is an important dividing line. It was also the beginning of the standardization that Bajaj would later be mentioned time and again. John Zhang realized early on that the higher the degree of human involvement, the worse the standardization of the product will be.
At the end of 2022, Bawang Cha Ji introduced automatic tea-making machines, which simplified the work of sales clerks to just scanning a code and the machine would automatically dispense cups, which could be handed directly to customers unless additional heating was required. The average time to dispense a cup was reduced to 8 seconds. On the issue of standardization, Tea Face didn’t introduce tea-making machines until 2023, and cautiously chose a semi-automatic model.
For a founder with ambitions of scale, efficiency may be more important than taste.
On the first day of business, Lemony Tea provided customers with tea ice bricks specially made from tea broth to ensure that the melting of the ice wouldn’t affect the taste of the tea itself, but later stopped providing them. An investor has asked why, the other party’s answer is that the initial stability of the tea drink is not enough to ensure the quality of tea ice, and now the stability is very high, there is no need .
John Zhang once mentioned in an interview in 2021 The only supply chain that Lemony Snacks will do is tea.
In some counterparts left and right, backed by a large single product to achieve the standardization of the king of tea Ji, only need to expand expansion and expansion.
Uncopyable
Bawang Cha Ji 2023 annual meeting, the last round of the lottery has been completed, the suited and booted Zhang Junjie suddenly asked the stage, enough? Employees cheered and shouted Not enough!
Draw 100 more 10,000! John Zhang shouted.
In a way, such even somewhat well-behaved scene is the current side of this company.
The past two years, is the stage of the more rapid expansion of the king of tea Ji. A Shanghai franchisee told us in 2024 that their store’s daily turnover exceeded 30,000 yuan. When the first Bawang Tea Ji opened in Shanghai, Dianping did not take care of it, or James Zhang himself called Dianping to ask why it was not on the list.
A supervisor in charge of the technical front-end at Bawang told Dark Surge Waves that after the business explosion in 2023, the original IT department could no longer support business development, and the staff size had grown by a large percentage, so he couldn’t even recognize all the people under him.
Such a growth myth, attracted a lot of envy. But it’s not easy to replicate.
Followers envy the king, large single product has become the consensus of the original leaf milk tea, if you do not understand this, may not be a player in the industry. A tea drink CEO who focuses on the original leaf fresh milk tea said. Jasmine milk white, which is directly named after the best-selling single product, is the best example.
But it is impossible to blindly learn from the king. The above tea drink brand has a multi-ingredient roasted fairy grass, sales accounted for more than 10 , because and the base tea strategy does not match, the internal want to take the product off the shelves, but not want to adjust can be adjusted Brand growth needs such a diversion paragraph.
The tea drink CEO also said that even if the sales of fruit tea may not be able to win over the base tea, but the needs of the audience still can not be ignored, still in the summer on the new fruit tea, winter push strawberry.
The present is no longer the 2017 of the start of the Lemony Snacks, relying on the franchise system, it has occupied the best position in each province. And according to people close to John Zhang revealed to Dark Surge Waves, Bawang’s marketing investment in 2024 is a magnitude you have not seen in the Chinese tea drink market .
But even with all this momentum, some consumer investors don’t think they’re missing out on Lemony. Because in front of coffee or tea, he is still more optimistic about the former. A view held by many in the tea industry is that when buying a cup of coffee, consumers’ expectations are set, but with tea drinks they tend to prefer the new to the old.
Lemony Snacks is not more than five new products a year, because James Zhang believes that not innovating can maximize profits, so that consumers remember your strengths. A person in the know revealed. In comparison, in the first nine months of 2023, Guming launched 107 new models, not to mention that the coffee industry is also pursuing the trend Ruixing launched 102 new products in the same year.
There are also people close to John Zhang mentioned to us, the price will be the death of the bully For example, the morning coffee afternoon tea slogan Ruixing killed the light milk tea track in a familiar posture, throwing 100 million cups of 9 9 yuan gently jasmine Also, for example, sweet la la a named Qingfeng Malbai original leaf fresh milk tea, with half the price of a replica of the Burgundy tooth extinguished strings.
After the start of the year 2025, the expansion of the bully stores finally began to slow down.
History has turned the page.
In December 2023, Lemony Snacks once again marched into Changsha and decided to collide head-on with the hard core of Tea Face. This is also the key task of Bawang in 2024. A middle-level person from Bawang once told us that this is a battle for the industry and a battle for dignity.
However, at least for the time being, it seems that Tea Face is still resistant to the fight and continues to be encrypted. The newly-opened Baron’s Tea Geezer still has very few people, even though its location and size are superior to Tea Face.
While Bajaj moved its headquarters to a modern, single-family building in Shanghai, Cha Yan, which is located in Changsha’s Zhongtian Plaza and trying to cram more people into its offices, is still more of a traditional catering company. The square’s first floor is home to Huaqiang North’s cell phone repair shop, and only the third, fourth and top floors are part of Cha Yan’s offices. At lunchtime, employees often have to climb the stairs because they can’t fit in the elevator.
In the early years, the king of tea Ji to expand outward, the biggest worry is that the tea face will be released to join. And the king went to each city is under the banner of Pingtai Cha Yan. In an early BP, it positioned itself as a nationalized layout, fast jamming As for Tea Face, it was a cautiously expanding regional brand.
Many people have advised Lv Liang to expand to first-tier cities, but he always said that his internal training is not enough. A Tea Face employee said, Tea Face to the field to expand stores, to first send a regional manager to visit, and the regional manager is basically from the store clerk store manager big store manager gradually grow up, this process may take more than five years. Before the official announcement of Suzhou in July 2024, Tea Face has not opened up new cities for a year.
Company strategy, ultimately, is a mapping of the founder’s character. Nie Yunchen, the founder of Xicha, is a demanding product manager Lv Liang is similarly dedicated enough to the product. A Tea Face employee said that Lv Liang still spends most of his time on the product, often staying in the R&D department until 10:00 11:00 p.m. But in some people’s opinion, Zhang Liang is not a product manager. But in the opinion of some people, Zhang Junjie is thinking more about the business model and is not so picky about taste.
The goals of the two companies can also reveal the differences between the two founders Lemony’s slogan is Starbucks of the East, while Lv Liang prefers Nestle, which has been alive for 159 years.
Character determines destiny. The character of the founder determines the fate of the company. Many investors have interpreted James Zhang as perhaps being more eager to succeed because he once had nothing to lose, more interested in making things bigger, and more concerned about whether he could sell Bertram’s Strings to 100 countries.
This is a multiple choice question, a person close to the tea face has repeatedly told us, tea face choose to eat one bite at a time, but it does not mean that the rice in the pot must be yours, because someone snatched the pot away.
In fact, Tea Face has been close to fully owning the pot countless times. An early executive remembers that in the second half of 2019, social media platforms rumored that Tea Face was going to liberalize franchising, and he received at least 40 messages that day, internal external, all of which were sent to me to say that Tea Face was going to franchise. At the end of 2020, Tea Face’s directly-managed store landed in Wuhan, followed by a flash store that appeared in Shenzhen Wenheyou.
But even when Tea Face sought external financing in early 2022, Lv Liang was still adamant that franchising could not guarantee service.
At that time, not long after the move to Chengdu, the king has just blown the horn of expansion and even in the profit to loss loss of more than ten million yuan of difficult times. If the tea face to keep Changsha direct, open the franchise in the country, relying on a few yuan lower than the king of the unit price, even in the king’s hometown of Yunnan, but also enough to kill, to the present 10,000 stores are possible. The executives said, this move is not necessarily good or bad for the tea face, but it must be fatal to the king.
Now history has turned the page. He said.
END
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