While most tea brands in China are racing to expand, Molly Tea is taking a different approach. Founded three years ago and known for its jasmine tea, Molly Tea is prioritizing deliberate growth over rapid expansion. This strategy has raised both admiration and skepticism, especially after securing RMB 100 million (USD 14 million) in new funding. While many of its competitors have scaled up aggressively, Molly Tea operates just 785 stores, with a modest target of 1,100–1,200 locations by the year’s end.
According to Zhang Bochung, founder of Molly Tea, the brand is committed to maintaining high standards across its stores, believing that brick-and-mortar businesses need time to develop properly. This mindset contrasts with other brands in China’s rapidly expanding tea market, which now boasts nearly half a million stores. “Molly Tea never chased rapid expansion. Scale is important for brand-building, but our priority has always been quality,” Zhang told 36Kr in an interview.
Despite receiving more than 10,000 franchise applications last year, Molly Tea accepted just over 100 partners. This cautious approach, centered on mid- to high-end positioning in first- and second-tier cities, is a calculated gamble in a market where price wars and chain homogenization are becoming more common.
Molly Tea’s focus on jasmine tea has helped the brand stand out in an industry packed with fruit-tea-heavy menus. Jasmine tea, once a staple in traditional Chinese tea culture, has seen renewed popularity through Molly Tea’s modern take. The brand has also expanded its menu to include floral milk teas, featuring scents like gardenia, magnolia, and osmanthus. However, relying heavily on a specific niche comes with its risks—especially in a market where trends shift quickly.
Molly Tea’s financials are solid, with projected revenue growth of nearly 400% this year, partly due to its focus on smaller, more cost-efficient stores. By shrinking the average store size from 60 to 35 square meters, the brand has reduced overhead and increased profitability.
However, maintaining quality in a franchise-heavy business model could be a long-term challenge. Franchise-based businesses often struggle with consistency, especially in an industry that relies heavily on fresh ingredients and precise preparation methods. Additionally, with coffee giants like Luckin Coffee and Starbucks entering the milk tea market, Molly Tea will need to defend its premium positioning.
While many in the industry are driven by constant innovation and fast growth, Molly Tea is betting on a different formula—slow and steady. The brand’s cautious expansion, focus on quality, and niche in jasmine tea make it a unique player in China’s bustling tea market. But with consumer preferences constantly evolving, the real test will be whether Molly Tea can sustain its appeal in the long run.
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