Can Cha Yan Yue Se Break Into Shenzhen? Can the New Tea Beverage Market Overcome Its Stock Dilemma?

In April 2026, Tea Yan Yue Se, a brand with years of regional experience, will officially enter Shenzhen’s core business district with dual store openings. This marks the brand’s first presence in a first-tier city. Having previously focused on defending its core market in Hunan and expanding to a few emerging first-tier cities, Tea Yan Yue Se’s move southward is not only a strategic attempt to break through development bottlenecks but also a reflection of the industry entering a stock competition era, where brands seek new growth.

Will this delayed expansion into first-tier cities help Tea Yan Yue Se overcome its growth challenges? Can it provide new solutions for the stagnating new tea beverage industry?

Why insist on going south?

An inevitable choice driven by domestic pressure and exploration obstacles

Tea Yan Yue Se’s southward expansion is not a sudden impulse but a passive response to multiple development pressures. As a tea beverage brand rooted in Hunan, it has already expanded beyond Changsha, opening over a thousand directly operated stores in cities like Wuhan, Nanjing, and Chongqing. However, growth in its core market has become increasingly constrained, with competition in Changsha intensifying. After the entry of Bawang Chaji into Hunan in early 2024, which quickly opened over 60 stores, and the emergence of similar brands like Danma Tea House and Yulian Tea House, Tea Yan Yue Se, which insists on direct operations, faces serious market share pressure.

To break the deadlock, the brand has tried multiple approaches: creating sub-brands like Yuan Yang Coffee and Good Mocha Lemon, covering various consumption scenarios such as coffee, lemon tea, and bars; and in July 2025, testing the North American market via e-commerce to expand overseas. However, these efforts have not generated significant growth. Sub-brands heavily rely on the main brand’s traffic, with many stores concentrated in Changsha near the flagship, making independent expansion difficult. Overseas efforts have only involved snack foods and cultural products, without launching core tea drinks, representing superficial exploration that fails to build genuine brand influence.

Industry insiders comment: “Tea Yan Yue Se’s cross-border and overseas attempts are still confined by regional brand thinking. Sub-brands closely follow the main brand, and overseas only do light assets like peripherals. They are reluctant to step out of their comfort zone. Under continuous domestic market pressure, entering first-tier cities has become one of their few ways to break through.” Shenzhen, as a core city in the Greater Bay Area, attracts many young professionals and women—the key consumer groups for new tea drinks. Guangdong, with 86,700 tea beverage stores, ranks first nationwide, and its strong tea-drinking culture makes Shenzhen a strategic choice for Tea Yan Yue Se’s expansion.

Is Shenzhen a good target?

A dual challenge of a saturated market and operational pressures

Tea Yan Yue Se’s move into Shenzhen seems to choose the right track but faces many obstacles. The city’s tea market is already a red ocean, with established brands like Heytea and Nayuki, which have long dominated first-tier cities and high-end markets, as well as local brands like Jasmine Milk White that deeply understand regional tastes. Competition for differentiation and customer loyalty has become fierce.

Meanwhile, the brand will face operational and cost challenges. Maintaining a direct operation model in Shenzhen, a first-tier city, means dealing with high rents and labor costs in prime commercial areas, significantly increasing operating expenses. Balancing costs and pricing will be a critical issue.

Several restaurant industry analysts say: “Tea Yan Yue Se’s direct model can sustain in new first-tier cities, but in Shenzhen, the cost per store could increase by over 30%. Their existing pricing and profit models will need to be restructured, which is the biggest challenge.”

Additionally, whether the brand’s traditional Chinese-style tea positioning can resonate with Shenzhen’s diverse and open consumer tastes remains to be seen. Whether its classic products will be accepted locally also requires market validation. The supply chain system previously built for emerging first-tier cities must adapt to the fast-paced operations of a first-tier city. Supply chain stability and delivery efficiency will directly impact the brand experience.

Behind Tea Yan Yue Se’s Shenzhen expansion lies the broader dilemma facing the entire new tea beverage industry. According to iiMedia Research, China’s new Chinese-style tea market growth rate plummeted from 136% in 2018 to an estimated 3.1% in 2026, shifting industry focus from incremental growth to stock competition.

Industry experts note: “The era when new tea brands could rely on viral hits to stand out is over. Homogeneity, innovation fatigue, and quality control issues are common problems. Competition has shifted from store count to supply chain, product strength, and operational efficiency. Leading brands face their own challenges: Mixue Bingcheng, despite rapid expansion, struggles with quality issues; Heytea and Nayuki face store optimization and profitability challenges, with safety, operational pressure, and management flaws common across the industry.”

Today’s new tea industry must return to its core business principles. Consumers now demand more than freshness—they want tasty, high-value, and highly experiential drinks, with food safety as a non-negotiable bottom line. Tea Yan Yue Se’s Shenzhen move is a crucial step in its national expansion and a major test of its product, supply chain, and operational capabilities. Whether it can establish itself in Shenzhen will not only determine its own future but also serve as an important reference for the industry’s stock-based breakthrough.

Previous reports:

Tea Yan Yue Se’s South China dual flagship stores land in Nanshan, Shenzhen, opening in late April to establish roots

In late April, the South China flagship store opens in Shenzhen, with Tea Yan Yue Se insisting on direct operation, not franchising

Reported by: Southern Metropolis Daily · Wan Cai She, Reporter Chen Ying Shan