The New Taste of Tea: How Heytea Took Chinese Drink Culture to the World
Atharv Dwivedi
It would not be wrong to think of tea as one the most important inventions of China with roots stretching back thousands of years. While preparation methods have changed over the years, from powdered forms in the Song Dynasty, to steeped loose leaves in Yuan Dynasty, the fundamental nature of the beverage has remained largely unchanged for centuries.
That tradition, however, was about to be dramatically reimagined. By 2017, in Shanghai, customers started forming queues that lasted, on average, for three hours, not for any luxury product, but for a cup of tea. A tea company called Heytea had a product that broke convention, a high-quality brewed tea topped with a savoury, creamy foam made from real New Zealand cheese. This offering, which became known as "cheese tea," marked a significant departure from the powdered milk teas that had long dominated the modern market. Founded five years earlier by Nie Yunchen on the premise of using premium, fresh ingredients, Heytea had not just created a popular drink; it had created an entirely new beverage category and pioneered the rise of "new-style" tea culture.
The architect behind this disruption was a young entrepreneur named Nie Yunchen. In 2012, at just 21 years old and fresh off a failed mobile phone repair business, Nie noticed a peculiar trend of customers in long queues were waiting patiently for milk tea that was often made from low-quality powders and artificial flavourings. He saw an opportunity not just to sell a better product, but to elevate the entire experience. This conviction drove him to spend the next six months in a painstaking process of trial and error, personally experimenting with different formulations to find the perfect balance of fresh tea, real milk, and natural fruits. The result of that dedication was a small shop in the city of Jiangmen, Guangdong, which would eventually become the first outpost of his tea empire.
From that single shop, the brand's growth was propelled by a meticulous dual strategy: an unwavering commitment to product quality and an acute understanding of modern marketing. On one hand, Heytea distinguished itself through its ingredients. It publicly committed to using high-quality ingredients like real New Zealand cheese for its signature foam, fresh fruits, and even developed its own proprietary, antibiotic-free milk which was a first in the Chinese tea market. This focus on premium, natural ingredients stood in stark contrast to the artificial powders common among competitors and served to justify its higher price point.
On the other hand, Heytea masterfully cultivated its image as a modern brand, transforming its drinks into a status symbol for China's millennials and Gen Z. The brand's minimalist, aesthetically pleasing store designs and photogenic packaging were engineered for social media, quickly earning it the label of a "wanghong" or "internet-famous" brand. This online buzz was amplified by a series of high-profile collaborations with an exclusive roster of partners, from luxury fashion house Fendi to Rihanna's Fenty Beauty, cementing its status as a lifestyle accessory. This fusion of a tangible, premium product with an intangible, aspirational image allowed Heytea to transcend the beverage category, positioning itself not just as a tea shop, but as a cultural icon.
Heytea's distinct approach rapidly propelled it into a leading position within China's burgeoning tea market. The brand experienced explosive growth, fuelled by significant investment from majorplayers like Sequoia, Tencent, and Temasek, with its valuation reaching US$2.3 billion. In November 2022 they decided to switch to franchise model, a move aimed at boost their presence beyond the first and second-tier cities where it initially focused. As a result by 2024, Heytea had established over 3,000 stores in China alone.
However, Heytea operates within an intensely competitive market, facing pressure from two distinct types of rivals. On one side are the mass-market chains like Mixue, which, with over 36,000 stores globally by 2024, dwarfs Heytea in sheer volume and competes aggressively on price, though not on Heytea's premium positioning . On the other side are premium competitors such as Nayuki, which also target affluent, young consumers with high-quality ingredients and stylish cafes, constantly innovating to maintain their market share . While Heytea has maintained its leadership in the premium segment, the presence of these numerous and rapidly expanding competitors means the brand must continuously differentiate and innovate to sustain its top position and navigate an increasingly saturated domestic market.
As competition intensified in the domestic market, Heytea began looking abroad for new growth opportunities. Its international expansion started in 2018 with the opening of its first overseas store in Singapore. But it wasn't until 2023 that globalization efforts truly accelerated, spurred by the extension of its franchise program to international partners. While many Chinese beverage brands expand gradually into neighbouring Southeast Asian markets, Heytea took a bolder, more direct approach of launching flagship stores in the commercial hearts of major Western cities. Within a single year, it established high-profile locations in London’s Soho, New York’s Broadway, and key urban centres across Canada and Australia. This positioned them as a global contender capable of catering to diverse international tastes.
This global push saw Australia become a key location in Heytea’s Western expansion. The brand made its Australian debut in October 2023, launching its first store on Melbourne's Swanston Street. The reception was immediate and overwhelming, with the location selling a record 3,000 drinks in a single day. This initial success paved the way for a more aggressive, multi-city rollout. By August 2024, Heytea branched out in Sydney’s high profile George Street, once again drawing long queues.
This launch marked the start of a broader strategy to establish 11 stores across Australia, with more locations planned for Sydney, Melbourne, and Brisbane. To better appeal to the local market, the menu was adapted to include oat milk vegan options and free upgrades to zero-sugar sweeteners to target the health-conscious Australian consumer.
From a single shop in China to drawing long lines in Australia, Heytea’s story is about making a traditional drink new and exciting. It became famous by using high-quality ingredients and building a cool, modern brand. But this success now presents its biggest challenge: how to grow into a worldwide company without losing the special, premium feel that made it popular.
Heytea has shown it understands this problem. In early 2025, with fierce competition in its home market, the company stopped taking new franchise applications in China. This was a clear choice to focus on quality instead of just the number of stores. While its successful launch in places like Australia is a good sign, the real test is applying this "quality over quantity" lesson everywhere it goes. The work to turn a popular Chinese trend into a lasting global brand is far from over.