Bubble tea brand The Alley has made a notable return to mainland China, opening new stores in Hangzhou and Dongguan. The Hangzhou location is situated in Jinsha Paradise Walk, while the Dongguan store has taken its place in Times City Plaza. The Alley’s next moves include opening additional outlets in Guangdong and Shanghai, with an ambitious plan to expand across Jiangsu, Zhejiang, Shanghai, and the Guangdong and Guangxi regions throughout the year.
Pearl milk tea has been enjoying a resurgence in recent years, particularly in South China, which has become a hotspot for new local brands. Chen Mandi, for instance, once sold over a thousand cups daily per store, while Baojinzhu has expanded to nearly a thousand outlets. Similarly, brands like Baozhugong and Baozhumei, both known for their brown sugar pearl milk tea, have scaled to hundreds of locations.
Zhao Yuechao, head of The Alley in China, told 36Kr that the decision to reenter the mainland market was driven by the fresh potential in the growing pearl milk tea trend.
Looking back, The Alley was one of the first internet-famous brands in the tea beverage scene, though its path was anything but smooth. Founded in Taiwan in 2013, The Alley quickly expanded to Japan, Canada, Hong Kong, and beyond. By 2017, its first store in mainland China triggered a frenzy, with eager customers lining up for hours.
What followed is a familiar story. The Alley’s team misjudged the trademark registration process, allowing just a month when it actually required at least six. This oversight opened the door for counterfeit stores to flood the market. Founder Qiu Maoting lamented the irony: thousands of Alley stores had popped up, yet none were his. The imitators not only used the brand’s name and logo but also managed to register the trademark first, forcing the real company into retreat.
After more than two years of legal battles and anti-counterfeit efforts, The Alley finally secured its rightful 43-class trademark registration at the end of 2019. In 2022, CCTV Finance reported on The Alley’s long and costly battle against counterfeiters. However, the prolonged trademark war nearly pushed the brand into irreversible decline, with many mainland stores closing in 2021 and 2022.
Overseas, however, The Alley saw a different picture. The brand’s international presence provided a lifeline for its growth, and by the end of 2022, The Alley had opened more than 500 directly operated stores across 17 countries. Today, it operates in over 100 cities worldwide.
Reflecting on The Alley’s global success, Zhao commented that while many tea beverage brands are racing to expand internationally, The Alley is one of the few making a comeback to its home market. On its return strategy, Zhao emphasized two key factors: handmade production and competitive pricing. The brand will continue to highlight its signature black sugar and fresh milk drinks, made by hand with real ingredients, priced around RMB 15 (USD 2.1) per cup. For locations, The Alley will focus on midrange shopping malls, with stores spanning 20–30 square meters, and a design aesthetic that pairs black with bright orange.
In a 2019 interview with 36Kr, Zhao noted that the Chinese market leads the overseas market by three to four years, with fierce competition. That competition has only intensified today, with brands like GoodMe, Mixue Bingcheng, Auntea Jenny, and ChaPanda all submitting IPO filings within the past 12 months.
The Alley plans to invest RMB 30 million (USD 4.2 million) in brand marketing and promotion throughout 2024. Yet, the challenge remains: consumer memory is short-term, and The Alley could be facing another uphill battle as it reestablishes its presence in a crowded market.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Ren Cairu for 36Kr.