Beijing, August 18, 2023 – Wang Xiaokun, the visionary entrepreneur behind Cha Panda, a renowned Chinese tea chain, has achieved billionaire status following a successful funding round that valued his company at an impressive $2.1 billion. Wang’s ascent to billionaire status is attributed to his strategic leadership and the rapid expansion of Cha Panda.
At the age of 40, Wang Xiaokun now boasts a net worth of $1.1 billion, as estimated by Forbes. His wealth is primarily rooted in his ownership of nearly 60% of the Chengdu-based beverage chain, which has experienced remarkable growth over the past three years, resulting in a vast network of over 7,000 stores. Cha Panda has captivated tea enthusiasts with its diverse offerings, including signature beverages like mango pomelo sago, taro bubble tea, and jasmine milk green tea – all priced reasonably at $3.60 or below.
Wang’s wife, Liu Weihong, has also become a wealthy figure with a fortune totaling $700 million, owing to her substantial 33% stake in the company. Liu plays a pivotal role as the chair of the supervisory committee, overseeing the day-to-day operations of Cha Panda. Despite multiple attempts to seek comments, the company has remained tight-lipped, refusing to divulge additional information about their future plans.
The successful funding round, which concluded in June, witnessed shares of Cha Panda being acquired at 13.2 yuan ($1.8) per share by prominent investors, including CICC, Orchid Asia, and Shanghai Loyal Valley Investments. As the company gears up for an initial public offering, key details such as timing and scale remain undisclosed. Industry experts believe that fresh funding is essential for Cha Panda to continue its expansion in China’s fiercely competitive tea-beverage market.
Jason Yu, Managing Director of Kantar Worldpanel Greater China, emphasized the importance of store count in this competitive landscape: “When it comes to drinking milk tea, people aren’t loyal at all and always choose from multiple brands… So whoever has more stores has a better chance of being seen by consumers, as well as getting a larger share of their spending.”
Cha Panda’s origins can be traced back to 2008 when Wang Xiaokun began his entrepreneurial journey by selling fruit and bubble tea from a modest shop near a school in Chengdu. Over the years, the company’s store count grew steadily, reaching 531 by 2020. However, the business truly flourished with the adoption of a franchising model.
Presently, Cha Panda’s strategy centers around crafting beverage recipes and supplying the necessary ingredients, such as fruit and tea leaves, to its network of branded beverage shops. This innovative approach allows Wang to maintain lower costs compared to competitors with directly operated stores. The number of Cha Panda-branded stores skyrocketed to an astounding 7,117 by August this year, with only six under direct management in the first quarter.
In the previous year, Cha Panda achieved remarkable financial results, generating revenue of $580.3 million, a 16% increase from the year before. The company’s profit also surged by 24% to $132.3 million. The prospectus cited Frost & Sullivan’s research, naming Cha Panda as the third-largest tea shop in China by retail sales.
To engage younger consumers and enhance brand recognition, Cha Panda sponsors music festivals and other offline cultural events, complementing their online promotional campaigns. In June, the company demonstrated its commitment to its roots by adopting a giant panda at the Chengdu Research Base of Giant Panda Breeding, as announced in a press release by the facility.
However, the key to Cha Panda’s ongoing success remains its ability to control costs while delivering value-for-money products. Jason Yu of Kantar Worldpanel pointed out, “Consumers pay more attention to costs as the milk tea brands don’t really differentiate from one another… The products are similar as they are all a mixture of tea with other ingredients, such as fruit.”
