How full equity buyouts could help China’s cooling bubble tea sector turn a new leaf

Bain Capital’s acquisition of Gong Cha may signal a shift in bubble tea investment strategy, as sector slows after years of rapid expansion

Growth of mid to high single digits was now forecast for the sector in China, down from double-digit growth in previous years, analysts said.

In the latest development, global private investment firm Bain Capital said on August 6 that it had reached a deal to buy Taiwan-founded bubble tea brand Gong Cha Global from US private equity firm TA Associates and other shareholders.

Bain Capital would work closely with Gong Cha’s management team and focus on its store expansion in Japan, South Korea and the United States, it said in a statement.

Gong Cha operates almost 2,200 stores in 33 markets worldwide. Well-established across the Asia-Pacific – particularly Japan, South Korea and Australia – the brand is also expanding in the Americas and Europe.