Chagee is extending its summer product lineup from beverages to include Gelato.
On May 21, Chagee announced the launch of its "Geelato" (tea-infused Gelato) at nine initial locations across Shanghai, Shenzhen, Beijing, Chengdu, and Wuhan. These outlets are situated in core commercial districts and landmark areas.
Gelato, traditionally Italian ice cream, is known for its denser texture, lower air content, and more intense flavor. The name "Geelato" blends "Gelato" with Chagee's tea-centric identity, a concept reflected in its product flavors.
The initial Geelato series features ten flavors, including "Boya Juexian," "Yimo Shanyue," and "Yunjiao Kameiluo," along with three Geelato tea beverages. This move represents Chagee's effort to leverage its established tea flavor profiles beyond drinks and into the ice cream counter.
Historically, during hot seasons, items like cones, sundaes, slushies, and sorbets have served as seasonal additions to tea shops.
This year, however, ice cream is evolving beyond a low-cost traffic driver or seasonal item, with some brands developing it into a more independent product line. Prior to Chagee's Geelato, Heytea also introduced its "Xiladuo" Gelato, available exclusively at its LAB stores.
Such cross-category ventures are feasible because leading tea beverage brands already possess extensive store networks, a stable young customer base, established supply chains, and digital operational capabilities.
These brands can swiftly launch new products in high-traffic stores and achieve initial traction through membership systems, mini-programs, and social media. Customers visiting for a tea might now also try a Gelato.
Nevertheless, Gelato is not a lightly scalable product category.
It demands prime store locations, consistent foot traffic, product freshness, cold chain management, and skilled staff. Compared to milk tea, Gelato faces greater challenges in maintaining flavor consistency, managing inventory waste, and balancing store efficiency.
These management difficulties are exacerbated within franchise systems and during large-scale expansion.
Moreover, Gelato sales heavily rely on in-store foot traffic, potentially declining significantly in winter, while cold chain and loss-reporting costs are relatively higher. If stores cannot consistently attract sufficient customers, the ice cream counter could shift from a summer revenue boost to an operational burden.
Thus, Chagee's pilot not only tests consumer willingness to pay for tea-flavored Gelato but also examines how well ice cream integrates with the existing operational framework of its tea shops.
Only when a relatively stable model balancing customer flow, average order value, repeat purchases, and product loss is established can Gelato transition from a brand marketing initiative to a replicable business.
In this process, the counters at milk tea shops are likely to become increasingly crowded.