In the ancient Greek epic "The Odyssey," winning the Trojan War was merely the prologue; the true test came after setting sail—with wayward navigation, storms, and hidden reefs turning an ostensibly clear journey home into an unpredictable voyage.

For tea beverage brands over the past two years, going overseas has been a similarly Odyssean journey.

The opening of a first store is just the departure from port; with every new market entered, brands must re-answer the difficult questions around supply chains, regulatory compliance, equity structures, and control rights.

The most visible change is the fading of the noise—the fervor around tea chain overseas expansion has cooled notably this year.

One professional who has long served food and beverage brands in their overseas ventures recalls that 2024 was still "a year of explosive demand," with many brands approaching service agencies hoping to enter foreign markets with minimal upfront investment, testing whether their product and store models could hold up.

But by 2026, the number of brands openly discussing large-scale expansion has clearly diminished. Among domestic tea and coffee brands that have publicly committed to overseas store count targets, only a handful remain, including Chagee, Molly Tea, and Tianlala.

Over the past few years, as domestic store density increased and price competition intensified, overseas markets were once viewed as a "second growth curve" for finding new momentum and lifting valuations. Especially during the concentrated wave of new-style tea companies pursuing public listings, the ability to expand beyond China directly influenced how capital markets assessed their long-term growth ceilings.

However, after the initial halo of asset-light experimentation faded, the hidden reefs began to surface.

This year, Molly Tea, after more than two years of overseas presence, publicly fell out with its New York partner, with both sides heading to court over brand licensing, joint venture stores, and operational control. The asset-light model of "quickly establishing a presence" with local resources has now exposed fatal rifts over profits and control rights as the brand moves toward scale expansion.

This is precisely the unavoidable flip side of transitioning from "opening the first store" to "scaling replication" in overseas markets.

Consumer habits, commercial systems, and supply chain conditions differ dramatically across countries. A successful pilot store does not at all guarantee that the same product and operating model can be seamlessly replicated elsewhere.

As the initial novelty subsides, the yardstick for evaluating tea brand internationalization is being rewritten.

Is overseas expansion a genuine growth opportunity that has been eagerly anticipated, or is it a false narrative amplified by store counts and capital market expectations?

The 'Board the Bus First, Buy the Ticket Later' Approach

Molly Tea has become the most closely watched "falling out" case in overseas tea expansion this year.

In mid-2026, citing disputes over trademark rights, brand licensing, and control of joint venture stores, Shenzhen-based Molly Tea filed a lawsuit against its New York partner in the U.S. District Court for the Southern District of New York. The court subsequently issued a preliminary injunction, ordering the defendant to cease using the relevant trademarks and hand over control of certain accounts.

This lawsuit has thrust the early-stage cooperation model of new-style tea brands' overseas ventures into the spotlight.

According to reports from 36Kr, Molly Tea and its New York partner initially signed only a brand licensing and technical services contract before jointly establishing a joint venture company. It wasn't until early 2026 that the headquarters sent the other party a Franchise Disclosure Document (FDD) in an attempt to redefine the equity structure of both existing and new stores.

When disagreements arose over the licensing and equity arrangements for a new store near Columbia University, accusations over whether the headquarters had unilaterally changed the cooperation terms ultimately escalated into a courtroom battle that tore the partnership apart.

Compared to the domestic market, the management radius for food and beverage brands expanding overseas is magnified exponentially. Cross-regional, cross-timezone, and cross-legal-system operations make localized governance exceptionally complex.

To reduce early trial-and-error costs, many brands entering overseas markets in their initial phase choose to partner with local resource holders—using technical service agreements or jointly established companies to quickly validate product models and location feasibility with just a few stores.

The "board first, buy the ticket later" approach has become an industry-wide practice not merely because of trial-and-error costs, but more fundamentally due to anxiety over the "competitive window period."

Guo Ji, founder of Shanghai Zhongshen Law Firm and its overseas franchise service arm, has observed that in recent years, many Chinese investors or local institutions operating food and beverage businesses overseas long-term have taken notice of the chain operation and standardization capabilities of Chinese tea brands, actively returning to China to seek out brand partnerships.

"When clients are already knocking on your door, if you still proceed methodically through all compliance steps, competitors will have already squeezed in. Time simply doesn't wait," Guo Ji said.

Wang Weida, brand director at a supply chain company serving well-known tea brands overseas, told All-Weather Technology that in some countries, brands must first obtain formal trademark registration certificates before they can complete franchise filing or sign franchising contracts with full legal effect.

He told All-Weather Technology: "To rush the timeline, some brands temporarily use training contracts or technical service agreements as substitutes for formal franchise agreements to get stores operational first."

However, such stopgap measures essentially push legal and regulatory risks into the future.

Mature multinational chain brands will choose between direct operation, joint ventures, or franchising based on the specific market, designing equity buybacks, regional rights recovery, and breach of contract remedies in advance.

Yet fledgling Chinese tea brands lack both the same level of compliance experience and bargaining power.

"Using substitute contracts to open markets only defers the problem. Once franchise disputes arise later, if trademark rights are not yet solidified and the contract format doesn't fully meet local regulatory requirements, the brand will be extremely passive in pursuing operational rights, breach liabilities, and damage compensation," Wang Weida analyzed.

Guo Ji further pointed out that the biggest difficulty with "buying the ticket late" lies in the retroactive handling of established facts: brands must both make supplementary disclosures to regulators and renegotiate with early partners whose interests are deeply intertwined. The resulting time consumption, capital costs, and upfront investments in legal entities, audits, and contract arrangements can easily become sunk costs.

Molly Tea's decision to forcibly "buy the ticket" and tighten control this year may not be coincidental; the turning point directly corresponds to its upgraded scale ambitions.

Earlier this year, Molly Tea co-founder Gao Yunxi explicitly revealed its phased expansion plan: North American stores must reach 80-100 by 2026, while simultaneously pushing the Indonesian market toward 40-50 stores.

When a brand attempts to shift from a few pilot stores to a hundred-store scale, the headquarters inevitably must tighten management and advance compliance. During this process, the ambiguous terms and conflicting interests left by early partnerships gradually surface, ultimately transforming into untenable compliance risks and control rights disputes.

The Real Barriers to Going Global

Compliance is not a matter of black and white, but a gradual process shaped by both subjective and objective conditions.

For tea brands just entering overseas markets, expecting to complete the entire compliance chain from the very first store is simply unrealistic.

Wang Weida is currently responsible for his company's market development in Kazakhstan. In his experience, a relatively complete overseas expansion process includes market research, trademark registration, company establishment, outbound investment filing, and then brand launch and franchise opening.

He summarizes the main compliance hurdles into three categories: outbound investment and capital pathways, contract and trademark legality, and the supply chain.

Among these, the core of capital pathway compliance lies in completing Overseas Direct Investment (ODI) filing to legitimize the legal outflow of funds and the shareholding structure of overseas entities.

While the first two can be gradually rectified through retroactive filing and supplementary disclosure, the supply chain stands as the hardest barrier to circumvent.

"Your core materials need to be produced in China. No matter how strong your local relationships are, you cannot magically resolve customs clearance and market access issues," Wang Weida said.

Behind every cup of tea are multiple categories—tea leaves, milk bases, toppings, fruit juices and jams, packaging, and equipment—and different countries have different entry requirements for imported food and related products.

The U.S. market requires food facility registration, import declaration, and Foreign Supplier Verification Programs (FSVP); Southeast Asia and parts of the Middle East emphasize Halal certification; and the Central Asian and Eurasian Economic Union markets require EAC conformity assessment.

"Among these, EAC is relatively cheap—a few hundred US dollars per item—but getting all the materials needed for an entire store certified will still cost at least 100,000 RMB," Wang Weida said.

What's more troublesome than cost is that some certifications force suppliers to adjust raw materials, formulations, and even production processes.

Take Halal certification as an example: it not only strictly prohibits animal-derived ingredients such as pork collagen but also involves rigorous on-site "factory audits." Certification bodies go deep into workshops, requiring that entire production lines and even factory premises contain no prohibited substances, with strict traceability of historical co-production records.

To cover the costs of line changes and segregation, factories often set extremely high minimum order quantities. "But if a brand only has a dozen stores overseas, its purchasing volume simply won't get past the factory's starting line," Wang Weida said.

Furthermore, the vast majority of domestic tea companies cannot obtain organic certifications required by some overseas markets, and these markets lack China's mature blended tea system. If local substitute ingredients are used directly, the final product's flavor and taste are highly likely to deviate.

When scale and compliance costs don't align, some brands choose to bypass formal customs declaration and certification, bringing ingredients into the country through non-standard methods. But this is ultimately an arbitrage tactic for a specific period—once regulatory enforcement tightens, operational risks will erupt concentratedly.

To some extent, scale is not just the result of going global; it is also a key precondition for solving supply chain problems.

Brands that already possess scale advantages can use their massive purchasing volumes to cover formulation adjustments, production line modifications, and certification costs—even forcing suppliers to provide customized cooperation.

Tianlala, which focuses on the down-market segment with over 8,000 domestic stores, told All-Weather Technology that approximately 90% of its core semi-finished raw materials for overseas markets are still shipped directly from its domestic supply chain, while fresh fruit and simple consumables are sourced locally. As store density increases, the company plans to build regional central warehouses in key markets and develop localized production in mature markets.

Heytea, meanwhile, has chosen to build a denser supply chain network in the North American market ahead of time. As of 2025, Heytea has established multiple warehousing centers in the Eastern and Western U.S., creating a "regional central warehouse + forward warehouse" system. Core ingredients are shipped directly from headquarters, while short-shelf-life categories such as milk and fruit are sourced from local mainstream suppliers like Sysco. Currently, 13 core categories have achieved localization.

For global players with greater ambitions, the endgame of localization is not just finding alternative suppliers, but moving production capacity directly overseas.

For example, Mixue Bingcheng has put "building a supply chain factory in Brazil" on its agenda to serve the Americas market. Chagee has also explicitly proposed advancing supply chain localization in North America in its listing materials, planning raw material processing and local tea supply systems.

Without enough stores and purchasing volume, many supply chain compliance and cost issues are nearly unsolvable.

However, once leading brands cross this threshold, the real challenge becomes another one entirely—can these heavily invested supply chain capabilities support rapid store replication in unfamiliar markets with vastly different cultures and consumption habits?

The Heated Battle in Southeast Asia

Scale is so important, yet once removed from the domestic environment, achieving that scale advantage again becomes extraordinarily difficult.

Shifting the lens to Southeast Asia—the market with the highest expectations—the actual progress of listed brands and leading players reveals the region's complexity.

When Shanghai Aunty went public, it disclosed plans to allocate approximately 20% of its IPO proceeds to overseas expansion, setting a target of opening 300 stores in Southeast Asia by 2025. However, as of the end of 2025, its overseas store count stood at only 45—the target fell far short.

Even Mixue Bingcheng, currently the only Chinese brand to have reached thousands of stores overseas, experienced its first annual contraction in seven years of international expansion.

As of the end of 2025, its overseas stores totaled 4,467, a net decrease of 428 year-on-year, with adjustments mainly occurring in markets like Indonesia and Vietnam where it had rapidly expanded earlier.

The contraction of Mixue is no accident. Southeast Asia is no longer a blank market waiting for Chinese brands to crush with a "dimensional reduction" strategy.

As early as 2022, local brand Tealive alone had reached a density of approximately one store per 40,000 people.

In Indonesia, with its larger population base, competition has evolved into a three-way battle among Chinese brands, local chains, and local brands backed by Chinese supply chain backgrounds.

According to a 2026 report on Southeast Asian coffee and tea chain landscape by Momentum Works, although Mixue Bingcheng still holds the top position in regional store count, Thailand's ChaPoyom and Indonesia's homegrown Momoyo have both reached approximately 1,500 stores each.

Among the top seven tea chains in Southeast Asia, besides Mixue at number one and WEDRINK at number four (approximately 1,050 stores), number seven Bingxue (over 600 stores) also comes from China, following the same value-for-money and supply chain-driven approach.

As the old landscape peaks, some players are still attempting a counter-offensive.

Tianlala, since opening its first overseas store in Jakarta in 2023, has continued to accelerate its international expansion. As of mid-2026, its overseas signed stores have surpassed 500, with over 300 in operation.

A source close to Tianlala told All-Weather Technology that the brand aims to increase its cumulative overseas signed stores to 1,000 by year-end.

Tianlala's assessment of its opportunity comes from its experience in franchising, supply chain, and down-market penetration, built through over 8,000 signed stores domestically.

But whether this low-price replication model can continue to pass through customs remains highly uncertain.

On one hand, Southeast Asia is not a homogeneous, unified market. Indonesia, Malaysia, and the Philippines have mature commercial systems, while Laos and Cambodia present entirely different infrastructure and regulatory environments. A model validated in one country is difficult to apply across the entire region.

On the other hand, under homogeneous competition, expansion is no longer simply about market growth but about the redistribution of share. "When others collapse, you can carve out a slice of the pie with more standardized operations and supply chains, but the overall market capacity remains what it is," Wang Weida said.

As the "scale fantasy" in Southeast Asia hits its ceiling, the path of rapidly scaling through asset-light franchising is gradually losing its effectiveness. The second half of tea brand internationalization is forcing more players to move toward a heavier model.

The Cost of Long-Term Thinking

Having moved past the early "light arbitrage" stage, leading brands are already showing signs of "buying their tickets."

A notable trend: compared to early reliance on local franchisees or joint venture partners for testing, more headquarters are tightening control, choosing to increase direct operation ratios or implement strict management oversight.

Taking Mixue Bingcheng's Central Asian market as an example, Wang Weida revealed that before 2025, the local market was primarily self-managed by franchisees, with fewer than five headquarters-dispatched operations support staff. By 2026, the combined team of headquarters-assigned and locally hired operations personnel has expanded to nearly 40 people.

"Strict management means all operations are re-centralized under headquarters," Wang Weida said. Even if stores are still operated by franchisees, headquarters' control over materials, operations, and the franchise system has changed completely.

After Chagee returned to Singapore in 2024, the brand directly abandoned the franchising model, fully converting to headquarters direct operation.

Its overseas directly operated stores grew rapidly from 20 in mid-2024 to 236 by the end of Q1 2026, now surpassing its overseas franchise store count. Except for the Malaysian market, which it entered early and has reached operational maturity, almost all newly entered Asia-Pacific regions have been brought under direct operation.

Behind this tightening of control lies heavy asset investment in the millions of US dollars and longer payback periods.

Heytea has not only converted some overseas franchise stores back to direct operation in recent years, but has also significantly raised the investment threshold in the North American market, building self-operated warehousing networks and forward warehouse systems on both the East and West Coasts ahead of large-scale expansion.

In early 2025, it opened its first HEYTEA LAB in New York's Times Square with a single-store investment reaching the million-dollar level, frequently leveraging New York Fashion Week and designer collaborations to enhance brand premium.

But for brands seeking to take root in unfamiliar markets, what needs to be "supplemented" goes beyond organizational structure and asset accumulation—there are also the high costs of consumer education and localization adaptation.

Unlike China's highly mature market, which has been collectively educated by tea brands over many years, overseas consumer demand is stratified—from traditional powdered milk tea with abundant toppings to fruit tea and original-leaf fresh milk tea. Different stages of demand coexist across different regions.

The simpler the product structure and the higher the average ticket price, the greater the education cost a brand must bear.

To this end, Heytea has been compressing the time gap between domestic and overseas product launches. The cycle for some new domestic products to reach overseas markets has been shortened to within two months, alongside the development of overseas-exclusive SKUs.

Tianlala maintains unified core products in Southeast Asia while adding coffee and fruit-flavored specialty drinks in the Philippines. In Uzbekistan, traditional pearl milk tea—no longer dominant in China—has instead become the core product.

So-called localization is by no means a simple matter of revising a menu; it requires establishing high-frequency feedback mechanisms among R&D, supply chain, and local operations.

Outside observers often find it difficult to judge how far a brand's overseas capabilities have truly developed based solely on publicity volume and store opening numbers.

"The vast majority of brands in the industry keep a low profile about their actual overseas performance, for one of two possible reasons," Wang Weida analyzed. "Either there are still hidden issues with capital, contracts, or supply chain compliance—and being too loud could attract regulatory attention—or they are genuinely making money and staying quiet to prevent competitors from swarming in."

Rather than marketing narratives and short-term store opening scales, what deserves sustained observation is whether a company continues to meaningfully allocate core personnel, supply chain assets, and long-term capital overseas.

Building warehouses, deploying teams, raising direct operation ratios, and even constructing factories—all of these signify longer investment cycles and higher sunk costs.

At least for now, this remains a long-distance race that only a few leading players can afford.

The narrative of tea brand internationalization has not been falsified; what has been falsified is the "asset-light, quick-success expansion" arbitrage fantasy.

From leveraging local partners in the early days to rapidly claim territory, to today's compliance reckoning, supply chain restructuring, and the reclaiming of direct operational rights, the overseas journey of new-style tea brands is undergoing an inevitable "dehydration."

Now that the fever has broken, only those who build sustainable, profitable, and irreplaceable local operating systems will truly take root overseas.