Shuyishao Xiancao

Shuyishao Xiancao, operating as Shuyi Tealicious internationally, is a prominent player in the competitive tea beverage market, specializing in grass jelly-based drinks. The company's journey began in 2007 when founder Wang Bin established a small tea shop in Sichuan named 85°tea, introducing the then-novel concept of adding grass jelly, a popular dessert in Fujian and Taiwan, to milk tea. This initial venture laid the groundwork for the brand's future focus.

A significant turning point occurred in 2013 with the formal incorporation of Sichuan Shuyi Catering Management Co., Ltd. However, the brand faced a trademark infringement lawsuit from the bakery chain 85°C in 2016. This legal challenge prompted a strategic rebranding in 2017 to "Shuyishao Xiancao," explicitly centering its brand identity around its signature ingredient, grass jelly. This clear positioning fueled a period of rapid expansion, with the company developing a diverse product line including variations like Yangjiaganlu Grass Jelly and Taro Ball Grass Jelly. By September 2021, the company had reached a peak of 7,000 stores.

The company operates primarily through a franchise model, which has been the engine of its swift growth across China and internationally. Its business model relies on multiple revenue streams: initial one-time fees from franchisees, including a cooperation fee, brand use fee, and a deposit, as well as ongoing management fees. A substantial portion of its income is derived from the mandatory sale of raw materials and proprietary ingredients to its franchisees, ensuring product consistency while creating a continuous revenue channel. The company has established a robust supply chain to manage costs effectively. The target market initially focused on tier-three and tier-four cities and university towns, leveraging a value proposition of ample ingredients at an affordable price point, summarized by the slogan "half the cup is full of ingredients."

While Shuyishao Xiancao has not publicly pursued an IPO, it secured over 600 million RMB in its first round of financing in early 2022, backed by investors such as Jue wei Food, Qiaqia Food, and Tencent Investment, which valued the company at an estimated 10 billion RMB. The company has expanded its footprint globally, with operations in several countries including the United States, Canada, and various Southeast Asian nations. Despite its growth, the brand has faced challenges, including increased market competition leading to a decline in the number of active stores to under 6,000 by mid-2024 and public scrutiny over product composition and food safety.

Keywords: Grass jelly tea, beverage franchise, Shuyi Tealicious, Wang Bin, Chinese tea chain, new-style tea, franchise business model, beverage industry, Asian drinks, milk tea, taro ball tea, beverage supply chain, food and beverage, retail franchising, international expansion, private equity financing, Chengdu startup, tea beverage market