Bain Capital acquires bubble tea chain Gong Cha as China market cools

Global private equity firm Bain Capital has agreed to acquire full control of Taiwan-founded bubble tea chain Gong Cha Global from US private equity firm TA Associates and other shareholders, a deal announced on August 6 that industry watchers say may mark a strategic pivot as China's once-booming bubble tea market cools.

The acquisition sees Bain Capital planning to work closely with Gong Cha's management team to focus on store expansion in Japan, South Korea and the United States, according to a company statement. Gong Cha currently operates almost 2,200 stores across 33 markets worldwide.

Shift as sector growth slows

The deal comes as analysts forecast mid to high single-digit growth for China's bubble tea sector, a sharp deceleration from the double-digit growth rates recorded in previous years. Bain Capital's acquisition of Gong Cha may signal a broader shift in bubble tea investment strategy as the sector slows after years of rapid expansion.

Geographic footprint

Gong Cha has established a strong presence across the Asia-Pacific region, particularly in Japan, South Korea and Australia, and is also expanding its footprint in the Americas and Europe. The brand's diversified geographic spread appears central to Bain Capital's investment thesis as it takes full equity control of the chain.

Source: South China Morning Post