In March 2026, a notable development emerged in international finance that caught the attention of consumer goods investors: U.S. private equity firm TA Associates is considering the sale of its stake in the bubble tea brand Gong Cha and has enlisted JPMorgan to explore a potential transaction. According to informed sources, the deal could value Gong Cha at approximately $2 billion (around RMB 14 billion).
This figure not only represents one of the largest mergers and acquisitions in the bubble tea sector to date but also outlines a near-perfect capital exit trajectory. Seven years ago, in 2019, TA Associates acquired Gong Cha from South Korean private equity firm Unison Capital for only about $288 million. This implies that in less than seven years, even excluding profit distributions during this period, the brand's value has surged nearly sixfold, generating an unrealized gain of over $1.7 billion (approximately RMB 12 billion).
However, behind these dazzling financial figures, Gong Cha presents a stark duality. In its place of origin, mainland China, this brand revered as the "originator of bubble tea" has virtually vanished, even forced to rebrand and defend its rights due to rampant copycats, with its primary operating entity deregistered by the end of 2024. Conversely, in overseas markets such as South Korea, the United States, and the United Kingdom, it is an undeniable top performer, boasting over 2,200 global stores and targeting an ambitious goal of exceeding 10,000 stores by 2032.
This potential transaction is not merely a successful private equity operation; it also reveals how "global deployment" and "localized setbacks" have collectively shaped a brand's capital value in an era of intense competition within the global tea beverage industry.
Stumbling in the Mainland: How the "Originator" Became the "King of Knockoffs"
If we rewind to 2017, Gong Cha was still a dominant force in mainland China. At a time when Heytea had only 100 stores and Naixue's Tea fewer than 50, Gong Cha's store count once exceeded 750, covering prime commercial areas in first- and second-tier cities nationwide. Its signature "Panda Milk Foam" drink, with its distinctive "savory milk foam + clear tea" flavor profile, ended the era of powder-based bubble tea dominance and served as an introduction to bubble tea for a generation of consumers.
Yet, this very "pioneer" failed to capitalize on the industry's subsequent explosive growth, instead becoming embroiled in a protracted "brand protection war."
The root of Gong Cha's decline in mainland China lies in the generic name trap associated with its trademark and an initially lax regional licensing model. Historically, the term "Gong Cha" often referred to tea offered as tribute to the imperial court, creating inherent weaknesses in trademark protection and preventing the establishment of effective competitive barriers. More critically, when the brand first entered the mainland market, it adopted a "regional franchising" model, dividing the market into different territories licensed to various agents.
While this "divide and conquer" strategy accelerated initial expansion, it sowed the seeds for significant problems. Numerous seemingly identical brands like "Yuke Gong Cha," "Xiyu Gong Cha," and "Siyun Milk Foam Gong Cha" emerged, with multiple entities using similar branding, leading to management chaos and inconsistent quality control. Around 2012, stores operating under the "Gong Cha" banner across China numbered in the thousands, but the vast majority were not official brand outlets. The genuine brand owner was even compelled to run advertisements emphasizing to consumers: "The Milk Foam Gong Cha with the four-cloud logo is the authentic one from Taiwan."
By the time the original brand was forced in 2016 to rename its main mainland operation from "Yang Yang Hao Gong Cha" to "Siyun Milk Foam Gong Cha" and initiate legal actions to protect its rights, the market landscape had already transformed dramatically. Almost simultaneously, new tea brands like Heytea and Naixue's Tea spearheaded an upgrade revolution centered on "fresh fruit and fresh milk," shifting the bubble tea industry from street-side stalls to social spaces within shopping malls. Preoccupied with internal conflicts, Gong Cha was slow to react in terms of product innovation (such as popular items like Mango Pomelo Sago and fruit teas) and youthful brand marketing, gradually fading from consumers' memories. Tianyancha APP shows that Gong Cha (Shanghai) Catering Management Co., Ltd., established in 2012, was deregistered in November 2024, marking the definitive end of its operational presence in the mainland market.
The failure in the mainland market represents a tragedy for Gong Cha, missing out on its primary battlefield due to early management missteps. However, from a capital perspective, this "passive contraction" inadvertently forced the brand to reallocate core resources entirely overseas, ultimately laying the groundwork for its subsequent high valuation.
Flourishing Abroad: The "Golden Seven Years" of Reverse Acquisition and Globalization
In stark contrast to its struggles in mainland China, Gong Cha staged an impressive "counterattack," particularly in the South Korean market. This success story forms the core foundation for TA Associates' sixfold return on investment.
The seeds of Gong Cha's globalization were sown early. In 2012, Australian venture capitalist Martin Berry introduced Gong Cha to South Korea, coinciding with the initial phase of餐饮 chain expansion in the country. Leveraging standardized store formats, chain operation models, and marketing featuring K-pop stars, Gong Cha quickly became synonymous with bubble tea in South Korea.
The success in South Korea even triggered a rare "reverse acquisition." In 2016, because the revenue generated from the South Korean operations significantly surpassed that of the Taiwanese parent company, Unison Capital, the PE firm backing the Korean operations, acquired approximately 70% of the Taiwanese parent company's equity. This meant that the overseas franchisee effectively became the owner of the brand headquarters, shifting the operational focus from Taiwan, China, to South Korea. This move is uncommon in global餐饮 history and signaled Gong Cha's entry onto a capital-driven fast track of internationalization.
In 2019, U.S.-based TA Associates took over, becoming Gong Cha's new owner and relocating the global headquarters from Seoul to London, further reinforcing its international brand positioning. Under TA Associates' stewardship, two key strategies were instrumental in achieving the valuation multiplier.
On one hand, they accelerated penetration into Western markets. Driven by TA, Gong Cha entered a phase of rapid expansion in Europe and America. In the United States, Gong Cha recently acquired the operating rights of 170 franchise stores, bringing most of its 240 U.S. locations under more direct control and announcing a long-term goal of 1,000 stores in the country. In the United Kingdom, Gong Cha signed agreements with new master franchisees, planning to add 225 stores in the coming years, aiming to establish the UK as one of its largest global markets.
On the other hand, they focused on enhancing operational efficiency and digitalization. Facing fierce global competition, Gong Cha launched a new store format, "Gong Cha 2.0," and introduced digital kitchen systems. Reportedly, its smart tea-making equipment can complete about 80% of the beverage preparation process within 20 seconds. This ability to reduce reliance on manual labor and improve standardization through technology is a core competitive advantage for its expansion in developed markets.
As of March 2026, Gong Cha's operations span 32 countries and regions worldwide, with a total store count exceeding 2,200. Its financial performance is equally impressive, with total system sales reaching $600 million in 2024 and group revenue growing 12% year-over-year. It is this extensive global franchise network, mature supply chain system, and proven unit economics across multiple countries that underpin the $2 billion valuation. In the eyes of investors, Gong Cha is no longer merely a Taiwanese bubble tea brand but a餐饮 operation platform with demonstrated global expansion capabilities.
Notably, Gong Cha's current valuation stands at approximately RMB 14 billion. As the Chinese new tea drink market enters a phase of transition characterized by competition for existing market share, brands like Mixue Bingcheng, Guming, and Auntea Jenny, while deeply rooted domestically, are still in the early stages of increasing their overseas presence. Conversely, Gong Cha, having largely withdrawn from the Chinese market, has already validated its global model. For potential acquirers, acquiring Gong Cha means purchasing a direct "ticket" to established markets in Europe, America, Japan, and South Korea, bypassing the significant trial-and-error costs associated with building overseas teams from scratch and adapting to local regulations and supply chains.
Of course, whether this potential $2 billion transaction ultimately materializes remains uncertain. On one hand, global private equity firms are in a critical cycle of fundraising and exits, and TA Associates' decision to sell now is clearly aimed at locking in substantial returns. On the other hand, potential buyers must carefully assess the challenges facing Gong Cha: amidst the aggressive overseas expansion of Chinese brands like Heytea and Mixue Bingcheng, does Gong Cha possess sustained competitiveness in product iteration speed and brand rejuvenation? It also faces risks related to contract renewals or market reshuffling in key markets like South Korea and Singapore.
The potential sale of Gong Cha is not just a turning point for the "originator of bubble tea," but also a microcosm of the global tea beverage competition entering a new phase. It demonstrates that even after setbacks in the home market, precise global strategy and capital operations can secure a significant position on the world stage. For Chinese tea brands expanding overseas, Gong Cha's "dual life" serves as a valuable case study: it warns of the critical importance of brand management and trademark protection, while also showcasing the capital heights achievable through standardized output and localized operations.
The ultimate fate of this milk foam tea brand may well reshape the competitive landscape of the global bubble tea market.