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CNBC
a day ago
- Business
- CNBC
China's fintech giant Ant doubles down on health care with new AI app — and it wants it to go global
BEIJING — Alibaba-affiliate Ant Group is doubling down on health care with a new smartphone app, based on artificial intelligence technology that the company says could be rolled out overseas. It's the latest sign of how China-developed AI is quickly building consumer applications. Ant, operator of the popular Alipay mobile payments app, has focused much of its AI development efforts on health care based on large language models from DeepSeek, Alibaba and Ant. In a telling sign of global aspirations, the new health-care app launched on Thursday has a straightforward English name — AQ — which stands for "answer your question," said Zhang Junjie, general manager of health-care business at Alipay. Users can consult AI avatars of real-life medical specialists before getting priority access for a diagnostic appointment or hospital care if the situation is serious enough, he said. AQ can tap more than 5,000 hospitals and nearly 1 million doctors in China, according to Ant. While Ant's focus is on the mainland China market for now, the new app or its tech could be licensed out to a third party, Zhang said, without specifying a time frame. He said many foreigners in China have already used a pilot version of the app, and that Ant plans to release versions of the app in other languages. Chinese companies from startups to more established companies such as Tencent and Ping An Insurance have long sought to capitalize on the integration of internet and software with health care. In the last several months, U.S.-based tech giants such as Microsoft and have also announced progress on AI-powered health-care tools. In China, a large data pool and nationwide emphasis on digitalization have helped provide a foundation for AI-powered health-care functions, according to a report last month from the Cheung Kong Graduate School of Business. It pointed out that China's national health insurance system covers more than 95% of the country's 1.4 billion people, while about 70% of hospitals have digital record-keeping systems. Alipay is one of the two major mobile payments apps in mainland China. In addition to payments, the app can be used to pay the water bill, hail a taxi or order groceries from Alibaba's supermarket chain. The payments app has also branched into health care over the last decade, with features such as allowing users to digitally make an appointment at one of China's notoriously crowded public hospitals, instead of having to wait in line for a ticket. Those Alipay health-care services have already reached nearly 80 million users in China, Zhang said. The standalone AQ app incorporates those features, along with AI-powered functions such as doctor recommendations, medical report analysis and personalized medical advice. Alipay has expanded to users outside China, as has its mobile payments rival WeChat.
The Star
01-05-2025
- Business
- The Star
Chagee marches ahead in latest overseas push
Chagee Holdings Ltd, a leading Chinese premium tea beverage brand, made its debut on the Nasdaq stock exchange on April 17, signaling the company's global expansion drive and mirroring the rising presence of Chinese tea drinks overseas. Since its founding in 2017, the company has envisioned creating a global brand, said Zhang Junjie, founder, chairman and CEO of Chagee. "This is just the beginning. We will continually support healthy lifestyle choices, drive industry innovation, and deliver on our mission of creating connections every day with tea," he said. The beverage chain raised about $411 million by issuing 14.68 million shares, giving it a market capitalization of $7.66 billion as of the close of trading on its first day. Chagee is also preparing to open its first North American teahouse in Los Angeles. Founded in Yunnan province in Southwest China, Chagee initially developed at a measured pace before pivoting toward international markets. Its first overseas store opened in Malaysia in 2019, a move that signaled the beginning of its "tea + culture" global strategy. The company operated 156 stores overseas by the end of 2024. It plans to open 1,000 to 1,500 new stores globally this year. Unlike several competitors who thrived on trends like cheese tea or fruit tea, Chagee focused on original leaf fresh milk tea, building a niche with its streamlined, efficient, and quality offerings. The company's rapid growth was supercharged by capital injections from prominent investment firms, enabling its expansion across the country and beyond. As of the end of 2024, Chagee operated 6,440 stores worldwide — 6,217 of which were franchises — representing an 83 percent increase from the previous year. Its 2024 GMV (Gross Merchandise Volume) surged 173 percent year-on-year to 29.5 billion yuan ($4.04 billion), with average monthly GMV per store in China hitting 5.12 million yuan. Its annual revenue reached 12.41 billion yuan, while net profit came in at 2.52 billion yuan — translating to a net margin of 20.3 percent, significantly above the industry average. Chagee's success has largely been driven by its "top single product "strategy. By eliminating lower-performing categories and focusing on a core set of offerings, Chagee has been able to boost efficiency and reduce complexity. Its proprietary machines can prepare drinks in as little as eight seconds. In 2024, 91 percent of Chagee's GMV in China was generated by its signature fresh milk tea series, with 61 percent of sales attributed to just three products. One standout item, bo ya jue xian, or jasmine green milk tea, sold over 600 million cups as of August 2024, more than 300 million of which were sold in 2024 alone. This product strategy also enables a highly efficient supply chain. Chagee reported logistics costs of under 1 percent of its global GMV, and inventory turnover of just 5.3 days — the fastest among major Chinese tea drink brands. Despite its success, Chagee faces emerging challenges. The company's prospectus revealed that same-store GMV growth slowed in the second half of 2024, declining 18.4 percent year-on-year in the fourth quarter. Analysts attribute the slowdown in part to market cannibalization from the rapid opening of new stores in the same areas. To diversify and maintain momentum, Chagee has launched a sub-brand, "Chagee freshly brewed", which focuses on premium Chinese tea. With three pilot stores opened in Shanghai and prices ranging from 13 to 22 yuan, the brand is testing new waters. However, similar "tea space" concepts by competitors like Heytea and Nayuki have struggled to achieve scalable success. With China's new tea drink market growth expected to slow from 44.3 percent in 2023 to 12.4 percent in 2025, according to the 2023 new tea beverage report released by the China Chain Store and Franchise Association, leading brands are increasingly turning to overseas expansion. Independent food and drink industry analyst Zhu Danpeng said that supply chain capabilities will be the decisive factor in the success of global expansion. "Models, prices, and products can all be replicated, but building a global supply chain is a long game. Only companies with fully integrated supply chains will thrive," Zhu said. Chagee's overseas strategy also hinges on cultural adaptation while retaining its core identity. In Southeast Asia, for example, it aligns with local tastes by using familiar milk-tea combinations, such as oolong or jasmine tea with premium milk. This cultural resonance has contributed to positive reception abroad, said Zhu. The company has built a strong brand identity by fusing traditional Chinese aesthetics with modern design. Its visual branding draws on cultural symbols such as Peking Opera masks and the Ancient Tea Horse Road in Yunnan province, while store interiors balance traditional motifs with minimalist modernity, appealing to young, culturally minded consumers, he added. Chagee enters the global stage as part of a broader wave of Chinese tea brands expanding abroad. Heytea opened its first overseas store in Singapore in 2018 and has since moved into markets such as the United Kingdom, Australia, Canada, and the United States, opening more than 70 stores overseas. Meanwhile, Mixue Group has established over 4,800 overseas locations and is the world's largest ready-made beverage chain by number of stores. Mixue built four local distribution centers and plans to continue to expand its logistics facilities in four countries in Southeast Asia. Other players like ChaPanda have also entered the fray. ChaPanda has emphasized localization, rapidly opening multiple outlets overseas since last year and adjusting its menu to cater to local preferences. The company now has 18 overseas stores and is pushing forward with its global strategy in markets including South Korea, Thailand, and Spain. The company's 2024 financial results, released in March, showed that its revenue reached 4.92 billion yuan, with the number of stores growing by 7.6 percent. - China Daily/ANN
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CNA
24-04-2025
- Business
- CNA
Commentary: How Chagee, Mixue and Luckin are brewing success in a crowded market
Commentary The Chinese tea and coffee chains offer lessons for consumer brands in a changing business environment, says economist Lee Kok How. SINGAPORE: Chinese beverage companies are having their moment in the spotlight. Chagee CEO Zhang Junjie became a billionaire at age 30 after the tea chain successfully went public on the Nasdaq on Apr 17, against the backdrop of the US-China tariff war. Just weeks earlier, beverage giant Mixue – now the world's largest F&B chain by store count, surpassing McDonald's and Starbucks – listed in Hong Kong. These brands, along with Luckin Coffee, are reshaping the industry. Ambition is not enough to conquer global markets, neither is luck. Their journeys to international success may be different but what they share is a deep understanding of brand positioning and strategic execution. CLEAR BRAND POSITIONING Each one has built a clear market position and every decision is consistently aligned with that and its target audience. Chagee has positioned itself as a premium tea brand, with cultural sophistication at its core. Its collaborations reflect this – from co-branding with the Forbidden City Palace Museum to partnerships with designer Angel Chen at Shanghai Fashion Week 2024, and a Van Gogh-themed collection that combines fine art and tea culture. It is also endorsed by Zheng Qinwen, Olympic gold medalist in tennis, aligning the brand closely with wellness and active lifestyle. These partnerships also reinforce its aspirational narrative to young, upwardly mobile consumers. Luckin Coffee, by contrast, focuses on urban, youthful convenience. Its intellectual property (IP) partnerships – with blockbuster video game Black Myth: Wukong, beloved children's show Sesame Street, viral mascot Butterbear, and the NBA's Houston Rockets – project a vibrant, accessible image. Celebrity endorsements from Liu Yifei and Jackson Yee further amplify Luckin's appeal among Gen Z and millennial customers. Meanwhile, Mixue leans fully into its mass-market roots. Rather than associating with high-profile celebrities, it has built a brand identity around catchy jingles and its own IP – its mascot Snow King is instantly recognisable online and across suburban and rural China. FILE PHOTO: A customer walks out of a Mixue Bingcheng bubble tea store at a shopping mall in Beijing, China September 19, 2024. REUTERS/Florence Lo/File Photo Promotional gifting through branded merchandise is another strategy these brands pull off brilliantly to deepen emotional connection with consumers. Chagee's focus on exclusivity reflects its premium strategy. In China, it rolled out limited-edition Forbidden City-themed blind box bookmarks and Van-Gogh themed branded merchandise. In Malaysia, a limited-edition collaboration with homegrown fashion brand Pestle & Mortar also appealed to locals. Luckin Coffee strikes a middle ground. In Singapore, a recent promotion offered cartoon character Maltese dress-up stickers – a playful but lifestyle-oriented reward that fits well with its young urban clientele. In contrast, Mixue keeps it simple and mass-focused, with Chinese New Year red packets and lucky draw prizes such as Snow King thermos bottles, glass tumblers, plush toys and snacks – perfect for families and younger crowds drawn by affordability and fun. Store formats are another physical reflection of market positioning. Chagee focuses on high-traffic, upscale locations such as Singapore's Vivocity, Shanghai's Global Harbour and Metro City, with stores designed to offer an immersive, boutique tea-drinking experience. Flagship stores are part of the brand journey – reinforcing premium cues from the moment a customer walks in. Luckin Coffee's model favours small-format, no-frills stores tucked into high-footfall areas, perfect for takeaway orders. Convenience, not luxury, is the priority. Mixue's strategy is to be everywhere, opting for heartland spots in Singapore. In China, stores are in affordable suburban and rural store locations. None of these formats happen by accident. Each is a conscious extension of brand positioning to capture the specific journeys and behaviors of their target consumers. The exterior of Chagee VivoCity. (Photo: Chagee) But rapid international expansion brings inevitable growing pains. Luckin Coffee continues to manage reputational repair after its 2020 accounting scandal, when it admitted to fabricating sale figures worth over US$310 million in 2019. Mixue is navigating quality consistency across more than 45,000 outlets run by franchisees across 12 countries. Chagee faced controversy after some netizens called out its packaging and merchandise designs for being close imitations of famous luxury brands like Dior and LV. More recently, the company angered locals for featuring China's nine-dash line encompassing disputed territories in the South China Sea on its app in Malaysia and Vietnam, drawing calls for a boycott. Focusing on the business perspective, what stands out is that these challenges arise from aggressive scaling – not from losing sight of who they are. This will be a key lesson for all businesses working to adapt to the changing global environment and a more ominous consumer outlook. Precision, clarity and discipline around brand positioning will be what truly move the needle. Lee Kok How is an Entrepreneur and Affiliate Faculty of Singapore Management University (SMU). He was formerly Principal Economist at BHP and Senior Economist at EDB and MTI. The views are those of the author and do not represent SMU and that of its affiliates. CHAGEE mixue Luckin Coffee
Daily Express
22-04-2025
- Business
- Daily Express
Chagee tea boss becomes billionaire after Nasdaq debut
Published on: Tuesday, April 22, 2025 Published on: Tue, Apr 22, 2025 Text Size: A Chagee branch at Imago - (Pic by Imago Shopping Mall) Zhang Junjie, a 30-year-old Chinese entrepreneur, has become a billionaire after his tea chain, Chagee Holdings, surged up to 40 percent on its Nasdaq debut on April 17, boosting his net worth to US$2.6 billion, according to Bloomberg. Despite US-China tensions and a sluggish IPO market, Zhang chose New York for Chagee's listing as Hong Kong faces market saturation and waning investor interest in new tea ventures, according to The Straits Times. Founded in 2017 in Yunnan, Chagee blends modern retail with traditional Chinese tea culture and has become a major player in China's beverage scene. Zhang joins a wave of wealthy tea entrepreneurs, including Mixue Group's founders, as the sector grapples with rapid growth, market oversupply, and cautious investors. * Follow us on Instagram and join our Telegram and/or WhatsApp channel(s) for the latest news you don't want to miss. * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
