Taipei, Jan. 8 (CNA) Sharetea (歇腳亭), one of Taiwan’s most well-known bubble milk tea brands, will extend its reach in the Middle East to Kuwait after having set up outlets in Dubai in 2012.
Lian Fa International Dining Business Co., which owns Sharetea, said in a statement released earlier this week that it had signed an agreement with a partner in Kuwait in preparation for setting up a foothold in the oil-producing country, making Sharetea the only international hand-shaken beverage brand there.
Lian Fa said that while Kuwait had been recently affected by the COVID-19 pandemic as well as volatility in crude oil prices, the country’s economy has been undergoing a recovery since the second half of last year and is expected to grow by about 3 percent this year.
The bubble milk tea brand said it had high hopes of capitalizing on increasing business opportunities in Kuwait and that it aimed to introduce Taiwan’s bubble milk tea culture to more consumers in the Arab world.
Sharetea currently has four stores in Dubai, United Arab Emirates. The brand said it expected Taiwan’s bubble milk tea to become more popular among the young generation in the Middle East market.
Lian Fa is upbeat about the global bubble tea market with sales expected to reach US$4.3 billion in 2027 from US$2.32 billion in 2020, and an expected 9-percent compound annual growth rate (CAGR) in sales during that period prompted the company to expand Sharetea’s Middle East operations.
Lian Fa is scheduled to launch its initial public offering on Taiwan’s over-the-counter market for Jan. 14. According to its prospectus for the listing, the U.S. market accounts for 55.95 percent of its total sales in the first seven months of this year and Hong Kong, where there is a total of 44 Sharetea shops, made up 15.86 percent of its revenue.
In the first nine months of last year, Lian Fa posted NT$614 million in consolidated sales, up 31 percent from a year earlier, and its net profit hit NT$85.57 million or NT$5.52 per share, compared with NT$19.30 million or NT$1.47 per share for the entire 2020.
Sharetea started as a black tea stall on Nanyang Street, downtown Taipei, in 1992, and established Lian Fa in 2004. It now has more than 350 outlets in 13 markets worldwide, including Hong Kong, the United States, Canada, the Czech Republic, Singapore, Indonesia, the Philippines, and Vietnam as well as Dubai.
Lai Po-yu (賴伯宇), president of Lian Fa, said in the statement that the U.S. market had become the focus of Sharetea’s global expansion and the number of stores in the U.S. market was expected to hit 131, spread across 24 U.S. states, by the end of the first quarter, up from 112 as of the end of July 2021.
Lai said more than 40 Sharetea stores were in a preparatory stage for opening in the U.S. market, with the brand expected to be in a total of 25 U.S. states by the end of this year.
Lian Fa said a cup of tea from Sharetea cost between US$5 and US$7, even higher than a Starbucks coffee, but many U.S. consumers still liked the Taiwanese brand since its flavors cater not only to ethnic Chinese consumers but also American consumers.
According to Lian Fa, about 70 percent of its franchisees and 50 percent of its customers in the U.S. markets are non-ethnic Chinese.