CHAGEE’s Market Breakthrough: A Study of Marketing Strategies
in China’s Highly Competitive Tea Beverage Industry
Zihan Yu
School of Visual Arts, New York, 11101, U.S.A.
Keywords: New-Style Tea Beverage, Cultural Branding, Marketing Strategy, Brand Differentiation, Consumer
Engagement.
Abstract: China’s new-style tea beverage market has witnessed rapid expansion, growing from RMB 42.2 billion in
2017 to RMB 100.3 billion in 2021, with a CAGR of over 20%. Amid this highly competitive environment,
CHAGEE has emerged as a standout brand by leveraging a distinct brand identity and strategic marketing
execution. This study analyzes the core drivers behind CHAGEE’s success, including its emphasis on cultural
positioning, product innovation centered on original-leaf milk tea, immersive offline experiences, and
integrated multi-channel distribution. Findings suggest that CHAGEE’s ability to blend traditional Chinese
tea culture with modern consumer expectations has enabled it to build strong brand resonance. Its success
demonstrates the power of cultural differentiation and consistent branding in capturing both domestic and
global market opportunities in the new-style tea industry.
1 INTRODUCTION
In recent years, China’s new-style tea beverage
market has undergone significant expansion, growing
from RMB 42.2 billion in 2017 to RMB 100.3 billion
in 2021, with a compound annual growth rate
exceeding 20%. However, the market has also
become increasingly competitive, with a high number
of brands and relatively low market concentration.
According to industry data, the top five players (CR5)
account for approximately 58.3% of the high-end tea
beverage market and around 51.2% of the mid-to-
low-end segment (Qianzhan Industry Research
Institute, 2023), indicating a competitive
environment with room for brand breakout. Leading
players such as Heytea, Nayuki, and Chayan Yuese
have captured significant market share through strong
brand influence, robust supply chains, and innovative
marketing. Meanwhile, brands like Mixue Ice Cream
& Tea have rapidly gained traction in lower-tier
markets by emphasizing affordability. In this context,
differentiation and creative marketing are essential
for brands to win consumer preference. CHAGEE has
emerged as a representative case of successful brand
breakthrough under such conditions.
Founded in 2017 by Zhang Junjie in Kunming,
Yunnan, CHAGEE launched its first store during a
period of rapid growth in China’s modern tea
industry, as consumer demand for healthy and high-
quality beverages continued to rise. The brand name
draws inspiration from the Chinese epic and
traditional opera Farewell My Concubine, and its
logo is based on the imagery of huadan opera
characters, evoking strong elements of traditional
Chinese aesthetics. This cultural narrative resonates
with consumers’ deep-rooted pride in China’s
historical heritage and demonstrates the brand’s
commitment to cultural respect and preservation. The
founding team consists of young entrepreneurs
passionate about tea culture, many of whom possess
extensive industry experience and strong professional
backgrounds. As of 2023, CHAGEE held
approximately 5–7% of the market share in China’s
competitive new-style tea beverage industry—a
notable achievement given the fierce competition
(Chen, 2023).
The primary aim of this study is to investigate
how CHAGEE has leveraged marketing strategies to
stand out in the competitive tea beverage industry.
Specifically, it examines the brand’s practices in
differentiation strategy, product development,
cultural storytelling, consumer engagement, and
multi-channel distribution. By analyzing CHAGEE
as a case study, this research seeks to provide
Yu, Z.
CHAGEE’s Market Breakthrough: A Study of Marketing Strategies in China’s Highly Competitive Tea Beverage Industry.
DOI: 10.5220/0013992400004916
Paper published under CC license (CC BY-NC-ND 4.0)
In Proceedings of the 2nd International Conference on Public Relations and Media Communication (PRMC 2025), pages 407-413
ISBN: 978-989-758-778-8
Proceedings Copyright © 2025 by SCITEPRESS Science and Technology Publications, Lda.
407
valuable marketing insights for the tea beverage
sector as well as broader consumer goods industries.
This research adopts a case study methodology
grounded in market analysis, consumer behavior, and
branding strategy. Through the collection and
examination of industry data, brand communications,
product supply chains, and consumer feedback, this
study offers a comprehensive evaluation of
CHAGEE’s market breakout strategies. Additionally,
the research incorporates consumer survey data to
analyze the brand’s target audience profile and
decision-making factors, thereby offering a more
holistic understanding of the mechanisms behind
CHAGEE’s marketing success.
2 BRAND POSITIONING AND
MARKET STRATEGY OF
CHAGEE
2.1 Oriental Cultural Brand
Positioning
Founded in Yunnan in 2017, CHAGEE draws from
the province’s rich legacy in tea cultivation and
production, as Yunnan is globally renowned for its
diverse tea varieties and long-standing tea culture.
The brand strategically positions itself as the “New
Oriental Teahouse”—a representative of
contemporary Chinese-style tea beverages. This
positioning emphasizes the profound heritage of
Chinese tea culture. With the slogan “Brewing
Friendship with Oriental Tea,” CHAGEE’s brand
mission is to “inherit Chinese tea traditions and lead
the fashion of new tea culture,” aiming to introduce
Chinese tea to the world (CHAGEE, 2022).
CHAGEE’s emphasis on oriental cultural identity
is not incidental but based on deep market insight.
The founding team conducted a comprehensive
review of the milk tea industry and found that after
the rise of HEYTEA and Nayuki in 2015, innovation
in premium milk teas based on real tea and real milk
had largely stagnated (Zhang, 2023). Although
brands like Chayan Yuese have embraced a
“Guofeng” (national style) aesthetic, their
development is geographically limited, primarily
within the Hunan and Hubei regions. This revealed
untapped potential in the national market for
culturally differentiated brands.
The founding team of CHAGEE analyzed the
global expansion of Starbucks in the U.S., identifying
it as both a product diffusion and cultural diffusion
phenomenon (Li & Wang, 2024). They posited that
the rise of oriental culture presents Chinese tea brands
with a similar opportunity for international
expansion. In other words, Starbucks’ success reflects
not only business growth but also the global
projection of American cultural influence. As oriental
culture gains greater prominence globally, Chinese
tea brands like CHAGEE have the potential to extend
their influence through cultural identity, echoing
Starbucks’ path on a new trajectory.
In recent years, the rise of “national fashion”, the
emergence of domestic brands, and increasing
appreciation for local culture on social media have
signaled a growing sense of cultural pride among
younger consumers. As a result, new consumer
brands with inherent oriental cultural elements
naturally attract favorable attention. From a product
perspective, the stagnation in innovation among
premium tea brands in the “real tea + real milk”
category since 2015 further opened a space for
CHAGEE’s differentiated development.
CHAGEE has built a highly recognizable visual
identity system based on its clear brand positioning.
The brand’s visual design integrates elements of
oriental aesthetics—from its logo and packaging to
store interiors—drawing inspiration from traditional
Chinese opera culture to form a distinctive brand style
(Huang, 2024). The logo references the serenity and
graceful lines of Buddhist statues, while
reinterpreting them through Western geometric
abstraction. This fusion of “Buddhist poise and
geometric aesthetics” not only captures a modern
aesthetic but also strategically positions the brand for
international markets, appealing to younger
consumers' visual preferences.
In terms of packaging, CHAGEE excels at
embedding cultural narratives into cup and accessory
design. For instance, the launch of the “Wild
Gardenia” series featured intricate, rhythmic oriental
linework. The cups were designed with CHAGEE’s
initial “C” combined with gardenia motifs and Tang
Dynasty pipa patterns, arranged in layered formations
against a blue tie-dye background. For the 2024
Chinese New Year, CHAGEE drew inspiration from
the “C-shaped jade dragon” of the Hongshan
Culture—hailed as the “First Dragon of China.” This
design merged the dragon’s shape with the twelve
Chinese zodiac signs and the brands signatureC
pattern, creating a product rich in both traditional
symbolism and modern design language.
Regarding store design, CHAGEE places strong
emphasis on multisensory experiences. Natural wood
textures, traditional joinery structures, seal script
calligraphy, and maps of ancient tea-horse trade
routes are used to cultivate an immersive oriental
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aesthetic (Seefuner, 2023). Its stores incorporate
traditional opera costumes, hand embroidery,
woodwork, and architectural craftsmanship, offering
a refreshing design language. These spatial
experiences serve as tangible carriers of brand
culture, enhancing customers’ emotional connection
and cultural recognition of the brand.
Notably, CHAGEE’s application of national
fashion culture is not a simplistic retro reproduction.
Instead, it embeds self-awareness and contemporary
relevance into its brand storytelling (Zheng, 2023).
The brand’s marketing philosophy of “Youth
Awakening” reflects both the spiritual essence of
traditional culture and the re-creation of new-style
oriental aesthetics by modern youth. This cultural
branding strategy results in a “win–win” dynamic: it
enhances brand identity while helping CHAGEE
transcend regional limitations in its market
expansion.
2.2 Location Strategy and Premium
Market Positioning
CHAGEE adopts a clearly defined premium market
positioning in its location strategy, with stores
primarily situated in high-end shopping malls and
high-footfall, high-commercial-value central
business districts (CBDs) in Tier-1 and emerging
Tier-1 cities—such as Chunxi Road in Chengdu and
Grandview Mall in Guangzhou. This approach
enhances the brand’s ability to command a premium
and shapes its image as a mid-to-high-end tea
beverage provider. Approximately 37% of
CHAGEE’s stores are located in shopping malls, with
around 70% of them positioned on the first floor,
thereby increasing visibility and accessibility to
affluent consumers and reinforcing the brand’s
identity as a luxury tea brand.
Such a refined and data-driven location strategy
has enabled CHAGEE to cultivate a distinctive mid-
to-premium brand image and enhance the perceived
value of its products. This, in turn, has contributed to
strong appeal among both franchisees and consumers,
increasing brand loyalty and customer retention. The
premium positioning—characterized by higher price
points, strong brand recognition, and superior
customer experiences—has given CHAGEE a
competitive edge in China’s fiercely contested new-
style tea beverage market and laid a solid foundation
for its continued expansion.
3 SOCIAL MEDIA MARKETING
AND BRAND
COMMUNICATION
CHAGEE has established an omnichannel digital
presence across multiple major social media
platforms, forming a comprehensive “content seeding
matrix” to maximize its influence. Through
differentiated content strategies, CHAGEE has
demonstrated both depth and breadth in its social
media operations, revealing a high degree of strategic
planning and execution—offering a valuable case
study in brand marketing.
3.1 Social Media Seeding Strategies
CHAGEE's social media deployment is both broad
and precise. On TikTok China, brand-related
hashtags have surpassed 1.4 billion views, while on
RedNote, over 50,000 posts related to the brand have
been published. Its total online exposure has
exceeded tens of billions of views, creating a viral
wave of user-generated content. On RedNote in
particular, CHAGEE ranks high in consumer
mindshare, with a monthly search index surpassing 3
million.
In response to the unique characteristics of
different platforms, CHAGEE adopts tailored
marketing strategies. On TikTok, the brand operates
two official accounts with a combined following of
over 410,000. One account focuses on localized
narrative-driven content (e.g., for the Guangxi
region), while the other delivers nationwide
promotional campaigns, achieving a balance between
regional and national reach. On RedNote, CHAGEE
emphasizes content related to product trials, brand
storytelling, new product launches, and interactive
user campaigns, building a following of over 46,000.
On Weibo, the brand maintains daily activity with
over 53,000 followers and has developed multiple
user communities to support the conversion of public
traffic into private user domains.
CHAGEE implements a hybrid strategy
combining viral content with routine seeding. The
brand uses a small number of highly creative
promotional materials to drive traffic, supported by a
steady flow of conventional promotional content to
facilitate conversion. This dual-pronged approach has
successfully improved both brand awareness and
sales. Moreover, the brand excels at topic marketing,
running campaigns such as “Milk Tea for Everyone
in China,” which generated over 100 million views
and significantly increased brand recognition.
CHAGEE’s Market Breakthrough: A Study of Marketing Strategies in China’s Highly Competitive Tea Beverage Industry
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As the brand expands internationally, social
media continues to play a key role in its marketing
strategy, particularly in the use of key opinion leaders
(KOLs). In the Hong Kong market, CHAGEE
executes multi-platform campaigns across Instagram,
Facebook, and RedNote. In Malaysia, the brand
appointed national sports celebrity Lee Chong Wei as
its spokesperson, rapidly enhancing local visibility.
3.2 Influencer Collaboration and
Co-Branding Strategies
CHAGEE places a strong emphasis on KOL and
KOC (key opinion consumer) strategies in its social
media marketing framework, building a multi-level
influencer matrix to synchronize brand exposure with
consumer conversion (Wang, 2024). Influencer
collaborations are adjusted according to campaign
phases: during the pre-launch stage, the brand
primarily works with mid-tier KOLs and KOCs to
shape brand identity and build awareness; during the
peak stage, mid-to-top-tier influencers are engaged to
amplify content dissemination and elevate brand
tone; in the maintenance stage, lower-tier influencers
are activated to reinforce product experiences and
sustain long-term user engagement.
While top-tier influencers offer wide visibility,
brand research indicates that mid-tier influencers
within specific niches often drive higher user
conversion rates (Jiang & Li, 2023). Therefore,
CHAGEE allocates influencer resources with
flexibility and precision according to specific
marketing goals and campaign stages, achieving a
balance between exposure and conversion.
On the tactical level, CHAGEE places particular
importance on “store-visit influencer marketing” to
enhance consumer trust and authenticity (Zhu, 2024).
The brand collaborates with leading food and
beverage influencers to create high-quality store visit
content, organizes live-streaming sessions from
physical stores to enable real-time interaction and
improve brand credibility, and produces short-form
videos tailored to each platform’s content distribution
logic in order to boost engagement and reach.
Additionally, CHAGEE actively engages in co-
branded campaigns to expand brand influence and
increase consumer loyalty. During the 2024 Lunar
New Year, the brand launched a culturally themed
interactive campaign powered by AIGC (Artificial
Intelligence Generated Content) technology, coupled
with a UGC (User-Generated Content) strategy.
Under the slogan “Friends in the Year of the Dragon,
First Cup Must Be CHAGEE,” the campaign
attracted over 10 million participants and
accumulated more than 100 million video views. By
combining AIGC with UGC, the brand not only
extended its communication reach but also enhanced
user interaction, reinforcing its presence in the
competitive beverage market.
3.3 Consumer Engagement and
Community Building
CHAGEE places a strong emphasis on user-generated
content (UGC) in its social media marketing strategy,
considering it a key metric for evaluating both brand
popularity and the level of consumer interaction.
Through the careful planning of topical marketing
campaigns and offline events, the brand stimulates
organic user participation and content creation,
thereby cultivating a highly engaged and loyal brand
community.
In terms of topical marketing, CHAGEE excels at
crafting creative copywriting that integrates humor,
cultural resonance, and social relevance to spark user
conversations. Examples include phrases such as
“Drink Bo Ya’s Lament, Stay Awake All Night,”
“After Mulan’s Journey, I Enlisted at 3 a.m. for My
Father,” and “Tea Is for the Afternoon, But Insanity
Is for Midnight.” These culturally-infused slogans
draw on traditional Chinese references while
resonating with the social language of younger
generations, creating viral momentum in a short
period of time. Such campaigns not only increase the
brand’s visibility on social media platforms but also
foster emotional connections between the brand and
its users by encouraging the creation and sharing of
related content. CHAGEE further enhances user
engagement by regularly launching trending topics
such as name-your-own-product contests and tea
pairing challenges, deepening user interaction and
encouraging sustained content generation.
Offline, CHAGEE creatively integrates brand
promotion with user participation by designing
playful and experiential campaigns that motivate
consumer engagement. During the Chongqing
Marathon, for instance, the brand launched a “Dance
in Store for a Free Drink event, encouraging
customers to exchange a designated physical activity
for a free product experience. This not only enhanced
the entertainment value of the campaign but also
stimulated new waves of user-generated content on
social media. In the Guangdong region, CHAGEE
offered “Free Tea for Practicing Wing Chun,”
aligning with local cultural traditions to deepen brand
affinity. Similarly, in Sichuan, it launched a “Do
Yoga, Get Tea” campaign centered on wellness and
lifestyle trends, effectively attracting attention from
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targeted consumer segments. These region-specific
events created a dynamic atmosphere for brand-
consumer interaction, reinforcing both online and
offline engagement and amplifying the brand’s
topical relevance across multiple channels.
CHAGEE’s UGC strategy is further reinforced
through structured mechanisms that encourage and
guide user content creation. By leveraging
community management, interactive mechanisms,
and incentive systems, the brand motivates
consumers to share product reviews, packaging
experiences, and co-branded merchandise. On
RedNote, for instance, user-generated reviews of
CHAGEEs products have surpassed tens of
thousands of posts, covering aspects such as flavor,
packaging aesthetics, and brand storytelling. These
authentic testimonials not only strengthen the brand’s
credibility but also serve as crucial reference points
for potential customers. Additionally, CHAGEE
utilizes a combined UGC and social viral strategy by
implementing user-specific challenges, limited-time
tasks, and interactive rewards to incentivize sustained
consumer participation. This approach helps the
brand maintain high visibility and engagement across
platforms.
4 COMPARATIVE ANALYSIS OF
DIFFERENTIATION WITH
COMPETITORS
In China’s rapidly evolving new-style tea beverage
market, CHAGEE has established a distinctive
competitive positioning in contrast to brands such as
HEYTEA and Nayuki. In terms of brand identity,
both HEYTEA and Nayuki emphasize fruit-based
teas priced above 25 RMB and adopt minimalist,
modern design aesthetics often likened to the iOS-
style visual language. In contrast, CHAGEE positions
itself as a “new Chinese-style Guofeng tea brand,”
gaining consumer recognition through its focus on
original-leaf milk tea and its strong integration of
traditional Chinese cultural elements. This strategic
differentiation has allowed CHAGEE to carve out a
unique niche in the increasingly crowded tea market.
Regarding store design and spatial strategy,
Nayuki applies a “large store + small store” model
and emphasizes the “third space” experience, while
HEYTEA employs a lighter, more contemporary
interpretation of new Chinese-style tea spaces.
CHAGEE’s stores, by contrast, are deeply rooted in
oriental aesthetics and cultural expression, blending
traditional and modern elements to create a distinctive
brand experience. Its interior design incorporates
traditional opera costumes, natural wood textures,
hand embroidery, and mortise-and-tenon
architectural craftsmanship—offering a fresh and
immersive spatial experience that sets the brand apart.
From a product strategy perspective, CHAGEE’s
positioning of “healthy tea beverages + oriental
culture” has formed a clear competitive barrier. A
notable trend in the tea beverage industry is the
growing emphasis on "cultural tea" as brands seek to
differentiate themselves. HEYTEA has also begun to
embrace oriental aesthetics—for example, its store in
Sanlitun, Beijing incorporates imperial gold color
palettes, stone-inspired door handles, bamboo-leaf
wall motifs, lanterns, and Chinese calligraphy in its
interior design, signaling a shift toward culturally
resonant branding (Tea Beverage Competitive
Analysis Report, 2023). This trend illustrates that
CHAGEE’s cultural strategy is influencing industry
direction, while also attracting intensified
competition from peers seeking to emulate its
approach.
CHAGEE’s market competitiveness is further
reflected in the performance of its flagship products.
According to industry data, its signature drink "Bo
Ya’s Lament" sold approximately 230 million cups in
2023 alone. At an average price of 16 RMB per cup,
this single product accounted for roughly 34% of the
brand’s total annual revenue. This strong single-
product effect has also drawn competitive attention.
In 2024, Luckin Coffee launched a jasmine tea
product called “Qingqing Jasmine” at a price of 9.9
RMB, widely seen by consumers as a budget-friendly
substitute for CHAGEE’s "Bo Ya’s Lament." This
kind of cross-category competition underscores
CHAGEE’s product influence, which has extended
beyond the boundaries of traditional tea beverages.
Functionally, CHAGEE aims to position itself as
the “Oriental Starbucks,” as noted by its founder in a
public address. Its products, such as “tea lattes,” are
designed to offer functional benefits comparable to
coffee. For instance, the new product "Mulan’s
Journey," launched in May 2024, contains
approximately 292.8 mg of tea polyphenols per cup,
delivering a strong energizing effect and directly
competing with coffee in terms of functional
performance. This functional differentiation enables
CHAGEE to compete not only within the tea market
but also within the broader energy beverage segment.
In terms of future development, CHAGEE has
demonstrated robust expansion capabilities and
strong potential for international growth. According
to data from Qichacha, the brand has registered 390
trademarks and holds 4 patents, supported by a well-
CHAGEE’s Market Breakthrough: A Study of Marketing Strategies in China’s Highly Competitive Tea Beverage Industry
411
structured branding system, effective marketing
model, and integrated resource management.
CHAGEE employs a “1+1+9+N” store expansion
model, which involves the pre-establishment of
localized operational structures and refining store
formats through direct ownership before scaling up
via tightly controlled franchising. This systematic
growth strategy provides a strong foundation for the
brand’s long-term development in both domestic and
global markets.
CHAGEE’s international expansion is already
underway. By the end of 2021, the brand had opened
nearly 40 stores across Malaysia, Singapore, and
Thailand. This global strategy not only extends the
brand’s market footprint but also serves as a cultural
export platform for Chinese tea traditions. With the
rising global influence of Chinese culture,
CHAGEE’s positioning—centered around oriental
aesthetics—may present increasing opportunities for
global resonance and market expansion. The brand’s
slogan, “Brewing Friendship with Oriental Tea,”
reflects both its commercial ambition and cultural
mission.
5 CONCLUSION
CHAGEE has successfully distinguished itself in
China’s highly competitive new-style tea beverage
market through its clear oriental cultural positioning,
efficient social media marketing, differentiated
product strategy, and systematic expansion model. Its
experience offers valuable insights for both the tea
industry and broader consumer goods sectors.
First, clear brand positioning is fundamental to
market breakthrough. CHAGEE’s identity as a “new
oriental tea brand” was not a random choice, but the
result of deep market insight and forward-looking
cultural trend analysis. By integrating traditional
Chinese culture with contemporary tea consumption,
CHAGEE has addressed modern consumers desire
for healthy, high-quality beverages while resonating
with younger generations’ growing cultural
confidence and appreciation for national heritage.
This culturally driven strategy has enabled the brand
to stand out in an otherwise highly homogenized
market.
Second, omnichannel social media marketing is
essential for expanding brand influence. CHAGEE
has developed a comprehensive media matrix across
major platforms such as Douyin, RedNote, and
Weibo, implementing differentiated content
strategies tailored to each channel’s characteristics.
Through clever topic design, collaborations with key
opinion leaders (KOLs), and integrated online–
offline interactive campaigns, CHAGEE has
successfully stimulated organic user engagement and
content dissemination, generating a viral
communication effect. This social media–driven
model has not only boosted brand visibility and user
participation but has also significantly reduced
customer acquisition costs.
Third, a systematic expansion strategy is critical
to achieving scalable growth. CHAGEE has adopted
the “1+1+9+N” model in its store expansion efforts,
which involves the preliminary establishment of
localized operations, the refinement of local store
models through direct ownership, and the formation
of a tightly controlled direct-franchise hybrid system.
This approach ensures both consistency in brand
identity and product quality, while accelerating
market penetration and large-scale expansion.
Looking ahead, CHAGEE has demonstrated
strong growth momentum and international potential.
According to Qichacha data, the company has
registered 390 trademarks and holds 4 patents,
supported by a comprehensive brand system, an
effective marketing model, and interconnected
resource allocation. Its 1+1+9+N” expansion
strategy continues to underpin its growth trajectory by
providing operational resilience and scalability across
markets.
CHAGEE’s international footprint is already
taking shape. By the end of 2021, the brand had
opened nearly 40 stores across Malaysia, Singapore,
and Thailand. This global strategy not only enlarges
CHAGEE’s market reach but also contributes to the
international promotion of Chinese tea culture,
aligning with its mission to “brew friendship with
oriental tea.” As traditional Chinese culture gains
increasing global influence, CHAGEE’s culturally
rooted brand positioning may find even broader
opportunities in international markets.
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