Guming: Hailing from a Small Town in Taizhou, is Tapping into a Billion-Yuan Market?

February 12th,Guming Holdings Limited listed on the Hong Kong Stock Exchange,becoming the third stock in the new tea beverage sector, following Naixue's Tea and Chabaidao.

This cup of milk tea, drifting from the streets and alleys of Daxi Town in Wenling, has undergone 15 years of refinement to become an influential force in the landscape of China’s new tea beverage industry. From a hand-pushed cart to a massive empire of thousands of stores, from local sentiment to a national trend, Guming has written a growth model for Chinese consumer brands through hard work and breakthrough innovations.

The Sweet and Sour Beginnings from Zero to One

In 2010, on the streets of Wenling, 26-year-old Wang Yunan pushed a modified tricycle, dedicating countless hours under the scorching 40°C heat to perfect his milk tea recipe. A graduate of Zhejiang University of Science and Technology, Wang likely never imagined that the 5-yuan milk tea in his hand would someday unlock a billion-dollar market.

“I just wanted to create a delicious and affordable cup of tea,” the founder’s simple vision laid the groundwork for Guming’s core principle of high quality and affordability.

At that time, the tea beverage market was far from the vibrant industry it is today. Numerous brands were emerging, and the market order was still in its infancy.

Running a “milk tea business” was not as sweet and glamorous as outsiders might perceive. The challenges of starting from scratch were tangible and tedious—mixing drinks, managing operations, fundraising, and reviewing processes... Wang Yunan faced an endless array of tasks to juggle each day.

Looking back at the early days of entrepreneurship, Wang Yunan candidly admits: “There was no business logic, we were just doing it with sincerity.”

He personally selected every raw ingredient, traveling to different regions to find high-quality tea leaves, fresh fruit, and rich milk sources. In order to develop a unique flavor, he and his team worked day and night, constantly adjusting recipes and conducting repeated experiments.

The creation of Guming’s first signature tea wasn’t easy. Take the popular fruit tea series as an example: during development, the team tried countless combinations to find the perfect balance between fruit and tea. From choosing the right ripeness of the fruit to controlling the brewing time and temperature of the tea, every detail was carefully refined.

When sales of the milk tea were not as expected due to poor taste, Wang Yunan kept drinking it and making improvements. He even set up a mobile stall with his tricycle and invited neighbors and passersby to try his self-made milk tea.

Eventually, a refreshing fruit tea with a perfect blend of fruit and tea flavors was born. Thanks to thorough market research in the early stages, this fruit tea resonated with local tastes, and soon long lines formed outside the small shop. Word of mouth spread quickly, and Guming’s name began to take hold in the small town.

“The reason a product survives is because consumers like it. If consumers drink it once and don’t like it, then it has no reason to exist,” said Wang Yunan.

Over the next three years, Wang Yunan and his partner Ruan Xiudi “passionately and diligently” drank 20,000 cups of milk tea, continuously improving and iterating. They replaced artificial flavoring with high-quality tea leaves and focused on introducing new fruit teas to meet consumers’ demands for healthy and refreshing flavors. Through this, Guming built a “moat” around its “taste” and firmly established its market position.

The Battle for Supply Chain Breakthrough

After achieving success in Daxi Town, Guming began its expansion journey.

In 2013, Guming began to expand into regions around Taizhou. Each time the brand entered a new area, the team would conduct in-depth market research to understand local consumer preferences, spending power, and the competitive landscape.

Based on these research findings, the team would make targeted adjustments to their products, launching drinks that suited local tastes. For example, in areas where people preferred sweeter flavors, the drinks would be made a little sweeter; in regions rich in local fruit resources, Guming would increase the use of these fruits in their beverages.

During the expansion process, building a solid supply chain became a top priority for Guming. The company adopted a self-distribution model and built its own supply chain, a forward-thinking move in the tea beverage industry at the time.

The self-distribution model ensured that raw materials were delivered to stores on time and remained fresh, ensuring stable product quality. Meanwhile, having its own supply chain allowed Guming to better control costs and ensure the quality of raw materials from the source.

The launch of the hugely popular “Super A Cheese Grape” drink in 2021 proved the strategic value of Guming’s full industry chain layout. To support its expansion, Guming has now established three specialized factories for juice and tea processing and 22 warehouses nationwide. These warehouses cover a total area of approximately 220,000 square meters and feature over 60,000 cubic meters of cold storage capacity that can support various temperature ranges.

In 2023, Guming completed cold chain distribution of raw materials worth over 4 billion yuan, setting the highest record in China's fresh tea beverage industry. Among the top 10 fresh tea beverage brands in China by GMV, Guming is the only one capable of frequently delivering short-shelf-life fresh fruits and milk to stores in lower-tier cities.

This supply chain system, known as the “strongest on earth” by its employees, allows Guming to quickly iterate on its products while ensuring consistent product quality and flavor across tens of thousands of stores. As a result, it has become a beloved brand among consumers.

The Glorious Journey of Nationwide Expansion

From a local town to thousands of stores, Guming’s strategy of “regional density” in store placement has paved the way for its nationwide chain success.

Guming believes that once a brand has more than 500 stores in a single province, it establishes the foundation to showcase the “scale effect,” or what is known as the “critical scale.”

With its success in regional markets, Guming began its push into the national market. It continued to leverage its advantage in second and third-tier cities, further intensifying its store expansion. Guming recognized the immense potential in these cities, where the demand for tea beverages had yet to be fully met.

Throughout its nationwide expansion, Guming continuously optimized its management system and operational model. To ensure that nearly 10,000 stores maintained consistent product quality and service standards, Guming established a strict quality control system. From selecting suppliers to procuring raw materials, processing, delivery, and store-level preparation and sales, every step follows strict standards and monitoring protocols.

Guming adheres to the values of “unity, simplicity, sincerity, and striving for first place,” fostering a unique franchise culture and building lasting partnerships. As the first fresh tea beverage brand in China to establish a Franchisee Committee, Guming uses this platform to gather suggestions for major business decisions and has held an annual National Franchisee Conference for 11 consecutive years to enhance communication.

This strong partnership network drives efficient store operations, ensuring product and service quality, improving consumer experiences, boosting store performance, attracting more franchisees, and reinforcing cooperation. This creates a virtuous cycle that supports Guming’s long-term development and helps establish a unique Guming tea culture.

At the new starting point of its listing, Guming remains as clear-headed as it was in its early entrepreneurial days.

During a roadshow, Wang Yunan presented an old photo showing the weathered tricycle with the faint inscription of “Guming.” This image serves as the perfect reminder for those who persevered: True national pride always grows from the land and the hearts of the people.

Translator：金蒙蒙 Louis