With Singapore’s super-hot weather, it is no wonder that the icy sweetness of bubble tea is an addiction amongst Singaporeans.
In fact, we love bubble tea so much that we are willing to fork out a lot of money for it. And by a lot, I mean hundreds of millions of dollars.
Here’s how addictive bubble tea is, not just to Singaporeans, but in the general Southeast Asia region.
Exponentially-Growing Industry
Southeast Asians’ love for bubble tea has helped the industry grow even during the pandemic. Case in point: the industry growing to US$3.7 billion in 2021.
This report, conducted by venture outfit Momentum Works and payments start-up qlub, was published on 16 August with lots of pretty cool insights. For instance, did you know that Indonesia’s bubble tea industry is ranked first in market size in the region? It has an annual turnover of US$1.6 billion.
Second place goes to Thailand, with an annual turnover of US$749 million, followed by Vietnam at US$362 million.
Despite being the smallest in the region, our tiny red dot came in fourth with an annual turnover of US$342 million. When you think about how much our country’s size and population differ from the top three… we definitely have an addiction.
Singaporeans Have Highest Purchasing Power for Bubble Tea
You can’t write bubble tea, or BBT, without “bb”. And you know Singaporeans: if you really want me right, you should chase after me…
OK, old memes aside, Singaporeans were found to have the highest purchasing power for bubble tea. Basically, it means that we are very willing to spend our money on it.
In fact, the average price of a bubble tea order in Singapore is almost two times more than that of other countries in the region. This makes Singapore a hot spot for premium brands, since the expensive price tag apparently isn’t an issue here.
We’re such a premium location for bubble tea brands that there are currently more than 60 of them in Singapore, providing a wide variety of tastes and price points.
Chinese Brands May Start Dominating Market
Southeast Asia’s bubble tea industry’s kings and queens have been home-grown and Taiwanese brands. But with a whole lot of Chinese brands starting to enter the market, this trend might change soon.
The bubble tea market is huge in China, with an annual turnover of US$20 billion. Many of these popular Chinese brands are bringing their expertise to Southeast Asia, which is why you see stores like Mixue and Heytea popping up in Singapore.
Although bubble tea seems like a pretty good industry to invest in right now, experts are warning us that it isn’t as easy as it seems to make a continuous profit.
After all, there are already so many bubble tea brands with similar menus, and with a challenging supply chain, said qlub’s chief operating officer Mr Sik Hoe Yong.
With an emerging group of Chinese players coming into the regional market, bringing along their experience in branding, supply chain and cost management… you’ll be sure to see rising competition for local players.
The founder and CEO of Momentum Works, Mr Jianggan Li, shared, “It’s not difficult to observe and learn their play and strategy, but what’s more important is to ensure positive unit economics and a good return on investment.”
But one thing’s for sure: even a pandemic cannot stop Singaporeans’ love for bubble tea.
You can also watch this video to know more about bubble tea:
Featured Image: Shutterstock / NeedSwanya