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Chagee Sees Global Boom Amidst Domestic Slowdown
5 Sep
Summary
- Overseas GMV more than doubled, driven by South Korean expansion.
- Domestic operating income surged, with margins significantly improving.
- Active members declined, while the domestic market faces intense competition.
Chagee Holdings Limited's second quarter revealed a stark contrast between its international and domestic performance as of August 28, 2026. The company's overseas operations became its primary growth engine, with Gross Merchandise Value (GMV) more than doubling year-over-year to RMB 504.0 million. This growth was significantly boosted by its successful debut in South Korea, where new teahouses saw high initial sales and app downloads.
Domestically, Chagee demonstrated resilience by improving its financial health. GAAP operating income surged by 387.6% to RMB 524.7 million, pushing the operating margin to 15.4% from 3.2% in the prior year. This improvement was attributed to reduced general and administrative expenses and strategic reductions in sales and marketing spending. The company also launched a record 17 new products this quarter, contributing to a notable increase in offline GMV in pilot stores.
However, the Greater China market presented significant headwinds. Total GMV in the region fell 3.3% sequentially, with franchised teahouse revenue declining by 18.1% due to intense competition and economic pressures. Active members also decreased to 47.1 million from 50.0 million in the first quarter. Despite these domestic challenges, the company continued its share buyback program and is considering a regular dividend, signaling confidence in its overall strategy.
