Introduction to Bubble Tea Market
The bubble tea market was $2.4 billion in 2019 and is estimated to reach $4.3 billion by 2027, with a 7.80% CAGR from 2020 to 2027.
Revenue and Profit Margin
- On average, a well-established boba shop generates $200,000 to $500,000 annual revenue.
- A cup costs a tea shop owner 3.5-5 INR to make, selling it for 10-20 INR with a 15 INR profit margin per cup.
Sales and Earnings in Different Locations
- Tea shops near offices sell 900 cups a day at 5 to 7 INR, earning 5300 INR daily.
- Shops on highways sell 400 cups at 10 INR, earning 4000 INR.
- Shops in markets sell 500 cups at 7 INR, earning 3500 INR.
Startup Costs and Financing
- The startup cost to open a milk tea shop in the Philippines is 30,000 to 100,000 pesos.
- Financing options include personal savings, small business loans, crowdfunding, and investors.
Market Research and Target Audience
- Boba appeals to Gen Z and Millennials, with 94% of adults 20-29 visiting a boba shop recently.
- Market research questions include popular flavors, purchasing behavior, unaddressed needs, pricing perceptions, and preferred websites.
Profitability and Success Factors
- Coffee shops are profitable due to high margins and low costs. Effective cost management ensures success.
- Opening a boba shop can be profitable if done correctly and is considered a lucrative area in the food and beverage industry.
Cost Analysis and Pricing
- A store charges $3-3.50 USD per 16-20 oz boba, with materials costing about $0.75 USD, resulting in a 350% markup.
Starting a Bubble Tea Business
- Steps to start a bubble tea business include defining the store concept, obtaining permits and licenses, sourcing ingredients, perfecting recipes, training staff, and marketing the shop.
Growing Bubble Tea Market
The bubble tea market is rapidly growing globally, presenting a favorable opportunity to start a bubble tea business.