Goodmilk's founder Wang Yunan has said: the Shanghai milk tea market is brutally competitive with extremely high delivery ratios, making profitability much harder.
Shanghai has more bubble tea shops per capita than any other Chinese city. Rent is among the highest. Labor costs are higher. And consumers are sophisticated β keeping them interested is expensive.
For a brand built in lower-tier cities with affordable pricing, Shanghai is a completely different game. The margins that work elsewhere wouldn't hold up.
The more I researched, the more I realized: starting a bubble tea shop looks easy. But the economics are brutal. The profit margin on a 15-yuan cup of milk tea is razor thin between rent, labor, ingredients, packaging, and constant product innovation.
Goodmilk's decision to stay out of Shanghai isn't a failure. It's a calculated strategic choice. And it saved me from the fantasy of quitting my job to open a charming tea shop.