This 40YO Chinese Entrepreneur Just Turned Into A Billionaire By Selling $3 Milk Tea

Can you turn into a millionaire by selling tea? Even if you think the answer is yes, a?Chinese?entrepreneur has done something much bigger than that. He has outdone what most people may think of by becoming a?billionaire?by selling milk?tea!

A Chinese Entrepreneur Turns Into A Billionaire By Selling $3 Tea

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Meet 40-year-old Wang Xiaokun, the founder and chairman of Cha Panda, who has recently joined the world’s billionaire list?after a recent funding round valued his Chinese tea chain at $2.1 billion.

Wang currently has a net worth of $1.1 billion, according to Forbes estimates. His fortune is based on a nearly 60% stake in the Chengdu-based beverage chain, which has expanded rapidly over the past three years to the point where it now has a network of more than 7,000 stores. The chain’s signature beverages include mango pomelo sago, taro bubble tea, and jasmine milk green tea, most of which are priced at $3.60 or less, as per a Forbes report.

Wang’s wife, Liu Weihong, has also amassed a sizable fortune of $700 million based on her 33% stake in the company. She chairs a supervisory committee and is responsible for supervising Cha Panda’s daily operations, according to a preliminary prospectus filed with the Hong Kong Stock Exchange.

The company has?not yet revealed any further details of its?IPO, including its timeline and size. As per analysts, Cha Panda needs fresh funding to open more stores to keep pace in China’s fiercely competitive tea-beverage market.

Also Read:?22-YO Shubham Saini's?Tea?Stall Accepts?Crypto?Payments

How The Tea Chain Was Started In 2008

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The origins of Cha Panda can be traced back to 2008, when Wang began selling fruit and bubble tea from a small shop near a school in China’s southwestern city of Chengdu, which is known for its spicy cuisine and also for being the home of giant pandas.

Over the next decade or so, Wang managed to grow Cha Panda’s network of stores to 531 as of 2020, but the business really took off when he adopted a franchising model.?Cha Panda’s strategy now is to develop the recipes for its beverages, and then sell the ingredients, such as fruit and tea leaves, to Cha Panda-branded beverage shops.?

By doing so, Wang can keep the chain’s costs lower than rivals like Hong Kong-listed Nayuki Holdings, which has to spend more on employee salaries and rental expenses for its directly operated stores.

Already Had More Than 7,000 Stores Before The IPO

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The total number of Cha Panda-branded stores has grown to a whopping 7,117 as of August this year, and the company’s prospectus says it only had six of those stores under its direct management in the first quarter, as per the report.

Last year, Cha Panda managed to generate $580.3 million in revenue, 16% more than the previous year. The company’s profit jumped 24% to $132.3 million. It was the third-largest tea shop by retail sales in China, according to Frost & Sullivan’s research that was cited in the prospectus.

To increase its brand awareness among younger consumers, the company also sponsors music festivals and other offline cultural events to supplement its online promotional campaigns.?But ultimately, success comes down to controlling costs and offering value-for-money products, right?

Also Read:?Why?China?Is Facing World's Biggest Millionaire Exodus This Year

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