Shuyi Tealicious Store Count Was Shrinking as Its Founder Made Two Personal Restaurant Investments

This is an English adaptation of a FoodBud historical article originally published on August 21, 2022.

Shuyi Tealicious had recently slowed its corporate-level investment activity, but founder Wang Bin began making moves personally.

In July 2022, Hainan Shuhan, an entity close to being personally controlled by Wang Bin, invested in Jianbingdao, a chain brand focused on jianbing, a Chinese savory crepe format.

In August 2022, Wang invested in another company, Sichuan Zhanfu, taking a relatively high 40% stake. Sichuan Zhanfu’s largest shareholder had previously operated Kaqiduo Pizza, a pizza-focused store concept that later closed. Whether the new venture with Wang Bin would continue in pizza was still unclear.

A Pressured Year

At the start of 2022, Shuyi Tealicious raised more than RMB 600 million from multiple institutions, including a fund under Juewei and Qingdao Nuowei. Because Qingdao Nuowei was led by Trout & Partners, Shuyi Tealicious then began brand upgrades and store-model iteration.

FoodBud observed that Shuyi Tealicious appeared to face major operating pressure in the first half of 2022. In earlier reporting, FoodBud noted cases where individual franchised stores displayed advertising for promoted new products at the entrance, but those products were unavailable inside the store. Similar problems appeared repeatedly: either small supply-chain issues or difficulty getting franchisees to implement new-product rollouts.

On brand upgrade, Trout’s work shifted the category positioning from grass jelly drinks to plant-based. Whether the plant-based concept was sufficiently understood in the domestic market, and how long consumer education would take, remained to be seen. From a back-end supply-chain perspective, the direction appeared to be reducing reliance on products such as non-dairy creamer. Shuyi Tealicious personnel had previously noted that invested company Xuzhou Fangde was no longer mainly producing non-dairy creamer.

Store-count data also showed contraction. Shuyi Tealicious had previously promoted a network of more than 7,000 stores. By this point, Guming had overtaken it, while Shuyi Tealicious had shrunk to around 6,500 stores, according to data cited from Zhaimen Canyan. FoodBud judged that Shuyi Tealicious’ performance in the first half of 2022 was very likely down sharply.

In May 2022, Shuyi Tealicious began extending investment into front-end brands, first investing in Changsha-based DOC Coffee and then taking control of it. Industry sources said Shuyi Tealicious was refining DOC Coffee’s store model, lowering the brand tone somewhat, and pushing quickly toward a franchise model.

FoodBud had previously covered Shuyi Tealicious’ investments across different formats, including Xuzhou Fangde Food and DOC Coffee. Those were corporate-level moves. More recently, founder Wang Bin had begun his own investment layout.

The Investment Logic of Restaurant Founders

It is common for restaurant founders to invest in brands outside their core business.

Heytea founder Nie Yunchen, for example, invested in Zhao Ji Chuancheng and Kuddo Coffee, and also bought all of Crow Coffee’s shares.

Xijiade founder Gao Defu is another case. Because Xijiade’s main-brand expansion mechanism is partner-based, Gao personally needed to hold stakes in many companies. Listing the Xijiade main brand would be difficult, and whether a listing was necessary may not have mattered much to the founder.

Gao also participated in investments outside the core business, including restaurant chain brands such as Yu Jian Xiao Mian and Lacesar Pizza, and through funds invested in Banu Hotpot and Fei Da Chu.

For Wang Bin’s investment path, Shuyi Tealicious and Jianbingdao had already launched a co-branded store in June 2022. In July 2022, Wang took a stake.

Jianbingdao founder Liu Min began trying to open jianbing stores in 2010. Over three years, six stores failed. In 2014, Liu found a workable store model and began building Jianbingdao as a chain. After eight years of development, it had 74 stores.

Jianbingdao uses a small-store model, so its expansion path is franchise-led. That means it can reuse Shuyi Tealicious’ franchising system and part of its supply-chain system.

The other investment, Sichuan Zhanfu, stood out because Wang’s stake was relatively high. Whether it would continue the previous pizza-chain direction was still uncertain.

For restaurant founders with sufficient capital, a central question is how external investments can preserve and increase asset value while also creating some synergy with the main business.

Note: financing, stake, store-count, and listing-related figures in this article are historical as of the original August 21, 2022 publication.