The Philippines Milk Tea Craze: An Opportunity for Entrepreneurs

Before anything else, what is milk tea and why is it now considered a viable product/idea around which to set up a business? Milk tea here is actually what is called pearl tea, also commonly referred to as bubble tea or boba tea in different countries. The name is taken from the fact that it originated as a drink made out of the combination of chilled tea with milk, a sweetener (traditionally sugar), and rehydrated tapioca pearls for chewiness. The term is nonetheless used to cover a wide range of other products served by vendors now, though, and some of these do not even have tea or milk any longer. That said, they are all still just variations based on the same recipe.

Philippines milk tea shops are the main business for those looking to make money by serving this beverage to others; and they mean big business nowadays. There are a lot of tea shops around the country at the moment, yet demand does not show any signs of abating. In fact, even the smaller shops can boast of raking in the profits for around 200-300 sold drinks in a single day, according to PHNI, a popular supplier for bubble tea related products in the Philippines.

So what explains the demand and how stable is it? The first question is very easy answered: Filipinos love cold drinks. The country is a tropical one and people turn naturally to chilled beverages to ease the heat that regularly surrounds them, which explains why even coffee shops in the country note that chilled and shaken products sell better than hot ones around the clock. Furthermore, the local taste for sweets makes sweet and often creamy milk tea drinks popular with persons of all ages.

The stability of the demand for the product is really what businessmen consider when putting up a new enterprise, though, and one cannot complain about the demand for milk tea in that aspect. Its endurance despite the many doomsayers predicting its imminent downfall as a fad can be explained by comparing its clientele to that of cafes. Part of the reason coffee shops have succeeded all around the world is that they have built for themselves a loyal clientele who come to the stores every day and make purchase of a product a daily habit, whether to obtain a shot of caffeine to help them with work or simply as a routine indulgence.

Most of the people who come to tea shops are actually ones who used to go to coffee shops as well. They turn to tea shops for different reasons. Some actually only visited coffee shops before in order to purchase tea, being unable to get chilled tea drinks elsewhere. Some were genuine coffee lovers now trying to convert to tea in an effort to replace an old habit with a possibly healthier one. Whatever the reason, they come to tea shops with a regularity that the owners of said shops can be thankful for and which entrepreneurs can mark. The milk tea industry is obviously thriving in the country, so new businesses belonging to it can be expected to pop up in the next year or so as well, to better meet the demand.

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Joe Mead, AKA Traveling Joe, is one of the founders of DigMNL.

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