Gong Cha NZ shifts growth focus to existing stores and Express

Gong Cha is shifting its New Zealand growth strategy towards strengthening existing stores, supporting franchisees and exploring smaller-format opportunities after the economic slowdown stalled earlier expansion plans. The bubble tea franchise has 30 locations nationwide, with a transport hub site set to open at Auckland’s Te Waihorotiu Station.

Expansion targets give way to sustainable growth

Reporting by the New Zealand Herald on 14 November outlines a change in emphasis for a brand that has operated in New Zealand for more than a decade. Gong Cha’s current network comprises 18 Auckland locations and 12 elsewhere in the country.

That footprint falls short of an earlier ambition. Speaking to Stuff in 2023, Gong Cha representative Teh said the business planned to increase its store count from 28 to 40 and lift staff numbers to about 300 by 2025.

At that time, annual New Zealand sales were between $20 million and $25 million, with plans to increase them to $40 million. Those figures describe the business at the time of the earlier announcement, not its current sales performance.

Teh told the Herald that the economic slowdown had halted those plans. The focus for the next few years is now on “sustainable growth”. Rather than presenting another numerical store target, the latest strategy puts existing outlets and franchisee support alongside opportunities for a different store format.

Spending pressure meets higher operating costs

The change follows difficulties through the Covid-19 pandemic and the subsequent recession. Teh said bubble tea remained popular, but the wider economic environment had put pressure on customers’ spending.

“While the bubble tea category remains popular, consumer spending has been under pressure due to the cost of living, higher interest rates and general economic uncertainty,” Teh told the Herald.

The business also faces rising operating costs. Teh identified wages, rent, insurance, utilities, ingredients, freight and logistics as areas where costs had increased.

Together, those pressures explain why store numbers alone offer an incomplete picture of expansion. Opening more outlets and strengthening the performance of an existing network are different objectives. Gong Cha’s revised approach explicitly includes the latter, although the report does not provide current store-level profitability figures or details of the support measures planned for franchisees.

For New Zealand’s franchise community, the development is a concrete example of a network adjusting its ambitions as trading conditions change, rather than simply continuing towards a previously announced target.

Express format opens another route to customers

New locations remain part of the strategy, but Gong Cha is looking beyond traditional shopping malls and high streets.

“We aim to strengthen existing stores, support our franchisees, and explore new opportunities through Gong Cha Express in supermarkets and transport hubs,” Teh said.

One transport hub location is already set to open at Te Waihorotiu Station on Victoria Street West in Auckland’s central business district. The report does not give an opening date, so the site remains a forthcoming addition rather than an operating store.

The supermarket and transport hub opportunities signal a broader approach to site selection. Teh said the business considers population density, customer demographics and foot traffic before confirming a location.

Those criteria matter to the distinction between an opportunity and a committed opening. Supermarkets are identified as a channel Gong Cha intends to explore; the station site is the specific forthcoming location named in the report.

Products and loyalty also feature in the reset

Gong Cha’s plans extend beyond its physical footprint. The business has recently launched an expanded range of refreshers and intends to introduce a loyalty programme to strengthen customer engagement.

Founded in Kaohsiung, Taiwan, in 2006, Gong Cha now has more than 2,100 stores across 28 countries. Its international scale provides context, but the New Zealand strategy is being described in terms of local trading pressures, existing-store support and selective opportunities.

The practical takeaway for prospective franchisees is to distinguish earlier expansion ambitions from current commitments. Ask how existing stores will be supported, what evidence underpins a proposed location and how customer engagement plans fit the operating model—not simply how many outlets a network hopes to open.