Franchise Review | Lemon Tea Craze: How TANING Rose to the Top?

1. Market Overview: The Rise of Modern Tea Drinks

According to the NCBD “2020-2021 Modern Chinese Tea Industry Report,” the market is experiencing explosive growth. In 2020, the market size reached 86.5 billion RMB and was projected to exceed 100 billion RMB in 2021. The number of tea shops in China is also climbing, from 480,000 in 2020 to an estimated 520,000 in 2021.

Key features of today’s China tea market include:

• Huge market potential.
• Intense competition.
• There is a low barrier to entry for new shops.
• Products are easily copied.
• High rate of store closures.
• One of the fastest industries to recover post-pandemic.
• Strong interest from investors.

The Lemon Tea Niche
Our focus, TANING Lemon Tea, specialises in a classic drink with a modern twist. Lemon tea, made from tea and fresh lemon slices, has a history of over 100 years. It became extremely popular in the warm climates of Guangdong, Hong Kong, and Macau, and is now a standard item in nearly every Hong Kong-style café.

Around 2017, hand-pressed lemon tea emerged as its own distinct category. Instead of just brewing, these new shops use a "hand-smashing" technique to release the lemon's fresh, fragrant oils, emphasising a healthy, natural product. Today, there are over 2,500 dedicated lemon tea stores in China.

2. About TANING: The Brand & The Product

Company Profile
TANING Lemon Tea was founded in Guangzhou in 2017. Today, it is the largest lemon tea brand by store count, with over 350 locations (including 45 corporate-owned stores). The brand operates in 61 cities across 27 provinces in mainland China and has successfully expanded to Taiwan and Vietnam.

TANING is dedicated to promoting Cantonese tea culture. In 2020, the company launched several themed stores in Guangzhou that offer an immersive cultural experience. They also partner with local media to host cultural events, building a deep connection with the community.

The brand has a strong and engaged online following, with over 1.3 million fans and 350+ customer groups on WeChat, demonstrating its growing influence and market potential.

Product Strategy
TANING's slogan is: "Great Tea, Fresh Lemons. Perfectly Balanced." The brand sells over 80 million lemon teas a year. Its signature lemon tea sold over 294,000 cups from a single takeaway platform in just six months. The menu is kept fresh with 1 to 3 new products launched quarterly.

A Superior Supply Chain
TANING's success is built on its control over ingredients.

• Lemons: They use specific varieties (Perfume and Eureka lemons) from designated orchards. They have strict standards for tree age (5-10 years), fruit weight (120-150g), and freshness (delivered within 72 hours of picking). This powerful supply chain allowed TANING to maintain stable prices in 2021 when a poor climate caused lemon prices to spike nearly 400%.
• Tea: TANING is one of the few tea brands with its own 40-acre tea garden in Fenghuang Mountain, a famous tea region. They also have a strategic partnership with a publicly listed tea company to secure high-quality leaves.

Flexibility and Innovation
TANING adapts its menu to local tastes. In markets outside of Guangdong, they offer a small selection of milk tea products. In the winter, the menu shifts to feature more hot drinks.

A unique feature is their signature packaging, offering drinks in both cups and convenient bags. TANING is also exploring retail products, selling its own tea and other merchandise in stores.

3. On-Site Store Assessment

The NCBD team visited three TANING stores in Guangzhou to evaluate their real-world performance. Here is a detailed look at one of those stores.

Store Profile: Fashion Tianhe Mall Location

• Time of Visit: Sunday, 5:05 PM (1 hour duration)
• Location: High-traffic entrance of a major shopping mall in Guangzhou’s busiest commercial district.
• Competition: Very high. There are several major tea brands nearby (CoCo, 1點點), but during our visit, the TANING store was noticeably busier.
• Staff: 4 employees
• Size: Approximately 18 m² (take-out only, no seating)
• Sales Volume: 90 cups sold in 1 hour during the visit. (Meituan monthly takeaway sales: 1,174)
• Note: This store’s traditional Cantonese design stood out and attracted many passersby.

Performance Data for All 3 Visited Stores(Gross Margin is 73% according to official company data)

Disclaimer: This data is from on-site observation and may differ from actual operational figures. Profit calculation does not include all expenses.

Assessment Conclusions

1. All three stores (both mall and street-side locations) were profitable and performing well.
2. The store with the unique Cantonese cultural design had the highest foot traffic and sales.
3. Over 70% of customers ordered via the TANING in-app小程序 (mini-program).
4. Celebrity endorsements and founder posters effectively attracted customers.
5. Customers often bought two or more drinks per order.
6. In Guangdong, lemon tea attracts a wider audience than milk tea, including middle-aged and older customers.
7. With ~80% of products available hot or cold, the business has no significant off-season.
8. The supply chain control gives TANING product stability and high profit margins.
9. As the market leader with 350+ stores, TANING has a strong brand presence, especially in its home market of Guangzhou.

4. Franchise Information

TANING offers three partnership models:

1. Managed Investment: For hands-off investors who only provide capital.
2. Co-Managed Model: TANING provides the store manager with the ability to run operations with the partner.
3. Standard Franchise: The traditional franchise model.

Store types include flagship (drinks only) and composite (drinks + snacks).

5. NCBD Franchise Rating: 81.72 (Grade: A)

Based on a comprehensive review of the market, product, profitability, and franchisor support, TANING Lemon Tea receives an NCBD Index score of 81.72, for an official rating of Grade A.

NCBD Index Scale:

• A (80-100): Excellent. Lower risk, recommended for investment.
• B (60-80): Good. It can be considered, but it requires careful evaluation.
• C (40-60): Fair. Proceed with caution.
• D (<40): Poor. High risk, not recommended.

6. Final Analysis

TANING's key strength is its mastery of the supply chain. This has become its core competitive advantage, allowing it to grow rapidly while maintaining quality and profitability, even during periods of market volatility.

The lemon tea category is poised for nationwide growth, and TANING, as the current leader with a strong supply chain and unique cultural branding, is in an excellent position to capture this opportunity. In 2021, the company plans to continue its expansion, aiming for nearly 550 stores by year-end.

For entrepreneurs, TANING represents a strong opportunity in a fast-growing beverage category.