Bubble tea shop The Alley sets sights beyond Bangkok

Taiwan-based bubble tea chain The Alley is pushing ahead with its expansion in Thailand with plans to open 20 more stores next year to capitalise on underserved secondary markets.

The Alley currently operates 12 branches in Thailand, primarily in the Bangkok metro area and with one location in Chiang Mai, under the management of franchisee Millary Co.

In November the company will open two new locations, one at Iconsiam and the other at The Mall Ngamwongwan in Nonthaburi. The Alley opened its first shop in Thailand in 2018 at Siam Square and recently celebrated its oneyear anniversary in the country.

The company reports selling 100,000 drinks a month and plans to focus its expansion on provinces like Udon Thani, Chon Buri, Rayong and Phuket.

“For markets like Phuket, Chon Buri and Rayong, they lack a premium segment for bubble tea,” said Anol Thanesvorakul, co-founder of Millary. “We want to move fast to get ahead of the competition, as there are really only a few players in the premium segment.”

According to company data, 79% of The Alley’s customers are women and over half are aged 24-35. The flagship brown-sugar fresh milk drink leads in sales.

The bubble tea market has exploded in Thailand in recent years and is estimated to be worth 2.5 billion baht.

Grab Food said orders for bubble tea on its platform in Thailand grew by 3,000% in 2018. But Grab Food only started in the country in 2017, so the growth in bubble tea sales is likely concurrent with Grab’s own massive expansion of the food delivery platform that year.

“We’re not focused on bubble tea alone, as we want to grow into a lifestyle brand in terms of the variety,” said Unawan Tangkaravakoon, co-founder and managing director of Millary. “Our last store is completely different from our first, and we want to offer a modern design to our shops to encourage people to sit and stay longer.”

The Alley is launching new products such as bakery items, soft-serve ice cream and over 20 hot drink options. It’s also selling “eco-friendly” products such as metal straws and cloth cup carriers to cut down on plastic use.

Mr Anol and Ms Unawan said the government’s recent doubling of the sugar tax on sugary drinks had no effect on business and The Alley did not raise prices.

A recent study by the Foundation for Consumers found that most bubble tea brands in Thailand exceeded the recommended daily intake of six teaspoons of sugar.

According to The Alley’s data, most customers are requesting less sugar in their drinks, with 35% getting the regular amount of sugar, 24% ordering half the amount of sugar, 33% requesting only a little sugar and 8% asking for no sugar.