On franchisee selection, subsidy wars, and cross-border mergers and acquisitions, Lemon Season's Wang Jie reviewed the past five years with us.

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In 2021, the battle in China’s new tea drink industry seemed to have reached a conclusion.

At that time, the batch of "golden generation of tea drinks" that emerged around 2015 had already carved out their territories: Mixue Bingcheng was racing towards 20,000 stores, Heytea and Nayuki were fighting fiercely in high-end shopping districts, while Guming had built a strong presence in lower-tier markets.

Just when everyone thought there were no more gaps in the tea drink sector, Wang Jie, who had previously worked in office supplies, F&B hardware/software, as a franchisee, investor, and Luckin consultant, saw a new opportunity on the streets of Guangdong.

It was an unpleasant experience. Her first sip of Guangdong's original lemon tea left Wang Jie with the impression: "It tasted awful."

Despite the off-putting taste, she saw another astonishing data point: In Guangdong alone, there were over 6,000 dedicated lemon tea shops. Vitasoy lemon tea’s annual sales could reach several billion yuan.

This meant that amid a crowded red ocean, there was still a super category not yet nationalized—lemon tea.

In February 2021, Wang Jie opened Ningji’s first lemon tea store in Changsha.

This store was purposefully located in a “bad spot” in Changsha—so small you could hardly turn around—just to test if the product could attract customers independent of location. The industry loved "big franchisees" with deep pockets for expansion, but Wang Jie preferred college students willing to work full time in the store, even setting a rule—the money to open a store must be earned by oneself, not given by parents, because only when you spend your own money, you’ll have reverence for the business.

Today, Ningji’s franchisees have an average of 1:2.7 stores each, and the number of signed stores exceeds 3,000, finding its place in the lemon tea sector once thought couldn’t leave Guangdong.

Ningji also faces challenges.

On one hand, competition in the domestic new tea drink market is becoming increasingly intense, and the platform-led subsidy wars are squeezing industry profits;

On the other hand, lemon tea is easy to copy, the product’s own barriers aren’t high, and how to maintain differentiated advantages in the big single-product track remains a long-term challenge.

Recently, Xin Feng interviewed Ningji co-founder Wang Jie. In this highly competitive industry, she showed a rare “outsider’s” perspective: she doesn’t focus on rivals' store counts, but only keeps an eye on who’s competing for her talent.

“Whoever is competing with me for talent, that person is my rival.” said Wang Jie.

Below is the interview transcript, about how a new tea drink company tries to carve out a place in the field through “reverence” and “acquisitions.”

First time drinking, didn’t like it

Xin Feng: What considerations led you to enter the lemon tea sector at that time?

Wang Jie: This actually started with my partner, Fu Fu. Fu Fu was born in 1998, studied art in Guangzhou for six years, and had a natural feel for lemon tea. We discussed many projects, but Fu Fu wasn’t very interested until we went to Guangzhou and tried lemon tea.

That was my first time trying it, and to be frank, my first impression was “it tasted awful.” Traditional lemon tea prepared in the old style suited locals more. But our market research showed a surprising fact: Guangdong already had 6,000 lemon tea shops, and Vitasoy’s annual sales was also in the billions.

This means the category has a broad market foundation and huge potential for growth.

Based on this, we judged it was worth doing. With respect to supply chain barriers, we decided to start from the source and grow our own lemons.

On February 8, 2021, we opened our first store and launched our first major product—an improved “lemon tea.” We reduced the sour, astringent, and bitter notes, enhanced the flavor, increased popularity, and soon attracted more consumers.

Xin Feng: The risk in a single-product strategy is often “can you survive the winter” and “will it become outdated.” How do you handle this challenge?

Wang Jie: We have a principle for choosing categories: check if it existed ten years ago, and try to predict if it’ll still exist ten years later.

Lemon tea definitely existed ten years ago—many brands have been making it for more than ten years, which suggests a solid foundation. Whether it will still exist ten years later depends on whether it fits future trends.

Nowadays, people pursue health. When it comes to lemon tea, the first association consumers have is health. As long as we keep evolving the flavor and don’t lose our customers, I think it won’t disappear within ten years.

Xin Feng: Lemon tea is highly replicable—did you consider the moat issue back then?

Wang Jie: Definitely, brands like Heytea, Nayuki, and Chayan Yuese all make lemon tea. But I actually want more people to do it.

When we started, Guangdong had 6,000 stores but not one brand went national. When we began moving north, market recognition was really low.

So I want all brands to join in, enlarge the market pie, and complete category education. Only when awareness goes up will our follow-up expansion be smoother.

Xin Feng: The franchise model was key to Ningji’s rapid expansion. What support do you provide to franchisees so they keep running stores?

Wang Jie: The core is still the single-store model.

First, each store must be profitable. You yourself must first develop and prove this model, and check if it can be copied across cities or even countries.

Second is training and implementation. Whether staff can strictly follow SOPs (Standard Operating Procedures), and replicate flavor 1:1 is crucial.

Finally, selecting the right franchisees.

Xin Feng: What requirements do you have for franchisees?

Wang Jie: First: Funding source—It may only take 300k-500k RMB to open a store, but we examine whether you have strong anti-risk capital. More importantly, the money must be earned by yourself, not given or borrowed from parents. Only when you spend your own money will you have reverence for business.

Second: Management experience—We like people with management or entrepreneurial experience, even failed experience is a plus. People who’ve failed have more respect for business.

I don’t exclude “newbies,” but those thinking “give me 300k, hire a staff, and I’ll recoup in three months lying down” lack reverence for business. If you’re a college student willing to watch over your store all day and stick to SOPs, you’re a qualified entrepreneur.

For example, our first store in Shanghai was run by a college student—did very well.

Third: Resource capability—For example, can you find good shop locations.

Xin Feng: Do you require franchisees to stay in the store?

Wang Jie: No, because many of our franchisees have management skills, so they’ll open multiple locations—for example, our franchisees now average 1 to 2.7 stores each.

Xin Feng: What’s the typical staffing ratio for a store?

Wang Jie: Each store isn’t big, usually 20-30 square meters, and about 4 people.

Xin Feng: Any specific strategy for location selection?

Wang Jie: Our first store was in a very poor spot at the south gate in Changsha—tiny store.

We chose Changsha because it’s a consumption-driven city with lots of young people willing to try new things, no heavy brand bias.

Poor location was chosen to test product strength. If the location’s too good, you don’t know if customers come for location or product. In that tiny store, we could do 15,000 RMB a day, couldn’t even turn around in the shop—proof the product is strong.

This led to our current selection logic: not just location, but rent ratio. We only allow stores to open if rent is less than 15% of revenue.

Unless the franchisee can manage multiple stores and spread overhead costs, we don’t want them to suffer too much pressure in off seasons.

Specially developed products for the subsidy war

Xin Feng: What’s your view of the difference between direct-management and franchising?

Wang Jie: I feel direct-management and franchising are two separate things—direct is management-centric, franchise is service-centric.

We serve franchisees, not manage them.

So those doing direct usually don’t do franchises well, and vice versa.

These are two different systems; you can’t just switch the team.

Xin Feng: This year, the food delivery subsidy war is a hot topic. How do you feel about it?

Wang Jie: We participated.

The platform, company, and franchisees all spend a lot of money in this subsidy war, and ultimately sometimes stores don’t make money.

Our solution was to develop two products specifically for the food delivery war, with relatively low costs.

Overall, the subsidy war is also a chance for brand exposure, so we had to put ourselves in front of customers.

Some brands choose not to join in, because they want to maintain brand tone and won’t lower prices, which I understand.

Xin Feng: Who do you think Ningji’s competitors are?

Wang Jie: I strongly agree with this view: whoever competes with me for talent is my competitor.

When Jack Ma led a team to visit Google in 2009, he spoke to Larry Page: "NASA (US space agency), Obama administration, they are my competitors. Whoever competes with me for talent is a competitor." He added, Facebook and Apple compete for talent with high salary and stock options, but NASA can attract top engineers with only 1/5 Google’s pay (about $70,000/year)—the key is NASA’s grand vision to explore the universe is more appealing.

For Ningji, it’s the same. Whether food industry peers or giants from other sectors, anyone fighting for talent we need is our competitor.

Xin Feng: Speaking of talent, your CFO Qiu Zichen’s departure led to speculation about fundraising difficulties. Can you clarify?

Wang Jie: James (former CFO) made major contributions in his three years at Ningji. He left for personal reasons—to start his own business. It’s a life choice, and we wish him well.

As for fundraising, our cash flow is healthy, and with long-term investors like Tencent, ByteDance, and Shunwei backing us, they value the team and long-term prospects, not short-term store count or profits.

Planning to acquire Brazilian brand

Xin Feng: You created the BOBOBABA milk tea brand in the US. Why not use Ningji directly?

Wang Jie: Going overseas is like learning to swim—you need to find a good pool first.

The US is still in the “developing country” stage for milk tea—market knowledge is at bubble tea. If we push lemon tea directly, it’d be a triple challenge: new product, new team, new market—too risky.

So our strategy is "cross the river by feeling for stones": We first use “BOBOBABA” to enter with bubble tea, get the team and model working, then bring in Ningji.

Xin Feng: Has your US operation met expectations?

Wang Jie: The part that’s below expectations is store opening speed—it took 7 months to open one store. Management performance post-opening is as expected.

Generally, for all overseas brands, single stores are profitable due to scarcity.

Xin Feng: US store size, staffing, and food delivery situation?

Wang Jie: Our US store is about 130 square meters, 8 staff. Locals prefer in-person interaction—customers like to enjoy afternoon tea and chat in store. Delivery makes up less than 20% of our sales.

Xin Feng: Did you consider opening in Chinese areas in the US?

Wang Jie: Our first US store is in a white neighborhood. Our overseas expansion aims to meet the country's consumption demand, not just serve one consumer group.

Xin Feng: Will you launch more brands or categories beyond lemon tea?

Wang Jie: Yes. I most admire the “acquisition king” Danaher, who used the DBS system to acquire over 400 companies. I hope Ningji can build a DBS-style management system, so we don’t just make lemon tea but also acquire other brands and use our system for scale, like we acquired a coffee brand before.

Xin Feng: Any standards for acquisition candidates—any size requirements?

Wang Jie: No, I’d rather a brand perfect its single-store model and be replicable.

Xin Feng: You recently inspected Brazil—can you share your findings?

Wang Jie: Stuff is expensive there; for example, you rarely see tea drinks over 20 yuan in China, but there you do.

The overall ticket price in Brazil is similar to Shanghai, and tastes skew sweet, like in the US.

But Brazil wages are very low, and people like spending ahead—say, a fan costs 99 yuan, and it could be paid over 10 months; many people do that by habit.

Xin Feng: If you open stores in Brazil, will you choose lemon tea?

Wang Jie: I’d rather acquire than start from scratch. It’s really far from China—if our brand or products go there, it takes time and trial/error to grow consumption habits, so I won’t create a new brand locally but acquire an existing one.

Xin Feng: What categories are you eyeing in Brazil?

Wang Jie: We’re observing which ones can scale; those that can are our focus, but it’ll still be beverage-related.

Local coffee is famous, plus ice cream, acai, yerba-mate—locals love these.

Xin Feng: Will you have different operations strategies by country?

Wang Jie: In the US, we're direct-management, but just as a model store—not for long-term. Direct vs franchise is different; you can't let two mindsets compete. We’re clear on our shortfalls.

Even after acquiring business in Brazil, we'll keep franchising.

Xin Feng: How do you split responsibilities among the team?

Wang Jie: Our team is clearly divided, responsible for different regions. For example, domestic, Southeast Asia, and Australia are handled by CEO Jinshan; North and South America are handled by me and Fu Fu.

Xin Feng: Will later store opening in the US go faster?

Wang Jie: Actually, because of local government procedures, even if we push, speed won’t improve much. For example, sign approval might take four months. This isn’t up to us.

Xin Feng: Is Southeast Asia better?

Wang Jie: A bit, but the key problem is market size and low spending power. In Indonesia, people may only buy drinks under 10 yuan. That’s why Mixue can open stores there so easily, while other brands struggle to do the same.

Investor once blocked the door to “wire money”

Xin Feng: Do you remember what the goal was in the first BP you showed investors?

Wang Jie: Actually, I never wrote a BP for my A or A+ round, just a mind map. For A round, I met at least 100 investors, and at least 50 for A+.

Our investors are Tencent, Bytedance, Shunwei, etc. They’ve backed over 1,000 companies. Our fundraising is only a small portion of their top portfolios, so their strategic vision and trust make it easier for us to take a long-term approach.

Our investors aren’t like others—they don’t care how many stores you opened today or this month’s profits. They really understand business and how it works.

Xin Feng: So fundraising is also a process for you to choose investors?

Wang Jie: Yes, we considered that. Back then business was really hot: we opened our first store in February 2021, launched fundraising in June, and got the money in July—timing was fast.

Honestly, at the time someone literally blocked our door, asking for our bank details to wire money—there really were investors like that. But I don’t dare accept such investors.

Risk Notice and Disclaimer ClauseThe market carries risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account an individual user’s specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article suit their specific situation. Investing based on this is at your own risk.

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