How Much Does It Cost to Franchise CoCo Milk Tea? 21 Counterfeit CoCo Milk Tea Stores in Shanghai Were Investigated

CoCo Fresh Tea & Juice is a beverage brand founded by Yiding International Co., Ltd. on April 28, 2010. In recent years it has expanded into overseas markets. As early as 2011 it opened stores in New York, letting overseas Chinese taste the flavors of home thousands of miles away and easing their homesickness. Word has it that CoCo Fresh Tea & Juice's standing abroad is the equivalent of Starbucks' standing in China. Its overseas prices already run more than twice its domestic prices. A few years ago, the company listed on the New York Stock Exchange.

With demand for bubble tea growing in recent years, the industry has kept expanding, and those born in the 1990s and 2000s have become its main consumer force. As demand rose, so did the counterfeiters — among them, copycats of the bubble tea giant "CoCo Fresh Tea & Juice."

In early 2021, consumers who bought counterfeit "CoCo Fresh Tea & Juice" products on food delivery platforms filed complaints with the Shanghai Putuo District Market Supervision Administration. In April 2021, that administration investigated 21 fake CoCo Fresh Tea & Juice stores, 19 of whose business entities had obtained the trademark usage rights to "CoCo&Lucky" through franchising. All 21 fake stores were exposed, with a single outlet generating as much as 1.78 million yuan in revenue in less than half a year.

During the actual investigation, however, it emerged that those 19 business entities did not use the "CoCo&Lucky" trademark in compliance with the rules. The "CoCo" lettering was displayed prominently on shop signs, bubble tea cups, and straws, leading consumers to believe their products had some connection to "CoCo Fresh Tea & Juice," in violation of Article 57, Item 2 of the Trademark Law of the People's Republic of China.

In the operation, law enforcement seized and destroyed over 90,000 infringing bubble tea cups, 79 rolls of sealing film, over 50,000 straws, and over 60,000 handbags. Under Article 60, Item 2 of the Trademark Law of the People's Republic of China, the parties behind these 21 counterfeit bubble tea stores were issued a total administrative fine of 1.0647 million yuan.

In February of this year, reporters reported that the counterfeit bubble tea brand "CoCo&Lucky" had opened more than a dozen stores in Shanghai, using a business model of cutting costs and ramping up marketing to create blockbuster stores with monthly sales of over 3,000 items on food delivery platforms, disrupting the market.

The brand manager of "CoCo&Lucky" once said that a bubble tea priced at 11 yuan would not lose money even after handing 8.5 yuan to the delivery platform, because their cost per drink is only between 3 to 4 yuan. They are not afraid of being labeled counterfeit, nor of having no walk-in business. As long as costs stay low enough, they can use marketing to capture the online market.

The incident made it onto the trending topics on Sina Weibo, drawing heated discussion among netizens.

When an industry's pie grows, it inevitably attracts more people who want a slice. The bubble tea market keeps getting bigger, and so do the counterfeit brands hoping to ride on a well-known name. For ordinary consumers it is hard to tell at a glance — they just want to drink a cup of bubble tea. So, have you ever been fooled?

FrontStreet Coffee Recommendation

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