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36Kr reported on Saturday that Honeymoon Dessert and Tea Buds, two Chinese food and beverage brands, have recently merged. Moreover, Liu Zizheng, founder of Tea Buds, will become the president of Zhigang Group (the parent company of Honeymoon Dessert) and the co-CEO of Honeymoon Dessert.
In addition to the merger, Zhigang Group also announced the completion of a new round of strategic financing, which was jointly led by well-known catering groups and new consumer unicorn companies. At present, Honeymoon Dessert runs nearly 300 direct stores in mainland China, Hong Kong and Singapore. The company’s annual income is nearly 1 billion yuan ($150.0 million), and the profit is stable.
The management team has also been strengthened. Rose Hu, the former head of Starbucks’ supply chain in China and COO of Peet’s Coffee, and Song Xiaoli, the former COO of Tea Buds and the former head of Starbucks’ operations in East China, will join the team.
Honeymoon Dessert was founded in Hong Kong in 1995, with a focus on the concept of afternoon tea desserts. After the establishment of its Shanghai headquarters in 2010, it started scale expansion in mainland China. With the direct sales mode and its own central factory system, relying on the shopping center dividend, Honeymoon Dessert was all the rage around 2010, and the number of stores it operated in mainland China was once close to 500. However, with the emergence of various new tea brands, its brand image gradually fell behind, and profits have continued to decline in recent years.
Tea Buds is a new tea brand established in 2019. It started with cherries and focused on making tea with high-end fresh fruits. Since its establishment, Tea Buds has completed four rounds of financing, with a cumulative financing amount exceeding $10 million. It adopts the mode of “boutique shop,” and currently has 15 stores in China.
After the merger, New Honeymoon Dessert will initiate plans for the upgrading and opening of new stores. It is reported that the new flagship store is positioned as a medium and large store with an area of about 200 square meters, and a brand-new dessert concept will be introduced. It will be opened in Beijing and Shanghai in the second half of this year.