How Gong Cha used Starbucks to build a bubble tea empire

Gong Cha's transformation from a local Taiwanese tea shop into a global boba empire is a masterclass in clever positioning.

Martin Berry, the group's founder and chairman, recently shared the "quite terrifying" gamble he took when launching the brand in South Korea.

After quitting his career in banking, Berry and his wife risked $2.5 million of their personal savings to open their first five franchise outlets.

To survive the competitive Seoul market, Berry decided to ride the coat-tails of a coffee giant. "So my strategy was, I'm going to put a Gong Cha — the first five stores — next to Starbucks," Berry told CNBC.

His logic was simple: capture the overflow of a proven audience. "And if I can get one in a hundred people who are going into Starbucks to come and try a Gong Cha, then I've got a business," he explained.

This David-and-Goliath tactic worked. Since Berry entered the fray in 2011, Gong Cha has expanded to nearly 2,200 stores across 33 countries.

The brand’s success mirrors a wider boom in the bubble tea industry, which has seen rivals like Mixue and Luckin Coffee pursue aggressive global expansions and successful stock market debuts.

While Starbucks remains a caffeine powerhouse, Berry’s cheeky placement strategy proved that sometimes, being a good neighbour is the best way to build a brand.

By offering a fruity, foam-topped alternative to the daily latte, Gong Cha turned a fraction of Starbucks' footfall into a loyal, worldwide following.