The founder of a huge boba chain said he opened stores next to Starbucks to get a fraction of its customers
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- Bubble tea chain Gong Cha's founder said he banked on Starbucks' success to get his first customers.
- He said he opened stores in South Korea next to Starbucks outlets to get a fraction of its customers.
- The bubble tea chain now has nearly 2,200 stores in 33 countries.
The founder of the bubble tea brand Gong Cha said he had a novel idea to get his first patrons through the door.
In an interview with CNBC, Martin Berry, the founder and chairman of Gong Cha group, spoke about how he came across one of the chain's outlets in Singapore before it became a global boba behemoth.
Berry said he and his wife pooled $2.5 million of their savings to open the first five Gong Cha franchise stores in South Korea, a venture he said was "quite terrifying."
Berry quit his banking job to go all in on bubble tea. To get his first customers in Seoul, he decided to get Starbucks' help.
"So my strategy was, I'm going to put a Gong Cha — the first five stores — next to Starbucks," Berry told CNBC. "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."
Gong Cha was founded in Taiwan in 1996 by Wu Zhenhua, and Berry entered the business in 2011 to expand the brand to South Korea and other countries. As of January, the chain had about 2,200 stores in 33 countries, including the US and Canada.
The chain is known for its fragrant, fruity teas and its milk foam topping.
Bubble tea brands have seen large success in recent years, with several making splashy IPOs.
Mixue, the world's largest fast-food chain that sells cheap bubble tea and ice cream, has more than 45,000 stores worldwide and just opened its first outlet in New York City at the start of the year. It went public in Hong Kong last March, with its stock jumping 30% from its IPO price at market open.
Other Asian beverage brands, like Luckin Coffee, have positioned themselves as Starbucks' rivals, offering similar drinks at lower prices. Luckin Coffee expanded to the US last year, with several outlets in NYC.