Sexytea stayed in one city for seven years — and made leaving it a national event

Lü Liang opened the first Sexytea in Changsha in 2013, selling low-teens-yuan drinks against rivals charging 20–30, in stores decked out in Chinese-style decor with packaging full of traditional motifs and themed landscapes. He had tried franchising in earlier ventures and decided he was 'not good at it', so Sexytea would be fully direct-operated — and it would not leave Changsha.

A milk-tea brand as a city totem: Chinese-painting cups, classical names — and staying in one city so scarcity does the marketing.

While competitors franchised into every mall in China, Sexytea spent seven years deepening one city: hundreds of Changsha stores, tea-plus-cultural-creative merchandise, and a brand voice tied to Hunan identity. Only in November 2020 did it open a store outside the city (Changde), and in December 2020 its first store outside Hunan, in Wuhan — where buyers queued eight hours, resellers charged 300 yuan a cup, and staff held signs reading 'we do not endorse reselling'. At its Nanjing opening in August 2022, police were called in to manage crowds while resellers asked 120–200 yuan a cup.

Sexytea became 'Changsha's calling card' — part of the city's tourist itinerary, joked about by police departments and raided by cross-province resellers. Every new-city opening was national news. By 2024 it ran 1,200-plus direct-operated stores (about 75% still in Hunan) with an estimated RMB 3.12 billion revenue and RMB 460 million net profit, without a single franchisee.

Sexytea (茶颜悦色) was founded in Changsha in 2013 by Lü Liang, who registered the brand in 2015. Its formula was distinctive but reproducible: Chinese-style store design, packaging steeped in traditional motifs, drinks named after classical phrases such as Yulan Latte, and prices in the low teens of yuan while competitors charged 20 to 30. Lü's real decision was what not to do: no franchising, and no expansion out of Changsha.

The restraint had a logic. Direct operation let the company keep quality and staff culture under its own roof — Lü later said he feared 'uncontrollable' outcomes abroad because its supply chain and organization were not ready. Regional concentration made its logistics workable. And absence made the brand mythic: for years, the only way to taste it was to go to Changsha, which turned the drink into a destination.

When the brand finally left, the scarcity engine fired. The Changde store in November 2020 and the Wuhan flagship in December 2020 produced hours-long queues, 300-yuan resales and national headlines; in Nanjing in 2022 the crowd required police and the local public-security account joked about it on Weibo. Buyers from other provinces paid 120 to 200 yuan per cup for a drink that cost about 15 at the counter.

By 2024 the company operated more than 1,200 direct stores — roughly three quarters in Hunan — with an estimated RMB 3.12 billion in revenue and RMB 460 million in net profit. It remains the counter-example in a franchise-mad industry: growth deliberately traded for control, and scarcity used as the marketing department.

Direct operation kept quality and brand voice consistent — the one thing a queue-driven reputation cannot survive losing.

Staying regional made supply chains feasible for a brand that gives away free refills and insists on fresh-made drinks.

Scarcity generated earned media worth far more than advertising: queues, resellers and police alerts were all coverage.

Tying the brand to Changsha's identity made the city government, tourism board and residents stakeholders in its success.

Underpricing richer rivals turned a novelty visit into a repeat habit for locals.

Scarcity beats saturation: refusing to expand kept quality and mystique, turning each new city into free nationwide advertising — but the same refusal capped growth as faster rivals closed in.

The strategy aged into a trade-off. As China's new-tea market growth slid to 5–7 percent, franchise chains scaled past 10,000 stores while Sexytea remained a four-province, direct-only operator that still had not entered Beijing or Shanghai as of late 2025. It launched sub-brands (Yongyang Coffee, Good Melon Lemon and others) and its parent company weighed IPO plans. The queues that made it famous have thinned, but the brand remains Changsha's most liquid cultural export — proof the totem strategy worked, and a caution that totems do not travel quickly.