(Yicai) Nov. 29 -- Chagee and ChaPanda, two Chinese new-style tea chains, have jointly set up a venture to run a packaging materials business.

Sichuan Chabenyuan New Material Technology will research and develop new material technologies as well as manufacture and sell plastic and paper products, according to corporate data provider Tianyancha. Chagee and ChaPanda have not yet commented on the tie-up.

China has one of the largest and fastest-growing packaging markets, and the food and beverage sector is a large part of that.

Despite being rivals, their supply chain partnership can be a win-win situation for Chagee and ChaPanda, according to industry insiders. It demonstrates benign market development amid fierce competition in the new-style tea sector, they added.

Chagee’s Guochao Information Technology Dongtai will have a 76 percent stake in the joint venture, while Sichuan Rongshang Jiahe Technology, in which ChaPanda has an indirect stake, will own the rest.

China has a rich tea culture and in recent years novel presentations of traditional teas have become a hit with consumers. New-style tea drinks, including cold brew, tea latte, fruit, and cheese tea, often use fresh ingredients and are made with novel recipes and use technology.

China’s new-style tea market grew 3.5 percent to CNY103.8 billion (USD14.6 billion) last year from 2021, according to a report by consultants AskCI Research. It will likely swell to CNY149.8 billion this year and exceed CNY200 billion in 2025.

Founded in 2008, Chengdu-based ChaPanda has more than 7,000 stores and secured CNY1 billion (USD140.4 million) in a June fundraiser for a valuation of nearly CNY18 billion (USD2.5 billion). It filed for an initial public offering in Hong Kong in August.

Set up in Yunnan province in 2017, Chagee has over 2,700 outlets globally.

Editor: Martin Kadiev