(Yicai) Nov. 29 -- Chinese new-style tea brands have begun to branch out into the snack food sector due to significant competitive pressure, with some opening dedicated snack shops while others offer snacks with their tea drinks.

Modern China Tea Shop Chayan Yuese recently opened its first grocery store in Changsha, Hunan province, focusing on low-price retailing, including tea leaves, snacks, and others. Mixue Bingcheng, also known as MXBC, which owns the most shops in the Chinese new-style tea market, has started to sell snacks at many of its outlets.

In addition, other brands, such as Nayuki and Heytea, sell snacks through their mini-programs that are made for placing online orders for tea drinks.

Zhan Junhao, a brand positioning expert, told Yicai that new-style tea brands have many goals when entering the snacks market, including adding a new source of income, using their brand image to attract new customers and boost stickiness, and meet customers' more diversified needs to improve brand image.

Customers' desire to pair snacks with their afternoon tea can be met via the new business model, an insider from a new-style tea brand said to Yicai. The gross profit margin from the company's tea drinks and snacks is nearly equal, the person pointed out.

The gross profit margin varies relatively notably among companies in the snacks and new-style tea markets, according to their financial reports. Who makes more money from new-style tea drinks or snacks depends on the specific product and company situation, but overall, new-style tea drinks face more pressure than snacks.

China's new-style tea market will likely expand 6.4 percent to CNY354.7 billion (USD49 billion) this year from the prior one, according to iiMedia Research. The expected growth is significantly lower than the double or even triple-digit jump over the past several years, it noted, adding that the growth will likely slow to just 1.5 percent in 2028.

The snack food industry in China has seen a new round of growth over the past two years and will likely reach CNY1.14 trillion (USD157.6 billion) in 2026, according to Frost & Sullivan. Its annual compound growth rate will likely remain stable at about 6.8 percent between 2021 and 2026.

Editors: Shi Yi, Martin Kadiev