(Yicai) Sept. 18 -- Milk tea chain Heytea plans to slow the pace of new store openings amid a slew of closures in the sector as the Chinese market becomes saturated.

Heytea will not pursue rapid store expansion in the short term and will control the density of stores in the coming months, the firm said in an internal memo seen by Yicai. It has grown further this year, adding about 1,100 stores to bring the total to around 4,300.

China’s milk tea sector has entered choppy waters, with more than 130,000 stores closing in the year ended Aug. 5, according to Canyandata. Some 35,518 opened, reducing the total number to 431,753. This has been largely the result of fierce competition, product homogeneity, and price wars that have left firms with slim profit margins.

Heytea noted that with limited consumer demand, the industry has adopted similar product and brand strategies, leading to intensified competition. The Shenzhen-based company said it will not go with the flow, and will focus instead on introducing more differentiated products and promoting its brand.

As a result of the complex domestic market environment, many Chinese tea chains have been expanding overseas. In July, Heytea opened its first pop-up store in Paris, and Naixue unveiled its first outlet in Singapore. Mixue Bingcheng already has more than 4,000 stores outside of China.

Editors: Shi Yi, Futura Costaglione