Everyone from Starbucks to Chinese giants wants in on the global boba tea craze. Meet the family who started it all.

Speaking to Business Insider at his company’s headquarters in the central Taiwanese city of Taichung, Liu was candid about how the move benefited his business.

“In Taiwan, we need to sell tea leaves with a human touch — customers need to try some tea before buying tea leaves, so some would just be chatting for long hours with you over tea but not buy eventually,” said Liu, 72.

Furthermore, traditional Chinese tea drinking involves multiple steps, which can make the sale pitch long-drawn. And when customers finally do commit to buying a bag of tea leaves, they could brew it for weeks.

It’s just not the best way to make money.

From chilled tea to boba milk tea

Inspired by iced coffee on a trip to Japan in the early 80s, Liu went home with the idea for a hand-shaken iced tea — a bold move for the teahouse at the time, as cold tea was generally only served at street food stands, he said.

Soon, Lin Hsiu-hui, a young staffer who was managing sales of chilled tea at the teahouse, was outselling his traditional hot offerings.

“With iced tea, you can sell to anyone from three years old to 80 years old. With hot tea, you can only sell to old people,” said Liu.

It also helped that the younger customer base would buy one cup of ready-made chilled tea a day instead of one bag of tea leaves a month.

Liu knew he had stumbled upon a winner.

Liu instructed Lin, who is now the R&D director at Chun Shui Tang, to experiment with adding new ingredients to tea.

Lin said she simply added her favorite childhood Taiwanese dessert treat — chewy tapioca balls — to milk tea. Liu coined the term “pearls” for the topping because they reminded him of black pearls.

Liu likened the evolution of his tea offerings to coffee giant Starbucks, which was founded in 1971 and started out selling coffee beans. Now, Starbucks sells everything from beverages to meals, coffee mugs, and merchandise.

Liu’s daughter, Angela — who is now Chun Shui Tang’s managing director — acknowledged she would like the Taiwanese tea chain to be like Starbucks is to coffee.

But it has a long way to go: The tea company has over 200 outlets globally, compared to Starbucks’ count of more than 38,000.

And Liu, the teahouse’s founder, doesn’t appear to be in a rush to expand. He said he’s keen on taking a longer-term approach to growing Chun Shui Tang. He’s also not looking for external funding.

“It’s a business that can be sustained for a long time. Tea has been around for the last 5,000 years, so it’s a long-term game,” he said.

A controversial start becomes a global phenomenon

Chun Shui Tang’s claim about being the founder of boba tea isn’t without controversy.

A teahouse called Hanlin Tea Room in the southern city of Tainan also claims to have invented the beverage around the same time after Tu Tsung-ho, its late founder, spotted white tapioca balls at a market. Hanlin Tea Room did not respond to a request for comment from BI.

The two companies were embroiled in a bitter lawsuit spanning 10 years. The court eventually did not rule in either company’s favor, as neither filed a patent or trademark protection.

Meanwhile, pearl milk tea and its many iterations were popping up in and outside of Taiwan all the while. Today, the industry is estimated to be worth billions globally.

Now a global cultural phenomenon and a symbol of Taiwanese identity, the proliferation of boba tea underscores the island’s soft power in an era when news constantly revolves around military threats from China, which claims Taiwan as its territory.

Today, boba tea can be easily found in the US — a far cry from when Liu’s daughter, Angela, was studying at Purdue University in the US some 15 years ago.

At the time, Liu had to get her tea leaves and pearls shipped to her. Now, Taiwanese government data show exports of tapioca and substitutes — which includes tapioca balls — to the US by tonnage more than doubled in the five years to 2023.

In a sign that nearly every drink can now be boba-fied, Starbucks has a take on boba too, with raspberry pearls and a summer berries mixture. None of Starbucks’ boba beverages contain tea.

Chun Shui Tang’s executives appear unperturbed by the many shapes and forms boba tea takes these days — Heinz ketchup boba tea, anyone? — because they’ve already been there and done that.

In 2008, Chun Shui Tang introduced a boba tea hot pot with a savory tea-infused broth. They’ve also experimented with a boba tea-infused cheese tart and with recipes that incorporate herbs.

While such out-of-this-world creations are good for buzz, customers still generally prefer beverages that do not “defy common sense,” said Liu.

Father of the teahouse founder refused to speak with him for 3 years

Liu comes from a family of physicians.

His father, a medical doctor, cut a stern figure — except when he was drinking tea.

“I was five when I saw that my father was smiling only when drinking tea, so I thought, ‘Tea can really make someone happy,'” said Liu.

Liu wasn’t cut out for medical school, and after a few years in a corporate job, he started his tea business at the age of 30. His father was supportive and gifted him a teapot, thinking he would do a “proper job” running the business.

Upon learning that his son introduced a chilled tea beverage and was adding new-fangled toppings to a traditional beverage, the physician hit the roof.

“He thought I was fooling around,” said Liu.

Liu’s father refused to speak to him for three years — until Liu finally showed up at the elder man’s door with convincing sales figures and a shiny new car.

He still keeps the teapot his father gifted close to him in the office to remind him of his first supporter.

Chun Shui Tang OG shop in Taichung is a tourist hotspot

Today, Liu’s OG Chun Shui Tang teahouse in Taichung is on many tourists’ checklists.

There wasn’t much activity around the area in late June when BI visited the shop. It’s located on an unassuming street with an apparel shop, a law firm, and a tutoring center.

But Chun Shui Tang had a steady stream of travelers heading to its shop fronted by a striking blue tiled roof.

Unlike most boba tea shops today, where customers take out their beverages, Chun Shui Tang still retains its original genteel teahouse element where customers could dine in — and most do.

There’s also much more than boba tea on its menu. Customers can order food including noodles, various side dishes, and breakfast toast. They also still serve traditional Chinese tea.

Mark Anthony Villones, a tourist from the Philippines, was at the store when BI visited. He told BI he did not quite expect to see a sit-in dining concept where customers could order more than snacks.

Just like other travelers BI spoke to, Villones said he was simply there “to try the original bubble tea” with a group of friends during a holiday to Taiwan.

His friend, Kayne Sy, said she found the teahouse and boba tea — served in a tall cocktail glass — “really nice,” but wasn’t blown over.

Her comments sum up one of Chun Shui Tang’s biggest challenges: a very crowded marketplace.

The competition is tough amid fierce competition from China

Chun Shui Tang will be up for a tough fight in the global boba tea market.

While Chun Shui Tang is a familiar name in Taiwan, it — alongside its younger brand, TP Tea — is not the most recognizable brand globally.

“Nowadays, there are more and more chain bubble tea operations in China that have ambitions to go overseas to expand their global footprint,” Jason Yu, the Greater China managing director at Kantar Worldpanel, a consumer research group, told BI.

Some of the mainland chains — such as Central China-based Mixue — are also backed by venture capital money, making the competition especially stiff — since the operating model is easily replicated and scalable, he added.

“Taiwan’s bubble tea shops are doing well in Taiwan, but they are probably not expanding as fast as their Chinese counterparts,” said Yu.

As for Taiwanese firms’ clout as the first to invent the product, Yu said he isn’t sure that’s enough to make them frontrunners in the global race.

“It helps with storytelling, but it’s not enough,” said Yu. “Being the original can give you a few marks, but it’s never the whole thing. It’s really about the brand, it’s about the product, it’s about the supply chain.”

After all, modern coffee culture was popularized by the Italians — but it’s Starbucks from the US that has become a massive global phenomenon, Yu said.

Chun Shui Tang founder Liu said he isn’t worried about the competition, because the market is big enough for everyone.

After all, his tea business has only gotten better, not worse with more competitors — because it’s through them that they learn about boba tea and his pioneer Taiwanese brand, he said.

“They are our helpers, not our rivals,” said Liu.