Bubble tea, or boba, is a tea-based drink that originated in Taiwan and has gained popularity worldwide. Made with freshly brewed tea, it boasts a rich texture and comes in many variations—it can be creamy, sweet, or even savory.
According to Fortune Business Insights, the global bubble tea market was valued at USD 2.63 billion in 2024. As its popularity grows, major chain brands such as Gong Cha, Chatime, Coco Fresh Tea & Juice, Quickly, and Xing Fu Tang have expanded globally. No matter where you are, chances are you’ll find one of these brands nearby.
One of the biggest names, Gong Cha, has opened over 2,000 stores in 23 countries, offering insight into the global economy. Similar to The Economist’s Big Mac Index—used since 1986 to compare purchasing power across countries—we can evaluate global buying power through the price of Gong Cha’s Pearl Milk Tea, a classic choice for bubble tea drinkers and the “OG” of boba flavors. While the drink remains the same, its price varies significantly from city to city.
In this dataset covering ten cities, we use New York and the U.S. dollar as the benchmark: In New York, a cup costs $6.25, serving as a reference point. Compared to New York, London ($7.76) and Sydney ($6.40) rank as the most expensive cities for Pearl Milk Tea. Meanwhile, Manila ($2.16) and Taipei ($2.13) offer the most affordable boba, indicating stronger purchasing power for their local currencies.
Asia remains the largest market for bubble tea, but prices vary across the continent. While Seoul and Singapore have similar economic standings, bubble tea costs more in Tokyo ($5.98) and Singapore ($4.89) than in Seoul and Beijing ($2.75), reflecting differences in cost structures.
Local Currency Undervaluation/Overvaluation Against the U.S. Dollar
Inspired by the Big Mac Index, we introduce the Boba Index as an alternative way to examine purchasing power parity (PPP) by comparing bubble tea prices across different locations.
Purchasing Power Parity is an economic theory that suggests the same good should cost roughly the same worldwide after adjusting for exchange rates. By analyzing the price of a standard bubble tea in major cities, we can gain insights into which currencies might be overvalued or undervalued. If bubble tea is significantly cheaper in one country than another, it suggests the local currency has greater purchasing power.
Based on this comparison, the Philippine peso and Taiwanese dollar appear undervalued, while the British pound and Australian dollar seem overvalued relative to the U.S. dollar. However, other factors influence prices, including rent, labor costs, and demand elasticity. For instance, high prices in London and Sydney may reflect expensive real estate and higher wages.
Since Asia is the biggest bubble tea market, fierce competition among vendors keeps prices affordable. As a result, purchasing power in many Asian countries is relatively stronger compared to Western countries. Additionally, lower labor and rent costs enable businesses to maintain profitability at lower prices.
The Boba Index offers a flavorful way to explore the global economy. Whether you’re sipping boba in New York or Taipei, your cup of tea is more than just a drink—it’s an economic indicator in disguise.
