I can only assume they are being used as fronts to launder money or as a business investment to secure residency as there seems to be no possible way even a city of Melbourne's size could consume this much bubble tea. It's almost at the point where there are bubble tea sellers directly next to each other in the street. And I'm talking dozens, if not hundreds, of them.
There are tens of thousands of mainland Chinese living in the CBD, and it’s basically a daily staple for a huge chunk of them.
Some of these places are charging $7-$8 for something that costs all of 20 cents to make. The margins are huge - the biggest difficulty is securing the right location with the right footfall.
That’s an example of Hotelling’s law [1]. Competing businesses are better off clustering together in high traffic areas rather than spreading out to cover the market in a way that serves customers more efficiently. It’s a weird phenomenon and a clear refutation of the invisible hand.
Actually it's the opposite: more choice is brought by the invisible hand where people naturally go to, even if it puts businesses in direct competition and thus reduce prices