Chinese food and beverage chains win fans in Southeast Asia

Chinese food and drink brands are making significant strides throughout Southeast Asia, providing viable options to prominent U.S. chain restaurants and broadening China’s commercial and cultural impact on nearby markets.

The prominent Chinese drink company Mixue Group has emerged as the global leader in food and beverages regarding the number of locations, surpassing both Starbucks and McDonald’s.

The company, whose brand name Mixue Bingcheng means “Honey Snow Ice City,” in Chinese, is capitalizing on the region-wide sweet tooth with affordable offerings of ice cream, coffee and bubble tea drinks.

“On platforms such as TikTok and others, there’s a jest suggesting that every vacant shop will quickly transform into a Mixue outlet,” stated Rahma Yuliana, alluding to a common phrase in Indonesia, where Mixue boasts over 2,600 locations.

A working mom who operates an internet-based company often spoils her child after school with affordable goodies like a cup of brown sugar milk tea priced at $1.10, which is roughly 30% less expensive compared to what competitors like Chatime offer. She can also get an ice cream cone starting at just 50 cents, making it more budget-friendly even when compared to fast-food giants like McDonald’s.

By September, the Mixue Group operated through more than 45,000 outlets offering their Mixue beverages, ice creams, and Lucky Cup coffee items—a figure surpassing both Starbucks’ and McDonald’s’ store counts, according to market observers. Approximately 40,000 locations were situated within China.

By December, according to reports from Singapore-based research firm MomentumWorks, Chinese food and beverage companies had established more than 6,100 stores across Southeast Asia.

India and Vietnam make up approximately two-thirds of the market share, whereas Chinese brands are more prevalent in Singapore and Malaysia due to their large Chinese-speaking communities.

Almost all of Mixue’s outlets operate as franchises, receiving their drink ingredients from the company. These include beverages such as Creamy Mango Boba, Mango Oats Jasmine Tea, and Coconut Jelly Milk Tea. In addition to Mixue, prominent players in the market also feature hot pot specialist Haidilao, Fish With You pickled fish eateries, along with popular drink brands including Luckin Coffee, Heytea, and Chagee.

Jianggan Li, the CEO of Momentum Works, stated that Chinese companies are aggressively exploring fresh opportunities for expansion within Southeast Asia as they grapple with intense rivalry in their domestic markets.

The initiative taken by food and beverage sellers has highlighted that China can provide much more than inexpensive electronic goods.

Li mentioned that the firms are thoroughly prepared, leveraging automation to boost their productivity and excelling in digital advertising strategies.

Major Western enterprises often require considerable time to identify local collaborators and formulate enduring strategies. In contrast, Chinese food and beverage firms exhibit “greater impatience,” according to him.

In Bangkok, the capital of Thailand, Chinese businessman Siya Han has committed more than $1.37 million to establishing 12 Mixue locations along with roughly 10 additional eateries offering spicy soup dishes, pickled cabbage fish, and breaded chicken fillets within approximately six years.

She mentioned that stores located in shopping centers require considerable time to recuperate expenses because of substantial rental deposit fees. However, her other locations generally reach profitability between six months to one year, not factoring in the benefits from their lease agreements.

As she put it, ‘If you expand Chinese restaurants too gradually, you won’t make it,’.

In Kuala Lumpur, the capital of Malaysia, Liu Liujun—the vice president of the Chinese pickled cabbage fish franchise known as Fish With You—recognized an opportunity within the substantial ethnic Chinese community and expanding economies across Southeast Asia.

The company’s $235,000 investment in one of its branches in Malaysia yielded returns within merely nine months, as queues formed daily at the outlet nearly every day, noted Liu, who manages the firm’s international growth throughout the area.

Victoria Kovalan mentioned that the introduction of new Chinese brands has made it simpler for her to explore different types of cuisine.

“She mentioned that it has broadened our taste preferences,” she said, speaking about the rise in popularity of Sichuan hotpot, famous for its spicy tastes.

Nguyen Thu Hoai, a Vietnamese student from Hanoi, was initially doubtful about Mixue due to its status as a Chinese brand. However, she has now turned into a frequent visitor, citing its reasonable prices and superior quality as the key factors that changed her mind.

The growth of Chinese food and drink brands is indicative of a larger pattern where Chinese products are now perceived not just as inexpensive but as genuinely valuable, according to Gordon Mathews, an anthropology professor at the Chinese University of Hong Kong.

Mathews recalled the cultural impact of McDonald’s worldwide growth, mentioning his visit to its initial location in Guangzhou, the financial center of South China, during the 1990s. There, a staff member shared with him, “I wish to go to America.”

“If Chinese food brands were to expand globally, they could potentially wield significant influence; however, the extent of this effect still needs to be observed,” he stated. “While China faces challenges in gaining soft power, it is effectively leveraging its products to make strides forward,” he added.