Consumers rejoice but Malaysian, Indonesian entrepreneurs sound alarm as Chinese chains flood region

Malay Mail

2 days ago

KUALA LUMPUR, July 21 — Chinese brands are enjoying growing success in Southeast Asia, but some local players and observers remain wary about their rapid rise and potential impact on domestic businesses.
In a CNA report, a Malaysian food and beverage entrepreneur said anonymously that he is under pressure from Chinese chains such as Mixue, which offer bubble tea at RM5 and ice cream at RM2, asking, 'It will remain to be seen how long they will be here.'
'I do hope locals will support local brands and restaurants,' he added, underscoring the concerns of small operators facing fierce price competition.
Experts say that while Chinese companies are gaining market share through affordability and innovation, the pace of their expansion has raised questions over long-term sustainability and market fairness.
Andry Satrio Nugroho from the Institute for Development of Economics and Finance predicted that low-price strategies may not last as production shifts to other countries, saying aome Chinese goods are now produced in Vietnam to keep costs down.
He also noted that a continued perception gap with Chinese brands, saying they were often still seen as a second-tier choice to Western competitors.
Gaikindo co-chairman Jongkie Sugiarto said that Japanese brands remain dominant in Indonesia due to a strong reputation for reliability, and Chinese players 'need to work on' building that same level of trust.
Habib Dzakwan from Jakarta's CSIS think tank cautioned that unchecked expansion may provoke nationalist sentiment, stating, 'If not addressed, it's easy to trigger anti-Chinese sentiment.'
A BYD Dolphin Surf electric vehicle is displayed on stage during a presentation by BYD carmaker in Berlin, Germany May 21, 2025. — Reuters pic
Lee Pei May of the International Islamic University Malaysia noted that local businesses are already raising concerns over the invasion, saying, 'This is due to the fact that Chinese firms are highly competitive.'
Despite these concerns, analysts agree that China's mix of scale, technology and strategy means its brands will continue to grow in the region's markets.
Consumers also reported growing affinity for some Chinese brands, rejecting the view that they were less than alternatives from other countries.
Entrepreneur Aditya Adri Saleh said after using a Chinese EV for nearly a year, 'I would not second guess Chinese products until I test them out myself.'
'While others see it as an influx of inferior products that wouldn't last long, I can attest from personal experience,' he added.
Habib believes the trend will persist as long as purchasing power remains unchanged, saying, 'Consuming Chinese brands is a pragmatic yet rational choice.'