How Chinese consumer brands are muscling into South-east Asia

Business Times

5 days ago

EVERY tourist arriving in Ho Chi Minh City visits the 110-year-old Ben Thanh Market. Its surrounding streets pulse with local eateries, coffee joints, and souvenir shops.
Yet amid these Vietnamese staples stands a branch of Miniso, a lifestyle chain that may appear Japanese but is actually Chinese. Since entering Vietnam in 2016, the brand has grown to 66 locations, taking prime spots in malls and bustling street corners.
It's not the only one.
Number of outlets of Miniso, PopMart, Cotti, Haidilao as of 30 June 2025; Luckin, Chagee as of 30 March 2025, Mixue as of 30 September 2024. SOURCE: TECH IN ASIA RESEARCH
Chinese consumer brands are expanding at breakneck speed across South-east Asia, snapping up flagship corners and turning passers-by into fans. That said, the region is far from being one single market, and brands sticking to a particular homegrown playbook could stumble.
Scale advantage
Chinese consumer brands are not new to South-east Asia.
Haidilao, China's largest hot pot chain, entered Singapore 13 years ago. Meanwhile, Mixue, now the world's biggest F&B player by outlet count, picked Vietnam as the site for its first overseas store in 2018.
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SOURCE: TECH IN ASIA RESEARCH
Yet Chinese brands have only started expanding aggressively across the region in the past three years.
By the end of 2024, more than 60 Chinese F&B brands were operating over 6,100 outlets in South-east Asia. That's triple the 2022 figure of less than 2,000, according to research firm Momentum Works.
With China's consumer market still flat post-pandemic, South-east Asia, with a population of 700 million people, 30 per cent of whom are aged 15 to 34, has become a good target for brands, said Lina Yan, consumer analyst at HSBC Global Investment Research.
SOURCE: OVERSEAS COMMUNITY AFFAIRS COUNCIL OF TAIWAN, WORLD BANK
Cultural ties play an important part here. Four of South-east Asia's six biggest countries have the world's highest ethnic Chinese population shares.
'Southeast Asian markets are definitely more China-friendly than the US and Western countries,' Jason Yu, managing director at Beijing-based CTR Research, told Tech in Asia.
Among Chinese brands, Mixue stands out in scale, with 4,700 outlets across South-east Asia as at September 2024, according to its prospectus. Over 84 per cent of them are in Indonesia and Vietnam.
Mixue sells ice cream and cold drinks for under US$1, with all its stores in the region run by franchisees. Most of its revenue comes from selling supplies to them.
The company's scale of 40,000 outlets in China gave it a foundation of a low-cost, reliable supply chain that no competitor can match. Its optimisation level is simply in a league of its own.
That operational edge lets it keep franchise fees low to scale fast and earn from ingredient sales, according to Jason Ong, master transformation strategist at Axxelerated Transformation, a Singapore-based consulting firm specialising in retail innovation.
'It's intensely competitive in China,' he said. 'Anyone who survives there and expands abroad must already have a strong playbook.'
Other Chinese beverage chains such as Luckin and Cotti also ran tens of thousands of stores in China before entering South-east Asia. In contrast, the region's biggest homegrown coffee brands – Thailand's Cafe Amazon and Indonesia's Point Coffee – have around 4,400 and 1,200 outlets, respectively.
Beyond sheer numbers, some Chinese brands are making South-east Asia the centrepiece of their global push.
For example, Miniso's largest store in the world is not in China but in Indonesia. Opened in August 2024, the flagship spans 3,000 square metres.
New approach
Miniso began by positioning itself as Japanese-influenced. However, it later ditched Japanese elements in its styling after a backlash in China driven by consumer nationalism.
Now it touts itself as a global lifestyle brand.
Its makeover has signalled a bigger shift. Chinese consumer brands, long deemed budget copycats of Western or Japanese labels, are winning on their own paths.
Leading Chinese brands are reshaping their image by investing heavily in design, R&D, and customer experience, said Mark Greeven, professor of innovation and strategy and dean of Asia at the International Institute for Management Development.
While Miniso partners with well-known global intellectual properties such as Disney, Harry Potter, and Sanrio, Pop Mart has sparked a global craze among young consumers with Labubu figures from its exclusive IP.
This applies not only to South-east Asia. These brands are 'winning over new generations of consumers worldwide,' Greeven added.
Moreover, Chinese brands are not just about low prices anymore. Chagee, which positions itself as a premium milk tea chain, prices its drinks roughly on par with Starbucks coffee in Singapore.
Bumps on the road
Still, Chinese brands face challenges from South-east Asia's diverse market.
SOURCE: IPSOS' RESEARCH (2024)
'The region is deeply nuanced,' said Ryan Wei, founder of Indonesia-based Sino Indo Pacific (SIP) Group and former chief business officer at Indonesian F&B giant Boga Group. 'There's no single playbook – you will not win in Vietnam the same way you do in Indonesia or Thailand. It's not like expanding to another province in China.'
For example, Luckin and Chagee have maintained both franchising and direct operations models in the region – different in each country.
SOURCE: MOMENTUM WORKS (2025)
Finding the right local partners is crucial when entering a new market, said Nathanael Lim, Asia-Pacific insight manager for beverages at data analytics firm Euromonitor International.
Some brands do not get it right the first time, however.
Chagee, for instance, abruptly exited Singapore in early 2024 after operating for five years through a franchise partnership model. It later returned with direct operations and now runs six stores in the city-state.
SOURCE: EUROMONITOR INTERNATIONAL
That said, localisation isn't just about business models. It also demands cultural awareness.
In April 2025, Chagee planned to open its first Vietnam store along one of Ho Chi Minh City's most premium streets. But it pulled out after a public outcry and boycott calls from locals.
The backlash was triggered by a map on the company's app and website showing the nine-dash line – China's disputed territory claim in the South China Sea that overlaps with Vietnam's own.
No apology, no update. Chagee's Vietnam entry is likely off the table.
Commenting on the incident, CTR Research's Yu said it's not easy for Chinese brands to navigate politically sensitive issues abroad. If a brand removes the nine-dash line to follow local laws, it risks backlash at home if the situation gains traction on Chinese social media.
'They will need to strike a delicate balance to please both Chinese and foreign sentiment when dealing with politically charged topics,' he explained.
But while Chinese brands excel in tech and operations, many still lack international finesse, argues SIP Group's Wei. A large number of them have only started expanding overseas in the last five years, while American and Japanese companies have decades of global experience.
Missteps are then inevitable.
'But at the end of the day, success belongs to those who keep outgrowing themselves,' Wei added. 'And on that front, I believe Chinese players are learning and evolving faster than most local brands.' TECH IN ASIA