In the last decade, mainland Chinese food and beverage (F&B) companies have aggressively expanded into regional markets, particularly Southeast Asia, driven by domestic market saturation and Beijing’s “going out” policy. Targeting emerging consumer bases, these firms focus on niche sectors like ice cream and milk tea, offering affordable options that challenge traditional franchise models.
Leading brands such as Mixue Ice Cream and Tea (Mixue Bingcheng), Naixue (Nayuki), Joyday, Chagee, and Luckin Coffee have entered Southeast Asia from Chinese cities like Xiamen and Shenzhen. Unlike established Western franchises such as Starbucks, which operate through exclusive master franchisees targeting affluent urban customers, these Chinese companies promote a low-cost franchise model accessible to entrepreneurs in smaller cities and rural areas. For instance, starting a Mixue franchise requires less than US$40,000 in initial capital, enabling rapid network growth.
Mixue stands out as the fastest-growing mainland Chinese F&B brand in Southeast Asia. Since entering Vietnam in 2018 and Indonesia in 2020, Mixue has rapidly expanded—opening over 2,000 stores in Indonesia within four years and nearly 1,000 outlets in Vietnam over five years. This success is attributed to an efficient supply chain, affordable pricing, and a franchise model designed for quick, scalable growth.
However, entering developed markets such as Australia, South Korea, and Japan remains difficult for Chinese firms due to strict regulations, high costs, and strong local brand loyalty. In contrast, Southeast Asian countries offer more receptive environments and significant room for growth in ice cream and related sectors.
Indonesia, with its large Muslim population, requires halal certification for F&B businesses. Mixue faced protests in 2023 over halal concerns but secured certification from the Indonesian Ulema Council (MUI) after initial delays, demonstrating the challenges and importance of local compliance.
Other Chinese firms like Aice Group and Yili Group’s Joyday brand have also made inroads in Indonesia by tailoring products to local tastes and investing in domestic production facilities. The Indonesian government’s supportive regulatory climate, coupled with localized supply chains, has helped these companies thrive amid stiff competition.
Beyond business, these brands influence cultural perceptions of China. A July 2023 article in The Jakarta Post praised Mixue for its positive economic impact and resilience, suggesting that popular, affordable Chinese F&B brands can improve local attitudes toward China, reflecting the broader soft power potential of consumer franchises.
Still, the long-term sustainability of the low-cost franchise model remains uncertain. While effective for rapid expansion, Chinese F&B firms must address challenges like quality control and market saturation as competition intensifies.
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