Chinese restaurant chains are accelerating their growth in South Korea, capturing customers in the major tourist regions of Seoul with genuine Chinese food. This development is fueled by a boost in sales.
Emerging Leaders in the Industry
Among the most rapidly developing contenders is the hot pot franchise Tanghuo Kungfu Malatang. Since the inauguration of its initial franchised store in Suwon in 2012, the chain has expanded exponentially, boasting over 560 locations in South Korea as of the end of March. These locations encompass both franchised and company-managed stores.
Tanghuo Kungfu Korea reported an impressive KRW22.2 billion (US$14.7 million) in revenue in 2024, an increase of 21% from the previous year. The company’s operating profit skyrocketed elevenfold to KRW10.5 billion during the same timeframe.
Now, the company’s establishments are primarily located in the main tourist hotspots of Seoul, such as Gangnam Station, Myeong-dong, Hongdae, Seongsu, and Daehangno.
The company is also offering incentives for new partners by exempting franchise, training, and royalty fees and providing free serving bowls.
A spokesperson for Tanghuo Kungfu Korea stated, “As the malatang market in Korea continues to grow, we aim to appeal to potential entrepreneurs and share with them our brand’s operational expertise and practical support benefits. We look forward to active involvement by local restaurant owners so we can jointly spearhead malatang’s market growth here.”
Other Key Players
Other Chinese brands are also on the rise. The hot pot chain Haidilao reported sales of over KRW100 billion last year, a significant increase compared to KRW78.1 billion in 2024. The brand, recognized for offering customers complimentary nail art services and entertainment shows, has grown to ten locations since its introduction into South Korea in 2024.
Bantianyao Grilled Fish has established six outlets since it entered the market in 2020, while Haihai Kaochuan, a skewer barbecue chain managed by Haidilao, inaugurated its first Seoul outlet in Myeong-dong this past January.
These restaurant chains are emulating the expansion strategy of major Chinese tea brands, which have demonstrated their success in China with thousands of stores. Their push into South Korea is a strategic move, given that China’s domestic market is nearing saturation.
Milk tea brand Chagee announced plans to launch three outlets in Seoul by the end of June, marking its first expansion into East Asia outside China. Other brands, such as Chabaido, HeyTea, and Mixue, are also extending their reach in the country.
Market Outlook
Market analysts regard South Korea as a desirable entry point for global expansion, attributing its appeal to the country’s significant cultural influence through trends like K-pop, K-food, and K-beauty. This positions the country as an ideal testing ground for new brands prior to broader international deployment.
Questions & Answers
What are some Chinese restaurant chains expanding in South Korea?
Some Chinese restaurant chains expanding in South Korea include Tanghuo Kungfu Malatang, Haidilao, Bantianyao Grilled Fish, and Haihai Kaochuan.
What strategies are these chains employing for their expansion?
These chains are waiving franchise, training, and royalty fees for new partners, providing complimentary offerings, and focusing on locations in major tourist areas. They are also following the successful expansion strategies of Chinese tea brands.
Why is South Korea considered an attractive market for these expansions?
South Korea is considered an attractive market due to its strong cultural influence and trends such as K-pop, K-food, and K-beauty. These aspects position the country as a potential testing ground for brands before broader international rollout.
