Chinese milk tea brands are broadening their horizons and expanding into new markets in Asia and the West. These brands have traditionally focused on Southeast Asia as their primary area for foreign expansion. However, with the market becoming overcrowded, they are now setting their sights on other regions. This comes as the tea market grows increasingly saturated, prompting a shift in emphasis from rapid expansion to improving store performance and streamlining operations.
Over 60 Chinese milk tea brands had established more than 6,100 outlets throughout Asia by the end of 2024, most notably led by major chains such as Mixue and Chagee. Mixue, the largest food and beverage chain globally in terms of store count, has begun adjusting its operations in Indonesia and Vietnam. Despite a decrease in store numbers in these markets, the company maintains its focus on the region while pushing into emerging markets, including its first location in Kazakhstan.
Expansion and Competition
Chagee, another renowned milk tea brand, has plans to venture into the South Korean market with three upcoming outlets in Seoul. It joins a growing number of its peers already established in the market, including Heytea, Mixue, ChaPanda, and Auntea Jenny. Chagee has further signaled its intent to spread its reach into Japan.
Understandably, the homefront competition for these Chinese brands is fierce, with the milk tea boom of the last decade leading to around 420,000 outlets. To attract customers, some brands resort to pricing their products at less than a dollar or offering free online orders.
Moving Westward
Besides nearby Asian markets, several brands are also extending their presence to the United States. The country has become a significant focus for the sector, with the number of fresh tea retailers rising by 18.2% annually to 7,845 in 2025. It is projected that the U.S. market for freshly made tea drinks will be worth $2.9 billion by 2029.
However, penetrating the U.S. market brings its challenges. Amanda Wang, co-founder of beverage chain Ningji Lemon Tea, highlights the need to adapt to local tastes, noting American consumers’ preference for sweeter drinks. She also cites differences in the business landscape.
Despite these hurdles, various Chinese brands, including Mixue, Chagee, Chahalo, Molly Tea, and Auntea Jenny, have successfully launched U.S. stores or announced expansions in recent years. For instance, Mixue’s recently opened New York store, twice as large as its typical outlet in China, has managed to maintain the brand’s familiar look and affordable prices.
Competitive Edge and Consumer Response
Nevertheless, competitive pricing is not the only strength of Chinese tea brands. HeyTea, with its drinks averaging around $10, has enjoyed robust demand. Its Times Square store sold over 3,500 cups on its opening day and has since averaged over 2,000 cups daily. Other brands, such as Chagee and Auntea Jenny, have also experienced strong debuts in the U.S. market.
Consumers appreciate the diverse flavors offered by Chinese brands, distinguishing them from established chains like Starbucks. Consumers’ preference for different flavors and affordable prices are significant factors driving their patronage of Chinese tea brands.
Questions & Answers
Why are Chinese milk tea brands expanding into new markets?
Chinese milk tea brands are expanding into new markets as their traditional focus area, Southeast Asia, becomes overcrowded, and the tea market becomes increasingly saturated. This has led to a shift from rapid expansion to improving store performance and operations.
How are Chinese brands faring in the U.S. market?
Despite facing challenges such as adapting to local tastes and a different business environment, several Chinese brands have successfully launched stores or announced expansions in the U.S. They have garnered a positive response from consumers who appreciate the diverse flavors and competitive prices they offer.
What distinguishes Chinese tea brands from established chains like Starbucks?
Chinese tea brands stand out from established chains like Starbucks due to their unique flavors and affordability. They offer a variety of flavors not typically found in Western chains, boosting their appeal among consumers.
