Header photo source: Heytea.

During the Olympics, the buzz wasn’t confined to the stadiums. Chinese brands set up pop-up stores across Paris, drawing in crowds and making their presence felt in the heart of Europe.

In July, Chagee and Heytea seized the Olympic momentum, opening pop-up stores in Paris that pulled in over a thousand visitors daily. This marked a strong push into the European market, showing just how serious these brands are about expanding their reach.

To break into the local scene, Chinese brands didn’t hold back. Chagee strategically placed its pop-up store at Paris Saint-Lazare railway station, one of the busiest train hubs in Europe. According to the store’s staff, they estimated tens of thousands of visitors over the 20-day pop-up period.

Heytea, along with Miniso and others, took over the Champs-Elysees. Heytea’s pop-up in the 11th arrondissement blended Olympic themes with its signature drinks. On opening day, it sold over 1,000 cups of tea, bringing in sales north of EUR 10,000 (USD 11,000). Two Olympic-themed badge products sold out almost immediately.

Ying Zhe, head of integrated marketing agency Vbrandin, noted that dozens of Chinese brands, including Pop Mart, Baixiang, and Alibaba, made their way to Paris this year, combining offline and online marketing strategies. Brands like Heytea and Chagee were reported investing tens of millions of RMB on marketing in total.

Consumer brands like Heytea, Chagee, Pop Mart, and Miniso have been expanding globally for a while. Chagee now operates nearly 100 stores abroad, while Miniso boasts over 2,000 international locations. These brands are now targeting markets with higher purchasing power, and they are doing it in style.

Targeting the European market

In Europe, still a relatively new frontier for these brands, Heytea and Chagee capitalized on the Olympic spotlight to kick off their marketing campaigns, with pop-up stores playing a central role.

Heytea was methodical in choosing its location. Its pop-up store on the Seine’s right bank was close to several iconic Parisian landmarks and sat in a hotspot for local youth. This spot attracted tourists and local consumers alike, aligning perfectly with Heytea’s strategy.

Heytea’s product lineup featured four of its signature products—grape slush, mango pomelo sago, brown sugar bubble tea, and cheesy green tea—favorites that have already proven themselves in the Chinese market. The Olympic-themed packaging and promotional materials added an extra layer of appeal. Priced between EUR 5.5–7.5, these offerings matched local milk tea prices, making them accessible yet exotic.

This wasn’t Heytea’s first step into Europe. Last August, it opened its second overseas store in London’s Soho district, following its initial foray into Singapore. Situated near Chinatown, the London store is part of a growing cluster of Chinese tea brands like CoCo, Happy Lemon, and Yi Fang.

Heytea’s international footprint is expanding rapidly, with 49 stores either open or in the works across the US, UK, Canada, and Australia.

In contrast, while Chagee began its overseas expansion in 2018, it has yet to establish a presence in Europe, focusing primarily on Southeast Asia.

Chagee used the Paris pop-up to boost its visibility and brand recognition, hosting various interactive activities and collaborating with HungryPanda, a leading food delivery platform, to invite local businesses and organizations to sample their products.

With its massive marketing push during the Olympics, Chagee might be signaling where it plans to head next.

Heytea and Chagee’s primary goal is brand building, but they are entering a market that’s already somewhat familiar with Chinese tea. Even in France, a country with a deep-rooted coffee culture, Taiwanese milk tea brands like Machi Machi and Sevenbus, along with Yi Fang, have already made significant inroads.

But the pace at which tea brands are expanding overseas lags behind that of fast-moving consumer goods (FMCG) brands. For example, Miniso began exploring the European retail market in 2019 and, as of last year, had about 230 stores across France, Germany, Spain, Italy, and the UK.

One reason for the slower expansion of tea brands may be the complexity of their supply chains. Chinese tea beverages require a variety of ingredients—tea leaves, dairy products, fruits, sugar, and packaging materials. Most of these brands don’t yet have overseas manufacturing facilities, meaning they rely on importing materials from China. The long shipping distances make quality control and timely delivery a challenge.

Southeast Asia as the launchpad

Given the differences in consumer habits, tastes, and supply chain logistics, Southeast Asia has emerged as the preferred starting point for these tea brands’ global expansions.

The wave of Chinese tea brands entering Southeast Asia began in 2018, with Heytea opening its first overseas store in Singapore, followed by Mixue Bingcheng and Chagee in Vietnam and Malaysia.

Heytea expanded outward from Southeast Asia. When drive-through restaurants became popular in Malaysia, Heytea responded in 2023 by launching one and even developed new drinks like a durian cheese tea using local ingredients.

Chagee wasn’t far behind. In August, it opened three new directly operated stores in prime areas of downtown Singapore, with the first store occupying about 250 square meters at Orchard Gateway. The brand now runs over 100 overseas stores across Malaysia, Singapore, and Thailand, with the majority in Malaysia.

Chagee’s deepening presence in Southeast Asia is part of a clear strategy. The company has announced plans to open stores in eight Asian countries and regions, including Singapore, Malaysia, Thailand, Indonesia, Vietnam, the Philippines, Japan, and South Korea. To support this expansion, Chagee has set up a dedicated Southeast Asian team based in Singapore.

While Heytea and Chagee are the high-end pioneers, Mixue dominates Southeast Asia in terms of store numbers.

Mixue filed for an IPO in Hong Kong in January. According to its prospectus, by September 2023, it had opened about 4,000 stores across Southeast Asia, including Vietnam, Indonesia, the Philippines, Singapore, and Malaysia, making it the largest tea beverage brand in the region by store count.

In terms of supply chain, Mixue has also made significant strides. During its expansion, the company established localized warehousing systems in four Southeast Asian countries, with 11 self-operated warehouses covering about 66,000 square meters.

Tea brands are focusing on Southeast Asia and the broader Asian market for several reasons. Ying said that brands choose Southeast Asia not just for brand positioning but also due to factors like supply chains, culture, and market penetration. The region’s lower entry barriers, coupled with the increased acceptance of Chinese brands—thanks to prior entries of automotives and consumer electronics—and favorable logistics and policies, make Southeast Asia an attractive market.

However, once these brands enter neighboring markets, they must continuously adapt their business models to local conditions.

Earlier this year, there were reports that Chagee had encountered issues with franchisees in Singapore, who allegedly rebranded their stores as Amps Tea with minimal changes to staff or menu items, fracturing its franchise network. In response, Chagee quickly opened three new directly operated stores in Singapore, signaling its commitment to the local market.

After trials and adjustments, Chinese tea brands are now deeply entrenched in Southeast Asia, seeing it as a key market. Meanwhile, the distant European and American markets—with their distinct consumer habits, cultural preferences, and higher operational costs—might be tougher to crack than initially anticipated.

KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Hu Yiting for 36Kr.