Chinese Restaurants Overseas Benefit From Strong Supply Chains, But Struggle With Localization (AI Translation)
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文｜财新周刊 冯奕铭
By Caixin Weekly’s Feng Yiming
刚刚过去的6月，中国新茶饮品牌霸王茶姬在新加坡购物中心狮城大厦举办为期七天的快闪活动，有的顾客排队一个小时。
This past June, Chinese new tea drink brand Bawangchaji held a seven-day pop-up event at Singapore's City Square Mall, with some customers queuing for up to an hour.
这个快闪活动是在为霸王茶姬2024年8月正式开业的门店造势。其实，霸王茶姬早在2018年就通过国家总代理（下称“国代”）形式进入新加坡市场，五年后双方却因门店选址和装修等事宜出现分歧。2024年初，新加坡十余家霸王茶姬门店被翻牌成“与茶amps tea”，国代自立门户。
This pop-up event is generating buzz for Bawang Tea Sister's store, which will officially open in August 2024. In fact, Bawang Tea Sister had already entered the Singapore market in 2018 through a national general agent (referred to hereafter as "the agent"). However, five years later, the two parties encountered disagreements over store locations and renovations. In early 2024, more than ten Bawang Tea Sister shops in Singapore were rebranded as "YoCha Amps Tea," with the agent starting an independent venture.
一夜之间被“鸠占鹊巢”的霸王茶姬只得重新来过。2023年开始，中国餐饮行业掀起了新一轮“出海”热潮。这一次霸王茶姬决定放弃代理模式，本地招聘CEO进行直营。霸王茶姬对财新称，计划拓展到亚洲八个国家，即新加坡、马来西亚、泰国、印度尼西亚、越南、菲律宾、日本以及韩国。其中， 出海东南亚六国是未来五年内最重要的计划，且把亚太总部放在新加坡，目前在地产品与国内相同。
Overnight, Bawang Chaji, facing an unexpected takeover of its premises, had to start anew. In 2023, a fresh wave of overseas expansion swept through China's dining industry. This time, Bawang Chaji decided to abandon its franchise model, opting instead to hire local CEOs for direct management. Bawang Chaji informed Caixin that it plans to expand into eight Asian countries: Singapore, Malaysia, Thailand, Indonesia, Vietnam, the Philippines, Japan, and South Korea. Among these, the Southeast Asian markets will be the focus for the next five years, with the Asia-Pacific headquarters stationed in Singapore. Currently, the products offered locally are the same as those available in the domestic market.
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This past June, Chinese new tea drink brand Bawangchaji held a seven-day pop-up event in Singapore's City Square Mall, where some customers queued for up to an hour. The event generated buzz for Bawang Tea Sister's store, slated to open in August 2024. Though Bawang Tea Sister entered the Singapore market in 2018 through a national agent, disagreements in 2023 led to rebranding. Consequently, Bawang Chaji now focuses on hiring local CEOs for direct management rather than using the franchise model [para. 1][para. 2][para. 3].
Bawang Chaji announced plans to expand into eight Asian countries, emphasizing Southeast Asian markets. Other brands like Heytea and Shuyi Grass Jelly have also pursued overseas expansions, opening stores in various global cities. Chain restaurants such as Tai Er Sauerkraut Fish, Zhang Liang Spicy Hot Pot, and Yang Mingyu Yellow Braised Chicken are similarly increasing their global footprint. According to PayInOne CEO Lin Tan, the number of overseas hires has grown over 200% annually in recent years [para. 4][para. 5][para. 6].
The restaurant industry's quick return to competitiveness post-pandemic has driven several brands to look abroad for growth opportunities. For instance, Yang Mingyu Yellow Braised Chicken opened in Los Angeles in 2017 and rapidly expanded in Southeast Asia. Zhang Liang Spicy Hot Pot has similarly seen enthusiastic responses to its overseas franchises, despite a pandemic-induced hiatus [para. 7][para. 8][para. 9].
Organizations like the Chinese Ministry of Commerce are also encouraging international expansion. However, the supply chain remains a significant challenge. Easier items are exported while fresh ingredients are sourced locally to maintain authenticity. Franchise models have been successful, but direct operations are also explored by some companies. For example, Luckin Coffee employs a self-operated model for its rapid expansion in Southeast Asia [para. 10][para. 11][para. 12][para. 13][para. 14][para. 15].
Brands like Mixue Bingcheng have been successful, notably with 4,000 stores in 11 countries as of September 2023. The company has leveraged local partnerships and a cost-effective model to dominate markets like Indonesia. The influx of Chinese dining brands has motivated local brands to adopt similar strategies [para. 16][para. 17][para. 18][para. 19][para. 20][para. 21].
Despite initial enthusiasm, sustaining overseas operations proves challenging. Localization issues, such as adapting to different dining cultures and ensuring efficient supply chains, are critical hurdles. Moreover, effective employee management is imperative for success. Companies often dispatch Chinese managers initially but aim to hire and train locals for long-term operations [para. 22][para. 23][para. 24][para. 25][para. 26][para. 27][para. 28].
In summary, Chinese dining brands are aggressively expanding globally, particularly in Southeast Asia, driven by competitive pressures and official encouragement. They employ a mix of franchising and direct operations, leveraging both local and imported resources to adapt to regional markets. However, challenges like supply chain management and employee training persist and require careful navigation to ensure sustained success[para. 4][para. 5][para. 7][para. 10][para. 22][para. 27].
- Overlord Tea Jie
霸王茶姬 - Overlord Tea Jie, a Chinese new tea drink brand, hosted a seven-day pop-up event in Singapore in June to build momentum for a planned store opening in August 2024. Initially entering Singapore in 2018 through a national distributor, disputes led to rebranding of its stores. The brand is now expanding directly into eight Asian countries, focusing on Southeast Asian markets with plans for local CEOs and direct operations.
- HEYTEA
喜茶 - HEYTEA announced it would open to franchising in 2023 and launched its first stores in London, Melbourne, New York, Kuala Lumpur, and Vancouver. In July 2024, HEYTEA plans to set up a pop-up store in Paris.
- Shuyi Burned Herbal Jelly
书亦烧仙草 - Shuyi Burned Herbal Jelly, a Chinese tea drink brand, began overseas expansion in 2023. It has since entered Southeast Asia, Spain, and the U.S. markets, reflecting the broader trend of Chinese dining brands seeking international growth.
- TaiEr Pickled Fish
太二酸菜鱼 - According to the article, TaiEr Pickled Fish, part of the Jiumaojiu Group, expanded internationally during the pandemic, opening its first overseas restaurant in Singapore in 2021. Despite challenges, it attracted many diners. It later expanded to Malaysia, Thailand, Indonesia, and entered the U.S. market in 2023. TaiEr divides its global markets into three regions: Southeast Asia, North America, and Hong Kong, Macau, and Taiwan.
- Zhang Liang Spicy Hotpot
张亮麻辣烫 - Zhang Liang Spicy Hotpot, founded in Heilongjiang, China, launched its overseas team in 2019. By 2023, it reached 63 international stores across 15 countries. They adapt to local preferences and face supply chain and staffing challenges. The company’s strategy includes both direct operations and seeking local agents for certain markets.
- Yang Mingyu Braised Chicken
杨铭宇黄焖鸡 - Yang Mingyu Braised Chicken, established in 2011 in Shandong, has over 6000 locations in China and around 100 abroad. Its U.S. entry in 2017 saw high demand with prices at $9.9 per dish. The company’s international strategy focuses on brand upgrades and exploring new markets, with operations in countries like Thailand, Japan, Myanmar, and South Korea.
- Haidilao
海底捞 - Haidilao, a prominent Chinese hotpot chain, opened its first overseas store in Singapore in 2012. By Q1 2024, its overseas branch, Super Hi International, operated 119 stores, with 60% in Southeast Asia. The brand emphasizes adapting to local markets and efficient management, employing strategies like self-established central kitchens and local hiring.
- Tasty International
特海国际 - Tasty International, a subsidiary of Haidilao, was created in 2022 and listed on the Hong Kong Stock Exchange. As of Q1 2024, it operates 119 stores, with 60% located in Southeast Asia. It focuses on fine-tuning management and expanding internationally, with significant localization efforts.
- PayInOne
PayInOne - PayInOne is an overseas human resources platform. Its CEO, Lin Tan, noted significant growth in overseas hiring and salaries for Chinese restaurant businesses, with a 200% increase annually over the past three years. Lin highlighted that most food companies recruit local staff such as servers and cooks, while key positions like managers are often filled by Chinese employees, with a high reliance on part-time workers abroad.
- Luckin Coffee
瑞幸咖啡 - In 2023, Luckin Coffee started its international expansion by opening 32 stores in Singapore, viewing it as a "testing ground" due to its established coffee market and favorable conditions. The company plans to expand to Malaysia and the US, currently opting for direct operations rather than franchising.
- 5coffee
5coffee - 5coffee, a Chengdu-based coffee brand, signed its first Malaysian franchisee in 2023. The company saw significant interest, with around 20 overseas store signings in the first half of 2024. The company's representative, Zi Hao, mentioned they receive nearly 20 franchise inquiries each month.
- Tian La La
甜啦啦 - Tian La La, a Chinese milk tea brand, opened its first overseas store in Indonesia in August 2023. The company's chairman, Wang Wei, announced plans to expand throughout Southeast Asia, aiming to establish 500 stores by the end of 2024.
- Tea Hundred Ways
茶百道 - Tea Hundred Ways targeted overseas expansion by entering less competitive markets. Its first overseas store opened in South Korea, followed by openings in Thailand and Australia. As of June 13, it has four stores in South Korea, and two stores each in Thailand and Australia.
- Mixue Ice Cream
蜜雪冰城 - Mixue Ice Cream began its overseas expansion in 2018, opening its first store in Vietnam. As of September 2023, it has around 4,000 stores across 11 countries. The brand employs a high-cost-performance strategy and uses its iconic "Snow King" mascot. Despite starting as a high-level management-driven project, Mixue successfully replicated its model abroad, capturing significant market share, especially in Indonesia, Malaysia, and Singapore.
- Jiumaojiu Group
九毛九集团 - Jiumaojiu Group (09922.HK) oversees the Tai Er (Too Two) Sauerkraut Fish brand. Despite the pandemic, Tai Er continued its overseas expansion, debuting in Singapore in 2021. It further expanded to Malaysia, Thailand, Indonesia, and the U.S. in subsequent years. The brand divides its global market into Southeast Asia, North America, and Greater China, with multiple locations in each region.
- 2012：
- Haidilao opened its first overseas outlet in Singapore.
- 2016：
- Mixue Bingcheng began researching overseas markets.
- 2017：
- Yang Mingyu Yellow Braised Chicken opened its first American store in Los Angeles.
- August 2018：
- Bawang Tea Sister entered the Singapore market through a national general agent.
- 2018：
- Mixue Bingcheng opened its first overseas store in Vietnam.
- 2019：
- Zhang Liang Malatang established its overseas team and announced the opening of overseas franchises.
- 2021：
- Tai Er Sauerkraut Fish opened its first overseas outlet in Singapore.
- In 2022：
- Haidilao spun off its overseas business into an independent company, Super Hi International, listed on the Hong Kong Stock Exchange.
- 2022：
- Tai Er Sauerkraut Fish expanded to Malaysia, Thailand, and Indonesia.
- Early 2023：
- The consultation volumes for overseas expansion began to recover.
- By September 30, 2023：
- Mixue Bingcheng established approximately 4,000 outlets in 11 countries.
- March 2024：
- The Chinese Ministry of Commerce issued 'Guiding Opinions on Promoting High-Quality Development of the Catering Industry.'
- By June 2024：
- Zhang Liang Spicy Hotpot had 19 stores in the United States and 10 stores each in Singapore and Thailand.
- June 21, 2024：
- Yang Lijuan stepped down as CEO of Haidilao and took on the role of CEO at Tefei International.
- June 2024：
- Bawangchaji held a seven-day pop-up event at Singapore's City Square Mall.
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