---
title: "Milk tea goes to Nanyang: After 5,000 stores, MIXUE and Bawang Chaji encounter the same problem"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/286975227.md"
description: "Mixue Ice City and Bawang Chaji are facing fierce competition in the Southeast Asian market, with franchisees' payback period extended to 14 to 16 months, leading to losses for some stores. With the rapid expansion of Chinese tea brands, market saturation has increased, and the previously profitable business model is being challenged, reflecting the complexity of Chinese brands going overseas"
datetime: "2026-05-19T23:00:02.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/286975227.md)
  - [en](https://longbridge.com/en/news/286975227.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/286975227.md)
generator: "portal-rs"
---

# Milk tea goes to Nanyang: After 5,000 stores, MIXUE and Bawang Chaji encounter the same problem

**Written by｜Yu Jia, Gu Lingyu**

**Edited by｜Gu Lingyu**

On the streets of Jakarta, Indonesia, less than 50 meters apart, MIXUE and Momoyo (MoMoCha) are competing against each other. The same red and white signs, the same catchy tunes, and similar pricing. Chinese brands are not only competing with locals but also with their "pixel-level imitations."

"Currently, I do not recommend joining MIXUE." Jiang Ning was an early franchisee of MIXUE (overseas brand name) in Kuala Lumpur, Malaysia. His first store opened in 2022, and on the opening day, the queue wrapped around the mall corridor. "At that time, it was really profitable," he said, "Many people would drive 20 to 30 kilometers just to have a cup of MIXUE."

Three years later, walking into any moderately sized mall in Kuala Lumpur, you might see a red and white sign within 200 meters. Jiang Ning's monthly revenue per store has dropped from a peak of 300,000 Malaysian Ringgit to only one-third of that. Considering rent, labor, platform commissions, and various fixed costs, some months he is even operating at a loss. **He calculated for Tencent News' "Observation": the payback period for franchisees has extended from the initial 10 months to 14 to 16 months. The physical economy is inherently difficult, and this additional few months have made it hard for many franchisees to endure.**

This contrast is a microcosm of the entire story of Chinese tea brands going overseas.

Five years ago, Southeast Asia's streets only had a few scattered bubble tea shops. However, as the domestic tea market in China became increasingly competitive, going overseas became a necessary option for all leading brands. Since MIXUE opened its first overseas store in Hanoi, Vietnam in 2018, a grand "milk tea expansion to the South Seas" has begun. Brands like Bawang Chaji, Heytea, Nayuki, and Cha Baidao have followed suit, bringing abundant capital, mature supply chain systems, and battle-tested marketing strategies from China, attempting to replicate domestic growth miracles in this land of over 600 million people, with a hot climate and a large number of young consumers.

Initially, it indeed seemed like a dimensionality reduction attack. Chinese brands quickly opened up market gaps with cooler store designs, richer product lines, and highly aggressive pricing strategies. In the core business districts of Jakarta, Kuala Lumpur, and Ho Chi Minh City, queuing for a cup of Chinese milk tea became a trendy standard for local youth.

**However, with the rapid increase in store density, Southeast Asia, once seen as a gold mine for going overseas, quickly reached the peak of its dividend period. Tencent News' "Observation" found through field research that when everyone thought going overseas was a dimensionality reduction attack, replicating China's mature supply chains and business models in Southeast Asia, reality presented another answer: the weapons that once made Chinese tea brands invincible domestically—extreme low prices, high-density expansion, and standardized supply chains—have instead become sources of weakness and internal friction in Southeast Asia.** MIXUE Ice City began its expansion in Southeast Asia in September 2018 in Hanoi, Vietnam.

Guo Guanghui, the former General Manager of MIXUE Ice City in Singapore and Malaysia, and now the founder of Guanghui Overseas Enterprise Service Company, recalled in a media interview that at that time, the four-person overseas team had almost no one who could speak English and no one had ever been abroad. Their first task upon arriving in Vietnam was to hire locals, eat Vietnamese food, and learn to be Vietnamese. On the opening day, the first store in Hanoi sold nearly 1,400 cups.

However, after this initial success, there was nearly a year of dismal performance. By June 2019, Vietnam had opened a total of 20 stores, with daily sales of less than 1,000 yuan, and the goods sold were less than those that expired and were destroyed. Guo Guanghui said they could only focus on finding internal reasons, from site selection, product, employee training to market research, "PDCA cycles every day, solving problems bit by bit."

Solving problems, boosting single-store sales, instilling confidence in franchisees, and attracting more franchisees—this is the expansion logic of MIXUE Ice City in Vietnam. By April 2023, the number of stores in Vietnam exceeded 1,000, with 700 located in Hanoi alone.

The expansion in Indonesia has been even more rapid. MIXUE Ice City leveraged the channel paths previously established by Chinese mobile phone brands in Indonesia—brands like Xiaomi, OPPO, and vivo had already penetrated Indonesian towns five to six years ago, cultivating tens of thousands of retail and distribution networks. MIXUE Ice City infiltrated along this capillary network: it took two to three years to grow from 0 to 1,000 stores; it only took 8 months to grow from 1,000 to 2,000 stores. By September 2024, the number of stores in Indonesia is expected to exceed 2,600.

This speed is related to the business model of MIXUE Ice City. **MIXUE Ice City’s financial report shows that 97.6% of its revenue comes from selling goods and equipment to franchisees. The brilliance of this model lies in the fact that the more stores there are, the larger the scale of raw material sales from headquarters to franchisees, which increases the revenue and profit of the headquarters—logically, it is not strongly related to whether individual franchise stores are profitable.**

In 2025, MIXUE Group's revenue is expected to grow by 35% year-on-year to 33.56 billion yuan, with net profit increasing by 33% to 5.93 billion yuan. In the same year, its overseas stores decreased by a net of 428, mainly concentrated in Vietnam and Indonesia.

 MIXUE Ice City in Vietnam. Source: MIXUE Ice City

Jiang Ning told Tencent News' "Observation" that many new franchisees in Malaysia have not calculated their "fixed costs" clearly—when opening a company in Malaysia, compliance expenses such as tax advisors and company secretaries incur monthly, just like rent and utilities, which are rigid expenses. "When all these add up, the numbers look good, but where did the profits go?"

In Vietnam, where store density is higher, franchisee dissatisfaction arose earlier. In 2023, MIXUE Vietnam announced a 25% reduction in retail product prices, while raw material prices were only reduced by 8% to 10% This means that the raw material sales profits at the headquarters are basically unaffected, but the profit margin per cup for franchisees has been significantly compressed. Local media reported that Vietnamese franchisees took to the streets, raising banners in protest. Some franchisees stated that they could only earn a few million Vietnamese dong (approximately 1,000 RMB) per month, and in some months, they even incurred losses.

"MIXUE Ice City makes money from the supply chain, while franchisees are paying for the high-density store expansion," Jiang Ning believes.

The failure of the low-price strategy in Vietnam also comes from lower-priced competitors. Huang Yanfang, a senior observer in the catering industry and co-founder of the Pengyou Society, recently discovered during a visit to Vietnam that MIXUE Ice City is facing intense competition from the Taiwanese brand "Wu Family Red Tea Ice." This brand's pricing is lower than MIXUE's—one product's price is equivalent to 4-5 RMB, comparable to a cup of sugarcane juice on the streets of Vietnam. Currently, Wu Family Red Tea Ice has opened over 400 stores in Vietnam.

Huang Yanfang said, "The king of competition, MIXUE Ice City, has encountered an old master of tea drinks in Vietnam."

**The emergence of Wu Family Red Tea Ice reveals the fragility of the low-price model: low prices themselves are not a moat. When a competitor with lower prices and lighter assets appears, the original low-price advantage diminishes. Huang Yanfang believes that the supply chain barriers of MIXUE Ice City are real in the Chinese market, but in Indonesia and Vietnam, many core ingredients for Chinese tea drinks, such as pearls and milk powder, need to be imported from the mainland, and the costs of cross-border logistics and tariffs eat into the profit margins, making the actual costs for franchisees not low.**

The real barrier is not capital and scale, but a deep compromise with local religions, cultures, and policies.

霸王茶姬 (Bawang Chaji) once stumbled in Vietnam. In March 2025, Bawang Chaji entered the Vietnamese market, choosing a prime location in Ho Chi Minh City surrounded by shopping centers and five-star hotels for its first store. However, before the store opened, its official app login interface was deemed controversial by Vietnamese netizens due to map issues. Four days later, the first store in Ho Chi Minh City had its advertising sign removed and was enclosed with blue barriers before it even opened, and Bawang Chaji subsequently canceled its original plan for four stores and an investment of about 20 million RMB.

In contrast, in predominantly Muslim Indonesia and Malaysia, the challenges are concentrated on religious compliance. Indonesia has the largest Muslim population in the world, with over 230 million Muslim consumers having strict requirements for halal certification. The Indonesian government has made it clear that the food and beverage industry will implement mandatory halal certification in the future, meaning that any brand not certified will face legal risks and consumer boycotts. For Chinese tea drink brands, halal certification is not only a ticket to entry but also a compliance system that needs to be restructured across the entire supply chain from raw material procurement, production processes to store operations.

Shofia, a Muslim girl working for an NGO, is a loyal consumer of Bawang Chaji in Malaysia. She told Tencent News' "Qianwang" that one of the core reasons she chooses Bawang Chaji is that "it has passed HALAL certification." She said that some Chinese tea drink brands only have some stores certified, which makes it very inconvenient for Muslim consumers—"For religious reasons, Muslims absolutely will not consume non-HALAL certified food." This detail reflects the shortcomings of Chinese tea brands in the Southeast Asian Muslim market: incomplete certification and inconsistent execution, leading to an inability to establish complete trust among the majority Muslim consumer group.

In Malaysia, the landscape of Chinese tea brands going overseas is the most differentiated, with Heytea and Bawang Chaji taking two completely different paths.

Heytea has taken the most "pureblood" route. Since entering the Malaysian market in 2022, Heytea has opened fewer than ten stores in Kuala Lumpur, all of which are directly operated and located in the most expensive commercial areas—TRX, a top-end shopping mall that Chinese tourists must visit, Sunway Velocity, where many Chinese residents live, and 1 Utama, a favorite shopping spot for local Chinese. Heytea has also been conservative in obtaining local HALAL certification, with only some stores certified while others focus on the Chinese market.

This restraint has brought about a high premium capability. Some SKUs of Heytea are priced even higher than in China, with main drinks priced between 17 to 19 ringgit, equivalent to over 30 yuan, higher than other competitors. Yet, there is always a queue at Heytea.

Lawyer A Jie is a "milk tea hunter" in Kuala Lumpur. He recalls that when TRX opened in 2023, he specifically chose a weekday afternoon to drive from Negeri Sembilan to downtown Kuala Lumpur, waiting for over two hours at the expensive TRX mall to get Heytea. He and a few friends from China found a spot at Starbucks upstairs to wait, "Friends from the mainland didn't even order Heytea while waiting, just accompanying me. Everyone couldn't understand why it was worth it for a cup of milk tea."

A Jie has his own persistence. He says that local Chinese milk tea enthusiasts in Malaysia are open to all brands—if they buy ten cups of milk tea, they might drink two cups of MIXUE because it's cheap and try other new brands, but they ultimately still prefer Heytea. He interned in China during college, where his mentor would bring him different milk teas every afternoon, "Those are beautiful memories." Years later, Heytea holds a different emotional significance for him, "It has charm." More importantly, he believes Heytea is a "pureblood" Chinese brand that hasn't changed much in flavor due to localization, "It tastes the same as it did back in China."

However, Heytea's "slowness" also means its market coverage in Malaysia is extremely limited. Its consumers are essentially a group of Chinese who have emotional memories of Chinese tea drinks and local consumers who are curious about Chinese culture. The ceiling for this group is clearly visible.

Bawang Chaji has taken another route: exchanging localization for scale. Malaysian national hero and badminton player Dato' Lee Chong Wei has become the general agent and brand ambassador for Bawang Chaji. This unique approach of establishing a joint venture, neither fully direct-operated nor purely franchised, is Bawang Chaji's way of going overseas. Lee Chong Wei's massive popularity, combined with a deep understanding of local culture, has allowed Bawang Chaji to quickly establish cross-ethnic brand recognition in Malaysia.

Bawang Chaji's store opening strategy is more flexible, allowing consumers to purchase from airports, high-end malls, supermarkets, or street-side shops. Its takeaway bags are sturdy and waterproof, and local consumers are accustomed to using them for carrying miscellaneous items or lunch—this detail is proof of the brand's deep integration into daily life Shofia said that BaWang Tea Princess "feels more high-end, celebrating the completion of a project, the boss treats colleagues to BaWang Tea Princess more often."

 BaWang Tea Princess in Malaysia. Source: BaWang Tea Princess

In 2025, BaWang Tea Princess's global GMV reached 31.58 billion yuan, achieving profitability for 12 consecutive quarters, with over 300 overseas stores. However, at the same time, BaWang Tea Princess's net profit halved in 2025, and the domestic single-store GMV shrank by more than 30% from its peak of nearly 600,000 yuan. The high growth in overseas markets has largely become a new narrative for BaWang Tea Princess to tell the capital market—a story used to hedge against domestic pressures.

However, the true quality of overseas markets as a "second growth curve" will also be repeatedly tested in the capital market.

Taking MIXUE and BaWang Tea Princess as examples. MIXUE GROUP (02097.HK) saw its stock price rise to a high of HKD 618.5 after its Hong Kong listing, and as of the time of writing, the latest stock price is HKD 261.6, a decline of about 35% this year. BaWang Tea Princess (CHA.US) reached a high of USD 41.8 after its U.S. listing, while the latest stock price reported is USD 10.13. During the same period, both companies' fundamentals are still growing.

**Overall, the capital market's valuation logic for new tea beverages is shifting from "scale and traffic" to examining "single-store operational efficiency" and "sustainable profitability overseas." For brands still pushing for overseas expansion, the overseas market must gradually start to show its profitability.**

The capital market's doubts are not unfounded. In the offline battlefield of Southeast Asia, the awakening of local brands and tightening policies are presenting a situation for Chinese tea beverages that is more complex than just "price competition."

 Indonesian local tea brand Momoyo (摩么卡茶) began expanding its market in 2022, opening hundreds of stores within a year, with product pricing and store image highly similar to MIXUE.

Despite the aggressive entry of Chinese new tea beverages, Malaysian local tea giant Tealive still holds the top position in the industry. As of now, Tealive has nearly 1,000 stores across Malaysia. Its store opening strategy is completely different from Chinese brands, penetrating the lower market through a "gas station store" strategy from core business districts.

Beyond Tealive's channel barriers, local boutique milk tea shops are also continuously innovating. In October 2024, restaurant industry serial entrepreneur and "post-90s" Yan Wenbin founded the boutique milk tea brand ChaManMan FUFOOTEA in Johor Bahru, the capital of Johor state Yan Wenbin worked and lived in Guangzhou, China for many years. He carefully assessed the pros and cons of joining Malaysian or Chinese tea beverage brands and ultimately chose to create his own brand. "Many people think the beverage industry is already a red ocean, and Chinese tea beverage brands are constantly expanding. In the new Malaysian market, consumer choices are still highly concentrated on foreign brands, and the voice of local brands is relatively limited."

What he sees is a space that has not yet been fully satisfied. Malaysia has a developed tea beverage culture, and in 2025, during Malaysia's National Day, he launched the "Spicy Nasi Lemak Drink," incorporating the flavors of the local national dish, coconut rice, into the beverage, proving that local flavors can be reinterpreted. He also developed the "Cilantro Lemon Green Tea," mixing the often-avoided cilantro with traditional lemonade, unexpectedly attracting a group of loyal fans. In addition, he expanded the product line to include crispy puff pastries, forming a combination advantage of "beverages + desserts," enhancing the overall consumer experience and average transaction value.

Yan Wenbin's survival logic is another interpretation of the logic of Chinese tea beverage brands going overseas: rather than rapid expansion across the board, he focuses on the southern Malaysian market; rather than standardized products, he is more flexible and has a deep understanding of local tastes; rather than relying on scale effects, he continuously outputs topical and relatable content through social media, making him more agile.

Innovation in local tea beverages is not limited to boutique shops. BMS, a local organic ingredient brand with a 29-year history, has opened beverage counters selling bubble tea in every offline restaurant in Kuala Lumpur, aiming to promote its own organic dairy products and freeze-dried coffee powder. The well-known traditional Chinese medicine chain "Not Traditional Chinese Medicine" has opened a flagship tea beverage store in the tourist-heavy Petaling Street, offering tea drinks with traditional Chinese medicine elements, becoming a popular spot for local youth to check in—"Aromatic Osmanthus" is made with osmanthus, lychee, herbal medicine, and milk foam, priced at 18 ringgit, enhancing its premium through the concept of herbal medicine in tea beverages.

The commonality among these local brands is that they are doing something that is difficult for Chinese tea beverage brands to achieve: deeply binding their products with local cultural memories and everyday emotions.

At the same time that local brands are accelerating their growth, the Malaysian government has also begun to tighten the policy space for foreign-funded dining brands. In January 2026, Fuziah binti Salleh, Deputy Minister of Domestic Trade and Cost of Living, stated in Parliament that the government is comprehensively reviewing and revising the existing guidelines for foreign investment in the dining industry, limiting the rapid expansion of foreign brands to avoid marginalizing local businesses in fierce competition. Fuziah specifically mentioned MIXUE, pointing out that after entering the Malaysian market, it rapidly expanded to about 500 stores, and the government has taken restrictive measures against it in 2025, prohibiting it from casually adding new stores, emphasizing that "expansion is not easy."

**This is a signal. The attitude of Southeast Asian governments towards foreign dining brands is shifting from welcoming to cautious.**

Yan Wenbin believes that MIXUE will continue to expand its market share and monopolize the sinking market, with its success stemming from effectively transplanting a high-quality chain system and supply chain management from China to Malaysia. Meanwhile, the mid-to-high-end consumer market may gradually show signs of aesthetic fatigue towards overseas brands, especially the Chinese brands that have recently expanded aggressively—this phenomenon has already been widely observed in other dining sectors **Huang Yanfang has visited Southeast Asia multiple times, and his judgment is: the time window for new tea drinks to go overseas in various countries is closing.**

He believes that **the situation in each Southeast Asian country is vastly different, and each Chinese tea drink brand has a different strategy for matching with different countries.** However, there is a common trend: the information gap is disappearing, local competitors are growing, and the policy environment is tightening. The emergence of pixel-level tea drink imitation brands like Momoyo in various parts of Southeast Asia also proves that there are no insurmountable technological barriers to the business model of Chinese tea drinks.

For Chinese tea drinks to succeed overseas, it cannot just be about internal competition on prices and squeezing profit margins from franchisees, but should instead establish a global organizational structure, compliance system, and cultural identity. "Especially in Muslim countries like Malaysia and Indonesia, it is essential to respect local religious certifications and consumption habits, and to act legally and compliantly. In addition, the product adjustment mechanism of Chinese new tea drink brands should also be more flexible to avoid rigidity."

He reminds entrepreneurs planning to go overseas to conduct thorough market research and not to assume that simply having a startup fund and finding a tea drink brand to franchise will guarantee success. "Money is just one of the less important factors in the success of going overseas."

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**