Chinese F&B brands flock to Southeast Asia

According to a new report by Momentum Works on January 9, Chinese F&B brands that have established footprints across Southeast Asia over the past few years, with beverage chains such as Mixue, Wedrink and Chagee driving up the outlet numbers.

Singapore and Malaysia host the biggest concentration of Chinese F&B brands while Indonesia and Vietnam together account for about two-thirds of all the outlets, especially for the mass market brands.

“Southeast Asia has emerged as the top destination for Chinese F&B brands seeking to go global. Beyond introducing bold new flavours to the region’s rich culinary landscape, these brands are revolutionising the industry with innovative methodologies and cutting-edge expertise across all areas of F&B operations. This influx of knowledge and practices is poised to strengthen Southeast Asia’s F&B ecosystem, creating lasting benefits for businesses and consumers alike,” said Jianggan Li, founder and CEO of Momentum Works.

The F&B market in China totalled $748 billion in 2023 and saw more than one million restaurant closures in the first half of 2024 (a 70 per cent jump from 2023), signalling fierce competition and challenging economic conditions.

Due to differences in the F&B market maturity and sophistication in Southeast Asia, Chinese F&B players seeking opportunities in the region need to focus on localised strategies, particularly in the areas of operating models, partner selection, supply chain and cost structure considerations for each market.

Momentum Works noted Southeast Asia’s F&B market grew 4.6 per cent this year, reaching $132.9 billion in 2024. Large regional and international brands are profitable in the region, with some actively acquiring other brands. At the same time, local brands have also been gaining traction outside their home turf.

Cut-throat competition prompted many Chinese F&B brands to develop competitiveness in all parts of the F&B operations, including supply chain optimisation, operational efficiency, concept design, franchise management and online marketing, discovery and fulfilment.

According to experts based in Vietnam, Chinese players have been looking at the Southeast Asia F&B market for a long time, with specific interest in dairy and perhaps tea. Tea is a fast-growing market in Vietnam, so Chinese players won’t miss the opportunity to make a market entry.

Outside milk tea and snacks, Chinese cultural delicacies have strong potential in Vietnam’s F&B sector, as they have similar taste profiles and reasonable price points to what the Vietnamese want.

Vietnam’s F&B market exciting for expanding Chinese chains Experts warn that Vietnamese food and beverage businesses may face significant challenges due to the formidable economic power, efficient supply chain management, and trend-setting abilities of Chinese competitors.

F&B players remain upbeat about market Despite unexpected store closures showing no sign of stopping, food and beverage (F&B) businesses remain optimistic about the prospects for growth and the future of the market in Vietnam.

F&B market taking on fresh appeal Vietnam’s food and beverage market is emerging as a hotbed of opportunity, with several companies from neighbouring nations as well as those further afield ramping up activity.