As competition intensifies in China’s restaurant sector, a growing number of Chinese restaurateurs are turning their gaze abroad for new opportunities. However, this quest for international expansion comes with significant logistical and cultural challenges.
“Everyone around me is going abroad,” remarked one restaurant owner, highlighting the trend of culinary delegations and research groups exploring foreign markets.
The domestic outlook is bleak: Beijing’s catering industry reported total profits of just 180 million yuan (approximately S$33.4 million) in the first half of 2024, marking an alarming 88.8 percent decline from the previous year. Profit margins have shrunk to a mere 0.37 percent.
In contrast, the global Chinese food market remains fragmented and underdeveloped, with approximately 600,000 Chinese restaurants operating outside of China. This disparity is fueling interest among restaurateurs eager to capitalize on potential growth opportunities.
Southeast Asia, characterized by its proximity to China and significant Chinese communities, has emerged as an ideal starting point for expansion. Major chains such as Luckin Coffee and Tai Er Sauerkraut Fish have launched their first international outlets in Singapore, while popular bubble tea brands like Tianlala are making inroads into Indonesia.
Bubble tea shops, which typically require fewer resources and more streamlined supply chains, seem to navigate international markets more successfully. Mixue Ice Cream & Tea, China’s largest bubble tea chain with over 36,000 domestic stores, has already opened nearly 4,000 locations abroad, underscoring the viability of this expansion model.
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