From milk tea to hot pot, Chinese chains find scale, profit in Korea
How Koreans feel about China is one thing. How they eat and drink is another.
Chinese brands are settling deeper into Korea, with popular milk tea chains and vibrant hot pot franchises now occupying prime spots in major commercial districts nationwide. While their presence isn’t entirely new, this latest wave of Chinese culinary ventures competes less on their origin and more on their innovative offerings and consumer experience.
“With malatang, milk tea, and hot pot winning over younger consumers, the perception of Chinese food in Korea has shifted considerably,” an industry official noted. “Many of these brands now market themselves as premium dining and beverage experiences, captivating a diverse Korean audience.”
Chinese Beverage Brands: Expanding Across Korea
When the premium Chinese tea chain Chagee simultaneously launched three flagship stores across Seoul’s prominent neighborhoods of Gangnam, Yongsan, and Sinchon in late April, it underscored how firmly Chinese food and beverage franchises have taken root in Korea’s dynamic consumer landscape.
Other prominent Chinese beverage brands like Heytea, Mixue Bingcheng, and ChaPanda have already successfully carved out their significant corners of the market. ChaPanda boasts over 20 locations nationwide, Mixue operates 16 stores in Greater Seoul — encompassing Incheon and Gyeonggi Province — and Heytea has established five outlets across the capital, demonstrating their aggressive expansion in the Korean market.
While Chagee builds its distinctive menu around carefully selected, high-quality tea leaves and fresh dairy, offering a diverse range from fresh milk tea and traditional brewed tea to modern tea espresso, its rivals pursue different market strategies.
Mixue competes fiercely on affordability and extensive scale, making premium-tasting beverages accessible to a wider audience. Heytea, conversely, has strategically embedded itself in trend-sensitive neighborhoods by innovating with pairings like rich cheese foam and refreshing fruit tea. ChaPanda has pursued aggressive expansion while making substantial investments in optimizing supply-chain efficiency and digitalizing its operational processes.
For these burgeoning Chinese brands, Korea represents more than just a new market. It offers a crucial respite from China’s fiercely competitive domestic landscape and serves as an invaluable foothold for their broader global expansion strategies.
“Chinese tea brands will continue to enter the Korean market as long as substantial growth at home remains elusive,” an industry official stated, highlighting that their increasing appeal lies with Korean consumers actively seeking exciting alternatives to traditional coffee culture.
Chagee, a Nasdaq-listed chain with thousands of stores across Southeast Asia and the United States, has been explicit about its intentions. It views Korea as a critical testing ground, a market defined by intense competition, highly exacting consumers, and a sophisticated cafe culture with very little patience for mediocrity.
“Korea is experiencing rapid growth in demand for premium beverages and exerts considerable cultural influence within Asia,” said Chagee Korea CEO Kim Joa-hyun at a press conference on April 28. “We therefore view it as a strategic base for Chagee’s global expansion, offering insights and opportunities for our worldwide growth.”
If the surging popularity of milk tea represents the leading edge of this cultural and culinary shift, then Chinese food franchises form its deep and expanding foundation.
Haidilao, the renowned hot pot giant, offers the clearest measure of how deep that foundation runs in Korea, with its revenue in the country rising more than eightfold since 2020 to surpass an impressive 100 billion won ($68.7 million) for the first time last year.
Having initially entered the Korean market in 2014, Haidilao now proudly operates 11 stores across key locations including Seoul, Busan, and Jeju Island. Earlier this year, it further diversified its portfolio by launching Haihai Kaochuan, a new barbecued skewer chain — notably its first new brand introduced outside of China, showcasing its global ambition.
Haidilao’s remarkable growth has been built as much on an immersive dining spectacle as on its delicious food. From complimentary nail art services and elaborate birthday celebrations to captivating in-store opera performances, the brand expertly crafts memorable moments that travel exceptionally well on social media platforms, driving viral engagement.
“The key is providing consumers with the feeling that they have been treated to an experience, rather than simply fed a meal,” one industry insider observed, pointing to Haidilao’s customer-centric approach.
Across the entire hot pot category in Korea, customization emerges as the prevailing common denominator, catering to individual preferences.
Loonger Hotpot, for example, expertly leverages conveyor systems and individual pots, empowering diners to meticulously set their own unique flavors and control their dining pace, creating a highly personalized experience.
Sichuan-style hot pot operates along similar participatory lines. Tang Huo Kung Fu, a rapidly expanding malatang franchise with over 560 locations nationwide as of March, places customization squarely at the center of its appeal. Its signature numbing and fiery broth attracts younger consumers, who are increasingly drawn to interactive and highly customizable dining experiences.
“Young consumers no longer choose restaurants based on price alone,” a Loonger Hotpot official elaborated, emphasizing instead the compelling appeal of immersive dining experiences and trend-driven consumption, which are key to success in the competitive Korean market.
