On a chilly February day, Raymond Fong, a resident of Virginia, patiently sat outside the Tysons Corner mall for nearly two hours on a stool he had brought from home. He was eagerly waiting in line for a taste of milk tea from Heytea, a popular Chinese beverage chain. This was just one example of the growing trend of Chinese businesses seeking better economic opportunities abroad.
Amid a slowing economy in their home country and the uncertainties created by U.S. President Donald Trump’s tariffs, an increasing number of Chinese companies are expanding in the United States. Heytea, which made its debut in the Washington metropolitan area on Valentine’s Day, is just one of many Chinese businesses looking to make a mark in the American market. With the opening of their 27th store in the U.S., the company now has a total of nearly 80 stores outside of China.
Fong, who visited the store just days after its opening, shared his experience with VOA’s Mandarin Service, saying, “There were so many people in line that the mall was full, and we had to line up outside.” Heytea, which primarily focused on the domestic market since its establishment in 2012, shifted its focus to international expansion in 2023. In addition to the U.S., the company has also set up stores in the United Kingdom, Australia, Canada, Malaysia, and South Korea.
But Heytea is not the only Chinese food and beverage brand making its way into international markets. According to a report by research company Rhodium Group, there has been a rebound in overall Chinese investments abroad since the pandemic. Outbound investments by Chinese companies, which had decreased to $47 billion in 2020, increased to $67 billion in 2022 and then to $103 billion in 2023.
While food and beverage brands make up a small portion of these investments, they are the ones that consumers are most likely to see. A Beijing-based macroeconomic researcher, who preferred to remain anonymous due to the fear of harassment from Chinese authorities, explained, “Some people call 2023 ‘the first year of going overseas’ for restaurants and beverage businesses. I think there are several reasons for this. Firstly, the domestic market is no longer as profitable. Secondly, these businesses are all listed in Hong Kong and have raised funds there. Since Hong Kong is an open market, they are now looking to invest in other countries instead of back in mainland China.”
This trend has also been observed in other popular Chinese food and beverage brands. Mixue Ice City, a popular ice cream and tea chain founded in Henan province, began expanding its stores to Vietnam in 2018 and has since continued to expand to other countries like South Korea, Australia, Malaysia, and Singapore. The company now has over 7,000 stores in 11 countries, with more than 1,000 of those stores located in Vietnam.
Similarly, hot pot chain Haidilao, founded in Sichuan province in 1994, also has restaurants in numerous countries and went public on the U.S. Nasdaq stock market in May 2024. Eric Wong, a New York-based investor, believes that the decision of Chinese food companies to expand overseas is a necessity, given the current state of China’s economy. “Their profit margins in China are falling, and the domestic market is highly competitive. They are now looking for opportunities in other countries,” Wong told VOA.
However, expanding overseas comes with its own set of challenges, especially for businesses that are used to operating within China and relying on local supply chains. Wong explained, “Take Haidilao as an example. They have been successful in China because they own the entire industrial chain. However, they have not established the same advantage overseas, which makes it more difficult to do business.”
Despite these challenges, Chinese companies can still make high profits from their international storefronts. The anonymous researcher from Beijing stated, “Although the cost of opening a store in Europe and the U.S. is high, it is still profitable because the threshold is high, and the profit margin is high. Of course, their main market is still China, but they can still generate significant profits from their international stores.”
Food and beverage companies are not the only ones seeking profits abroad. There is a growing trend of Chinese producers expanding into Western markets in various industries. For instance, companies like Pop Mart and Miniso, which produce collectible toys and
