The milk tea market in Malaysia has seen a shift, with newer Chinese brands like Mixue and Chagee dominating the landscape, while some earlier franchises have struggled to stay...
A general view of the Chagee Eco Grandeur outlet in Shah Alam, November 21, 2024. — Picture by Yusof Mat Isaas a first-time user . Exclusively for Malay Mail readers: Use codeThe milk tea market in Malaysia has seen a shift, with newer Chinese brands like Mixue and Chagee dominating the landscape, while some earlier franchises have struggled to stay relevant.
KUALA LUMPUR, Dec 14 — Less than five years ago, Malaysians were swept up by the influx of milk tea franchises and beverages — characterised by the chewy tapioca balls or “pearls” in their serving — where people sipping through straws from large plastic cups is a common sight in urbanised areas nationwide.
“This has driven many Chinese brands, especially those in the food and beverage industry to look for opportunities in other markets by rapidly expanding their international franchise operations and South-east Asia is kinda like the first stop for them,” Shanghai-based market research company Labbrand Group’s Alex Lessard toldWith the local milk tea sector valued at US$64.57 million in 2022 and an estimated growth of 6.
“My previous choice was Mixue, but I made the switch recently. This was because Mixue’s sudden removal of many options from their menu, especially the cream cheese range, which I enjoyed.”her preferred choice was Auntea Jenny’s Taro Mochi milk tea and Tealive’s original pearl milk tea. “I also know, for a fact, that milk tea does not come cheap but I do not mind paying a higher price for a product that allows me to experience a sense of gratification after an exhausting day or long hours of work,” the marketing executive said.
This has led to the split in consumers on both extreme ends of the market as larger groups of habitual consumers either trade up or trade down, confining and driving existing milk tea chains to target the much smaller middle-market consumer group instead. Founded in Zhengzhou, Henan province by Zhang Hongchao in 1997, Mixue — whose name translates as “honey snow ice city” — with its smiling snowman mascot and bright red signs has rapidly expanded to about 32,000 stores in China and around 4,000 more in 11 other nations as of 2023.
Founded in Kunming, Yunnan province by Zhang Junjie in 2017 before expanding into a regional chain of teahouses, Chagee now boasts over 4,500 outlets worldwide.
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