On a chilly February day in Washington, D.C., Raymond Fong patiently waited outside the Tysons Corner mall for nearly two hours. Armed with a stool he brought from home, Fong was determined to be one of the first in line to try the highly anticipated milk tea from China’s popular beverage chain, Heytea.
Fong’s dedication is just one example of the growing interest and success of Chinese businesses expanding overseas. With a slowing economy at home and uncertainties created by U.S. President Donald Trump’s tariffs, more and more Chinese companies are looking for better economic opportunities abroad.
Heytea, which made its debut in the Washington metropolitan area on Valentine’s Day, is just one of many Chinese businesses expanding in the U.S. market. The company’s 27th store in the country marks its 80th store outside of China.
Fong, who visited the store just days after its opening, shared his experience with VOA’s Mandarin Service. “There were so many people in line that the mall was full, and we had to line up outside,” he said.
Since its establishment in 2012, Heytea has primarily focused on serving the domestic market in China. However, in 2023, the company made a rapid shift to expand its reach overseas, with stores now in the United Kingdom, Australia, Canada, Malaysia, and South Korea.
Heytea is not the only Chinese food and beverage brand making waves in international markets. According to research company Rhodium Group, Chinese outbound investments have rebounded since the pandemic. In 2020, outbound investments by Chinese companies were at $47 billion, but they increased to $67 billion in 2022 and $103 billion in 2023.
While food and beverage brands only make up a small portion of these investments, they are highly visible to consumers. “Some people call 2023 ‘the first year of going overseas’ for restaurants and beverage businesses,” said a Beijing-based macroeconomic researcher who requested anonymity for fear of harassment from Chinese police.
The researcher added, “I think there are several reasons. One is that the domestic market is no longer viable. These businesses are all listed in Hong Kong and have raised funds. Hong Kong is an open market. They are listed there, raised money, and then they will not invest back in mainland China, so they want to test the waters in the United States.”
One such success story is Mixue Ice City, a popular ice cream and tea chain founded in Henan province, China. The company began expanding into Vietnam in 2018 and has since opened stores in South Korea, Australia, Malaysia, and Singapore. With over 7,000 stores in 11 countries, Mixue Ice City has over 1,000 stores in Vietnam alone.
Haidilao, a hot pot chain founded in Sichuan province in 1994, has also seen success in international markets. The company 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 Chinese food companies’ decision to expand overseas is a necessity due to the current state of China’s economy. “Their profit margins within China are falling. The domestic market is very competitive, so they want to develop overseas,” he 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. “Take Haidilao as an example. They can succeed in China because they own the entire industrial chain. But it hasn’t established the same advantage overseas, so it is more difficult to do business,” Wong explained.
Despite these challenges, Chinese companies can still reap high profits from international storefronts. “Although the cost of opening a store in Europe and the United States is very high, it is still profitable. The high cost and threshold also mean a high profit margin. Of course, their main market is still China,” the Beijing-based researcher said.
Food and beverage companies are just one part of a larger trend of Chinese producers seeking profits abroad. Other industries, such as brick-and-mortar companies like Pop Mart and Miniso, which produce collectible toys and figurines, and online retailer Temu, also display a desire to expand into Western markets.
American consumers have embraced products and services from these companies, with around 18% of American households having shopped on Temu
