In recent years, China’s food and beverage industry has sped up its overseas expansion, with Southeast Asia as a key market. Among the top destinations, Malaysia and Indonesia stand out for their large populations, active economies, and cultural diversity, attracting many Chinese brands.
From bubble tea shops in Jakarta to growing dairy factories in Java, Chinese companies are reshaping local consumer habits. Notably, many brands are quickly taking root.
For instance, Chinese tea chain Mixue opened over 1,000 stores in Indonesia within two years, winning over young consumers with ice cream and tea priced under $1. The brand became a social media hit.
In late 2022, then-President Jokowi posted a cartoon on Instagram titled “Shop for Rent – Good for Ice Cream,” which netizens linked to Mixue’s rapid rise.
Chinese dairy giant Yili has built its first large-scale overseas ice cream factory in Indonesia, with a daily capacity of 4 million units—making it the largest in the country. Since entering the market in 2018, its ice cream brand “Joyday” has expanded to 260 cities.
In Malaysia, Chinese beverage brands like Heytea and Chagee are also entering major shopping districts, competing directly with local players.
With slowing growth in China and rising barriers in Western markets, Southeast Asia has become a key strategic focus for many Chinese companies. This article explores how Chinese food and beverage brands are adapting to local markets, winning over young consumers, and the challenges they face.
1. Flavor Innovation: From “Spicy Ice Cream” to Extra-Sweet Milk Tea
Taste differences have long challenged international F&B brands. In Indonesia and Malaysia, consumers prefer richer, sweeter flavors, pushing Chinese brands to innovate.
Compared to Chinese consumers, those in Southeast Asia—especially Indonesia—favor sweeter, more aromatic, and creamier products. Yili Group VP Dr. Yun Zhanyou noted in an interview with Dairy Reporter that “Indonesian consumers value flavor and texture… especially sweet, rich tastes like fruit and chocolate.”
Yili’s “Joyday” line in Indonesia focuses on layered textures and bold flavors, with products like Crunchy Matcha Cheese and Vanilla Milkshake ice cream designed to meet these preferences.
Joyday’s spicy chocolate ice cream also sparked buzz. A local consumer, Rani, said: “I tried it out of curiosity, but ended up loving the unique taste. Now it’s a go-to for gatherings.” While still niche, such products reflect Southeast Asian consumers’ openness to bold flavor combinations—offering room for further innovation.
In Malaysia, where sweet desserts like gula Melaka, milk tea, and nasi lemak are popular, brands often increase sweetness and use familiar local ingredients. For example, Singaporean tea brand LiHO Tea launched a Gula Melaka Avocado Milkshake for Malaysia, blending tradition with a healthy twist—earning strong local appeal.
Chinese brands that adopt similar local ingredients can create products with greater cultural relevance.
2. Extreme Affordability: Strategic Pricing
Product localization isn’t just about flavor—it also involves portion size and pricing. In Indonesia and Malaysia, consumers favor large portions and high value for money. Whether a food or drink item feels like a proper meal can also influence purchase frequency.
For example, Mixue’s drinks in Indonesia are priced around 8,000–10,000 IDR (about $0.50), cheaper than many local street vendors. This ultra-affordable strategy has made Mixue a go-to option for students, office workers, and suburban residents. With outlets densely located near campuses and residential areas, Mixue has become a daily habit for many.
Some consumers say, “It’s even cheaper than bottled water, so why not try it?” A student in Kuala Lumpur, Wei Ling, shared: “As a student, price matters. Mixue’s low cost makes it easy for me to buy every day.”
In contrast, Heytea—despite strong brand recognition—has grown slowly due to its high pricing. Young professional Lee commented, “Heytea is trendy, but too expensive for regular consumption.”
Overall, Indonesian consumers are more price-sensitive, making mid-to-high-end brands better suited to enter markets like Malaysia first. As Huxiu Capital founder Xu Lejia told EqualOcean, Indonesia has a low average transaction value, while Malaysia and Vietnam offer more favorable conditions for consumer brands.
3. Cultural Sensitivity and Halal Certification
Beyond taste and pricing, the most essential localization requirement for F&B brands is Halal compliance.
Roughly 60% of Malaysia’s population and 87% of Indonesia’s population are Muslim, making Halal certification not just a regulatory requirement but a key to entering the mainstream market.
Halal not only prohibits pork and alcohol, but also sets strict standards for ingredients, production, storage, hygiene, and even packaging. For Chinese brands expanding in these regions, Halal certification is a must for building trust and gaining market access.
For most Chinese companies, Halal is a completely new certification system. Outside of Muslim regions like Ningxia or Xinjiang, most brands in China lack experience with Halal processes.
When entering markets like Malaysia or Indonesia, companies must redesign product formulas, review all supply chain ingredients, train staff on religious norms, and apply for certification from local Islamic authorities.
Mixue, for example, has made Halal compliance a strategic priority in Indonesia. It proactively sought certification from the Indonesian Ulema Council (MUI), covering ingredients like dairy, tea, fruit syrup, and sugar, as well as production and store hygiene processes—ensuring no prohibited substances are involved.
Mixue prominently displays its Halal status on its website, social media, packaging, and marketing materials with a “100% Halal” label to earn the trust of Muslim consumers.
Mixue Malaysia issued an apology for using non-Halal-certified trash bags.
In Malaysia, Mixue has also been actively pursuing Halal certification. By early 2025, most of its outlets had received JAKIM certification, with some still in progress. However, even after initial approval, high sensitivity to surrounding details is required.
In January 2025, a Mixue outlet in Malaysia faced backlash for using trash bags labeled "non-Halal" in English. Though the bags were only used for waste disposal and had no contact with food, the incident raised concerns among Muslim customers and quickly went viral. Mixue promptly issued an apology, clarified that all ingredients are sourced from certified Halal suppliers, replaced its procurement system, and enhanced hygiene protocols.
Though minor, the incident highlighted how sensitive Muslim consumers are to Halal credibility—small missteps can trigger brand crises.
Beyond Halal certification, Chinese companies must also be aware of Malaysia’s ethnic diversity. For instance, a Mixue job posting once sparked controversy by stating: “Only open to Malaysian citizens, preferably Malay or Chinese with experience.” This upset members of the Indian community.
A consumer in Kuala Lumpur, Hafiz, commented: “Such ads make non-Malay and non-Chinese applicants feel excluded—it impacts how we see the brand.” Though Mixue quickly apologized, the damage had already been done.
4. Fun Marketing and Social Interaction: “Snow King” IP Takes Indonesia by Storm
Mixue has quickly gained popularity among Indonesian youth with fun marketing, using its cute “Snow King” IP and catchy theme song. These elements quickly went viral on TikTok and Instagram, sparking a brand craze. Indonesian consumer Fauzan shared, “I first saw the ‘Snow King’ video on TikTok, and out of curiosity, I went to try a cup. The taste was great, and I became a loyal customer.”
In Malaysia, Mixue launched a special drink for Ramadan, with “Selamat Hari Raya” (Happy Eid) displayed outside its stores. In Indonesia, Joyday released red-and-white ice cream for Independence Day, mirroring the Indonesian flag and resonating deeply with locals. Kuala Lumpur Muslim consumer Nur commented, “Mixue’s special limited drinks for Ramadan feel very thoughtful, and I’m happy to support the brand.”
Mixue Indonesia's promotional activities during Ramadan.
5. Local Identity and Language Use
In successful Southeast Asian market cases, whether a brand can achieve "localization" is crucial. Mixue has employed local staff, used local ingredients, and promoted local languages to establish a "local" image among consumers. Indonesian university student Dimas commented, "I never felt Mixue was a foreign brand; their stores, employees, and products are all very local—it feels like our own brand."
Although Malaysia and Indonesia share the Malay language culture, there are significant linguistic differences. Both countries are multilingual societies. While English is widely used in Malaysia, Malay (Bahasa Malaysia) is the official language, with Mandarin and Tamil spoken within respective ethnic groups. Indonesia, on the other hand, uses Bahasa Indonesia as the only official language, with local dialects in spoken language, but business communication is primarily in Indonesian.
For Chinese companies, relying solely on Chinese or English for promotion is clearly insufficient. Using "authentic, natural, and local" language expressions is key to building trust with consumers. For example, Mixue uses Indonesian for all menus, promotional materials, and social media content in its Indonesian outlets, with a casual and humorous language style that resonates with young people. On Instagram, they use phrases like "Segarnya bikin semangat!" (Refreshing boosts energy) to create a sense of closeness. In Malaysia, Mixue employs a bilingual strategy—displaying both English and Malay in stores—and actively uses Malay words like "Halal," "Segar," and "Minuman Ais" to convey its Halal image and local identity.
Action Suggestion - Building "Operations + Culture" Dual Adaptability
The trend of Chinese companies expanding into Southeast Asia reflects the growing economic and trade ties between China and these countries. In 2024, China’s bilateral trade with Malaysia reached a record $203.6 billion, making China Malaysia's largest trading partner for the 16th consecutive year. Similarly, China has remained Indonesia's largest trading partner for 12 consecutive years, with trade totaling $147.8 billion.
Meanwhile, Chinese direct investment in both Malaysia and Indonesia continues to grow. From 2003 to 2024, Chinese companies have invested approximately $30 billion in Malaysia, accounting for 7% of Malaysia’s 2023 GDP. This investment is mainly concentrated in sectors like automotive, real estate, semiconductors, and raw materials. From 2006 to 2024, Chinese companies invested $45 billion in 85 projects in Indonesia, focusing on metals, energy, and transportation. These figures demonstrate the strong momentum of Chinese companies in expanding in the region.
China’s Consumer Brands in Malaysia and Indonesia: The Importance of "Operational and Cultural Adaptability"
The success of Chinese consumer brands in Malaysia and Indonesia depends not only on product and price advantages but also on whether companies can build a dual capability system of "operational adaptability" and "cultural awareness." Based on this, EqualOcean offers the following five concrete suggestions to provide actionable pathways for more Chinese food and beverage and related B2C/B2B brands expanding into the Southeast Asian market:
Shift from "Replication Model" to "Local Co-Creation" Many Chinese companies, when entering Southeast Asia, initially adopt the strategy of replicating successful Chinese models—using the same products, supply chains, and operational logic. However, this often leads to "misfit" issues. EqualOcean advises companies to switch to a "local co-creation" model: engage local partners or shareholders early on to boost organizational credibility, create local consumer research teams to deeply understand preferences around religion, taste, language, etc., co-create from the first product with local designers, suppliers, and marketers, and establish local decision-making mechanisms to enhance store and management team responsiveness. For instance, Mixue formed a joint venture with a local company in Indonesia, with product development, store selection, and social media operations led by the local team.
Build "Institutional Infrastructure" for Halal Certification, Labeling Compliance, and Supply Chain Auditing In the food and beverage industry, regulatory compliance is not optional but a market entry threshold. EqualOcean suggests companies treat "Halal certification, localized labeling, logistics temperature control, and transparent channels" as foundational work. Start the Halal certification process within the first 6 months to avoid last-minute fixes, establish a compliance process covering BPOM, JAKIM, tax, labor, etc., work with local agents to create a transparent supply chain management system, and collaborate with local Halal parks, free trade zones, and port zones to secure entry support and benefits. For example, Yili's investment in an Indonesian factory, along with cold chain logistics, has garnered strong local government support, reducing costs and clearing times.
Leverage Social Media and Local KOLs to Build a "Culturally Engaging" Brand In Southeast Asia, particularly in Malaysia and Indonesia, young communities are more persuaded by brands that are "fun," "engaging," and "creative" than by traditional advertising. EqualOcean advises companies to set up local social media accounts early on and let local staff or content agencies manage them, create quarterly participatory topics, holiday events, challenges, etc., collaborate with mid-tier KOLs to create word-of-mouth marketing, and allow consumers to co-create (such as brand memes, hand-drawn packaging, interactive stores). For instance, Mixue’s "Snow King Dance Challenge" became a TikTok hot topic in Indonesia, and LiHO Tea enhanced cultural connections with limited-time festival drinks.
Develop "Bilingual or Multilingual Organizational Capabilities" and "Multicultural Team Structures" Localization of operations goes beyond language translation to involve comprehensive organizational language and cultural adaptation. EqualOcean advises companies to provide local language versions of all management documents (like SOPs, training manuals, and brand manuals), cultivate "cultural bridge" mid-level managers who understand both Chinese management logic and local customs, encourage Chinese staff to undergo language and cultural training, and set up "multicultural HR systems," including holiday scheduling, religious time arrangements, festive greetings, and employee relations. For example, Yili’s Indonesian factory has established a multilingual employee training system, combining native-speaking instructors with cultural guidance programs. Mixue offers prayer time arrangements for employees and follows Ramadan operational guidelines.
Set Clear Stage-by-Stage Goals and Gradually Expand Market Presence Given the complexities of operation and cultural challenges, companies should avoid "all-in" or "high-risk" expansion strategies. EqualOcean recommends proceeding in stages:
Stage 1 (0-12 months): Market validation period, using a "small area + single product + local joint venture" model to test the waters. Conduct thorough research on regulations, consumer demographics, language habits, and logistics networks, and build a local compliance and operational framework.
Stage 2 (12-36 months): Establish a regional operations center, expand SKUs and service touchpoints, build a brand community and KOL network, and localize some products or processes.
Stage 3 (36 months and beyond): Start local manufacturing, R&D, and digital system setup, build a "local brand image" that resonates with social culture, and expand to neighboring markets to leverage regional influence.
For instance, Yili followed a three-stage process to transition from product export to local sales, local manufacturing, and regional output. Mixue adopted a "dense store network + low price + strong social presence" strategy to achieve wide penetration in two years.
Conclusion
Over the next five years, the Southeast Asian market will remain one of the most promising strategic frontiers for Chinese consumer brands. Malaysia and Indonesia not only have large populations, diverse cultures, and stable growth but also exhibit trends of younger and more online-savvy consumers, offering a rich space for Chinese brands to expand. However, for companies, expanding into Malaysia and Indonesia is not merely a process of transplanting operations but rather a deep cultural transplantation and operational reconstruction challenge. The ability to overcome language barriers, regulatory hurdles, and cultural differences and build a truly "local brand mindset" will determine whether a company can sustainably root, develop, and expand in Southeast Asia.
