Walk through any mall in Malaysia right now and you’ll see it: a Mixue on one corner, a Luckin across the way, a Chagee down the escalator. In just a few years a wave of mainland-Chinese food-and-drink brands has washed over the country and changed the rules of the game — cheaper, faster, and backed by supply chains local operators can’t easily match. For consumers it’s a windfall of RM3 ice cream and RM5 coffee. For everyone selling those drinks — local and foreign alike — it’s a scramble to keep up.
Bigger than most people realise. By one industry count there are already more than 18,000 Chinese F&B brands operating in Malaysia, from tea-drink kiosks to barbecue and hotpot houses — and hotpot alone, led by names like Haidilao, makes up roughly a third of them. Across Southeast Asia, Chinese F&B brands have opened over 6,100 outlets, with Malaysia and Singapore especially crowded thanks to their large Chinese-speaking populations. The trigger was a slowing home market: as China’s economy cooled and its own F&B scene turned cut-throat, brands came looking for growth abroad — and brought their pricing, their supply chains, and their service culture with them.
| Brand | Segment | The play |
|---|---|---|
| Mixue | Ice cream & tea | Rock-bottom prices; 700+ outlets; earns mainly by supplying its franchisees |
| Luckin Coffee | Coffee | App-driven discounting; RM2.99 launch; 200 outlets planned via local partner Hextar |
| Lucky Cup | Coffee | Mixue’s ~90-sen coffee arm, newly arrived in Malaysia |
| Chagee | Premium tea | Polished “luxury-Oriental” tea houses that spawned local imitators |
| Haidilao | Hotpot | Reset the benchmark for service and customer experience |
| Fish With You | Sauerkraut fish | Queues out the door; one KL outlet reportedly paid back in ~9 months |
Mixue (“Honey Snow Ice City”) is the giant. With around 60,000 outlets worldwide it overtook Starbucks and then McDonald’s to become the largest F&B chain on Earth by store count. It entered Malaysia in 2022 and now runs 700+ outlets here, ice cream from RM2.90 and most drinks between RM2 and RM5. The clever, ruthless part is the model: Mixue is a light-asset franchise that makes its money not from you but from selling you the ingredients — so it wants as many outlets as physically possible. As the joke in the region goes, any empty shophouse will sooner or later become a Mixue.
Luckin Coffee is the one that already beat Starbucks at home — more outlets in China by 2022, more China revenue by 2023, 24,000+ stores and counting. It landed in Malaysia in January 2025 through a franchise with local group Hextar, opened with cups at RM2.99, and is aiming for 200 outlets in three years. Its whole machine was forged in China’s brutal “9.9-yuan” coffee price war — relentless app-based discounting designed to win share first and worry about margin later.
It isn’t magic, and it isn’t sustainable forever — but four things make it work:
Here’s the part that matters, and it’s a three-way squeeze — nobody selling a drink is safe.
Local operators and SMEs. The neighbourhood bubble-tea shop and the corner kopitiam simply can’t match RM3 drinks. Premium local players get caught too: while homegrown ice-cream names like Inside Scoop chase the premium end, Mixue undercuts the whole category on volume. Smaller operators are left with thinner margins or an empty shoplot.
Other foreign incumbents. It isn’t only locals in the firing line. Starbucks — the old king — is bleeding: same-store sales down, its China store target missed, and it has agreed to sell a majority stake in its China business. In Malaysia, Berjaya Food (which runs Starbucks Malaysia and Kenny Rogers Roasters) has posted a run of loss-making quarters and its shares have roughly halved. Premium Western ice cream — Baskin-Robbins, Häagen-Dazs — sits in the same pincer.
Each other, and the rent. The Chinese brands also fight one another and the Taiwanese incumbents; the market is just more crowded and more brutal for everyone. And there’s a subtler squeeze: landlords increasingly prefer deep-pocketed mainland operators who’ll pay top ringgit for prime lots, which drags rent benchmarks up. When a well-capitalised chain can pack up and leave, local businesses and landlords can be left holding inflated rents — a lose-lose that outlasts the tenant.
Let’s be fair about the other side of the ledger. For the person buying the drink, this is a golden age. Prices have fallen, choice has exploded, and service standards have jumped — Haidilao practically redefined what “attentive” means in a Malaysian restaurant. A RM3 ice cream and a RM5 latte are real gains for cost-conscious Malaysians, and competition of this intensity is, for the consumer, a gift. The pain is concentrated on the operators, not the customers.
The smart response, as one SME association put it, is to stop asking “how do I compete on price?” and start asking “where can I win on strengths others can’t copy?” And several homegrown names are doing exactly that.
ZUS Coffee is the poster child — a self-styled tech-driven disruptor that hit its 1,000th outlet in October 2025, holds roughly a fifth of Malaysia’s branded-coffee stores, and raised RM250 million to expand across the region. It deliberately sits between cheap convenience-store coffee and the pricey premium chains — “affordable aspiration” — and leans hard on its app and data. Tealive (around 950 outlets), Gigi Coffee, Oriental Kopi (whose market value tripled after listing), and local hotpot upstarts like Fu Pot are all playing the same game: differentiate, localise, and scale fast. Many also rode a wave of patriotic support after 2023 that hit Western brands hardest — a reminder that in F&B, sentiment is a competitive weapon too.
Government has felt the heat. Early in 2025 it signalled a review of the rules governing foreign F&B brands, after Parliament raised concerns that the likes of Mixue, Chagee and Auntea Jenny could squeeze out local SMEs. The tension is genuine: cheap prices are great for consumers, but some entrants import prefabricated stores and contribute little to the local economy, and if they can leave as quickly as they arrived, the local value they create may be thin. Where the line falls between healthy competition and a hollowing-out of local business is now a live debate.
The ultra-cheap, mass-market model is beating aspirational Western branding. Malaysians increasingly pick the RM3 cup over the RM15 one.
These brands profit by supplying their franchisees, so their instinct is saturation — open everywhere, even next to themselves.
The squeeze hits local SMEs and old foreign incumbents alike — Starbucks is retreating in China and losing money in Malaysia.
Survivors win on tech, localisation, and things price can’t buy. ZUS’s rise shows a local brand can out-run the giants.
Strip away the branding and this is a textbook disruption: consumers win on price, weak operators get flushed out, and the survivors are forced to get sharper. It rhymes with earlier waves — Japanese brands did something similar decades ago — but this one is faster and cheaper. Whether it settles into healthy competition or hollows out local value will depend on how nimbly local operators adapt and how the rules evolve. One thing is already certain, though: the days of comfortable margins on a cup of coffee or tea in Malaysia are over.