Why is Mixue "shrinking" in SEA and heading for the US and South Korea: a turning point for Chinese milk tea seen through the Vietnam market

Who: Major Chinese milk tea chains such as Mixue, Chagee, and HeyTea
What: are adjusting and scaling back store openings in Southeast Asia (SEA) while shifting toward aggressive expansion in the US and South Korea
When: The strategic shift is gathering full momentum through 2025-2026
Where: SEA markets such as Vietnam and Indonesia, versus developed-country cities such as New York and Seoul
Why: Because SEA's tea beverage market has reached a state of "saturation," with more than 60 brands and over 6,100 stores
How: In SEA: closing unprofitable stores and improving operational efficiency; in the US and South Korea: brand messaging through large flagship stores

What is happening on Vietnam's street corners

Walk through the busy districts of Hanoi or Ho Chi Minh City and red-and-white Mixue signs catch your eye everywhere. In the early 2020s, Chinese milk tea chains rushed into the Vietnamese market with overwhelming momentum. Priced close to local street-stall charm and decorated in a clean, Instagram-friendly cafe style, they won over young consumers.

But in 2025-2026, the tide is turning. In its 2025 interim earnings, Mixue officially acknowledged that "store counts in Vietnam and Indonesia declined year over year" and disclosed that it is carrying out a strategic adjustment. Meanwhile, the company is accelerating store openings in New York and Seoul, South Korea.

This is not simply a "withdrawal from Vietnam." It is a move that marks a structural turning point for the Chinese tea-chain business.

The reality of market saturation: what the numbers of 60 brands and 6,100 stores mean

According to a survey reported by VnExpress on April 13, 2026, By the end of 2024, more than 60 Chinese brands had already rolled out more than 6,100 stores across Southeast Asia.

Considering this figure against Vietnam's population (about 100 million) and its concentration in urban areas, a clearer picture emerges of what is happening. In Ho Chi Minh City's (population about 9 million) main commercial districts, milk tea shops line the streets every few hundred meters. And the competition isn't just among Chinese brands. Vietnamese local milk tea brands (Gong Cha Vietnam, The Coffee House's tea line, and others), Korean brands (the CJ group), and even local independently owned shops are all sharing the market.

In this state of "overcrowding," opening new stores does not necessarily translate into higher sales. Instead, "cannibalization" occurs, with stores eating into each other's existing customers. Mixue's move to start cutting back its store count in Vietnam is the result of this rational judgment.

Why the "US and South Korea": the logic of a blue-ocean strategy

The next markets Chinese tea chains have chosen are the United States and South Korea. There is a clear logic behind this choice.

US market: 18% growth, heading to a $2.9 billion market by 2029

The US fresh tea beverage market grew 18.2% year over year in 2025, reaching 7,845 stores. Industry forecasts see the market growing to a scale of $2.9 billion (about 430 billion yen) by 2029.

Looking at actual opening-day figures shows just how large that demand is.

Pricing is also interesting. At Mixue's New York store, milk tea starts at $3.49. Against local coffee and caffeine-free drinks priced at $6-7, the value proposition of "affordable, delicious Asian tea" is working. HeyTea, by contrast, is priced higher at an average of $10, yet demand remains strong even there.

South Korean market: fusion with K-culture

In South Korea too, Chagee plans to open three stores in Seoul in Q2 2026. HeyTea, Mixue, ChaPanda, and Auntea Jenny are already operating there. A Seoul university student commented, "I couldn't find milk tea of this quality in Korea," and this cultural novelty carries real appeal.

The difference from SEA is "competitive density." In Vietnam and Indonesia, dozens of brands are already fighting it out, but South Korea is still close to a blue ocean. Concentrating management resources on a market where first-mover advantage can be captured is a rational strategy.

The impact on Vietnamese consumers: what changes and what doesn't

How should Vietnamese consumers take the news that "Mixue's store count is shrinking"?

What will change:
Unprofitable street-level stores will be closed. Small stores in particular, ones in high-rent locations or specialized for hours with little foot traffic, are likely to be culled. Consumers may increasingly find that "the Mixue that used to be in my neighborhood is gone."

What won't change:
Chinese brands including Mixue are not withdrawing from the Vietnamese market. This is a shift "from quantitative expansion to qualitative strengthening," and the operational quality of the remaining stores may well improve. It also creates an opportunity for local Vietnamese brands to grow by targeting the vacated market share.

In understanding Vietnam's milk tea and beverage market, it is also worth keeping in mind the Vietnam skincare market 2026 shift in purchasing attitudes among young consumers, of the kind detailed there, as an important piece of background.

Comparison with the domestic Chinese market: fleeing a "hellish competition" of 420,000 stores

To understand this shift, it helps to know the situation inside China. At present, mainland China has about 420,000 tea and coffee shops in operation, and a customer-acquisition war built on sub-$1 pricing and free-order perks has become the norm.

Overseas markets serve as an escape from this "extreme price war." Developed markets in particular (the US, South Korea, Japan) allow pricing at 3 to 10 times domestic Chinese levels and make it easier to build brand image. SEA was positioned as a middle ground, with fierce price competition but still better than mainland China, but it has now become saturated as well.

Given this background, Mixue's contraction in Vietnam can be read not as a "failure" but as a "rational reallocation of capital."

Implications for Vietnam's D2C and e-commerce businesses

The moves of Chinese milk tea chains carry implications for Vietnam's business environment as a whole.

• The competitive structure of restaurant chains is changing: As Chinese brands shift to "quality over quantity," it becomes easier for local Vietnamese brands and independent cafes to differentiate themselves. Consumer appeals built on "local authenticity" and "storytelling" become more effective.
• The importance of TikTok Shop and social media sales: Even as physical stores decline, brands with strong online ordering and delivery capabilities can retain customers. TikTok Shop's fee increase (April 2026) is a headwind, but investing in digital channels remains essential.
• Reassessing the value of "local roots": In areas where Chinese brands have withdrawn or scaled back, locally rooted restaurant brands are gaining presence. Brands that make use of Vietnamese-grown tea leaves and local flavors could see a tailwind.
• A cross-border e-commerce perspective: The model by which Chinese brands are succeeding in the US and South Korea is also instructive for Vietnam-born brands. The concept of "Asian flavor" has demand in developed markets too.

The universal lesson for D2C and consumer goods markets shown by "Vietnam's saturation"

What is happening in Vietnam's milk tea market is a microcosm of the "market life cycle" common to Vietnam's D2C beauty market and other consumer goods sectors as well.

Rapid growth phase (2020-2023): first movers open up the market and consumers embrace it as "something new."
Maturity and saturation phase (2024-2025): competitors proliferate and price competition intensifies, making differentiation harder.
Reorganization phase (2026 onward): unprofitable players exit, and the strong survive on quality and efficiency. Local brands begin to fight back.

Businesses offering products and services in the Vietnamese market need to stay constantly aware of which phase their category is in. The "expiration date on first-mover advantage" that the milk tea market demonstrates will arrive in other categories just the same.

Conclusion

Mixue's shrink in Vietnam is not a "failure" but "adaptation to market saturation." Amid a crowded competition of 60 brands and 6,100 stores across SEA as a whole, rational players are directing their resources toward the "next blue ocean." That next stop is the US (a $2.9 billion market by 2029) and South Korea (where competitive density is still low).

For Vietnamese consumers, the Mixue signs on street corners may become a little rarer, but the quality of the remaining stores could improve. And for local brands, a chance is emerging to reclaim the share that had been taken from them.

"Market saturation" is not an ending but the start of reorganization. The changes taking place in Vietnam's tea market can be called a living case study that marketers across the consumer goods sector should learn from.

Source:
VnExpress, "Chinese milk tea brands expand in US, South Korea as Southeast Asia grows crowded" (April 13, 2026)