Chagee, a milk tea brand rooted in traditional Chinese culture, is set to expand into South Korea with plans to open three outlets in Seoul during the second quarter. This represents Chagee’s first venture into East Asia outside of China, with its first store strategically located in the bustling district of Gangnam.
“Even before our official opening, we have noticed a significant interest from South Korean consumers,” stated the beverage chain, as reported by China Daily.
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A CHAGEE shop in Yangpu District, Shanghai, China on March 19, 2026. Photo by CFOTO via AFP |
By the end of September, Chagee had a network of 7,338 teahouses, establishing a robust presence across Southeast Asia, including countries such as Indonesia, Malaysia, the Philippines, Vietnam, Singapore, and Thailand.
Auntea Jenny, another bubble tea chain originating from Shanghai, took a significant step by registering its franchise business in South Korea last month, preparing for the launch of multiple outlets, according to local news agency Newsis. The chain opened its first store in Seoul in October.
This growth is fueled by the increasing demand among South Koreans for modern Chinese tea beverages as a refreshing alternative to high-caffeine coffee drinks, bolstering the expansion efforts of both Chagee and Auntea Jenny.
Choi Yong-hee, a 34-year-old graduate student residing in Sinchon—where one of Chagee’s new stores will be located—discovered the brand during a family visit to Shanghai last October. “What I appreciated about Chagee was the fragrant milk tea that wasn’t overly strong, allowing for an enjoyable experience. I’ve struggled to find anything similar in Korea,” he remarked. “I’m excited to have easier access now.”
As more South Koreans take advantage of Beijing’s visa-free policies, they are becoming acquainted with a variety of freshly prepared tea-based drinks infused with fruits, juices, vegetables, and dairy.
Social media is further amplifying the buzz, with users actively sharing their reviews and menu suggestions. Google Trends indicates that searches for “Chagee tea” in South Korea have jumped by 110% in the last three months.
A brewing market
For years, Taiwan’s Gong Cha has held a dominant position in South Korea’s milk tea sector. Established in Kaohsiung in 2006 and entering Seoul in 2012, Gong Cha now operates over 800 locations across the country.
Despite the lack of competition matching Gong Cha’s scale, analysts suggest that tea-based beverages are becoming increasingly popular as a healthier option compared to coffee, creating a favorable environment for Chinese entrants.
Sales of decaffeinated drinks are on the rise, with Starbucks Korea revealing that decaf sales reached 9.8 million cups in the first quarter of 2025, marking a 31% increase from the same period the previous year, according to South Korean news outlet Pulse.
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An employee passes out hot and cold coffee drinks to a customer at a cafe in Seoul, January 2023. Photo by AFP |
This trend explains why numerous Chinese chains are expanding into South Korea, offering beverages with lower caffeine levels and increased milk and fruit content.
ChaPanda made its entry into the South Korean market in 2024 and now runs around 20 locations, while competitors HeyTea and Mixue have launched six and 14 stores, respectively.
According to a spokesperson from ChaPanda, “The Korean milk tea industry is still in the early stages of development. Although Taiwanese-style brands have initiated a presence, the market size remains limited.” They noted that many customers have been surprised to see the fruit offerings at their counters, with some inquiring if ChaPanda is a fruit shop.
ChaPanda highlighted a strong return rate among customers, with over 70% of their clientele being Korean, as per a report by Korea JoongAng Daily. The shop also pointed out that a significant portion of its visitors consist of Chinese students and tourists.
Another factor driving the overseas expansion of Chinese tea brands is the saturation of the domestic market. A report from Shanghai-based consultancy Triunity stated that the annual growth of the new-style tea market in China declined from 44% in 2023 to 19.7% in 2024, with projections suggesting a further decrease to 12.4% in 2025.
Chinese brands have effectively established themselves in Southeast Asia, which was their initial overseas market due to geographical proximity and favorable attitudes toward Chinese products.
Between 2019 and 2024, brands like Mixue and Chagee expanded their presence in that region by 80%, as reported in a July analysis by Euromonitor International.
By mid-2025, Mixue operated more than 4,700 outlets across 12 countries and regions, including Vietnam, Cambodia, Japan, South Korea, and Australia.
Molly Tea, which launched internationally in 2024, has established over 20 locations spanning North America, Europe, and Southeast Asia.
Moqian Sun, founder of the marketing and consulting firm The Harvest, noted that the expansion strategy—rapid presence in prime retail spaces, competitive pricing, localized flavors, and celebrity endorsements for increased social media visibility—has proven successful and is being replicated in other areas. “Consumers throughout Asia Pacific are highly receptive to tea-based drinks, facilitating the replication of established business models,” Sun said, as cited by South China Morning Post.
She concluded that the sustained success of these brands will hinge on their capability to adapt to local tastes, manage supply chains effectively, and maintain consistent quality across their stores.
Key Takeaways
- Chagee plans to open three new stores in Seoul, marking its expansion into South Korea.
- There is growing interest in Chinese tea beverages among South Korean consumers.
- Social media is significantly driving the popularity of Chagee’s offerings.
- Chinese tea chains like ChaPanda and HeyTea are capitalizing on the shift toward lower-caffeine drinks.
- The Korean milk tea market is still emerging, creating opportunities for new brands.
FAQ
What is Chagee known for?
Chagee is recognized for its milk tea and branding inspired by traditional Chinese culture.
Where will Chagee’s first store in South Korea be located?
The first store will be located in the Gangnam district of Seoul.
How many teahouses does Chagee currently operate?
As of the end of September, Chagee operates 7,338 teahouses across various countries.
What factors are contributing to the expansion of Chinese tea brands in South Korea?
Increased demand for lower-caffeine beverages and growing interest in tea-based drinks are driving this expansion.
How has social media influenced interest in Chagee?
Users are actively sharing reviews and menu recommendations, resulting in a 110% surge in searches for “Chagee tea” in South Korea.
