---
title: Why Chinese tea brands crowd into Korea and not Japan
description: Mixue, Chabaidao, HeyTea and Chagee are all in Seoul. In Japan they open and close while Gong Cha grew from 57 to 244. The rival is a 150-yen bottle of tea.
image: https://nobusato.jp/hubfs/covers-2026-11/why-chinese-tea-brands-crowd-korea-not-japan-cover-en-2026-10-m.png
---

[Nobu Sato](https://nobusato.jp/en?hsLang=en)

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Launching in Japan

In this article

1. [Japan's milk tea demand is real](https://nobusato.jp/en/blog/why-chinese-tea-brands-crowd-korea-not-japan#s1)
2. [In Japan the competitor is a vending machine](https://nobusato.jp/en/blog/why-chinese-tea-brands-crowd-korea-not-japan#s2)
3. [The cost structure flips in Japan](https://nobusato.jp/en/blog/why-chinese-tea-brands-crowd-korea-not-japan#s3)
4. [So what to do about Japan](https://nobusato.jp/en/blog/why-chinese-tea-brands-crowd-korea-not-japan#s4)

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2. [Articles](https://nobusato.jp/en/blog?hsLang=en)
3. [Launching in Japan](https://nobusato.jp/en/blog/tag/launching-in-japan)

# Why Chinese tea brands crowd into Korea and not Japan

The gap is the competitor and the cost without scale

[Nobu Sato](https://nobusato.jp/en/profile?hsLang=en)6 min read

Contents4

1. [Japan's milk tea demand is real](https://nobusato.jp/en/blog/why-chinese-tea-brands-crowd-korea-not-japan#s1)
2. [In Japan the competitor is a vending machine](https://nobusato.jp/en/blog/why-chinese-tea-brands-crowd-korea-not-japan#s2)
3. [The cost structure flips in Japan](https://nobusato.jp/en/blog/why-chinese-tea-brands-crowd-korea-not-japan#s3)
4. [So what to do about Japan](https://nobusato.jp/en/blog/why-chinese-tea-brands-crowd-korea-not-japan#s4)

**Chinese companies in Japan** · Seven public cases, taken apart for the moves, not to grade the companies.

1. [BYD built a car only for Japan](https://nobusato.jp/en/blog/byd-built-a-car-only-for-japan?hsLang=en)
2. [The subsidy wall: the rules are not written for you](https://nobusato.jp/en/blog/the-subsidy-wall-rules-are-not-written-for-you?hsLang=en)
3. [BYD's mini stores: another way to build a sales network in Japan](https://nobusato.jp/en/blog/byd-mini-stores-another-way-to-build-a-sales-network?hsLang=en)
4. [Xiaomi's Japan stores are catching up with Apple's. Why the first one was in Saitama](https://nobusato.jp/en/blog/why-xiaomi-opened-its-first-japan-store-in-saitama?hsLang=en)
5. [Open the repair center before you scale](https://nobusato.jp/en/blog/open-the-repair-center-before-you-scale?hsLang=en)
6. [Chagee isn't in Japan yet. Osaka already has a shop that looks a lot like it](https://nobusato.jp/en/blog/chagee-lookalike-in-osaka-trademark-first?hsLang=en)
7. Why Chinese tea brands crowd into Korea and not Japan

Chinese tea brands keep piling into Seoul and keep stumbling in Japan. Demand has little to do with it. In Japan they are up against a different rival and a cost structure that only works at scale. Look at Seoul first. In May 2026 Chagee opened five stores there within a week, all in core commercial districts, and the Gangnam flagship's fit-out reportedly ran to several hundred million won. Before that, Mixue entered Seoul in 2022 and has a dozen-plus stores near universities. Chabaidao came in February 2024 and reached 18 stores in eighteen months. HeyTea arrived in March 2024 and has six in Seoul.

Now Japan over the same period. Naixue opened its first Japanese store in Osaka in 2020 and closed it in 2021. HeyTea opened one in Osaka in 2025 and has already closed it. Mixue entered Tokyo in 2023 aiming for 1,000 stores by 2028. In June 2026 Nikkei's Chinese edition counted four. Chagee has zero stores in Japan, and a CHAGEE JAPAN Instagram account, created in 2024, with 16,000 followers.

## Japan's milk tea demand is real

Rule out one explanation first. Taiwan's Gong Cha entered Japan in 2015. It had 57 stores in 2019 and 244 by July 2026, with 40 million visits a year, and its Japanese per-store sales are expected to pass Korea's this year and become the highest in the world. Japanese people drink milk tea, and this is one of the markets on earth most willing to queue for a cup. Demand isn't the problem.

The same brands multiply in Seoul and open-then-close in Japan: the difference is the competitor and the cost without scale

Chinese tea brands in Seoul and Japan, 2020 to 2026. From Korea Herald, Commercial Times, 36Kr Japan, FOODBOAT, Nikkei Chinese

Seoul: stores multiplyChabaidao 18, HeyTea 6, Mixue a dozen-plus near universities, Chagee 5 in one week

Seoul’s competitor: 2,000-won budget coffeetea is what you buy when you don’t feel like coffee, so there is an empty seat

Japan: open, then closeNaixue opened 2020 and closed 2021, HeyTea Osaka opened and closed, Mixue 4 stores (target 1,000), Chagee 0

Japan’s competitor: 100-yen coffee and 150-yen unsweetened bottled teathe seat is taken. Gong Cha rebuilt itself and got to 244 stores anyway

← What happenedCompared with whom →

It isn’t a lack of demand. If the Japan plan is a copy of Seoul, one store opens and one store closes.

Figure 1. In Seoul Chabaidao reached 18 stores and Chagee opened 5 in a week, while in Japan Naixue and HeyTea opened and closed, Mixue has 4 stores against a target of 1,000 and Chagee has none: the difference is whether the competitor is cheap coffee or 150-yen unsweetened tea, and the cost structure without scale.

## In Japan the competitor is a vending machine

[Picking the wrong competitors](https://nobusato.jp/en/blog/picking-the-wrong-competitors?hsLang=en) argued that the first step of a market map is finding where the customer's money goes now. In Seoul the default drink for young people is coffee, specifically 2,000-won budget coffee of the Mega Coffee kind. Tea is what you have when you don't want coffee. That is an empty seat. In Japan the default is 100-yen convenience-store coffee and 150-yen unsweetened bottled tea from a vending machine, and unsweetened tea is a daily habit. Chinese tea sells on being cheap, large and sweet, and each of those hits a wall here. It costs more than bottled tea. Nobody wants to walk around with a 500 ml cup. And nobody wants it sweet.

What Gong Cha got right was size: 360 ml iced, 325 ml hot, a notch smaller than in China, so the price lands where Japanese people think a drink should cost. The taste barely changed. What Gong Cha localised was the competitor. It put itself between Starbucks and convenience-store coffee. Mixue and HeyTea were never its reference point.

## The cost structure flips in Japan

Chinese tea's low prices rest on two things. One is lots of franchisees, with headquarters earning from ingredients and packaging. The other is a supply chain that delivers to thousands of stores at once, so the cost per store is low. In Japan there are few stores, ingredients arrive in small imports, and freight, duty and the exchange rate sometimes push costs above local brands'. Mixue's Japanese prices were already two to four times China's in 2023, and rose again in 2024. Without scale, there is no scale advantage.

Then add the cost of opening a store in Japan at all. Fit-out reportedly costs five times what it does in China and makes up 70 to 80% of total investment. Landlords ask for ten to fifteen months' deposit and screen new brands. Signing to opening takes six to twelve months, against twenty days in China. After the 2019 tapioca boom collapsed and chains went bankrupt, landlords screen tea brands even harder. Mixue's Omotesando store was delayed eight months by import inspection of ingredients and equipment.

Korea has some of the same problems. But its franchise model is starting to run, the convenience-store tea habit is shallower, and young Koreans take to Chinese brands more readily than young Japanese do. With the same money, going to Korea first is the right call.

## So what to do about Japan

Treat Japan as its own market. It isn't the next stop after Korea. Gong Cha needed ten years, and a rebuild of size and price, to reach 244 stores. A Japan plan that says "copy Seoul" will most likely end the way Naixue and HeyTea did: one store opened, one store closed.

I wouldn't set a store count as the first-year target. I'd set three things. A store format that gets past landlord screening, the public health office and mall leasing committees. A supply chain that works without the parent's scale, even if that means sourcing locally. And a clear idea of who you're up against in Japan: Starbucks, the convenience store, or Gong Cha. Until those have answers, a second store changes nothing.

One more thing, before any store opens: [the trademark](https://nobusato.jp/en/blog/chagee-lookalike-in-osaka-trademark-first?hsLang=en). Chagee hasn't opened in Japan yet, and Osaka already has a shop that looks a lot like it.

References

- [NOWnews（引《韓國先驅報》）：中國茶飲品牌湧入韓國（2025-09-08）](https://www.nownews.com/news/6728218)
- [工商時報：霸王茶姬首爾開店（2026-05-24）](https://wantrich.chinatimes.com/news/20260524900151-420101)
- [36Kr Japan：ゴンチャに続けず……お茶ドリンク、日本で苦戦続く中国系ブランド（2026-10-24）](https://36kr.jp/503643/)
- [FOODBOAT：蜜雪氷城（MIXUE）はなぜ安い？日本で伸び悩む理由](https://foodboat.jp/view/page/mixue)

Author

[Nobu Sato](https://nobusato.jp/en/profile?hsLang=en)

Launching in Japan, starting with people and systems. I write about building organizations, sales teams and technology organizations in Japan, in English, Japanese and Chinese.

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## Read next

1. 01[BYD built a car only for Japan](https://nobusato.jp/en/blog/byd-built-a-car-only-for-japan?hsLang=en)5 min
   
   Three years of global models in Japan: 10,000 cars. In year four BYD launched a kei car built only for Japan: 1,000 ...
2. 02[The subsidy wall: the rules are not written for you](https://nobusato.jp/en/blog/the-subsidy-wall-rules-are-not-written-for-you?hsLang=en)5 min
   
   Nissan's Sakura gets a 580,000 yen subsidy; BYD's Racco gets 150,000. Japan scores a maker's contribution: chargers, ...
3. 03[Chagee isn't in Japan yet. Osaka already has a shop that looks a lot like it](https://nobusato.jp/en/blog/chagee-lookalike-in-osaka-trademark-first?hsLang=en)5 min
   
   An Osaka tea shop opened in April 2026 with a logo close to Chagee's. Chagee has no store in Japan, and Japan is ...

[Column guide: Launching in Japan](https://nobusato.jp/en/blog/guide-launching-in-japan?hsLang=en) · [Glossary](https://nobusato.jp/en/blog/glossary?hsLang=en) · [The method behind the articles](https://nobusato.jp/en/blog/method?hsLang=en)

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