The numbers tell two opposing stories at once. Mixue Group, the budget ice-cream-and-tea chain, has pushed past 4,800 stores across 14 countries — more overseas outlets than any Chinese consumer brand — yet its network contracted by 428 stores in 2025, the first annual decline in its history. Chagee, the upmarket rival listed on Nasdaq under the ticker CHA, told investors it will open about 200 overseas stores in 2026. One chain is shrinking abroad while the other is sprinting. Both are running into the same wall, and it is not a wall of demand.
The market they are chasing is real and large. China’s bubble-tea sector has grown past ¥350 billion, roughly US$48.5 billion, and Chinese chains have planted more than 5,000 stores overseas, led by Mixue, according to industry statistics compiled by BusinessStats. The thirst for milk tea in Seoul, Jakarta and Ho Chi Minh City is not the problem. The problem sits one rung above the counter.
A Franchise Machine Built on Expat Managers
For half a decade the model looked almost frictionless. Brands sold low-cost franchises, shipped ingredients from central kitchens, and dispatched small crews of Mandarin-speaking managers from headquarters to keep an eye on local franchisees. The pitch was simple: a franchisee puts up the capital and the rent, while head office supplies the recipes, the supply chain and a supervisor who makes sure the brand standards survive the trip overseas. That formula carried Mixue’s Indonesia operation past 2,300 stores and Vietnam past 1,300, figures cited by Chinese business media.
Chagee ran a version of the same play at a higher price point. Its fourth-quarter overseas gross merchandise value climbed 84.6 percent year on year to ¥370 million — about US$54 million — pushing its overseas store count to 345 after 83 net openings in the quarter. Chagee entered Indonesia, the United States, the Philippines and Vietnam in 2025, and will add South Korea as an eighth market in the second quarter of 2026, opening in Seoul’s Gangnam district alongside two further sites in Yongsan and Sinchon. The stores were never the hard part. A franchise can be supervised at arm’s length by an expatriate who speaks the brand’s language. A localization push cannot, and that distinction is now doing the damage.
Why the Light-Asset Model Broke
The pressure to change is arriving from regulators as much as from rivals. In North America, the U.S. “Supply Chain Security Act” pushes food and beverage brands toward sourcing more than half of their ingredients locally — a bar that outruns the Southeast Asian tea farms Chagee originally leaned on, as BCC Media reported. Compliance scrutiny has sharpened elsewhere too. Chagee spent late 2024 fending off public claims about caffeine levels in its drinks, a dispute that laid bare how thin its local regulatory bench really was.
The home market is pushing these brands out the door at the same time. Chagee’s same-store sales fell 20 to 24 percent in China during 2025 as Alibaba- and Meituan-led discount wars pulled coupon-hunting customers toward mass-market rivals, according to Latticework’s analysis — which is precisely why the overseas push has turned from an experiment into a lifeline. Chinese-language industry commentary published on August 20 described the mood bluntly as disenchantment: tea brands are being forced to pivot from light-asset arbitrage to heavy-asset local operation — real local supply chains, real local legal teams, real local leadership.
Mixue’s Japan push shows where the ceiling sits. After entering the market with a 1,000-store ambition, the company had opened just four outlets there, and its shares have drifted below the HK$202.50 IPO price, according to ChinaBizInsider. The overseas story, in other words, has stopped being a story you can tell with a store count.
The Talent That Barely Exists
That is where the search market turns unusually hard. The person a tea chain now needs sits at the intersection of three skills that almost never share a single résumé: fluent Mandarin and English, plus Korean, Vietnamese or Bahasa for the next market; operating experience in fast-moving consumer retail; and enough regulatory literacy to clear a food-safety filing or a lease negotiation without a lawyer on every call. A recruitment specialist at SunTzu Recruitment, who runs cross-border searches across the region, estimates the pool of people who have actually steered a multi-country retail rollout for a Chinese consumer brand “can be counted in the low hundreds.”
Forestown Executive Search, which tracks mid-to-senior cross-border hiring, reaches a parallel conclusion: conventional recruiting channels struggle to match cross-border operations directors, direct-to-consumer brand managers and senior executives for overseas regional markets — precisely the profiles tea chains are now bidding for against consumer-electronics and fast-fashion exporters. “The demand curve has bent upward faster than the supply of people who have done it before,” a senior consultant at SunTzu Recruitment observed.
The scarcity shows up most sharply in the markets brands want most. Chagee’s own data points to the prize: overseas membership grew 177 percent year on year in 2025, with 61 percent of those members under 30 — a young, local customer base that expects to be served in its own language, by people who understand its tastes. A country manager who can read a Seoul customer’s ordering habits is worth more than three expatriates who cannot, and there are not enough of the former to go around.
Local Bosses, Not More Expats
The shift underway is organizational before it is operational. A franchise-first company can steer much of the world from a head office in Zhengzhou or Kunming. A heavy-asset localization company cannot: it needs country managers with genuine decision rights, compliance officers who can sign a food-safety filing, and local marketing leads who grasp why a Seoul customer and a Ho Chi Minh City customer buy tea for different reasons. SunTzu Recruitment has responded by bundling country-manager and compliance-leader searches into a single cross-border mandate for consumer clients, rather than running them as separate one-off roles.
A partner at SunTzu Recruitment who oversees the consumer practice put the sequencing plainly. Brands that staffed overseas first and localized second are now trying to reverse the order, and reversing it is a people problem, not a capital problem. “You can fund a store in a quarter. You cannot fund a country manager into existence in a quarter.” The brands that internalize that sentence will consolidate the overseas market; the ones that keep flying expatriates in will keep shrinking, Mixue-style.
What Happens Next
That said, not every pullback is a failure. Some markets were never going to support a 1,000-store plan, and retreating is occasionally the capital-disciplined call rather than a defeat. The honest read is more nuanced: the winners are the chains that treat localization as a talent-acquisition exercise from day one.
For the search market, the direction is unambiguous. SunTzu Recruit’s practice lead expects 2026 to be the year overseas country-manager and compliance-executive searches for Chinese consumer brands move from a trickle to a sustained pipeline, concentrated in Seoul, Jakarta, Ho Chi Minh City and Kuala Lumpur. The tea chains opened the stores. Now they have to find the people who can actually run them.
Sources: jiemian.com, “Chagee to add 200 overseas stores in 2026” (Mar 31, 2026); kr-asia.com, “Chagee to open three Seoul stores”; chinabizinsider.com, “Mixue Overseas Stores Shrink 8.7% as Japan Plan Hits 0.4%”; businesstats.com, “Bubble Tea Industry in China Statistics 2026”; Wikipedia, “Mixue Ice Cream & Tea”; inf.news, “Mixue Bingcheng has been running in Southeast Asia for 5 years”; bccmedianews.com, “The Midfield Battle Behind Chagee’s 3.39 Billion CNY”; latticework.com, “Chagee: Starbucks of Tea with Global Ambitions”; eastisread.com, “The Caffeine Crisis: CHAGEE and China’s Anti-Drug Nerve”; forestown.com.cn, “Mid-to-Senior-Level Talent Recruitment”; panpacificbeijing.cn, “CHAGEE Releases 2025 Year-End Tea Friends Review”; oinchain.com, “中国茶饮出海祛魅与重资产转型” (Aug 20, 2026).
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