Chagee - From Market Leader to Market Learner: The Contrast Between Malaysia and Vietnam

Chagee, a premium Chinese tea brand founded in 2017 in Kunming, China, has rapidly grown to become a significant player in the Southeast Asian tea beverage market. Initially gaining traction with its luxury tea offerings in Malaysia since 2019, the brand distinguished itself by blending traditional tea culture with modern, customer-centric experiences. Chagee’s strategy emphasizes high-end store designs, personalized customer experiences, and innovative digital engagement, including a comprehensive mobile app that fosters loyalty through membership programs, seasonal promotions, and social media interaction.

Even though the brand’s expansion strategy was initially met with success in Malaysia, Singapore, and Thailand, when the company turned its attention to Vietnam in 2024, its expansion faced significant challenges. The release of its app displaying a controversial image tied to territorial disputes sparked a major backlash from Vietnamese consumers. This geopolitical issue brought Chagee’s expansion efforts to a halt, raising important questions about how international brands should navigate political sensitivities when entering new markets.

This case study explores Chagee's journey, examining the strategic decisions that allowed the brand to thrive in some Southeast Asian markets while struggling in others. It delves into the company’s efforts to differentiate itself in a crowded market, focusing on customer engagement strategies such as loyalty programs, social media engagement, and the integration of digital and offline customer experiences. On the other hand, the case also provides valuable insights into the challenges brands face when balancing global ambitions with local sensitivities and underscores the role of geopolitical awareness in international business strategy.