Chinese food, drink chains move quickly to conquer US

China’s fast-food and beverage brands have an opportunity to expand in the United States and escape cutthroat competition at home, writes Daisuke Wakabayashi and Joy Dong from Seoul and Hong Kong

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Heytea, with 4,000 stores in China, began its US expansion two years ago. Its Times Square location draws long lines for signature drinks like fruit tea with cheese foam.

As fraught as it has been recently, the economic relationship between the United States and China has not stopped a wave of Chinese food and beverage chains from moving aggressively into the United States for the first time.

Chinese tea shops in New York and Los Angeles are offering consumers drinks topped with a milk or cheese foam. Fried chicken sandwich joints are trying to lure diners in California with affordable fast food. Restaurant and drink brands, some with thousands of stores in China, are taking root in American cities to escape punishing competition at home.

Heytea, a tea chain originating in Jiangmen, a city in southern China, has opened three dozen US stores since 2023, including a flagship operation in Times Square in New York. Two other rival tea brands, Chagee and Naisnow, opened their first US stores this year. Luckin Coffee, a chain with three outlets for every one Starbucks in China, opened several spots across Manhattan.

Wallace, one of China’s largest fast-food chains, with more than 20,000 stores selling fried chicken and hamburgers, landed in Walnut, California, for its first shop. Haidilao, China’s largest hotpot chain, is redoubling its efforts in the United States after entering the market more than a decade ago.

The American expansion comes at a challenging moment for China's food and beverage industry. The Chinese economy is no longer growing at a breakneck pace, hampered by a long-running real estate crisis and sluggish consumer spending. To survive, restaurant chains are undercutting one another on prices, inciting an unsustainable, profit-killing race to the bottom.