Chinese brands push deeper into South Korean daily life

BYD ranks 4th in Korea's imported car market; Xpeng also set to enter

Chinese milk tea, cosmetics brands expand rapidly beyond hot pot chains

BYD's midsize electric sedan, the Seal [BYD]

Chinese brands are making deeper inroads into South Korean consumers' daily lives, expanding their reach from electric vehicles and electronics to milk tea and cosmetics.

Chinese EV maker BYD captured a 4.8 percent share of South Korea's imported car market from January through May, ranking fourth behind Tesla, BMW and Mercedes-Benz, according to data released Monday by the Korea Automobile Importers and Distributors Association. The result put BYD ahead of Lexus (4.2 percent), Volvo (4 percent) and Audi (3.8 percent). Cumulative registrations through May reached 7,023 units.

BYD entered the South Korean market in April last year with the Atto 3, a compact SUV that drew attention for its starting price of around 30 million won (about $21,700) — lower than most rivals. The company followed with the midsize sedan Seal and then the Sea Lion 7 in September, and introduced the Dolphin hatchback in February. The Sea Lion 7 has accounted for half of BYD's domestic sales so far this year.

BYD Korea is moving quickly to build out its sales network, planning to expand its domestic showrooms from 34 to 35 and its service centers from 20 to 26 by year's end. At the Busan Mobility Show, opening June 26, the company plans to unveil vehicles equipped with its hybrid "DM-i" technology.

Fellow EV maker Xpeng is also expected to enter the South Korean market this year. Xiaomi, meanwhile, plans to expand overseas starting with Germany next year.

Xiaomi currently operates eight stores in South Korea. Its smartphone lineup spans three tiers — from the Redmi series priced in the 200,000–300,000 won range to flagship Xiaomi models approaching 2 million won. Robot vacuums, televisions and portable batteries have also been gaining popularity.

An industry official attributed the rise of Chinese brands to a shift in consumer perception. "It's a signal that consumers no longer see Chinese brands merely as copycats or budget options — trust in their technological capabilities has grown," the official said.

Xiaomi's POCO M8 5G, priced in the 300,000 won range. [Xiaomi Korea]

Chinese brands are also gaining ground in food and beverage, beauty and fashion, driven in part by growing interest among younger Koreans in Chinese culture following the visa-free travel policy that has made cities such as Shanghai popular destinations.

Chagee, a well-known Chinese milk tea brand, entered South Korea in late April with three locations including one near Gangnam Station, then added outlets beside Deoksugung Palace and at Yeoksam Station in May. A sixth location in the Konkuk University area opens Thursday, and the brand is set to open a counter at Shinsegae Department Store's Gangnam branch in the second half of the year.

Several other Chinese milk tea brands — including Auntie Genie, Heytea, ChaPanda and Mixue — are also operating stores in South Korea.

Chinese hot pot chain Haidilao has surpassed 100 billion won in domestic sales. Haidilao Korea posted revenue of 117.7 billion won last year, up 50.9 percent from the previous year, while operating profit jumped 84.6 percent to 20.2 billion won over the same period.

Chinese malatang chain TanHuaKungFu surpassed 550 franchise locations in South Korea last year. Its local subsidiary, Korea TanHuaKungFu, recorded sales of 22.5 billion won and operating profit of 11.1 billion won last year.

Luckin Coffee, China's largest coffee chain, is also reportedly preparing to enter South Korea. Luckin, which has overtaken Starbucks in China, opened a store in Manhattan last year.

Chinese color cosmetics brands Flower Knows and Judydoll have been gaining popularity among Generation Z consumers in South Korea through social media. Flower Knows drew large crowds with a pop-up store in Seoul's Seongsu-dong last year. In fashion, Chinese designer brands such as Shushu/Tong are also building recognition.

The exterior of Chagee's flagship store in Gangnam, Seoul [Chagee Korea]

soho0902@heraldcorp.com