Chinese brands gain traction in Korean restaurant landscape

A Tanghuo Kungfu Malatang restaurant in Donghae, Gangwon Province, in this undated photo / Captured from social media

Chinese dine-in companies under major brands are expanding their presence in Korea by attracting customers in key tourism areas in Seoul with authentic Chinese flavors.

Their inroads align with Chinese milk tea brands that are also expanding their following here, betting on the fame built up in their home country. These signs of an influx of Chinese food and beverage brands demonstrate that Korea is essential to their global market expansion.

The most visible growth among Chinese restaurants in Korea is Tanghuo Kungfu Malatang. Following the opening of its first restaurant by a franchisee in Suwon in 2012, the number of its restaurants in Korea — either run by franchisees or directly managed by the company — has surpassed 560 as of the end of March.

Tanghuo Kungfu Korea posted 18.3 billion won ($12.1 million) in sales in 2023, a 108 percent year-on-year increase, while operating profit reached 943 million won, up 95 percent. Sales in 2024 surged again to 22.2 billion won, with its operating profit also jumping to 10.5 billion won. The restaurants are now located across Seoul’s major tourism hotspots, including the Gangnam Station area, Myeong-dong, Hongdae, Seongsu and Daehangno.

The company said last Friday that it will join a franchise expo this weekend at Coex in southern Seoul. By waiving franchise, training and royalty fees for new franchisees and offering food-serving bowls for free, the company aims to further expand its malatang market share here.

"As Korea's malatang market continues to expand, we want to attract prospective entrepreneurs and share with them our brand's operational knowhow and practical support benefits," a Tanghuo Kungfu Korea official said. "We hope to see active participation by local restaurateurs here so that we can together lead the malatang's market growth here."

A dine-in table at Haidilao features a variety of broths, sauces and shabu-shabu ingredients. Courtesy of Haidilao

Hot pot restaurant brand Haidilao generated higher sales than Tanghuo Kungfu despite having fewer restaurants in Korea in 2024. Haidilao Korea posted 78.1 billion won in sales, a steep rise from 13.9 billion won in 2020. Its sales last year are now estimated to have surpassed 100 billion won.

The brand is known for offering visitors “entertainment,” including free nail art services, snacks and board games for patrons waiting for their tables. Since debuting in Korea in 2014, the restaurant chain has expanded to 10 locations.

Other notable brands include Bantianyao Grilled Fish, which has expanded to six restaurants since entering the Korean market in 2020. Haihai Kaochuan, a barbecued skewer restaurant brand operated by Haidilao, opened its first eatery in Myeong-dong in January.

These Chinese dining brands share a similar market expansion strategy in Korea with major Chinese tea brands. Milk tea brand Chagee said it will open three stores in Seoul by the end of June, marking its first East Asian expansion outside China. Chabaido, HeyTea and Mixue are also building up their presence here.

The expansion into Korea by these Chinese food and beverage brands comes as the Chinese market nears saturation. Competition is particularly fierce among tea brands. Chabaido operates 8,400 stores in China, while Chagee runs more than 7,000, HeyTea with 4,000 stores and Mixue nearly 53,000. Intensifying competition at home has prompted the companies to seek growth overseas.

Market observers point to Korea as an ideal global market, largely due to its cultural influence, which has produced global trends such as K-pop, K-food and K-beauty. These cultural growth engines have made the country a testing ground for new brands before they expand into broader global markets, experts said.