Chinese Tea, EV & More Accelerate Entry into South Korea, Experts Say

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More Chinese companies, ranging from innovative tea brands to electric vehicle manufacturers, are increasingly entering South Korea amid escalating trade tensions between China and the U.S. and rising demand for “light luxury” products among young South Koreans, according to the head of the Korea-China Federation.

Since 2019, when trade tensions between China and the U.S. began to intensify, the number of Chinese firms in auto, food, retail, and other sectors expanding into South Korea has steadily grown. The COVID-19 pandemic further accelerated this trend, as explained by Park Seung Chan, a Yongin University professor.

Recently, the modern tea brand Chagee opened its first stores in Seoul’s Gangnam, Yongsan, and Sinchon districts on April 30. Meanwhile, other brands like ChaPanda and Heytea announced plans to enter South Korea’s predominantly coffee-focused market by 2024.

Auto powerhouse BYD launched its passenger car division in South Korea early last year, establishing sales networks in key regions such as Seoul, Gyeonggi Province, Incheon, Busan, and Jeju. Geely’s premium electric vehicle brand Zeekr is aiming to open local showrooms before the year’s end, while leading Chinese EV startup Leapmotor is also contemplating market entry.

Chinese AI technology companies have also gained traction in South Korea, with many successful cases of local market entry. Experts note that Chinese and South Korean firms generally do not compete but rather complement each other and often collaborate.

Deep Robotics, based in Hangzhou, successfully localizes in South Korea by combining China’s strengths in components and raw materials with South Korea’s expertise in branding and operations.

Furthermore, brands like Pop Mart, Chagee, and others align well with the “light luxury” preferences of Generation MZ in South Korea. This demographic, born between 1985 and 2006, faces significant life pressures, including housing difficulties, leading some to spend modest amounts on such products for personal comfort.

Young consumers in South Korea are highly trend- and price-conscious. For example, the number of 20- to 30-year-olds on China’s fast fashion platform Shein in South Korea nearly tripled year-over-year to 1.22 million in January.

South Korea’s clothing imports from China reached a record $4.89 billion last year, an 8.1% increase from the previous year.

Thanks to China’s visa-free policy, many young South Koreans now travel more easily to Chinese cities like Shanghai, sharing their experiences with local brands on social media. Park highlighted that social media’s rapid growth has further enhanced the positive influence of Chinese brands within South Korea.