Many global brands are struggling in China

Speed, sophistication, and extreme flexibility - that's how Chinese domestic brands are completely changing the game in their home market.

No longer in a position of "following" or "copying," names like Luckin Coffee, Manner, and domestic electric vehicle manufacturers are creating a reverse invasion, pushing Western giants onto the defensive.

Why are global empires like Starbucks and American retailers gradually losing their appeal in the billion-person market? The answer lies in digital integration and a deep understanding of consumers, as Chinese brands increasingly accelerate in the consumer race.

For retailers from the US, the issue is not just declining demand, but also the speed and sophistication of local competitors – who launch new products faster and offer more competitive pricing. They are also seamlessly integrated into China's digital ecosystem through mobile platforms like WeChat and Alipay.

In the food and beverage service sector, competitors like Luckin Coffee and Manner have surpassed Starbucks in terms of store numbers and market share, thanks to competitive pricing policies, mobile app integration, and a deeper understanding of Chinese consumer habits. Luckin achieves over 90% of its revenue through its app, while Starbucks still relies on in-store customer visits.

Professor Chengyi Lin, specializing in digital transformation at Insead Business School, stated: "Many global brands have begun to lose brand power in China. The key factor now is flexibility and adaptability."

Evidence of the fierce competition in the Chinese consumer market is evident in the country's 129 electric vehicle brands, over 50,000 coffee chains, and more than 450,000 bubble tea shops nationwide. Domestic businesses are not only dominating the mass market but are also targeting the higher-end segment, offering quality products at competitive prices.

The level of competition is also fierce, with domestic businesses challenging foreign companies in the food, fashion , electronics, and transportation sectors.

Experts believe that while Chinese businesses previously copied from large multinational corporations, they now sometimes even surpass them. This has led many brands to enter into joint ventures to maintain competitiveness.

Analysts predict that the trend of joint ventures will become even stronger, as Chinese brands expand globally while continuing to weaken the position of Western brands in their domestic markets.

Source: VTV