CHAGEE Malaysian Market Cultural Adaptation Strategies

Elevating Oriental Tea to Global Brand

Fengyuan Yang

Faculty of Economics, South China Business College, Guangdong University of Foreign Studies,

Guangzhou 510000, China

Keywords: CHAGEE, Localization, Cultural, Adaptation.

Abstract: With the saturation of China's new tea drinks market and the enhancement of China's economic strength and

cultural influence, the new tea drinks into the age of naviga-tion, the Southeast Asian market by virtue of the

multicultural background and a large Chi-nese population as well as a similar cultural background, has

become the first station of the internationalization of the many new tea drinks out to sea. This study examines

the localized marketing strategy and cultural adaptation of the new tea drink Chagee in Malaysia as an ex-

ample. The study concludes that cultural adaptation is the key to successful market entry, product localization

strategy is the foundation of brand market success, and market penetra-tion and promotion is the core path to

ensure successful brand expansion. Therefore, the or-ganic combination of cultural adaptation, localized

products and market penetration provides a clear internationalization path for China's new tea drinks, which

can quickly help enterprises complete market penetration, enhance brand awareness and consumer loyalty,

and establish sustainable competitive advantages through flexible product design and differentiated market-

ing strategies.

1 INTRODUCTION

With the strengthening of China's economic power

and the advancement of global integration, the global

influence of Chinese traditional culture has gradually

risen and become an important part of the international

competitiveness of Chinese brands. By introducing

Chinese elements, brands are able to establish

differentiated positioning in the international market.

This strategy not only helps Chinese brands in

developing foreign markets, but also shapes a unique

brand image and promotes corporate development.

The use of cultural elements has become an important

means of implementing differentiated competition and

enhancing brand influence.

The use of cultural elements can either enhance

brand affinity or weaken and blur brand tone. For

Chinese brands, the internationalization of cultural

elements needs to avoid “cultural discount” and the

dilution and blurring of brand connotation caused by

excessive localization. There is an innovative

federated learning method for cross-enterprise

recommendation systems (Zhang, 2023).

In addition, the internationalization process of

Chinese brands has made remarkable progress, but the

internationalization of Chinese brands generally exists

in the status quo of “focusing on the scale but not on

the brand”. The internationalized operation mostly

stays in the stage of Original Equipment Manufacturer

and Mergers and Acquisitions There is an innovative

federated learning method for cross-enterprise

recommendation systems (Chen, 2022).

The core value of the brand is vague, and the

cultural connotation is weak, which makes it difficult

for overseas consumers to form the value identity, and

falls into the competitive predicament of low-end and

price war. Differences between Chinese and Western

cultures exacerbate the difficulty of cross-cultural

communication, and it is difficult for a brand to break

through stereotypical cultural barriers if it only relies

on the reproduction of superficial cultural symbols

without constructing a universal brand value narrative.

Against this backdrop, Chagee, has successfully

integrated traditional Chinese cultural elements such

as theater to establish a brand identity. With the

intensification of competition in the domestic market,

it is gradually expanding to the Southeast Asian

market, especially Malaysia, which is rich in tropical

fruits and a large Chinese population with tea

consumption habits similar to those in China,

providing a good market base for the brand's

expansion.

Yang, F.

CHAGEE Malaysian Market Cultural Adaptation Strategies Elevating Oriental Tea to Global Brand.

DOI: 10.5220/0013990600004916

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on Public Relations and Media Communication (PRMC 2025), pages 301-306

ISBN: 978-989-758-778-8

301

Cultural adaptation is considered to be the core of

a brand's success in entering overseas markets. With

the development of cross-cultural theory, cultural

appropriateness and localization are becoming more

and more important. In cross-cultural marketing,

cultural difference is one of the key factors affecting

brand perception, and it has a deeper impact on the

generation of brand perception. Consumers from

different cultural backgrounds may interpret and react

differently to the same information. In addition,

consumers' purchasing decisions and brand loyalty

are strongly influenced by their cultural values and

social norms. There is an innovative federated

learning method for cross-enterprise recommendation

systems (Chen, 2024).

The balance between localization and

globalization is key in brand marketing and achieving

brand success. Localization focuses on adapting to

the culture and consumer needs of a specific market,

while globalization emphasizes brand consistency

and recognition across the globe. However, it remains

a key challenge for multinational brands to localize

while maintaining their cultural identity when

entering new markets. Brands need to make

adjustments in cultural adaptation, product strategy,

pricing, marketing channels and consumer behavior,

and design different brand marketing and

communication strategies to meet the needs of more

segmented markets in different regions. There is an

innovative federated learning method for cross-

enterprise recommendation systems (Mo, 2024).

This study will be organized around the following

question

BaWangChagee has culturally adapted well in the

Southeast Asian market, with Malaysia being a prime

example.

BaWangChagee has adopted various localization

strategies in the market environments of different

countries.

BaWangChagee has developed effective

marketing strategies tailored for different markets.

2 CONSUMER

CHARACTERISTICS AND

BRAND ACCEPTANCE IN

SOUTHEAST ASIAN MARKETS

2.1 Market Characteristics

2.1.1 Multicultural Landscape

Malaysia's total population of about 35 million

people, is a multi-ethnic, multi-cultural, multi-lingual

country, with three major ethnic groups, forming a

multi-cultural pattern at the same time there are a

small number of native residents of the Malay

Peninsula, the formation of differentiated consumer

demand.

The Malay ethnic group accounts for about 50%

of the total, which is the largest ethnic group in

Malaysia. The main language is Malay, and they

believe in Islam, which has a halal demand for

consumption, and their halal consumption market is

highly developed.

Chinese accounted for about 25%, is the second

largest ethnic group in Malaysia, the main language

is Chinese and Malay, Chinese are mostly middle

class, high income level, across a variety of

industries, retained a complete Chinese cultural

traditions, consumption habits are similar, and most

of them believe in Buddhism and Taoism.

Indians account for about 10% of Malaysia's third

largest ethnic group, the main language is Hindi,

practicing Hinduism, Islam, Christianity,

consumption habits are also influenced by religion.

At the same time, they have retained the complete

Indian cultural traditions. There is an innovative

federated learning method for cross-enterprise

recommendation systems (Huang, 2023).

2.1.2 Youthful Demographic Structure

Malaysia's consumer market is gradually to the

transformation of the young, Malaysia's total

population of 40 million which young people

accounted for up to 40%, especially between 20-35

years of age of the young people's groups, become an

important consumer of tea drinks. Most of the college

students and office workers are mostly Gen Z groups,

with strong spending power and very skilled in the

use of social media. As well as the alpha generation,

becoming a new group of consumers. Young

consumers pay more attention to fashion, health and

personalized drinks, and are willing to try emerging

brands and innovative flavors. At the same time, with

the improvement of health consciousness, more and

more consumers pay attention to natural, low-sugar

and additive-free tea drink products.

2.2 Consumer Behavior

2.2.1 Malay Consumers

Halal certification is the core demand. As a Muslim-

dominated consumer group, ethnic Malays have a

religious demand for food, as well as daily consumer

goods, and the availability of Halal certification for

their goods is the deciding factor for their purchase.

Their Halal consumer market is huge both online and

offline. Ethnic Malays are sensitive to price and

promotions, and emphasize on brand attachment and

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loyalty. They tend to favor branded companies with

high visibility. Ethnic Malay consumers tend to be

collectivist and family-oriented, emphasizing the

consumption of gifts and food for religious festivals,

as well as the experience and evaluation of goods.

2.2.2 Chinese Consumers

Chinese-American consumers generally have a sense

of cultural identity for brands with Chinese cultural

characteristics, spend more on traditional festivals,

and tend to spend on platform companies with

Chinese culture or companies or platforms with

Chinese language services. Chinese consumers have

higher incomes and emphasize on product quality and

cost-effectiveness, brand awareness and service

experience. Multiple ways of consumption, such as

online and offline consumption, are accepted.

2.2.3 Indian Consumers

People of Indian origin follow many religions and

most of them prefer Halal certified products to fulfill

their religious needs. They pay attention to the brand

and reputation of the products. They also have a sense

of cultural identity for traditional Indian culture,

spend more on traditional Indian festivals, are

sensitive to commodity prices and discounts, and pay

attention to cost-effective commodities.

2.3 Brand Acceptance

2.3.1 Store Count and Distribution

Since its inception in 2017, Chagee to “serve

consumers in 100 countries” as the development

vision, Malaysia is Chagee to develop the first

overseas market, August 2019 Chagee first overseas

store opened in Kuala Lumpur, Malaysia, and rapidly

expanding in the East and West Malaysia, currently

in Malaysia has more than Currently in Malaysia has

more than 130 stores, mainly located in Kuala

Lumpur, Penang, Johor Bahru and other

economically developed cities. Most of them are

located in shopping malls, commercial streets,

cultural centers and other areas with high traffic flow.

By 2024.11, the number of BaWangChagee stores

worldwide has reached 6,000. Stores are located in

Malaysia, Singapore, Thailand, the United States.

2.3.2 Sales Performance

The average temperature in Malaysia is close to 30

degrees throughout the year, and there is no

distinction between off-season and peak season, so

there is a demand for tea drinks all year round.

Chagee original leaves and fresh milk, highlighting

the flavor of tea, the main national style series “Bo Ya

Jue xian”, still best-selling in Malaysia. At the same

time, thanks to its marketing strategy, in the holidays

and promotional activities such as “double eleven”,

customer traffic and sales have maintained a steady

increase. Chagee quickly completed the local market

occupation, and became the top five milk tea store in

Malaysia.

2.3.3 Brand Reputation

Chagee proposes to be an oriental modern tea drink.

In 2019 Chagee and other brands are the first to

propose the transparency of raw materials and

calories to create a healthy new tea drink. Chagee has

a very high brand awareness in Malaysia, high-

quality and healthy tea drinks and perfect service and

marketing strategy, with Chinese tea culture as the

core, original leaf + fresh milk as a differentiator, to

create to be the Starbucks of the East, and spread the

Chinese culture. Its unique brand image is loved by

local consumers. It also combines online and offline

through celebrity endorsement and brand stories to

further enhance brand awareness.

3 CHAGEE’S EXPANSION

PATHWAY IN SOUTHEAST

ASIA

3.1 Brand Positioning and Strategy

Chagee is committed to promoting Chinese tea

culture to the global market, especially among young

consumers, by inheriting the spirit of the Ancient Tea

Horse Road. Adhering to the concept of “original

leaf fresh milk tea, drink the real tea flavor ” ,

focusing on the use of organic tea category, its own

ecological tea mountain direct picking, refusing to tea

powder dregs, and strict control of product quality, to

ensure that the tea drink authenticity and taste. In

terms of brand culture delivery, Chagee enhances the

brand's cultural recognition through the integration of

traditional Chinese cultural elements, such as Peking

Opera characters as the brand logo, and the milk tea

packaging design adopts Chinese cultural symbols

such as ink painting and blue and white porcelain. In

addition, the store design style is based on wooden

construction and seal script decorated walls,

combined with the mortise and tenon craftsmanship

of ancient architecture, creating a strong Chinese

atmosphere, and delivering the cultural connotation

of oriental tea drinks with the five senses experience.

There is an innovative federated learning method for

CHAGEE Malaysian Market Cultural Adaptation Strategies Elevating Oriental Tea to Global Brand

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cross-enterprise recommendation systems (Zhang,

2024).

BaWangChagee focuses on product innovation to

meet modern consumers' demand for healthy drinks,

such as launching low-calorie, sugar-free and

personalized customized tea drinks, and interacts with

consumers through social media to promote the

combination of brand culture and traditional culture.

During festivals, Chagee launched customized tea

drinks and festival commemorative peripherals,

combining online communication and offline

activities to further strengthen the emotional

connection between the brand and consumers.

Through emotional marketing and cross-border

cooperation, Chagee not only established a strong

brand identity in the domestic market, but also

successfully attracted consumers in the Southeast

Asian market.There is an innovative federated

learning method for cross-enterprise recommendation

systems (Shao, 2024).

3.2 Market Entry Strategy

With the increasingly fierce competition in the

domestic market, BaWangChagee began to seek

overseas market expansion, especially in Southeast

Asia. According to BaWangChagee brand research,

Southeast Asia did not appear in the local strength of

the new tea drink brand, which provides a broad space

for the development of China's new tea drink brand.

Chagee through the establishment of overseas

business units, and Malaysia and other Southeast

Asian countries to conduct in-depth market research,

found that the region's demand for new-style tea

drinks has huge potential. In particular, Southeast

Asian countries have a large Chinese community with

similar tea culture and consumption habits, providing

a natural cultural fit and sense of identity for the

brand. In addition, the Southeast Asian region's

respect for Chinese-style culture also provides

Chagee with an advantage in entering the market. The

similar cultural background with China makes it

easier for consumers to accept the brand and culture,

and the rich tropical fruit resources in Southeast Asia

enable Chagee to launch innovative tea drinks with

local characteristics, further enhancing the brand's

market attractiveness. By laying out in advance,

Chagee is able to occupy the market before it is fully

saturated, with the advantage of time difference and

cultural adaptation, reducing the risk of entry.

4 CASE ANALYSIS:

LOCALIZATION STRATEGIES

IN MALAYSIA

4.1 Cultural Adaptation

In the context of globalization, the cultural

appropriateness of a brand becomes a core element

for successful entry into new markets. Chagee's

localization strategy in Malaysia exemplifies how the

brand balances traditional culture with market needs,

especially in Malaysia, a multi-ethnic and multi-

religious country. In order to adapt to the Malaysian

market, Chagee ensured that its products comply with

Islamic teachings and fulfill the dietary requirements

of Muslim consumers by obtaining Halal

certification. This certification not only expands the

brand's consumer base, making Chagee acceptable to

ethnic groups other than the Chinese community, but

also enhances the brand's credibility and consumer

trust. At the same time, Chagee pays attention to the

important festivals in Malaysia, and by combining

with the festival culture, it further enhances the

cultural connection between the brand and

consumers.

The tea culture conveyed by Chagee emphasizes

the lifestyle of tea tasting and tea parties. Despite the

similar cultural background between Malaysia and

China, tea drinking in Malaysia is more of a

functional need to satisfy the need for daily drinks. In

order to adapt to this difference, Chagee has made

localized adjustments in service and store design. For

example, the brand focuses on the demand for buy-

now, go-now in stores, especially in Malaysia's hot

climate, where consumers prefer evening

consumption. For this reason, the opening hours of

some stores have been extended to the early hours of

the morning to accommodate local habits. In addition,

Chagee employs multi-lingual local staff to minimize

conflicts caused by cultural differences and improve

service efficiency and customer satisfaction. There is

an innovative federated learning method for cross-

enterprise recommendation systems (Zhang, 2025).

Chagee has not only launched the traditional

National Style series, but also tea drinks that

incorporate local flavors based on Malaysian culture

and tastes, such as Kampong Ru Yimo and Sticky

Green Hill. These products retain the core of Chinese

tea culture while meeting the needs of Malaysian

consumers for innovative flavors. In addition, Chagee

has also introduced low sugar, no sugar and show

calorie healthy tea beverages to fulfill consumers'

preference for healthier beverages. By combining

local tropical fruits and launching seasonal limited

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drinks, Chagee has further enriched its product line

and strengthened the brand's market competitiveness.

4.2 Omnichannel Marketing

The international communication of Chinese brands

has been facing challenges such as weak willingness

to communicate, lack of differentiated

communication strategy design and single

communication channel. Brand communication

strategy requires a multi-level and multi-angle

communication mechanism and the flexible use of

various strategies to effectively convey the brand

connotation and image and achieve the effect of

internationalization communication. Brand

communication strategy can be realized through

celebrity endorsement, brand narrative and

interpersonal communication. Only by adopting

various communication strategies according to local

conditions can brand awareness and recognition be

enhanced. However, many brands still face the

problems of poor radiation ability and insufficient

understanding of overseas consumers, resulting in

limited brand communication effects.

Chagee's success in this regard stems from its

innovative communication strategy. First of all,

BaWangChagee has enhanced the breadth and depth

of brand communication by combining online and

offline. In the early stage of entering the Malaysian

market, BaWangChagee cooperated with Lee Chong

Wei, a former national player of Malay badminton, to

quickly open the market by utilizing his high

visibility in the region. Lee's joining not only

enhanced brand awareness, but also helped the brand

make significant progress in product promotion, store

location, market differentiation and cultural

adaptation. In addition, with the influence of Lee

Chong Wei, Chagee has quickly set up stores in major

cities in West and East Malaysia, successfully

covering the entire Malaysian market. There is an

innovative federated learning method for cross-

enterprise recommendation systems (Zhang, 2024).

Online, Chagee actively used social media

platforms (e.g. Facebook, Instagram, TikTok) and

takeaway platforms (e.g. Grabfood, Foodpanda) to

promote the brand. During the epidemic, Chagee's

partnership with Grabfood enabled the brand to

quickly attract a large number of online consumers

and capture the market through new user offers and

combo discounts. The brand also launched co-

branded peripheral products through cross-border

cooperation with Levi's and others, further enriching

its brand image and attracting young consumers.

There is an innovative federated learning method for

cross-enterprise recommendation systems (Li, 2024).

Offline, Chagee focuses on brand narratives, such

as demonstrating the brand's social responsibility

through products and activities related to stray cats,

which are in line with the mainstream values of

Malaysian society. At the same time, Chagee has

chosen locations in high-traffic areas to increase

brand exposure and attract young people. Newly

opened stores attract traffic by giving away freebies

such as limited edition perfumes and lipsticks from

major brands, and organizing cultural activities such

as lion dances to further enhance consumers' sense of

brand identity and engagement.

5 CONCLUSION

In the context of globalization, Chinese brands face

the challenge of maintaining their cultural core and

adapting to local market demands when entering the

Southeast Asian market. By analyzing how the

cultural adaptation and localization of Chinese tea

beverage brands in the Southeast Asian market can

help brands successfully expand into the international

market through the synergy of cultural adaptation,

product localization, and market penetration,

especially in the Southeast Asian market, i.e., the

market of similar cultures, to achieve effective brand

penetration and localization.

First of all, cultural adaptation mechanism is the

key for brands to successfully enter the Malaysian

market. In the process of globalization, Chinese

brands need to effectively combine traditional

cultural elements with local culture to enhance their

cultural appeal and emotional resonance with local

consumers. By preserving local cultural

characteristics (e.g. traditional Chinese cultural

symbols) and integrating them with local culture,

customs and values, brands can not only differentiate

themselves, but also ensure localization and

adaptability. For example, in multi-ethnic and multi-

religious Malaysia, brands can promote localization

by obtaining Halal certification or adapting product

flavors to ensure that they meet the needs of local

consumers.

Second, product localization strategy is the

foundation of brand market success. Chinese brands

need to flexibly adjust their product portfolios

according to local consumers' tastes and preferences

to meet the needs of different groups. Brands can

enhance consumer identification and maintain market

competitiveness by launching products with local

characteristics (tropical fruit flavors). Through

precise product positioning, brands can flexibly adapt

to market demands without losing their cultural

characteristics and gain a larger market share in

multiple consumer segments.

The organic combination of cultural adaptation,

localized products and market penetration provides

CHAGEE Malaysian Market Cultural Adaptation Strategies Elevating Oriental Tea to Global Brand

305

Chinese brands with a clear path to

internationalization that enhances localized brand

identity and consumer loyalty. By flexibly adapting

product design, marketing strategy and brand

positioning, Chinese brands can establish sustainable

competitive advantages in Southeast Asia and other

international markets.

The results of this study can provide a replicable

localization framework for Chinese brand enterprises,

reduce the cost of trial and error, supplement the

examples of new-style tea drinks in cross-cultural

marketing, and propose the threshold of cultural

adaptation, so as to provide a reference for Chinese

enterprises' culture going overseas, and help

Southeast Asian regional economic and cultural

cooperation. This study are extended and researched

in the existing secondary data and research results.

The conclusion is based on a single brand of

BaWangChagee, lacks the research of other new-style

tea drinks and the generalization of other industries,

lacks more dynamic data, and needs to be deepened

in the diversity of cases as well as the dynamization

of data.

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