Walk through any Singapore mall today, and you’ll notice the vibe has quietly shifted.

That trendy new bubble tea shop? It’s straight out of Chengdu. The packed hotpot restaurant? It’s backed by a massive 700-outlet chain you’ve probably never heard of. And that massive morning coffee queue? It’s for Luckin, not Starbucks.

Chinese food and beverage (F&B) giants are aggressively planting their flags in Singapore. Brands like Molly Tea open up, and within two months, a second store is already serving customers.

But this isn’t just a random expansion trend. It is the direct spillover of a brutal, hyper-competitive economic war happening inside mainland China.

The Root Cause: “Involution” (Neijuan)

To understand why these brands are flooding Singapore, you have to look at what they are fleeing. In 2024 alone, a staggering three million food businesses closed in China.

Economists call this phenomenon involution (neijuan)—a vicious cycle of excessive internal competition where companies fight tooth and nail for the same shrinking pool of consumers. Instead of expanding the market, everyone resorts to aggressive price undercutting, destroying margins just to survive.

• The Coffee Race to the Bottom: Luckin Coffee squeezed margins by pushing lattes down to RMB¥9.9 (S$2). Newer rivals like Lucky Cup (backed by Mixue) went even lower, selling coffees for RMB¥6.6 (S$0.90).

• Not Just Food: This price-slashing bloodbath is happening across Chinese industries, even hitting massive EV players like BYD.

With China’s domestic market entirely saturated, brands have no choice but to look outward. And Singapore is their prime target.

Why Every Chinese Giant Wants a Piece of Singapore

Singapore isn’t just another market; it’s a global stamp of legitimacy.

Boasting one of the highest per-capita GDPs in the world and a sophisticated, well-documented food culture, Singapore acts as the ultimate testing ground. The logic is simple: If you can make it here, you can make it anywhere.

“If we can build up our brand in Singapore, the brand awareness can go to Malaysia and Vietnam, even Indonesia.”

— ChaPanda’s Singapore Manager

Singapore serves as a high-profile launchpad. Brands like Tai Er used their Singapore footprint to build regional momentum before successfully expanding into the US market.

The Unfair Advantage: Losses That Don’t Matter

Local Singaporean businesses are feeling the squeeze, and it’s easy to see why. The sheer scale of these Chinese chains allows them to play by an entirely different set of financial rules.

Because of this massive scale, individual outlets in Singapore don’t actually need to turn an immediate profit. They are heavily subsidized by supply chains honed in China.

For example, Luckin Coffee’s Singapore operations reported a loss of S$8.8 million (RMB¥47 million) in FY2024. Yet, because their China operations pulled in over S$6.4 billion in total revenue that same year, they can comfortably absorb the hit.

To these giants, a prime location in a Singapore mall isn’t an immediate profit center—it’s a marketing expense. This allows them to easily outbid local mom-and-pop shops on rent, sometimes offering landlords way above market expectations.

A “Darwinian” Landscape for Local Businesses

This financial cushion has created a highly unequal playing field. While Chinese giants treat losses as international branding budgets, local icons are fighting for survival.

The environment has become fiercely Darwinian. In 2024, 3,047 F&B businesses shut down in Singapore—the highest casualty rate in nearly two decades. Legendary local heritage brands like the 85-year-old Ka-Soh and established players like the Privé Group have been among the casualties.

The Million-Dollar Question

As of late 2025, around 85 Chinese F&B brands were operating over 405 outlets in Singapore—more than double the numbers from the previous year. They aren’t going to stop coming.

But the strategy does have a clear point of failure: it relies entirely on the mainland China business staying healthy enough to fund overseas losses forever. We are already seeing cracks; hotpot giant Haidilao quietly closed its iconic Clarke Quay flagship and a few other outlets to optimize efficiency.

Venture capital and private equity backing can buy a brand a few years of patient growth. But eventually, the clock runs out. The real test will come when these Chinese entrants are finally forced to stand on their own two feet and survive on Singaporean revenue alone.

Until then, expect the mall landscape to keep shifting.

Source: vulcanpost