The China-Southeast Asia connection

 

As China’s economic growth rate eases in recent years, Chinese enterprises continue to reach out beyond the mainland borders, seeking meaningful sales and profit in sectors ranging from food & beverage to advanced manufacturing. Its large-scale food processing technology infrastructure is an asset to supply chain resilience, ensuring reliable output across different product categories.

 

“Into 2026, more Chinese companies will aim to build and enhance their globalized supply chains – sourcing raw materials or building factories directly in foreign countries,” said Mr. Sam Gao, a founding partner of Top Guide Advisory Shanghai, and currently an advisor to DFP Capital (a Lever VC shareholder), as well as senior consultant for Charisma Partners.

 

 

Sam Gao is a founding partner of Top Guide Advisory Shanghai, an advisor to DFP Capital (a Lever VC shareholder), and a senior consultant for Charisma Partners.

 

 

“A classic success story is that of Yili Dairy and Mengniu Dairy, the leading dairy giants in China. They report faster growth (from a small base, of course) in overseas markets like Indonesia and Russia. About 25 years ago, these companies began by sourcing powdered milk from Australia and New Zealand. Today, they operate dairy farms and factories directly in those countries, targeting local consumers as well as expanding into Southeast Asia, particularly Indonesia and Vietnam,” he said.

 

Southeast Asia as market destination

Both its geographic proximity and rising consumer demand make Southeast Asia the center of China’s market expansion. “Catering chains will continue to enter select foreign markets to diversify their geographical distribution by establishing outlets,” Mr. Gao said. In fact, according to Momentum Works, over 60 Chinese F&B brands opened 6,100 outlets in the region as of December 31, 2024*. The number is growing.

 

To combat intense competition and to gain immediate entry into these markets, companies are using mergers and acquisitions to their advantage. “Chinese enterprises will make active M&As overseas to gain entry or market share in foreign countries, Mr. Gao said. “Meanwhile, foreign products continue to enter the Chinese market. Cheese, for example, was traditionally not part of the Chinese diet, yet companies such as Fonterra and leading domestic dairy producers have expanded cheese production to meet rising demand. Individuals and families are consuming more cheese, which has gained increasing acceptance in Chinese cuisine, bakeries, and the milk tea industry. Other foreign products that have already become widely embraced in China include coffee, pizza, hamburgers, and sandwiches,” he said.

You will find more insights from Mr. Sam Gao at: Outlook 2026: The China-Southeast Asia connection_ringier industry sourcing