Budget Mainland Chains Are Moving In: Three Ways Local Brands Can Compete Without Cutting Prices

Mixue’s branch at CTMA Centre in Mong Kok paid about HK$190,000 a month in rent. According to a September 2026 report by HK01, one market watcher worked out that at HK$9 for a cup of lemonade, the shop had to sell more than 21,000 cups a month just to pay the rent. By the time the report came out, the shop had already moved out, and another tea shop had taken over the unit for about HK$160,000 a month.

For a while, budget tea chains arrived thick and fast. A report in October 2024 counted 9 tea shops within about 100 metres on Soy Street in Mong Kok, 7 of them mainland brands (HK01). In July 2025, the cheapest iced lemon water at Mixue in Lo Tak Court, Tsuen Wan, was HK$9, and its mango pomelo sago was HK$20. At a Taiwanese-style tea shop nearby, the cheapest mango pomelo sago was HK$40 (HK01). By October 2026, Mixue’s Tsuen Wan branch had closed (Sing Tao Headline).

Seeing these prices, your first thought might be: should I cut my prices too?

Don’t rush. Of the mainland brands that have already arrived, some are still opening new shops, and some have closed every last one. Why customers choose you is a question of brand strategy, and a restaurant management question every shop has to answer sooner or later.

Mainland brands in Hong Kong: some have opened 22 shops, some have closed them all

We couldn’t find an official count of how many mainland restaurant brands have come to Hong Kong. Figures in the press range from 20 in January 2024 (Sing Tao Headline) to more than 60 in July 2025 (Winshang). The periods covered and the ways of counting differ, so the numbers shouldn’t be compared directly.

Some brands are still expanding. Chagee went from 15 shops in Hong Kong in early 2026 to 22 in August 2026, and expects to reach 24 by the end of 2026. Luckin Coffee has more than 50 shops in Hong Kong (Sing Tao Headline, August 2026). Yujian Xiaomian (遇見小麵) opened its first Hong Kong shop in May 2024, had 18 within two years, and expects to open about 15 more in 2026 (HK01, July 2026).

Others have already left. According to a Sing Tao Headline round-up in October 2026, Ningji (檸季) opened 10 shops in Hong Kong in one go in 2024, and its last one closed in June 2026. At its peak, fufuland had 11 shops; its last one shut in July 2026, and the brand closed down entirely. Mixue had about 9 shops in its first year. By October 2026, 6 had closed, leaving 3 (a report in the same paper in August 2026 put the number left at 5).

Looking at why these brands left, CUHK economist Terence Chong (莊太量) pointed to Hong Kong’s high rents and wages (Sing Tao Headline). Local restaurants have to carry both of these costs too. There’s no getting around them.

Before you cut prices, work out how much more you’d need to sell

The Hong Kong market itself hasn’t grown. Provisional estimates from the Census and Statistics Department put the total receipts of Hong Kong’s restaurants in 2025 at about HK$109.6 billion, up just 0.2% in value, and down 0.9% once price changes are taken out.

Local restaurants’ costs aren’t low either. Chan Ka-wah (陳嘉華), president of 香港餐飲行業協會, a Hong Kong catering trade body, says hiring a dishwasher in Hong Kong now costs more than HK$20,000 a month. Economics and finance scholar Lee Siu-po (李兆波) sees price wars as costly. He estimates that Cantonese restaurants (酒樓) are operating at a loss, and worries they can’t keep it up for long (Sing Tao Headline).

Before you cut prices, do a quick sum. The extra share you need to sell after a price cut equals the size of the cut divided by (your gross margin minus the cut). Gross margin is the selling price minus the cost of ingredients, divided by the selling price. Say your gross margin is 60% and you cut prices by 20%: that’s 20 divided by 40, so you need to sell 50% more just to earn back your original gross profit. Rent and wages aren’t even counted yet.

Then divide your monthly rent by the gross profit on each item, and you’ll know how many you need to sell each month just to pay the rent. The 21,000 cups at CTMA Centre were worked out from the selling price. Take out the cost of ingredients and the number of cups only goes up.

Mr Chau, owner of 萬波, a Taiwanese-style tea shop that has been open in Lo Tak Court, Tsuen Wan, for 6 years, doesn’t believe in cutting prices. He thinks Hong Kong’s costs are too high to make money from a price war, or to hold out for long. He would rather put his energy into quality, refreshing the menu regularly, and treating customers as friends (HK01).

Some local shops have chosen to adjust their prices. In the same report, Mr Chan of 花羡沐嵐, another tea shop, said business was 20–30% below its peak. About six months before the report, the shop launched half-price offers, and it planned limited-time specials including a HK$9 lemonade. Specials made up about 30% of its business. Even so, he believes that in the long run it comes down to quality (HK01). Food group The Food Story launched set menus of about HK$600–800 at its sukiyaki restaurant, where a meal runs about HK$1,000 per person, and opened lower-priced udon and oyakodon shops (HK01).

To be honest, no approach is guaranteed to win. But we have three that give customers a reason to choose you before they ever compare prices.

1. Sum up your brand positioning in one sentence

Try finishing this sentence: “Customers come to us because ___.” If the answer is “we’re cheap”, you’ll be compared with every shop that’s cheaper. If the answer is a soup base, a way of cooking or a piece of the shop’s history, a rival can’t copy it in a hurry.

Once you’ve written it, test it. Swap in the name of the shop next door. If the sentence still works, rewrite it. Any shop can say “delicious food, attentive service”. “Our soup base simmers for a full eight hours every day” or “three generations, one sauce recipe” are reasons a rival will struggle to copy. Sing Tao Headline noted that some local ramen shops with queues outside each win customers with their own distinctive soup base, at HK$100 or more a bowl.

In the same report, Chan Ka-wah suggested the trade learn from mainland brands’ standardised operations and data management, while holding on to Hong Kong-style wok hei and human warmth. Human warmth can’t be written into an operations manual, which is exactly why rivals find it hard to copy. Your shop needs a reason like that too.

Lin Heung Tea House (蓮香樓), a teahouse with a century of history, is another example. In summer 2026 it opened a 24-hour branch at the airport’s Terminal 1, its 4th shop. Wong Chi-yin (王智賢), its director of design and marketing, said the branch puts the culture of a century-old teahouse first, all four shops charge the same prices across the city, and it is in no hurry to expand for now (Wen Wei Po). The airport shop doesn’t have its own price list. Whichever branch customers walk into, they find the same Lin Heung Tea House.

Once your positioning is written, put that sentence where customers can see it: the first line of the menu, a sign at the door, the tone of every post on your social accounts. Sing Tao Headline reported that after a new generation took over a sugarcane juice shop in Central, they turned its signature sugarcane juice and Hong Kong-style herbal tea into premium products and opened social media accounts to promote them. Tourists started coming, and the shop was even recommended by the Hong Kong Tourism Board.

2. Turn service and experience into details customers remember

Mainland brands care about service too. Speaking in 2024, Chan Wai-kwan (陳慧君), Hong Kong general manager of Muwu BBQ (木屋燒烤), said its Hong Kong shops hand out snacks to customers waiting for a table and don’t limit dining time (HK01). With rivals doing the same, your service has to be specific enough that customers can put it into words.

Picture a regular sitting down, and the staff already remember they like it less sweet with less ice. Or a new customer on their first visit, and when the staff recommend the signature dish, they add a line about how it’s made. Details like these don’t need a price cut, but they may become the line a customer uses when telling friends about you.

Start by listing three details only your shop has, such as a sauce, a way of cooking, or a “code word” only regulars know. Make sure every member of staff can talk about them, and build them into a new hire’s first day of training.

Experience can open up new income, too. Wan Chai steakhouse Forkers turned its focus to corporate clients. It co-hosted a wine dinner with Penfolds and offers HK$10,000–20,000 event packages for teams of 30, with 6 bookings already. The report also noted it still made a loss in 2025 (South China Morning Post via The Star).

3. Put down roots in the community and let regulars carry the business

Lady 13 Kitchen opened its Tsim Sha Tsui branch in 2024, and business was slow at first. When a diner told owner Tina Lam there was a mosque nearby, she added halal, vegetarian and keto options, which the report said widened her customer base (South China Morning Post via The Star).

Community can also start with events. Social Goods, a bakery café that opened in Central on 1 January 2026, is known for its HK$18 egg tart, the “Eggie”, and runs yoga classes and vinyl record events to bring people in. The owner says they expected to break even in three months, and got there in three days (South China Morning Post via The Star).

Chains can take a regulars programme further. According to the same report, Tam Jai launched a mobile app and member offers, and added new dishes across breakfast, lunch, afternoon tea and dinner. After it revamped its membership programme, members’ share of total sales rose from just over 20% to more than half, and dinner business went up by 10%. Member offers are a discount too. The difference is that this one is kept for customers who come back.

If your sauce comes from a long-standing shop in the same district, or a dish follows the way it’s made in the owner’s hometown, put that on your menu and in your posts, so customers nearby know how you’re connected to the neighbourhood. For why regulars are worth more investment than one-off traffic, read The Traffic Game: Traffic Keeps Getting Pricier. Only Customers Who Remember You Are Yours.

To get more diners talking about you, you can use our influencer matching platform to invite influencers whose style suits yours to come and try your food. Influencers apply, and you decide who to approve (platform features). To see how it works, take a look at our restaurant marketing plans.

Let customers know you before they walk in

However good your soup base, and however well your staff remember regulars’ orders, customers who don’t know you won’t make the trip. The Food Story’s approach is worth a look: it focuses on local customers on weekdays and tourists at weekends, and promotes itself on Xiaohongshu, Dianping and WeChat (HK01). Who your customers are, and which platforms they use, decide where you tell your story.

What you say has to stay consistent, too. If your menu promises “a soup base three generations in the making”, your posts shouldn’t be just specials, day after day. The same positioning should come through in every post.

Writing your positioning is one thing. The hard part is living up to it every day, in every post. Try.Eat! Social offers brand social media management. From brand positioning, voice and visuals to monthly content and results, we plan the whole social strategy for F&B, lifestyle and beauty brands, and carry it out ourselves. You approve every post first. Take a look at the brands we’ve worked with.

FAQ

Budget mainland chains are coming to Hong Kong. Should local restaurants cut prices too?

Not necessarily. Local shops pay high rents and wages, so cutting prices comes at a cost. In the reports, some owners ran half-price deals and limited-time specials, while others don’t believe in cutting prices and rely on quality and regulars. Work out why customers choose you first, then decide on price.

What is brand positioning? Does a small shop need it too?

Yes. Brand positioning means saying in one sentence why customers come to you. A small shop has limited resources, so a clear reason for customers to remember it matters all the more. Take the local ramen shops mentioned above: each relies on its own distinctive soup base, and still draws queues at HK$100 or more a bowl (Sing Tao Headline).

Where should a small restaurant start with its brand management strategy?

Start with one sentence of positioning. Write down why customers come to you, then make sure your menu, your staff’s recommendations and your social posts all say the same thing. Brand strategy doesn’t have to be complicated, but you have to deliver on it every day.

How many mainland restaurant brands are in Hong Kong now?

There’s no official figure yet. Counts in the press range from 20 (January 2024, Sing Tao Headline) and 42 brands with 106 shops (mid-2023 to early July 2024, cnyes) to more than 60 (July 2025, Winshang). The periods covered and the ways of counting differ, so they shouldn’t be compared directly.

Want customers to have a reason beyond price to choose your brand? Talk to us.

Cover photo: FHSING MAgasdk / Wikimedia Commons (CC0)