Text | BrandPrism, Author | Feng Ye, Editor | Tian Tian

NextFin News -- In 2023, Mixue Ice Cream & Tea officially launched its entry into Japan, anchoring its first flagship store in Tokyo’s upscale Omotesando shopping district.

At the time, Mixue was riding high on a wave of aggressive expansion across Southeast Asia, chalking up one victory after another. But the discount giant had bigger ambitions: it was setting its sights on Japan’s deep-pocketed consumers. According to reporting by Nikkei, Mixue entered the country boasting a grand strategic blueprint to open 1,000 stores nationwide by 2028.

Three years later, that ambitious vision has imploded. Today, Mixue operates just four remaining locations across Japan, leaving its original master plan in tatters.

Mixue is hardly alone in its stumbles. Across the cross-border beverage industry, Japan’s retail ecosystem is notorious for brutal friction. As early as 2021, high-end competitor Nayuki’s Tea launched a high-profile entry into Japan, only to quietly close its doors a year later. Heytea spent years laying the groundwork before finally opening its inaugural store in 2025—yet by late April 2026, storefront listings confirmed the location had permanently shut down.

The hyper-efficient playbook that propelled China’s bubble tea brands to domestic dominance has run straight into a brick wall in Japan. In a mature market like this, sheer speed and aggressive scaling offer no guarantee of survival.

The Downfall of Low-Cost Magic

In China, two-yuan soft-serve cones and four-yuan fresh lemonades are Mixue’s ultimate customer magnet. In Japan, however, those signature loss-leaders completely lost their pull.

"Soft-serve ice cream and lemonade are already heavily saturated, commoditized products in Japan," explained Kodaka, founder of Japanese food and beverage consultancy Uhri Inc., in an interview with Brand Prism.

Japanese convenience store giant MINISTOP rolled out fresh soft-serve ice cream decades ago. Backed by an omnipresent franchise network, MINISTOP long ago became the go-to spot for ice cream buyers, even morphing into a popular culinary stop for Chinese tourists.

Fresh lemonade faced the exact same barrier. With convenience stores and vending machines occupying virtually every street corner in Japan, cheap bottled lemon drinks are always within arm's reach. "Consumers simply don't have a strong demand for freshly squeezed lemonade," Kodaka noted. "Mixue lacked a clear anchor product capable of pulling people through the door."

Mixue also failed to tailor its product design to local daily habits.

Kodaka observed that Japanese consumers overwhelmingly prefer lighter, smaller portion sizes. "Most drinks sold in Japan come in compact sizes. Mixue’s menu starts at 500 milliliters, which local buyers genuinely find too massive to finish."

Mixue’s Japanese stores currently offer three sizing options: 420ml, 505ml, and 660ml. Except for sundaes, most liquid drinks default to a minimum of 505ml. By contrast, Taiwan-founded Gong Cha—which boasts over 200 locations across Japan—offers a small size of just 290ml, catering directly to local habits of low-burden, portion-controlled drinking.

Bingkuai, a Chinese student living in Japan, highlighted an easily overlooked detail about local street culture. Public trash cans are notoriously rare on Japanese streets, enforced by strict municipal waste-sorting laws. Carrying around a half-empty 600ml cup is a hassle, and throwing it away on the go is nearly impossible. "You can’t just stand outside the shop and chug a giant cup," Bingkuai laughed. "And if I take it home, I have to thoroughly wash the plastic cup before I can even recycle it."

These subtle friction points add up, imposing a real hidden cost on the consumer.

Yet beyond product design, the real obstacle crushing Mixue is Japan's vastly different cost structure.

In China, two-yuan ice cream and four-yuan lemonade translate to 180 yen (about $1.15) and 280 yen (about $1.80) in Japan. Meanwhile, McDonald’s Japan sells its soft-serve cone for just 140 yen ($0.90).

This price flip lays bare the unavoidable costs of operating overseas.

On the supply side, local Japanese ingredients carry premium price tags, while shipping raw materials from China adds heavy logistics, cold-chain, and customs overhead. On the store side, rent, build-outs, and labor costs run far higher than in domestic China.

When Mixue officially opened Japanese franchise applications in March 2025, corporate disclosures recommended a recommended budget of roughly 30 million yen (about $195,000) per location—nearly four times the capital required for a store in China. Lease-related deposits alone accounted for 10 million yen, taking up a third of the total budget.

Kodaka noted that commercial real estate in Japan comes with unique cultural quirks. "Beyond standard rent and agent fees, tenants must put down a security deposit equal to six months’ rent to guarantee a three-to-five-year lease. On top of that, you have to pay the landlord a non-refundable key-money fee equal to two or three months' rent just to say thanks for leasing you the space."

These massive upfront costs severely throttled new store openings.

Hit by all these compounding pressures, the growth flywheel that built Mixue in China—low prices driving rapid franchising, which in turn unlocks massive supply chain scale—completely ground to a halt in Japan.

Why China's Tea Giants Keep Hitting a Wall

Mixue’s troubles are part of a broader trend. Years earlier, premium pioneers Nayuki and Heytea launched flagship stores in prime commercial districts like Osaka’s Dotonbori. Yet, once the initial hype faded, neither managed to secure a long-term foothold.

In Kodaka's view, this stems from the fact that Chinese and Japanese consumers have spent the past decade on completely different tracks.

In China, modern tea culture evolved through rapid iteration. Before 2015, bubble tea was broadly viewed as cheap powder mixed with water. The rise of Nayuki, Heytea, and LeLeCha sparked nationwide queues and drew in waves of venture capital, pushing the industry forward at breakneck speed. From cheese foam and fresh fruit teas to light milk teas and specialized botanical infusions, Chinese consumers were trained to constantly crave the next big flavor.

Japan’s retail market, by contrast, moves at a much slower beat. Around 2019, a major "tapioca boom" swept the country, generating massive lines outside Gong Cha and The Alley. But unlike in China, this craze never translated into a permanent shift toward complex fruit teas or botanical brews; it stayed stuck on traditional milk tea.

"For Japanese consumers, the product iterations of Chinese tea brands move far too fast," Kodaka observed. "Chinese brands are pushing next-generation drinks before local consumers have even wrapped their heads around the previous wave."

At the same time, Japanese consumers already rely on an established, deeply ingrained daily drink routine.

Data from the International Coffee Organization (ICO) confirms that Japan remains one of Asia’s largest coffee markets. Convenience store espresso counters, street vending machines, and coffee chains already cover commuting, office, and leisure needs seamlessly.

"In Japan, a tea brand's real rival isn't another tea shop—it’s coffee," Kodaka emphasized. To the average Japanese consumer, trendy bubble tea is an occasional indulgence rather than a daily habit. That explains why Chinese brands can draw long queues on opening day, yet struggle to build a stable base of repeat buyers.

In his book The Fourth Consumer Society, Japanese sociologist Atsushi Miura observed that mature consumer societies naturally move away from chasing constant novelty. Instead, consumers prefer established products that deliver steady, reliable value, shifting their mindset from acquiring more stuff to enjoying consistent utility.

Japan’s convenience store coffee and street vending machines have thrived for decades not through hype, but by delivering effortless certainty. Conversely, Chinese tea brands rely heavily on aggressive marketing, limited-edition drops, and constant buzz.

Where Japanese consumers crave familiarity and reliability, China's new tea brands may suffer from being simply too "new."

Is There Still a Way In?

That said, Japan isn't a total dead end for foreign tea brands.

Traditional Taiwanese bubble tea chains like CoCo Fresh Tea & Juice, The Alley, and KOI Thé entered Japan between 2015 and 2018. While keeping their store footprints modest, they built sustainable footholds through small, asset-light setups.

Taiwanese titan Gong Cha stands out as the real success story in Japan. Opening its first store in Tokyo’s Harajuku district in 2015, Gong Cha resisted the urge to aggressively blitz the market. Instead, it relied on corporate-owned stores to lock down standardized operations, gradually building genuine consumer appreciation for prepared teas.

Gong Cha’s playbook offers a clear lesson for newcomers: deep localization combined with disciplined brand building. The chain tuned down its sweetness levels for lighter Japanese palates, put pure tea options front and center, and introduced smaller cup sizes. Store-wise, Gong Cha balanced quick-grab windows with spacious, Starbucks-style sit-down lounges, giving young customers a place to hang out while elevating its brand image.

For Chinese beverage brands expanding into Japan, the biggest takeaway is learning to accept slow, steady growth.

Over the past decade, China's top tea players expanded effortlessly across domestic and Southeast Asian markets by relying on fast store rollouts, low prices, and massive supply chain efficiency. But Japan doesn't reward players who try to win on expansion speed alone.

The Japanese market offers neither demographic booms nor easy land-grab opportunities, and local consumers hold products, service, and brand identity to exacting standards.

Kodaka notes that Japanese commercial culture inherently dislikes short-term hype, favoring businesses that plan for stable, five-to-ten-year horizons. "In major Japanese commercial complexes, retail concepts often take three to five years just to break even on their initial investment—a timeline many Chinese entrepreneurs find hard to accept."

However, once a brand builds genuine trust in Japan, it gains access to remarkably long lifecycles and loyal customer retention.

China’s tea innovators may still conquer Japanese consumers down the road. But doing so will mean shelving the narrative of high-speed expansion, choosing instead to blend in, adapt to local habits, and build a lasting presence step by painstaking step.

(At the interviewee’s request, “Ice Cube” is a pseudonym.)