Chinese firms target Brazil as it becomes a magnet for expansion

Chinese companies – from sectors as diverse as bubble tea, budget retail and cars – are expanding their presence in Brazil, with analysts saying the robust trade ties between China and Latin America’s biggest economy could help pave the way for further investment.

Mixue Group, known for its affordable ice cream and beverages, opened its first Brazil outlet on Saturday, drawing large crowds in Sao Paulo, the country’s largest city. The opening marked its third store in the Americas after launching shops in Los Angeles and Mexico City.

The Chinese budget bubble tea chain said a second store in Brazil was in the works and would open soon. Around 20 products were available in the Sao Paulo store at opening, with ice cream priced at roughly 4 yuan (US$0.60) and lemonade at 7.8 yuan. It also introduced an acai-berry flavoured ice cream to cater to local tastes.

“China’s consumer names are performing well in Brazil, mainly driven by their ability to offer attractive pricing and execute effective localisation strategies,” said Sandy Lim, a China consumer analyst at S&P Global Ratings. “We believe Mixue’s core strengths in China – its low-price offerings and strong sourcing and supply chain management – are likely to form its key playbook in Brazil as well.”

The country of about 210 million people has a large young consumer base. Its ready-to-drink beverage market was growing at a solid pace, providing enough room for Mixue’s growth in the country, the retailer said.