
Battle of the Brew: Chagee & Starbucks’s Competition for Attention in the Malaysian Market
In a previous article, we discussed the rise of tea chains in Malaysia. So, why not look further on the difference between the BIGGEST coffee chain in Malaysia, Starbucks, and a new tea chain from Taiwan making its mark on the Malaysian market, Chagee.
It’s like David and Goliath. But who could’ve seen that this tea chain could go up against the GIANT that is Starbucks? However, each brand brings its own unique flair to the market, appealing to different segments of the population. This article explores how these two giants compete for dominance in Malaysia, examining their market strategies, customer preferences, and overall impact on the local coffee culture.
Think you got what it takes to take on the GIANT in your industry?
Market Presence and Expansion

Starbucks: Since opening its first store in Malaysia in 1998, Starbucks has firmly established itself as a leading coffee brand. With over 300 locations across the country, Starbucks has become synonymous with high-quality coffee and a consistent café experience. The brand’s extensive reach and substantial investment in store ambiance, technology, and customer loyalty programs have solidified its position as a major player in the Malaysian market.
Chagee: Chagee, a newer entrant to the Malaysian market, has quickly made a name for itself with its innovative blend of tea and coffee. Although it doesn’t have the same extensive network as Starbucks, Chagee’s strategic locations and growing presence are capturing attention. By focusing on unique flavor profiles and a fusion of traditional tea culture with modern coffee trends, Chagee is carving out a niche that resonates with local tastes.
Product Offerings and Innovation

Starbucks: Starbucks offers a broad range of beverages, including its signature espresso drinks, brewed coffee, teas, and an assortment of pastries and snacks. The brand’s emphasis on customization—allowing customers to tailor their drinks with various syrups, milk alternatives, and toppings—enhances its appeal. Seasonal promotions, such as the Pumpkin Spice Latte and festive holiday beverages, keep the menu dynamic and engaging for consumers.
Chagee: Chagee differentiates itself with a menu that marries traditional tea with modern coffee flavors. The brand’s offerings include creative combinations such as tea-infused coffee and specialty milk teas, catering to a diverse palate. Chagee’s emphasis on local ingredients and flavors, such as unique blends of local herbs and spices, provides a distinct alternative to Starbucks’ more standardized menu.
Customer Experience and Ambiance

Starbucks: Let’s face it; Starbucks is a lifestyle in Malaysia. Well, at least majorly before the BDS movement. Their outlets are known for the comfortable and inviting environment, designed to be a “third place” where people can relax, work, or socialize. The brand’s consistent store design, free Wi-Fi, and the availability of comfortable seating contribute to a positive customer experience. Additionally, the Starbucks Rewards program and mobile app offer convenience and personalized perks, enhancing customer loyalty.
Chagee: But Chagee is not far behind when it comes to establishing the atmosphere. Chagee’s approach to customer experience focuses on creating a relaxed and enjoyable atmosphere that reflects its cultural roots. The store designs often incorporate elements of traditional tea houses with a modern twist, providing a unique and cozy setting. Chagee’s emphasis on friendly service and a personalized touch resonates with customers seeking a more intimate and localized experience.
Marketing and Brand Positioning

Starbucks: Starbucks’ marketing strategy in Malaysia leverages its global brand recognition while adapting to local tastes. The company frequently engages in community-driven campaigns and partnerships, aligning its brand with social causes and cultural events. Starbucks’ strong social media presence and digital marketing efforts also play a crucial role in maintaining its position as a market leader.
Chagee: Chagee’s marketing strategy centers on highlighting its unique blend of tea and coffee, with a focus on local culture and flavor innovation. The brand utilizes social media and influencer partnerships to build buzz and connect with younger, trend-savvy consumers. Chagee’s localized marketing efforts, including collaborations with local artists and participation in community events, help it resonate with its target audience.
Competitive Dynamics and Market Trends

The competition between Chagee and Starbucks in Malaysia is indicative of broader trends in the coffee and tea industry. Consumers are increasingly seeking diverse and personalized beverage options, leading to a growing demand for innovative brands like Chagee. At the same time, established players like Starbucks continue to attract loyal customers with their consistency and extensive product range.
Chagee’s emphasis on blending traditional tea culture with modern coffee trends positions it as a fresh alternative in a market dominated by established brands. Starbucks, with its strong market presence and brand loyalty, remains a formidable competitor but faces the challenge of staying relevant amidst changing consumer preferences.
Final Thoughts
The competition between Chagee and Starbucks in Malaysia highlights the dynamic nature of the coffee and tea market. While Starbucks capitalizes on its global brand strength and extensive reach, Chagee differentiates itself through its unique product offerings and localized approach. As both brands continue to innovate and adapt to consumer preferences, the Malaysian market remains a fertile ground for exploring new trends and flavors in the world of coffee and tea.
Want to be a trendsetter and create your own cultural shift with your brand? Let’s talk. Preferably over at your nearest Chagee outlet.