Chinese Cuisine Brand YGF Malatang Ventures into Brazil

Consumer Staples Author: EqualOcean News Apr 23, 2024 02:21 PM (GMT+8)

“Go Global or Go Down”.A new wave of Chinese culinary expansion overseas has emerged, with an increasing number of Chinese restaurant brands stepping onto the international stage. While Southeast Asia and Europe and America remain primary territories for Chinese cuisine abroad, Latin America, the farthest from China, also eagerly anticipates the arrival of Chinese restaurant brands, longing to experience the unique charm of Chinese cuisine.


Regarding Chinese cuisine in Latin America, Chinese expatriates working and living in the region have remarked:"The Chinese food here is too expensive, outrageously so!" or "Expensive and unpalatable seems to be the norm for overseas Chinese cuisine." and "If you open a small restaurant in Mexico and make a lot of money, you could easily earn a six-figure salary!"

Moreover, in an anonymous poll on social media conducted by EqualOcean regarding the statement "Do you think Latin America is a desert for Chinese food?" as of April 11th, 67% of respondents agreed.

Indeed, when Latin America is mentioned, many people immediately think of the fiery passion of samba dancing and the colorful ethnic cultures. However, upon closer examination, one would notice the scarcity of Chinese restaurant brands in this exotic land.

Strolling through the streets of Latin America, one can find many local Chinese restaurants run by immigrant Chinese descendants. Some of these restaurants have been passed down through generations, with modest decorations that retain more elements of traditional Chinese culture. Although these restaurants bear the sign of Chinese cuisine, the taste of the food often differs from the traditional impression of Chinese cuisine. Perhaps to cater to local tastes or because the owners have lived in Latin America for so long, they have subtly incorporated exotic flavors into traditional Chinese dishes. For example, the "Chifa" restaurants spread across Peru cleverly integrate local Peruvian ingredients and seasoning methods into traditional Chinese cuisine, presenting a unique flavor.

For diners in Brazil, especially in São Paulo, if you're a loyal fan of spicy hot pot, you must have noticed the recent opening of YGF Malatang(杨国福麻辣烫) in São Paulo! Following the online trail, EqualOcean interviewed the owner of this restaurant, Mr. Yang. Through the exchange, EqualOcean deeply felt that Mr. Yang's experience in joining this restaurant in Brazil could be described as a thrilling "adventure."

During the interview with Mr. Yang, what surprised EqualOcean was that Mr. Yang had only first arrived in Brazil on November 20th of last year. Furthermore, his initial purpose for coming to Brazil was not for business expansion but to accompany his wife, who works for Shein, to this unfamiliar country. However, a twist of fate led him to discover business opportunities in this foreign land. Moreover, given Mr. Yang's prior experience managing three Cao's Duck Neck shops in China, he had rich experience in the hot pot category, which was also one of the reasons why he chose to join "YGF Malatang" in Brazil.

Another important reason is that Mr. Yang keenly observed the increasingly close relations between China and Brazil. With more and more Chinese companies investing in Brazil and establishing companies, especially choosing São Paulo, the most economically influential city in South America, this provides an extremely favorable market environment for the development of Chinese cuisine locally. To carefully plan and attract local Chinese company employees and the Chinese community, Mr. Yang thoroughly considered the location of the store. The final decision was to open the store near the Berrini area where Chinese companies are concentrated, which will also help increase the store's visibility and customer flow.


YGF Malatang Store in São Paulo, Brazil

Location: Av. Engenheiro Luís Carlos Berrini, 1113 - Itaim Bibi São Paulo, 04571-010

However, Brazil's security issues have long been criticized, becoming a pressing challenge that the local government urgently needs to address. During the process of renovating the storefront, Mr. Yang unfortunately experienced the dire impact of security issues firsthand - the store's cables were stolen by thieves. Despite taking prompt action and seeking help from the police in a timely manner, regrettably, the local police did not arrive at the scene promptly to investigate and handle the matter, ultimately leaving Mr. Yang with no choice but to accept the loss. This incident was also a significant reason for the repeated postponement of the hot pot restaurant's opening date.

In addition to security issues, Mr. Yang also mentioned the efficiency problem of Brazilian workers during the interview. He candidly admitted that the progress of renovation was extremely slow, despite the contract clearly specifying a two-month period, it ultimately dragged on for four months before completion. These difficulties made Mr. Yang deeply realize the hardships and challenges of starting a business in a foreign land. Not only does he have to face unfamiliar environments and cultural differences, but he also has to deal with various unexpected challenges. Despite this, Mr. Yang still adheres to his entrepreneurial dream. Through relentless efforts, he finally managed to open the store as scheduled in April, allowing more Chinese in Brazil to taste the flavor of "home."


During the renovation process of the storefront, the cables inside the store were stolen.

When asked if there would be any localization adjustments in taste to attract local consumers to try, Mr. Yang candidly replied, "During the trial operation period, we didn't make significant adjustments to the taste because 90% of our customers are still Chinese. The only difference is in the base broth, which will be made using the clear soup method from China."


Promotional Image for the Trial Operation of YGF Malatang in São Paulo

During the interview, Mr. Yang emphasized the challenges posed by the complexity and unpredictability of Brazilian customs. According to the management regulations of YGF Malatang headquarters, the company needs to provide franchise stores with standardized ingredients and large equipment. However, the cumbersome procedures of Brazilian customs have presented significant difficulties in importing these materials, especially the importation and clearance process of large equipment. This undoubtedly complicates the initial operation of the storefront and hinders the opening process to a certain extent.

In fact, this situation is not isolated. EqualOcean has learned that CoCo Fresh Tea & Juice(CoCo都可奶茶), which opened in Miraflores, the capital of Lima, Peru, and Guadalajara, the capital of Jalisco state in Mexico this year, has encountered similar challenges. The complexity of bureaucratic procedures and customs processes in Latin America has led to temporary shortages of raw materials and goods, resulting in repeated delays in store openings.

When Chinese restaurant brands go overseas, especially when entering the Latin American market, they must fully address the above-mentioned issues. The complexity and unpredictability of customs processes are just the tip of the iceberg, and potential issues must not be ignored. For example, the long sea freight time to Latin America (about 45-65 days) directly affects the stability of the supply chain of goods. This issue is particularly prominent in the catering industry, which has a high demand for fresh ingredients. Prolonged sea freight may not only lead to a decrease in the quality of ingredients but also result in missed sales seasons due to delays, causing a dual blow to brand image and economic benefits. Therefore, the international expansion of the catering industry requires careful planning and preparation, as well as the ability to cope with various potential risks and challenges, to ensure the steady development of brands in overseas markets.

Mr. Yang is confident in the future development prospects of Chinese restaurant brands in Latin America. He believes that the diversity of Chinese cuisine will surely find suitable chain brands for the Brazilian palate. Currently, Chinese restaurants in Brazil are mainly self-operated by overseas Chinese, and there is still a lot of room for the development of branded catering in Brazil. By leveraging the advantages of the supply chain, Chinese restaurant brands can grow and strengthen in the Brazilian and even Latin American markets.

Finally, EqualOcean wishes more Chinese restaurant brands to land in Latin America, with more "ease" and fewer "risks".