In the past two years, whenever brand owners talk about going overseas, nine out of ten will say: "Southeast Asia has huge opportunities—should we give it a try?" But those who have actually done it know that Southeast Asia is not the Southeast Asia you see on social media. It's not as simple as "opening a Shopee store" or "finding a distributor"; nor is it "randomly stocking a few 7-Elevens" to achieve nationwide sales. You will find: Walking down the streets of Jakarta, warungs are denser than convenience stores; in Ho Chi Minh City, the power of wet markets far exceeds e-commerce; in Manila, the biggest sales driver is not supermarkets, but the small stall at the street corner that allows credit. Many Chinese brands fail not because their products are bad, but because their understanding of this market was wrong from the start. This article aims to help you do one thing: Re-explain the Southeast Asian FMCG market. Clarify its channel structure, country differences, and the six key questions that Chinese brands must think through before going overseas. If you are planning to go to Southeast Asia, or are hesitating about taking this step, we hope this article helps you avoid a few pitfalls and detours.
Channel Structure of the Southeast Asian FMCG Market To understand the market opportunities in a region, we must first look at the local retail market structure. To understand the Southeast Asian FMCG market, the first thing is not to stare at Shopee or TikTok, but to acknowledge a reality: Offline is still the absolute main stage. Among offline channels, traditional trade is the most important. Completely different from China's current structure where online and offline are roughly half each, in most Southeast Asian countries, 80–90% of FMCG business is still completed offline. In Indonesia, you feel surrounded by offline channels—streets are packed with warungs (mom-and-pop shops), stalls, and small kiosks; almost every 100 meters you can buy a drink or a snack. In Vietnam, wet markets and mom-and-pop shops remain the core entry point for daily household purchases—buying vegetables, condiments, and daily necessities in one stop. In the Philippines, supermarkets often refer to sari-sari shops (sundry stores), not even chain convenience stores, but many communities rely on these small shops for daily life.
Ba Chieu Market, Ho Chi Minh City
For Chinese brands, this means two things are very clear. No matter how familiar you are with e-commerce tactics, you cannot skip offline; going overseas is definitely not just about doing Shopee and TikTok. Online can bring incremental growth and efficiency, but if you don't have the ability to distribute your products into thousands of small shops, stalls, and wet markets, it's hard to truly establish a foothold. Second, no matter how much you want to scale quickly, you cannot expect one or two key accounts (KAs) to cover the entire national market. A single hypermarket or convenience store chain cannot cover such a dispersed population; no matter how strong modern trade is, it is only part of the overall pie, not the whole. Let's further break down offline channels, and we see two completely different logics: traditional trade and modern trade.
1. Traditional Trade, also known as General Trade or Traditional Trade in Southeast Asia The formats are mainly warungs, sari-sari shops, stalls, and wet markets. The basic operating logic relies on personal relationships, familiar credit, phone/WhatsApp orders, and frequent small-batch replenishment. It is closest to consumers and closest to cash.
2. Modern Trade, also known as Modern Trade or MT in Southeast Asia The formats are mainly hypermarkets, supermarkets, convenience stores, membership stores, and drugstores. Like in China, negotiations are highly centralized, with unified purchasing centers and contract systems, and standardized, systematic operations.
So in most Southeast Asian countries, you see a very typical structure: In terms of sales volume, traditional trade is still the main force. The real bulk movement of goods happens in those unassuming small shops and stalls. But modern trade and online are rapidly rising. High-ticket items, high margins, new product education, and brand exposure happen more in malls, convenience stores, and online channels. This also explains an interesting phenomenon: Why do multinational giants entering Southeast Asia prefer to invest first in modern trade and e-commerce? Because that's where brand power is most easily amplified and seen, suitable for storytelling and upgrading. But why can local brands stick to the traditional trade base? Because it emphasizes relationships and business conventions. In countless small shops, night stalls, and wet markets, local brands lock in consumers' daily choices with price, familiarity, and personal connections. So for Chinese brands, a common misjudgment is to only see the face of modern trade while ignoring the substance of traditional trade.
Don't Treat Southeast Asia as a Single Country Many Chinese brands make a mistake in their first step into Southeast Asia: they treat Southeast Asia as one country. But the real Southeast Asia is a highly complex region with completely different development stages. Without sufficient understanding of the market, roughly applying one strategy to all will inevitably lead to hasty heavy investment and then a dim exit. Overall, the Southeast Asian market can be divided into four tiers.
First tier: Large population base and heavy traditional trade—typical countries: Indonesia, Vietnam, and the Philippines Second tier: Medium size but mature modern trade—typical countries: Thailand and Malaysia Third tier: High income, small size, and highly modernized—Singapore Fourth tier: Spillover markets—such as Cambodia, Laos, and Myanmar
First Tier: Indonesia, Vietnam, and the Philippines—markets with large populations, high growth, and deep traditional trade roots. These markets determine whether Chinese FMCG brands can grow big and strong in Southeast Asia. They share three common characteristics: (1) large and young populations; (2) traditional trade dominance; (3) modern trade and online are rapidly rising but penetration is still low. These are markets that brands must enter to achieve scale.
First, Indonesia is the most important market in Southeast Asia. With a population of 280 million and active growth, it is an absolute consumer powerhouse. However, the archipelagic structure leads to high logistics costs and difficult coverage. Countless warungs (mom-and-pop shops) form the infrastructure of consumer life. The consumption characteristics of warungs are simple: small packaging, high frequency, low transaction value, and cash transactions. Chinese brands often fall into two traps in Indonesia: First, underestimating the complexity of Halal certification. Without Halal certification, you basically cannot enter mainstream channels, modern retail, or even some online platforms. Second, underestimating the cost and difficulty of the last mile. Indonesia's logistics and geography determine that if you want to move volume, you cannot rely only on e-commerce or KAs; you must deeply embed in traditional trade. So Indonesia is a typical "patient market"; brands that persist with localization and multi-tier distribution systems will become winners.
Next, Vietnam has a large traditional trade base, but modern and e-commerce growth is also the fiercest. Vietnam is one of the fastest-growing FMCG markets in Southeast Asia, with very distinct characteristics. Traditional mom-and-pop shops have a high share, but modern retail is growing at an astonishing rate, e-commerce is growing even faster, and urban youth love trying new things. Brand competition has entered a three-dimensional involution: category, channel, and promotion. Vietnamese consumers are very friendly to new products, especially young white-collar workers. But the difficulty in Vietnam is that brand pull must be strong enough; otherwise, you can easily be squeezed out. It is the Southeast Asian country most like China's early FMCG market. Whoever keeps investing, promoting, and launching new products wins. Of course, overall brand investment costs in Vietnam are much lower than in today's China.
Finally, the Philippines has a simple but very effective structure. First, many young people with high consumption willingness; Second, rapid urbanization and extremely high e-commerce growth; Third, the core offline touchpoint is the sari-sari shop (sundry store). What is the Philippine sari-sari? You can think of it as our mom-and-pop shop, but it is also a social center for Filipinos and a place where household shopping can be done on credit. This means Filipino consumers are extremely price-sensitive but have some loyalty to established brands (because of familiarity, trust, and easy settlement). So if you want to do business in the Philippines, you must master small packaging, small sizes, and low transaction values.
Second Tier: Thailand and Malaysia—mature modern trade, a testing ground for Chinese brands to build a Southeast Asian brand. The characteristics of this market are: (1) high urbanization; (2) large modern trade share; (3) strong consumption power, especially in Thailand where consumers are willing to spend ahead of income; (4) relatively intense category competition and more discerning consumers. Thailand's most distinctive label is convenience stores. The density of 7-Eleven is astonishing, and hypermarkets, supermarkets, and mini-supermarkets are highly developed. It has a textbook modern retail system in Southeast Asia, and Thai shelves are where brands from all over the world compete. So for the Thai market, the question is not how to sell goods, but: Is your packaging eye-catching enough? Is your flavor unique enough? Can your shelf performance stand alongside global giants? Thailand is the ultimate test of product design, brand power, and channel capability. If you can establish a foothold in Thailand, your chances of succeeding in other Southeast Asian markets increase. Malaysia's consumption power is in the first tier of Southeast Asia, with the highest per capita disposable income and a high proportion of middle class. Its market structure is characterized by strong urbanization, mature modern retail (Lotus's, Aeon, Giant, etc.), multi-ethnic culture (Malay, Chinese, Indian), strong household consumption, and high demand for maternal and child care and personal care. Due to the high proportion of ethnic Chinese, Malaysian consumers have a higher acceptance of Chinese brands. However, to fully capture the Malaysian market, Halal certification is still the entry ticket. Many Chinese brands mistakenly think they can list first and then slowly add Halal. Without Halal, you don't even have the right to sell. Malaysia is a market very suitable for long-term brand building and is also suitable as the first stop for Chinese brands entering Southeast Asia.
Third Tier: Singapore—for branding and endorsement. Singapore is the most special market in Southeast Asia: small market, strong consumption power, complete modern trade, mature e-commerce, discerning consumers who value quality, and highly international. For Chinese FMCG brands, Singapore's significance is not entirely about sales volume; its core value lies in: 1. Brand endorsement and image display; 2. Headquarters economy—many multinational distributors, online platforms, and regional buyers are in Singapore; 3. Favorable tax policies.
Fourth Tier: Cambodia, Laos, and Myanmar—absorbing spillover demand. These three countries have relatively small populations, small markets, and uneven economic development. But they are geographically close to Thailand and Vietnam, and are natural extensions of their commercial systems. At the same time, they have high acceptance of Chinese brands, low competition intensity, and low marketing costs. Products that work in Thailand can easily be replicated in Cambodia. Many Thai distributors will proactively help you expand into Cambodia; it's a structure where one system covers two countries, very friendly to new brands. Vietnam's commercial system naturally radiates to Laos, and Vietnamese brands have huge influence in Laos. The same distributor system and logistics system can cover both Vietnam and Laos. Myanmar is a border trade market for China; you can enter the Myanmar FMCG market without large-scale investment.
Six Key Questions Chinese Brands Must Think Through Before Entering Southeast Asia Now more and more people are discussing going overseas to Southeast Asia, but what truly determines success or failure is never whether you do Shopee first or stock convenience stores first; Nor is it whether you go to Indonesia first or Vietnam first. What truly determines life and death is the underlying market understanding you build before entering Southeast Asia. If you are a FMCG brand preparing to go overseas, I suggest you think through these 6 questions before any action. These six questions are more important than channels, more critical than product selection, and more foundational than localization.
First: Do you want scale and a story, or structural profit? Many brands reflexively say when mentioning Southeast Asia: "Big population, fast growth, huge market—we want scale!" But you should ask yourself: In your global layout, what role does Southeast Asia play? Is it to tell a "growth story"? Or to be a "stable cash cow"? Or are you already squeezed to paper-thin profits domestically and need to find incremental growth outside? Different answers will lead you down completely different paths:
- If you want scale, you must go to Indonesia, Vietnam, and other large-population markets, enduring high logistics costs and complex distribution systems;
- If you want healthy profits, you are better suited to Malaysia, the Philippines, or auxiliary attacks on small and fast markets like Laos and Cambodia;
- If you want to become a regional brand, you must accept a 3–5 year investment cycle, not just shipping a container as "going overseas." Your positioning of Southeast Asia will directly determine your country priority, team configuration, and budget structure.
Second: Which countries? Which categories? One of the most common mistakes is when a brand says: "I want to do all of Southeast Asia." Too big, too broad, too scattered—it will definitely fail. A healthier, proven approach is: Step 1: Choose 1 main battlefield + 1 auxiliary battlefield For example: Indonesia + Vietnam, Vietnam + Thailand, or Philippines + Malaysia. You cannot do 6–10 countries well at the same time; brands don't have that many resources, and teams don't have that much energy. Step 2: Choose only 1–2 core categories per country The selection criteria can be very simple, such as demand has already been educated, but supply hasn't been squeezed to death, or your supply chain has a real advantage in this category. If you have already proven yourself domestically (e.g., as a king in a snack subcategory, a dark horse in daily chemicals, or an innovator in functional drinks), then your task in Southeast Asia is more about finding the right entry point than redoing product-market fit.
Third: Compliance certification and Halal certification This is the easiest thing for Chinese brands to underestimate in Southeast Asia. Especially in Muslim-majority countries like Indonesia and Malaysia: Without Halal certification, you can't even get through the door of supermarkets. Many bosses like to say: "Sell first, then handle the paperwork once it sells well." But formulas, auxiliary materials, and production processes all affect Halal certification results; Halal certification affects not only food but also personal care, washing products, and even packaging materials; serious importers will not represent a brand that acts first and talks later. The safest way is only one: During the product development stage, design formulas and packaging according to the strictest requirements of the target market. Find the most knowledgeable local distributor or consulting agency to help you sort out Halal, food and drug registration, label language, ingredient specifications, and tax structure. Making compliance a priority is the cheapest way to reduce overseas risks.
Fourth: Channel strategy: online as an outpost, offline as a base Almost all successful FMCG brands in Southeast Asia have followed a similar path: Step 1: Use e-commerce as an outpost—validate product direction at low cost Test on Shopee/Lazada/TikTok Shop to see which products are most popular, what price range consumers are willing to accept, and which main selling points resonate. This stage is not about making money but reducing the cost of trial and error. Step 2: Lock in 1–2 long-term importers and main distributors No matter how well e-commerce performs, you cannot bypass offline. And offline requires distributors and importers to help you start. When cooperating, focus on three things: (1) How to divide regions and channels? (2) Price system? (3) Who bears promotional costs and in what proportion? In Southeast Asia, never fantasize that one distributor can help you open all channels. A more realistic path is: you do strategic layout, they do channel execution.
Fifth: Product localization: far more than changing Chinese packaging to English Many people think localization is just changing packaging and translating into English. But true localization includes at least two levels: Level 1: Local fit of taste and functional selling points
- Southeast Asia generally prefers sweet and strong flavors, but there are huge differences between countries;
- The Philippines prefers small packaging and sweet tastes;
- Thailand likes strong aromas and heavy flavors;
- Vietnam likes health and light functionality;
- Indonesia emphasizes Halal awareness and value for money. Your selling points must be understood at a glance and loved at first taste by locals. Level 2: Specification system and usage scenarios At the same time, the specification logic differs completely by country:
- Philippines: small packaging, small bottles, and selling by piece are very important;
- Indonesia: high-frequency purchases, small amounts;
- Thailand/Malaysia: family packs and mid-to-high-end gift boxes are accepted;
- Vietnam: urban white-collar workers like combo packs and workplace scenarios. Product specifications determine whether you can enter mainstream channels and also determine replenishment frequency.
Sixth: Supply chain layout: from export to true going overseas The first stage for most Chinese brands going overseas is: Produce in China, ship by sea to local warehousing and distribution. But when scale increases, you will inevitably move to the second stage: true localized operations. For example, doing repackaging or light processing in Vietnam, Thailand, or Indonesia to reduce transportation costs and replenish faster. Or building a regional warehouse in Singapore or Malaysia to radiate to multiple countries with one warehouse, making online delivery faster, replenishment more efficient, and channel inventory more controllable. Even further, teams that view Southeast Asia as a long-term strategy will, after reaching a certain business volume, carry out local supply chain layout.
Epilogue: Looking Ahead to 2026 Who does the window of opportunity for Chinese brands going overseas to Southeast Asia truly belong to? Southeast Asia is currently experiencing multiple stages of China's past 20 years simultaneously:
- Vietnam is like China in 2010—e-commerce rising, white-collar consumption exploding
- The Philippines is like China in 2005—traditional small shops strong, small-packaging economy
- Indonesia is like China in 2008—many channel layers, high logistics costs, but huge market
- Thailand is like China's first-tier cities—intense brand competition, mature aesthetics
- Malaysia is like China's high-tier cities—high income, growing health consumption
- Singapore is like a "global stage"—a center for image display and regional resources If you go a few years earlier, market infrastructure is not yet complete; If you go a few years later, quality channels and mindshare will have been divided up by multinational and local brands. The brands that truly seize the window are not the fastest movers, but those who think most clearly.
For this reason, New Distribution will hold the "FMCG Overseas Channel Construction Forum" in March 2026. This will be a deep-dive matchmaking and methodology event designed specifically for Chinese brands going overseas—we will join forces with leading platforms, core channel partners, regional operation service providers, importers/exporters, and industry experts to systematically dissect the latest trends, channel strategies, and growth cases for Chinese brands going overseas, and build an efficient, actionable, and real-cooperation overseas business connection platform. Here, you will gain: Learn Methods: Hear frontline operational experience from core markets such as Southeast Asia, North America, Africa, the Middle East, and Latin America; Understand channel structures and RTM strategies in different countries; Master how brands build overseas organizations, supply chains, compliance, and channel pathways from 0 to 1. Promote Connections: Join the Brand × Channel × Service Provider industry exchange group on-site; meet face-to-face with 50+ overseas distributors, overseas platforms, and supply chain partners; let the people who can truly help you with distribution and implementation be seen by you all at once. Solve Problems: Face the three most painful issues for brands going overseas—How to find the right partners? How to do channels right? How to spend money where it's most effective? The forum will build a tripartite dialogue scene of Brand × Channel × Service Provider to solve cooperation difficulties in the shortest path. Welcome to join us, together with 3000+ FMCG industry partners, to gain insights into overseas markets, connect with global channels, and find the true foothold for the next stage of growth for Chinese brands!