It has long been held true by many that China businesses suffered because few brands were known in Western markets. BYD, Haier, Huawei and Xiaomi were among the first mid- to upper-end China brands to get recognition in global markets. They were followed by a myriad of smaller and sometimes niche brands.
Consider the humble cup of coffee or increasingly resurgent tea. Luckin Coffee is China’s largest coffee chain with 22,000 stores and US$4.7 billion ($6.1 billion) revenue in 2024. That’s an impressive 8% y-o-y increase. It is now expanding to Malaysia with a store in Sunway Pyramid, and to the US with its first store in New York. Cotti Coffee, founded in 2022, has more than 14,000 stores across 28 countries.
Heytea was a bubble tea pioneer with more than 4,000 stores worldwide and is eyeing the US as a larger market than China. Chagee, Coco Fresh Tea & Juice, Molly Tea and Auntea Jenny are all expanding bubble tea chains with tens of thousands of outlets globally.
Some might sneer at Pop Mart as an ephemeral business, but the billion-dollar blind-box toy brand has over 400 stores and 2,000 vending machines worldwide. Labubu dolls have been boosted to global fame using social media marketing via celebrity endorsements to drive a resale craze.
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Often seen as a poor cousin to the growth of online Chinese commerce, the physical footprint of Chinese brands has quietly expanded.
Miniso is a Guangzhou-founded retailer with 7,500 global stores, including 50 in Malaysia. Somewhat in the style of the old-fashioned departmental store, their modern outlets offer a blend of toys, beauty, electronics, snacks and home goods. This delivered US$2.3 billion of revenue in 2024 for an y-o-y increase of 22.8%. Miniso has iconic flagship stores in New York, Paris, London, Tokyo, and Melbourne.
Once content to be the global factory producing high-end branded clothes for European customers, China has turned the tables. The same production and design techniques are being used to develop China brands that feed an accelerated fashion cycle. Although not everyone is comfortable with this fast-fashion turnover, it represents an approach to the market that is difficult to match.
See also: The inescapable face of China
Fast-fashion retailer Urban Revivo has been dubbed “China’s Zara”. With US$961 million of sales and 400 stores in China, it has started to expand abroad with 19 stores to date. It is stepping into established Western markets, opening a New York Soho store in early 2025 and adding hundreds of new styles weekly.
These developments take China’s global brand expansion beyond the confines of the well-known e-commerce names like Shein and Temu.
China competition in your home market is no longer limited and just about price. It is about branding, the premium pricing that branding can bring and occupying market niches that were once considered safe from foreign competition.
Technical outlook for the Shanghai market
There are four important features to watch with the Shanghai Index now that the market has reopened after the Golden Week holiday.
The most immediate is the temporary resistance level B that formed near 3,888. It has been in place since the end of August and hangs in mid-air in the sense that it is not related to any previous historical resistance level.
A breakout above this level is bullish, and it’s the second important line that helps set the upside target near 4,050.
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The second feature is the long-term uptrend line A. In January to April 2025, this line acted as a support feature for the rising trend line. Although the market collapsed below this line, we kept it on the chart as a potential future resistance level. Turns out, it did not provide much resistance, but it has acted as a new support feature since August.
Up-sloping trend lines and horizontal resistance lines combine to create an up-sloping triangle pattern. The base of this pattern was formed over four trading days. The trend line has been successfully tested several times, so this is a valid pattern.
Projecting the value of the base of the triangle upwards above the resistance line gives the target of around 4,050.
The third feature is trendline C. This line defines the market rise starting from June 2025. It has a sharper slope than the long-term trend line A. Traders will look for this line to provide support for a rally breakout above resistance near 3,888. A confirmed bullish breakout will use this as a support feature for the move towards 4,050.
The final feature is the character of the long-term group of moving averages in the Guppy Multiple Moving Average (GMMA) indicator. They are widely separated. The upper edges are around the same value as trend line A, suggesting that this is a confirmation of longer-term trend strength. Any pullback below trend line C or A has additional support in the wide separation of the long-term GMMA.
These features help confirm a bullish outlook for the Shanghai Index.
Daryl Guppy is an international financial technical analysis expert. He has provided weekly Shanghai Index analysis for mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”. He is a former national board member of the Australia-China Business Council. The writer owns China stock and index ETFs
