In recent years, alternative milk brands have shifted from niche to mainstream in cafés across the Asia-Pacific region. Leading the way, Oatly and Oatside have used clever café partnerships and retail strategies to stand out. Their successes offer valuable lessons for beverage brands aiming to expand in the food service sector.
Café culture in Asia-Pacific has evolved rapidly, particularly in urban hubs. Young consumers drive demand for milk-based coffee and view cafés as lifestyle destinations rather than just coffee places.
In Indonesia, affordable milk-coffee drinks have become a cultural phenomenon, with successful coffee chains leveraging emotional branding—using names and messages that evoke nostalgia, friendship, and comfort—to create strong customer connections. Combined with affordable pricing, this strategy has cemented café culture among younger consumers.
Source: Sunny Idea
When Oatly entered China in 2018, they bypassed traditional retail channels and went straight to coffee shops. They integrated deeply with local market dynamics through a strategic joint venture with China Resources Corporation.
Source: CNBC
Their café-first strategy proved particularly effective in Shanghai's thriving coffee scene, culminating in a landmark partnership with Starbucks across 4,300 locations by 2020. The brand's presence grew to 11,000 points of sale, which led to China becoming their largest Asian market.
In Hong Kong, Oatly's success was built on several key initiatives:
Source: Coco Espresso
Singapore-based Oatside has taken a different but equally effective approach by focusing on deep local market understanding and strategic partnerships.
Source: Elephant Grounds Instagram
In Hong Kong, they partnered with Elephant Grounds to create a standout brand activation, transforming the café into an immersive "zoo" centred around their signature bear mascot. The creative theme captured customer attention and catalysed significant social media engagement.
Their collaboration with Lady M demonstrated their ability to reach new audiences through an innovative oat taro drink, paired with the café's renowned purple sweet potato mille-crêpe cake. This partnership showcased how alternative milk brands could move beyond coffee to create unique, locally inspired offerings.
Source: MARKETECH APAC
The brand has demonstrated particular prowess in adapting to local preferences. Collaborating with Flash Coffee across Singapore, Thailand, and South Korea, they launched the #DareToGoVegan campaign. The initiative offered free oat milk upgrades and included fun elements like gachapon machines, which gave out prizes and connected with the local love for gaming.
Oatside's success has been amplified by its thoughtful approach to visual merchandising. At partners like Sofe Coffee, the brand's presence extends beyond the counter to create immersive branded environments. Their collaboration with Cinnabon featured bespoke store redesigns that highlighted the partnership whilst maintaining both brands' visual identities.
Source: Marketing to China
Understanding local market nuances is crucial. Tailoring strategies to align with these local insights allows brands to connect more effectively with their target audience and meet specific market demands.
Oatly recognised Shanghai's sophisticated coffee culture and chose it strategically as its entry point. Oatside tailored its products to match Asian taste preferences, shown through its popular collaboration with Heytea, which reflects the region's strong tea culture.
Both Oatly and Oatside excel at creating branded elements that enhance the café experience whilst encouraging social sharing. Their approach includes custom artwork, eye-catching installations, branded merchandise, and packaging—carefully crafted to stand out in the Instagram age.
Successful brands often build genuine emotional resonance with their audience. Oatside's playful bear mascot and sustainability initiatives demonstrate how brands can connect beyond product features. Their brand story particularly resonates with Millennials and Gen Z, who value authenticity and purpose.
Social media strategy should work hand-in-hand with café partnerships. Flash Coffee's partnership with Oatside for the #DareToGoVegan campaign shows how in-store promotions can work with social media features like gachapon machines. Similarly, Oatly places photo-worthy setups in areas with many cafés to encourage customers to share content online.
Partnerships should create mutual value while maintaining authenticity. Oatside's collaboration with Lady M and Oatly's joint venture with China Resources Corporation show how partnerships can drive both innovation and scale.
Sources:
- OnePlanet Network
- Sunny Idea
- Brand Vision Insights
- Marketing to China
- MARKETECH APAC
- Agustin, S. A. (2020). Branding Strategy of Contemporary Coffee Shops in Indonesia. In Proceedings of the 2nd International Conference on Business and Management of Technology (ICONBMT 2020). Atlantis Press.