Mixue Ice Cream and Tea: The Chinese Giant Surpassing Starbucks and McDonald’s

A new name is making waves in the global food and beverage industry, and it isn’t a household brand like McDonald’s or Starbucks. Meet Mixue Ice Cream and Tea, a Chinese company that has quietly expanded into a global powerhouse with more outlets than both of these renowned brands. The company, which specializes in affordable ice cream and beverages, recently made headlines when its stock price surged over 40% on its debut at the Hong Kong Stock Exchange, marking the biggest IPO of the year in the financial hub.

A Business Born from Humble Beginnings

Mixue’s journey began in 1997 when Zhang Hongchao, a university student in China, started a small cold drinks stall to support his family. His entrepreneurial endeavor soon took off, and a decade later, his younger brother, Zhang Hongfu, joined the business. Together, they transformed a simple drinks stall into a multinational beverage empire. Today, Mixue boasts more than 45,000 stores across China and 11 other countries, including markets like Singapore and Thailand.

The name “Mixue” comes from the full title Mìxuě Bīngchéng, which translates to “honey snow ice city.” With its Snow King mascot and catchy theme song playing on loop in its stores, Mixue has built a recognizable and engaging brand identity.

A Business Model That Works

Unlike Starbucks, which owns and operates a significant portion of its outlets, Mixue follows a different approach. Almost all of its stores operate on a franchise model, allowing the company to scale rapidly while keeping operational costs low. Instead of being just a retail brand, Mixue functions more like a raw materials supplier, providing franchisees with the necessary ingredients and supplies to maintain consistency across its thousands of locations.

This approach has enabled Mixue to keep its prices extremely low, with the average item on its menu costing just six Chinese yuan (approximately $0.82). This affordability has made it a favorite among consumers, particularly during challenging economic times in China, where many people are dealing with financial difficulties caused by a sluggish economy, property market crises, and weak consumer confidence.

Outpacing Global Giants

When it comes to the number of locations, Mixue has already outpaced major global brands. McDonald’s, which has a vast global presence, has over 43,000 outlets, while Starbucks operates around 40,576 stores worldwide. In comparison, Mixue has surpassed both, making it the largest bubble tea, iced drinks, and ice cream chain in China and beyond.

However, Mixue’s market expansion strategy is very different from that of its Western counterparts. While Starbucks focuses on maintaining premium pricing and an upscale café experience, Mixue prioritizes affordability and accessibility, catering to a wide range of customers who seek budget-friendly treats.

The Impact of Mixue’s IPO

On its first trading day in Hong Kong, Mixue’s shares skyrocketed by more than 40%, reflecting strong investor confidence in the brand. The IPO raised $444 million, making it the largest listing in Hong Kong so far this year.

This strong debut stands in contrast to the recent struggles of Mixue’s competitors. For example, smaller bubble tea chain Guming saw its stock price drop when it debuted on the market in February. Similarly, the owner of another popular bubble tea brand, Chabaidao, also faced losses upon its market listing last year. In contrast, Mixue’s overwhelming success highlights its dominance in the industry and the strength of its business model.

The Future of Mixue

Despite its massive success, Mixue is not slowing down. The company has ambitious expansion plans and intends to grow its presence in more international markets. With its cost-efficient business strategy and strong brand recognition, it is well-positioned to continue its upward trajectory.

The Zhang brothers, the minds behind Mixue’s rise, have now become wealthier than some of the biggest names in the global food and beverage industry. Their ability to transform a small cold drink stall into a billion-dollar enterprise is a testament to their vision and business acumen.

As Mixue continues its expansion, it raises an important question: Will this Chinese giant become a truly global household name, much like Starbucks and McDonald’s? Only time will tell, but for now, its success story is one worth watching.