Mixue: The Bubble Tea Giant That’s Outgrown McDonald’s and Starbucks

• Mixue Ice Cream and Tea, which is now bigger in terms of the number of stores than both McDonald’s and Starbucks, premiered on the Hong Kong Stock Exchange recently and raised US$444 million (£352 million).
• Budget pricing and a franchise model are the bases of Mixue’s star-shining expansion in Asia and across the world, setting this rapidly growing company firmly into the ranks of global giants in the beverage industry.

Mixue Ice Cream and Tea is probably not a name that’s known by everyone, but this Chinese bubble tea chain has quietly taken over the world—by store count, at least. It’s true: it has more stores than McDonald’s or Starbucks and has just made its debut on the Hong Kong Stock Exchange.

A Blockbuster Making the Stock Market Debut

On Monday, shares of Mixue soared beyond 40% upon debuting in Hong Kong trade, raising an astounding amount of $444 million (£352 million). This made it the biggest initial public offering (IPO) in Hong Kong this year—a nice feat considering all ongoing economic challenges in China, such as the ongoing property crisis and consumer confidence being sluggish.

What, then, does Mixue stand for? Affordability. While the majority of premium coffee and tea brands come at a price, Mixue manages to do all this without emphasising the high average selling price of its ice creams and drinks: just six yuan ($0.82; £0.65)—making it a sin everyone can commit.

From a Small Student Business to a Global Powerhouse

Mixue’s story has ambitions and hustles. Back in 1997, Zhang Hongchao, a student at Henan University of Finance and Economics, started the business as a side hustle to support his family. Fast forward to today, and this little business has turned into a global empire with over 45,000 stores in China and 11 other countries, including Singapore and Thailand.

To put that in perspective, there are just over 43,000 McDonald’s outlets worldwide, while Starbucks boasts around 40,576 stores. This means Mixue has somewhat quietly grown bigger than the two biggest names in food and beverage.

Another Business Model

Mixue has a model different from that of typical coffee or bubble tea establishments. Most stores under its brand are operated and owned directly by Starbucks, in the same way that Mixue largely uses the franchise business model. It is less interested in branding and retailing in favour of a supplier role, furnishing its franchise partners with ingredients, equipment, and products. It is this business model that enabled the company to be so successful with rapid expansion and low-cost operation.

The Mixue Difference from Its Rivals

While Mixue continues to do handsomely in the market, some of its competitors have faced not-so-good fortunes. Bubble tea competitor Guming had its shares drop on the first day of trading earlier this year, while last year Chabaidao—the other main name in bubble tea—suffered the same fate. Mixue appears well and truly here to stay, given its successful IPO.

What Lies Ahead for Mixue?

Mixue is running the gauntlet of not slowing down anytime soon with its mammoth store network and booming franchise model. With its place in Asia already, the brand is creating a very huge identity that is hard for people to ignore with its iconic Snow King mascot and a catchy theme song that keeps playing on a loop in its stores.

Bubble tea and cheap iced drinks are also making strides globally, and Mixue is more than ready to stretch itself to cash in on this rising trend. Whether it will become as big a name as Starbucks or McDonald’s will unfold in time, but it is obvious that Mixue is a global giant in its rights already.