This unknown boba chain has more branches than McDonald S

This unknown boba chain has more branches than McDonald S

Two decades ago, a modest restaurant in one of the poorest provinces of China began to flourish its business by selling soft-care ice cream at a price of only 1 yuan (15 cents) per portion. Today Mixue Bingcheng has developed into the world's largest food and beverage chain according to the number of branches and has overhauled McDonald’s and Starbucks.

Surprising growth

With over 45,000 branches worldwide (as of September 2023), Mixue, which is better known for its bubble-tea offers today, has increased by more than 40 % on Monday on the stock exchange in Hong Kong. This happened on the first day of trading, after the first stock exchange was launched $ 444 million, as reported by the Hong Kong Stock Exchange.

strong increase in demand

"The demand for both retail and institutional investors was strong, as expected," said Devi Subhakesan, co-founder of the investor research company Investory PTE. This excitement led to the largest IPO in Hong Kong this year and the five largest last year.

price-performance ratio as a success factor

The prices for the characteristic drinks are between 2 and 8 yuan ($ 30 cents up to $ 1.20), and with a catchy Jingle and a snowman mascot, Mixue has attracted a large customer base in all of China since it was founded in the province of Henan almost three decades ago.

The philosophy of the founder

Zhang Hongchao, the founder of Mixue, comes from a poor family and follows a simple strategy. "Let people eat and drink well for only two dollars worldwide," he previously said in an interview with a Chinese state medium. This affordability remains the largest attraction of Mixue, especially in view of the economic challenges in his home market. On Monday in the Hong Kong district of Causeway Bay, Wang Li, a 42-year-old retail employee, said to CNN: "I'm not even looking at the prices." She regretted not experiencing the IPO.

franchising model

Over 99 % of the mixing branches are franchised, and most of the turnover comes from the sale of food, equipment and packaging to the franchisee. According to the prospectus, Mixue's net profit rose by 42 % in the first year of reporting to 3.49 billion yuan ($ 479 million) compared to the previous year.

beginnings and family

Mixue was founded in 1997 in Zhengzhou, the capital of the province of Henan, as a Shaved Ice shop. However, the first steps were not without difficulty. Zhang and his brothers come from a family of farmers and Zhang, as a student, produced a Shaved Ice machine and sold his creations under the name Coldsnap. However, the success failed to materialize, which is why he changed the concept and opened a restaurant called Mixue. In 2005 he set up a snack stand in front of the restaurant and sold 1-yuan ice cream.

expansion strategies

The favorable prices for soft-care ice cream led to a rush to his business, and quickly expanded on 20 branches. The price-performance ratio gained customers among students and with low-income people in China underdeveloped cities. Mixue finally added Boba when the drink gained popularity nationwide, and in 2017 Zhang launched a coffee brand called Lucky Cup.

The future of Mixue

The listing of Mixue follows the example of smaller competitors who went to the stock exchange in Hong Kong last year. Despite the initial sensation, however, they have difficulty maintaining their dynamics. Investors such as June Zhao from Beijing tried to acquire shares, but were not successful because of the high demand - it is reported to an oversubscription by more than 5,200 % by private investors. Zhao carefully commented: "Mixues future growth will be strongly based on expansion abroad."

global ambitions

Mixue strives to stay in the competitive tea market in China, which could grow to $ 66.5 billion by 2027. Almost 90 % of the Mixue branches are currently in China, while the international locations are in the Asia-Pacific region, including Indonesia, Vietnam and Malaysia. Despite the many branches worldwide, Mixue still does not surpass the big brands such as Starbucks and Tim Hortons in the sales figures.