In a stunning turnaround in the international fast-food sector, Mixue Ice Cream and Tea, a Chinese chain, has become the world’s biggest food and drink chain in terms of number of stores, beating industry giants like McDonald’s and Starbucks. With 45,000 stores across the globe as of December 2024, Mixue has more than doubled its store numbers in the last three years.
Established in 1997 by Zhang Hongchao in Zhengzhou, China, Mixue started as a small shaved ice store. It has grown to become a market leader in the fast-food industry, selling mostly cheap ice cream and tea drinks. The company’s flagship products, which cost around 6 Chinese yuan (about 83 cents), have been well received by consumers, especially in smaller Chinese cities where cheap options are highly sought after.
A milestone for Mixue was when it went public for the first time in Hong Kong, raising more than $400 million. Its IPO attracted warmth, as the shares shot up by close to 30% during opening trades, catapulting the firm’s valuation into the over $10 billion territory. This fund infusion is predicted to drive increased growth, with attendant risks of saturation in the market and cannibalization of established stores.
Mixue’s growth is thanks to its low franchising fees model, which is based on selling high-margin products to franchisees. The strategy has made rapid expansion easy, not just within China but throughout Asia and even into Australia. About 90% of Mixue stores are in China, with the remaining stores spread out in 10 other countries in Asia and Australia.
The brand’s identity is also reinforced by its mascot, Snow King, a Frosty the Snowman-like character, and a jingle to the tune of “Oh! Susanna.” These marketing tools have embedded Mixue into Chinese pop culture, making it more attractive to consumers.
In spite of its widespread penetration, Mixue also has weaknesses, most noticeably revenue per store. Although it takes the top position in a number of stores, its terminal revenues are $6.5 billion, falling short compared to some competitors such as Starbucks, whose revenues are at $55.5 billion. The gap tells a story about variations in customer expenditures and the average transactional value between Mixue and the others.
The aggressive growth strategy of the company continues with a vision to expand its global presence further. But this high growth has also raised questions about market saturation and whether new outlets would cannibalize the sales of existing ones. Mixue has recognized these risks but is determined to follow its growth path and become a global fast-food leader.
In short, Mixue Ice Cream and Tea’s rise to the title of the world’s largest food and beverage chain in terms of store numbers is a significant development in the landscape of the fast-food industry. Its emphasis on affordability, franchising strategy, and cultural appeal have been driving forces behind its success. With the company’s growth to come, it will have to overcome issues of market saturation and revenue maximization in order to continue leading.
