Meet Mixue: The $10B Chinese Tea Chain

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IPO Deep Dive

Mixue in one minute

Launched in China in 1997, the company began with one goal: make high-quality, freshly-made drinks and desserts affordable for everyone. Today, that $1 price point (around RMB6) powers a beverage empire.

By 2024, Mixue had scaled into the world’s largest freshly-made drinks company by store count. Its two flagship brands—Mixue (tea and fruit drinks) and Lucky Cup (coffee)—are now served across 45,000+ franchise locations spanning China and 11 international markets.

Mixue’s business is capital-efficient and logistics-driven. Unlike typical F&B chains, Mixue earns the bulk of its revenue not from franchise fees, but from selling ingredients, packaging, and equipment to its franchisees. In 2023 alone, its network sold 7.4 billion drinks—and 7.1 billion more in the first nine months of 2024.

The result? A dominant footprint in China, and rising global momentum.

The Numbers That Matter

• Store Count (as of Sept 30, 2024): 45,000+

• Cups Sold (2023): 7.4B

• Cups Sold (Jan–Sept 2024): 7.1B

• Market Share: 11.3% in China, 2.2% globally

• Global Rank (by cups sold, 2023): #2

• Global Rank (by GMV, 2023): #4

Stock Information: 

-Stock price: 435.00

-Market cap: 165.13B

-52-Week Range: 256.00 - 471.80

Mixue’s not just a tea chain—it’s a $3B+ supply engine, a mascot-driven brand phenomenon, and a fast-scaling global force. Let’s dig into Mixue’s model.

Introduction

The engine behind the empire? A powerful supply chain.
From procurement and production to R&D, quality control, and logistics, Mixue owns the end-to-end flow. That control allows the company to offer ~$1 drinks while maintaining strong unit economics and consistency across 45,000+ stores in China and 11 other countries.

The Results:

• GMV grew from RMB 22.8B in 2021 to RMB 47.8B in 2023.

• Revenue hit RMB 20.3B in 2023, up 49.6% YoY.

• Net profit surged to RMB 3.2B in 2023, growing over 58%.

• Operating cash flow reached RMB 5.1B in the first nine months of 2024 alone.

• Drink volume: 7.4B cups in 2023, and 7.1B more in just nine months of 2024.

The core driver? Mixue.
The tea drink brand accounts for more than 95% of company-wide revenue and gross profit. Lucky Cup, the company’s coffee sibling, remains a small but growing part of the portfolio. Gross margins for Mixue have hovered around 30%+ in recent years—driven by scale, efficient supply chains, and low franchise fees.

A few numbers that define Mixue:

• Female workforce share: 69% of store employees, 35% of franchisees

• Plastic reduced via eco-packaging in 2023: 12,700+ tons

• University R&D partners: Jiangnan University, Westlake University

• China’s largest lemon buyer: 100,000+ tonnes annually

What’s next?
While competition in China’s freshly-made drinks market is heating up, Mixue’s size, supply chain leverage, and brand affinity provide a strong moat. The company continues to expand internationally—and with an IPO on the horizon, the next chapter of global growth is just beginning.

History

It was 1997 in Zhengzhou when Zhang Hongchao decided to take a risk. Armed with a homemade shaved ice machine and a dream of selling refreshing desserts, he opened a tiny shop called Coldsnap Shaved Ice. There was no playbook, no fancy branding—just shaved ice and a belief that quality didn’t have to be expensive.

By 1999, he had a new name: Mi Xue Bing Cheng (Mixue), meaning “Snow Ice City”—a nod to the brand’s signature sweetness and cooling appeal. The market for freshly made drinks in China was fragmented and inconsistent. Mixue aimed to change that.

For years, Zhang kept things simple: low prices, fresh ingredients, fast service. That formula began to scale. Slowly at first. Then rapidly.

In 2018, Mixue introduced a new character—Snow King, a cheerful snowman in a red cape—designed to humanize the brand. But Snow King did more than that. Paired with an unforgettable jingle and a wave of viral videos, the mascot became a cultural force across Asia. Kids loved him. Adults knew the tune by heart. Suddenly, Mixue wasn’t just a tea chain—it was a movement.

Behind the scenes, Zhang and his team built something even more powerful: a massive, vertically integrated supply chain that gave Mixue unmatched control. From R&D to procurement, production to logistics, everything was done in-house. That scale brought leverage. Mixue could offer $1 drinks while protecting its margins—and maintaining consistency across tens of thousands of locations.

By 2024, Mixue had over 45,000 stores in China and 11 other countries. In the first nine months of that year alone, those stores sold over 7.1 billion drinks. Mixue wasn’t just China’s biggest freshly-made drinks chain. It was the world’s biggest—by far.

As the company scaled, so did its ambitions. Mixue began replacing plastic packaging with greener alternatives, reducing its PE plastic use by over 12,700 tons in 2023. It partnered with universities to develop biodegradable materials and launched ESG initiatives to support farmers and promote women in the workforce—who now make up 69% of store staff and 35% of franchisees.

The numbers told the story. Between 2021 and 2023, Mixue’s GMV more than doubled, reaching RMB47.8B. Net profit jumped from RMB2.0B to RMB3.2B, and revenue hit RMB20.3B. Cash flow soared. All without compromising the brand’s promise: value-for-money drinks for the masses.

But success brought new challenges. As China’s freshly-made drinks market became saturated, competition intensified. Mixue began facing copycats and location overlap, with cannibalization risks creeping in. Still, the team remained focused—using data, logistics, and branding to stay ahead.

Mixue’s story started with a homemade machine and a dream. Today, it’s a $10 billion global company with a snowman mascot, a bulletproof supply chain, and billions of drinks sold each year.

And just like that first shop in Zhengzhou, it’s still built on one idea: great drinks shouldn’t cost a fortune.

Risk factors

Mixue is the largest freshly-made drinks brand in the world by store count—but scale comes with complexity.
The company’s rapid growth, broad franchise model, and reliance on consumer behavior present key risks that could impact profitability, operations, and future expansion.

1. Consumer Demand Is Everything

Mixue’s business depends on mass consumer appeal for $1 fruit teas, lemonades, and ice creams. That demand, however, is highly sensitive to taste trends, seasonal changes, and economic pressure.
If customers shift preferences, cut back on discretionary spending, or lose confidence in the brand, the business suffers. Even small fluctuations—like competing product launches or weather cycles—can impact billions of annual drink sales.

2. Store Expansion Drives Growth—but Brings Operational Risk

With over 45,000 locations, Mixue’s growth engine is its expanding franchise network. But adding new stores means navigating local regulations, finding favorable real estate, and onboarding qualified operators.
Delays in opening, underperforming new stores, or internal cannibalization from store clustering can all impact revenue. Expansion also puts strain on the company’s supply chain and brand consistency—two pillars of its model.

3. Consistency at Scale Is Hard

Mixue’s promise—affordable, high-quality drinks everywhere—depends on delivering the same customer experience in every store. That’s a tall order with tens of thousands of franchisees.
Breakdowns in training, ingredient sourcing, or store management can erode customer trust. If quality slips, the brand suffers—and sales follow.

4. Franchisees Are the Front Line

Mixue doesn’t run most of its stores—its franchisees do. That makes performance highly dependent on independent operators maintaining quality, managing staff, and following brand standards.
When franchisees underperform, it impacts everything from supply orders to store closures. In 2023 alone, over 1,200 stores were shut down by either franchisees or the company—highlighting the risk of misalignment or saturation.

5. The Market Is Crowded

China has over 660,000 freshly-made drinks shops, and the top five players combined hold just 35% market share. It’s a fragmented, price-sensitive industry.
Brands are racing to secure top locations, franchisees, and market share. Some are slashing prices to win customers. Others are copying Mixue’s branding and products outright. That pressure can squeeze margins, dilute brand value, and make long-term positioning harder to maintain.

6. Growth May Be Slowing

In the first nine months of 2024, average GMV per store per day declined. So did order volume and cups sold. While Mixue continues to lead in scale, it’s facing the same market deceleration others are—and needs to adapt quickly.
If these trends continue, it could affect both topline and bottom-line performance.

7. The Brand Is a Moat

Snow King is more than a mascot—it’s Mixue’s cultural symbol. The brand’s success hinges on consumer perception, trust, and consistent product delivery.
Negative press, food safety issues, or quality complaints—whether real or rumors—could do lasting damage. The rise of counterfeits and copycat shops also poses a risk, especially if consumers can’t tell the difference.

8. Platform Health Depends on Execution

Mixue’s franchise model, while powerful, isn’t bulletproof. If the company fails to maintain high franchisee standards, scale supply chain operations, or protect its IP, the long-term impact could be significant.

The brand has momentum, but the market is evolving. Consumer preferences are shifting. Competition is intensifying. Execution will be everything.

Market Opportunity

The global freshly-made drinks industry is entering a period of accelerated expansion—fueled by emerging markets, evolving consumer habits, and deeper supply chains. Once dominated by fragmented tea shops and artisanal cafés, the category is fast becoming a structured, tech-enabled segment with billion-dollar brands and global footprints. At the heart of this shift: mass-market accessibility and the rise of chain operators offering high quality, value-for-money products at scale.

Global Market Overview

Measured by GMV, the global freshly-made drinks market reached $779.1B in 2023, growing at a steady 5.4% CAGR since 2018. But the pace is picking up. Forecasts expect a sharper 7.2% CAGR from 2023 to 2028, pushing the market to $1.1 trillion—nearly half the total global drinks market.

The drivers? China and Southeast Asia. These two regions, which together made up just 12% of global GMV in 2023, are on track to contribute nearly 40% of the market’s absolute growth through 2028. Both markets are underpenetrated, with per capita consumption far below developed economies. But both are catching up fast.

China: Massive Market, Mass-Market Momentum

In China, the freshly-made drinks segment is on an aggressive growth trajectory. GMV is forecasted to grow at a 17.6% CAGR from RMB517.5B in 2023 to over RMB1.1 trillion by 2028—making up nearly half of the country’s total drinks market.

Several dynamics support this projection:

• Low penetration, high upside: In 2023, per capita consumption stood at just 22 cups—far below the U.S. (323), EU (306), and Japan (172).

• Tiered opportunity: First-tier cities average 70 cups annually, but lower-tier cities trail at 13 cups, pointing to significant whitespace.

• Favorable macro tailwinds: Urbanization, rising disposable income, and digital infrastructure are lifting consumer access and frequency.

Our Group is the market leader in China, with a 11.3% share of GMV and 32.7% share of cups sold in 2023—nearly equal to the second through fifth-largest players combined.

Segment Spotlight

While premium offerings exist, it’s the mass-market segment (RMB ≤10) that is defining China’s future. This tier grew from RMB48B in 2018 to RMB136.6B in 2023 (23.3% CAGR), and is forecasted to triple to RMB372B by 2028.

What’s powering it?

• Price meets product: Affordable pricing with uncompromised quality.

• Scale economics: Centralized supply chains, in-house logistics, and standardized production deliver margin at volume.

• Brand equity: Consumer trust and loyalty are concentrated in household names.

Our Group leads this segment. In fact, we are the only mass-market player among China’s top five freshly-made drink brands by GMV.

Category Breakdown: Tea Rules, Coffee Surges

Freshly-made tea drinks continue to dominate, accounting for 50% of the market in 2023. But coffee is the fastest-growing sub-category:

• Tea Drinks: GMV expected to grow from RMB211.5B in 2023 to RMB519.3B by 2028 (19.7% CAGR).

• Coffee: GMV set to more than double, reaching RMB383.6B (20.4% CAGR).

Here, too, lower-tier cities offer the strongest lift. Third-tier and below markets are forecasted to grow 22.8% (tea) and 24.7% (coffee), driven by store expansion and affordability-focused formats.

Southeast Asia: The Next Frontier

If China represents scale, Southeast Asia represents speed. The region is the world’s fastest-growing freshly-made drinks market, with projected GMV growth of 19.8% CAGR—from $20.1B in 2023 to $49.5B in 2028.

Consumption is nascent—just 16 cups per capita in 2023—but urbanization, rising incomes, and consumer familiarity with bubble tea and coffee culture are setting the stage for explosive growth.

Mixue leads the charge here, with over 4,000 stores and 19.5% share of cups sold—the highest in the region.

As the industry scales, competitive advantage will rest on a few key factors:

1. End-to-End Supply Chain: From raw material procurement to last-mile delivery, vertical integration enables both quality and cost control.

2. Store Network Penetration: Particularly in underserved lower-tier cities, where density is still catching up.

3. Brand Equity: Mass-market winners will be those who establish daily consumption habits through value, consistency, and trust.

4. Operational Excellence: Tech-enabled standardization ensures scalable unit economics and franchise support.

Margin Pressures

Growth is strong, but risk remains:

• Cost Volatility: Fruit and coffee beans have shown price spikes, while labor costs continue to rise.

• Food Safety & Compliance: Any lapse in hygiene or quality control could erode brand trust.

• Market Saturation in Urban Centers: First-tier cities face increasingly dense competition, requiring sharper execution and differentiation.

Strategic Outlook

Freshly-made drinks are no longer just a trend—they’re becoming a daily essential in many parts of the world. As frequency grows and infrastructure matures, the category is evolving into a formal, high-margin consumer vertical with platform potential.

The next phase will be defined by companies who can:

• Extend deeper into lower-tier geographies

• Build defensible moats around brand and supply chain

• Embrace digitization across operations and marketing

• Transition from single-category drinks to diversified beverage and snack portfolios

With leading share in China and rapid expansion across Southeast Asia, our Group is well positioned to lead that evolution.

Product

Mixue operates a value-driven, global beverage platform anchored by two brands: Mixue (freshly-made tea drinks) and Lucky Cup (freshly-made coffee). Its product lineup—fruit teas, bubble tea, coffee, and soft-serve ice cream—typically retails for ~US$1 per item, unlocking massive scale in price-sensitive markets.

The business model is simple, asset-light, and powerful:

• Franchise-first: Over 45,000 stores across China and 11 international markets

• Fully-integrated supply chain: From farms and factories to stores

• High-volume, low-cost unit economics: ~7.4B drinks sold in 2023

Mixue is the largest freshly-made drinks company globally by store count (CIC, Sept 2024) and the second largest by cups sold.

Scale Flywheel

Mixue’s low price point unlocks mass-market access, while a strong brand and consistent quality drive repeat consumption.

• More stores → More touchpoints → Higher brand mindshare

• High volumes → Lower input costs → Stronger franchise economics

• Franchisee success → Store expansion → Category dominance

The result is a virtuous loop of scale, affordability, and loyalty—powered by a 19,000-strong franchisee base and a growing global footprint.

Supply Chain Flywheel

Unlike many franchise models, Mixue controls the full backend.

• 5 proprietary production hubs (1.65M tons annual capacity)

• 124 patents across ingredients, packaging, and equipment

• 60%+ of ingredients self-produced—industry-leading efficiency

This vertical integration ensures stable quality, lower costs, and operational resilience—while enabling one-stop sourcing for franchisees across 45,000 stores.

Brand-IP Flywheel

At the heart of Mixue’s consumer love is Snow King, its animated brand ambassador.

• 315M registered members

• 47M+ followers across China’s top social platforms

• 19.5B+ hashtag views for Snow King

From viral songs to animated series, Mixue isn’t just selling drinks—it’s building cultural currency that fuels customer engagement and drives organic store traffic.

 Franchise Economics Flywheel

Mixue’s low-cost, low-risk model is built to attract entrepreneurs.

• Entry cost below industry average

• Revenue model: sale of goods/equipment, not franchise fees

• 4.2M+ franchise inquiries during the track record period

Franchisees are operational partners, not just customers—empowered with centralized logistics, smart-store tech, and training. During COVID, Mixue waived fees and lowered costs for its network, reinforcing alignment.

International Growth Flywheel

Mixue’s success in China forms the playbook for Southeast Asia.

• ~4,800 overseas stores as of Sept 2024

• Largest tea brand in SEA by store count (CIC, 2023)

• Indonesia: 2.6B TikTok views on #mixueindonesia

Localized menus, Snow King-led cultural campaigns, and hybrid supply chains enable rapid penetration. A new Southeast Asia supply hub is underway to drive further expansion.

Financials (RMB)

• 2023 Revenue: ¥20.3B (+49.6% YoY)

• 2023 Net Profit: ¥3.2B (+58.3% YoY)

• 2023 GMV: ¥47.8B

• 9M 2024 Revenue: ¥18.7B

• 9M 2024 Net Profit: ¥3.5B

Mixue’s operating model—asset-light, vertically integrated, and demand-led—generates high margins and healthy cash flows: ¥5.1B from ops in 9M 2024 alone.

Why It Matters
Freshly-made drinks are no longer a niche indulgence—they’re a $180B+ global category growing at >17% CAGR. Mixue is building the infrastructure to lead this shift at scale. From raw ingredients to cultural content, it owns the stack.

Mixue isn’t just a beverage chain. It’s a cultural, retail, and supply chain engine—bringing premium quality to the mass market, one $1 drink at a time.

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Business Model

Mixue runs a high-scale, low-cost, and franchise-led model that makes freshly-made drinks accessible to the mass market—typically priced around US$1 per item. Its category-defining formula blends brand equity, deep supply chain integration, and a capital-light structure.

Here’s how it works—and why it scales efficiently across borders.

Mass-Market Model, Premium Unit Economics

Mixue generates revenue by supplying ingredients, equipment, and operational support to franchisees across tea, coffee, ice cream, and fruit drink verticals.

• Average selling price: ~RMB6 per item (~US$1)

• 2023 drink volume: ~7.4B cups

• 9M 2024 drink volume: ~7.1B cups

• Gross profit margin (Mixue brand): ~30–33% (2021–9M 2024)

Unlike vertically integrated retailers, Mixue doesn’t operate its stores—it enables over 19,000 franchisees to do so, creating strong alignment without the overhead. More stores mean more ingredient sales, more consumer touchpoints, and more brand mindshare.

Franchise Flywheel

Mixue uses a franchise-first model to rapidly scale in China and across 11 global markets, with >99% of stores operated by local entrepreneurs.

• Total stores (Sep 2024): 45,000+

• China coverage: 300+ cities, 1,700 counties, 4,900 towns

• Global footprint: 4,800+ stores in SEA, Korea, Japan & Australia

Flywheel in action:

Franchisee demand → Store openings → Ingredient sales → Consumer awareness → More franchisee demand

With initial investments and franchise fees set well below industry averages, Mixue lowers barriers to entry while retaining quality through standardized ops and proprietary smart store systems.

Vertical Integration

Mixue isn’t just a brand—it’s a manufacturer, supply chain operator, and logistics platform.

• Production bases: 5 sites, 1.65M tons annual capacity

• % self-produced ingredients: 60%+ (100% for core ingredients)

• Warehousing: 27 self-operated warehouses

• Delivery reach: >90% of counties in China within 12 hours

By controlling procurement, production, and delivery, Mixue ensures low costs, consistent quality, and real-time scalability—advantages hard to replicate. In 2023, its lemon and milk powder costs were 10–20% below industry average.

Cultural IP + Content Loop

Snow King, Mixue’s iconic mascot, is more than a character—it’s a cultural phenomenon driving mass awareness and consumer stickiness.

• Snow King views: 19.5B+ hashtag views

• Mixue theme song views: 9.7B+

• Registered members: 315M

• Followers across social: 47M+

This IP powers a content-driven marketing engine across digital and physical channels—TV, festivals, stores, parades—that fuels customer loyalty and organic growth at scale. In 9M 2024, branding expenses were just 0.9% of revenue.

Cash-Generating, Asset-Light Model

With no store capex, no working capital tied to inventory, and operating leverage across production and logistics, Mixue runs a capital-light business with strong cash flow:

• 2023 revenue: RMB20.3B (↑49.6% YoY)

• 9M 2024 revenue: RMB18.7B (↑21.2% YoY)

• Net profit (9M 2024): RMB3.5B (↑42.3% YoY)

• Operating cash flow (9M 2024): RMB5.1B

Franchisees pay upfront. Supply chain costs are locked in via scale and integration. The result: highly repeatable, high-margin unit economics across a fast-growing global footprint.

Mixue is now leveraging this platform to unlock future growth:

• Deeper global expansion — Southeast Asia is just the beginning.

• New product categories — In-house milk, semi-automatic coffee machines, proprietary recipes.

• Content monetization — Snow King as a licensing and brand platform.

• Tech investment — Smarter stores, AI-driven inventory, and R&D optimization.

Mixue isn’t just selling drinks—it’s building a franchising and supply chain empire optimized for low-cost scale, high consumer affinity, and cross-border dominance.

Management Team: 

Zhang Hongchao – Chairman & Founder

With over 27 years of industry experience, Zhang Hongchao is the visionary behind Mixue, having founded the company in 1997. A graduate of Henan University of Economics and Law, Zhang led Mixue’s transformation from a single ice cream shop into a global franchise empire. He oversees corporate strategy, long-term expansion, and cultural direction. His key achievements include inventing Mixue’s iconic Fresh Ice Cream—selling over 1.4 billion cups in 2024—and establishing the company’s vertically integrated supply chain across tea, dairy, fruit, and coffee.

Zhang Hongfu – Vice Chairman & Co-Founder

Zhang Hongfu joined Mixue in 2007 and was instrumental in scaling its franchise model across China. Drawing from his hands-on experience in store operations, he developed the company’s standardized management system that enabled fast, consistent replication across geographies. Today, as Vice Chairman and Vice Chair of the ESG Committee, Zhang focuses on franchise operations, supply chain integration, and organizational governance. His commitment to franchisee success has been core to Mixue’s ability to build a network of over 45,000 stores globally.

Cai Weimiao – Executive Director

Since joining in 2008, Cai Weimiao has overseen Mixue’s logistics and franchise supply operations. With over 15 years of experience, he built a network of 27+ warehouses that delivers inventory to 90% of stores within 12 hours. His innovations in automated inventory tracking and procurement have helped reduce waste and cut ingredient costs, contributing to Mixue’s affordability and efficiency.

The founding team operates with a long-term lens—prioritizing financial discipline, sustainable development, and social impact. As of the latest reporting period:

• Female inclusion: ~35% of franchisees and 69% of store employees are women

• Sustainability leadership: 12,700+ tons of PE plastic reduced in 2023 via green packaging

• Innovation partnerships: Ongoing R&D collaborations with Jiangnan University and Westlake University to advance biodegradable plastics and sustainable materials

Investment

Mixue’s evolution from a single shaved-ice stall in Zhengzhou to the world’s largest freshly-made drinks chain reached a milestone on March 3, 2025, with a landmark IPO on the Hong Kong Stock Exchange (HKEX).

IPO Highlights:

• Listing Price: HKD 262 (USD 33.72)

• First-Day Surge: +47%

• Capital Raised: HKD 3.5B (USD 450M)

• Retail Oversubscription: 5,295x

• Margin Loans Used: HKD 1.83 trillion — surpassing records from Ant Group and Kuaishou

In an otherwise muted public markets environment, Mixue’s debut was the largest IPO in Hong Kong in 2025—attracting a rush of institutional and retail interest. While other publicly listed bubble tea peers (Nayuki, Baicha Baidao, Guming) fell on the same day, investors signaled a decisive shift in confidence toward Mixue’s capital-light model, global footprint, and supply chain dominance.

Cornerstone Investors

Mixue’s IPO was anchored by a set of high-conviction, long-term backers who together committed USD 200 million in cornerstone investments:

This deep-pocketed coalition provides not only capital, but also cross-border market expertise and alignment with Mixue’s international expansion strategy.

Use of Proceeds & Strategic Focus

The HKD 3.5 billion raised will be deployed to:

• Accelerate international store expansion across Southeast Asia, Australia, and other growth markets

• Optimize capital structure to enhance cash flow resilience and capital flexibility

• Upgrade corporate governance for public company readiness and transparency

• Attract and retain global talent, particularly in supply chain technology and digital operations

The oversubscription frenzy also prompted Mixue to increase the retail allotment from 10% to 50% of the IPO—an uncommon move that further democratized access and cemented strong public support.

Competition

Mixue operates in one of the most competitive consumer segments in China—freshly-made drinks—a fast-evolving market where brands compete aggressively on product, pricing, and footprint.

This landscape is crowded and fragmented. In 2023, the top five brands collectively held just 35.0% of market share by GMV, and 54.9% by number of cups sold, according to CIC. Despite the competition, Mixue ranked #1 in China by cups sold (32.7%) and #1 by GMV (11.3%)—reflecting both the scale and efficiency of its operations.

Buyers today face a proliferation of options—from boutique bubble tea chains and premium coffee specialists to convenience-led pick-up models. Winning consumers requires more than low prices. The key battlegrounds include:

• Depth and variety of product offering (ice cream, lemonade, tea, coffee—all priced ~US$1)

• Speed, consistency, and freshness of in-store experience

• Store accessibility across city tiers

• Brand resonance and cultural engagement (Snow King IP, social media activations)

Mixue’s competitive edge lies in its value-for-money proposition, national footprint (45,000+ stores), and strong emotional connection with young consumers through pop culture IP and offline events.

Competing for Store Locations

Store expansion is another core front of competition. The biggest players are racing to secure prime real estate and high-quality franchisees. This dynamic is leading to:

• Location overlap and cannibalization risk

• Slower store profitability for underperforming sites

• Downward pressure on pricing as brands try to win price-sensitive consumers

Despite these headwinds, Mixue maintained industry-leading GMV growth in the first nine months of 2024—outpacing most of its top five peers.

Competitive Moats

Mixue’s defensibility stems from a mix of scale, vertical integration, and capital efficiency:

• Supply Chain Control: Over 60% of ingredients are self-produced

• Franchise Model: 99% of stores are franchised, minimizing capex and scaling fast

• Operational Technology: Smart store tools and real-time inventory systems

• Brand Equity: Snow King and Mixue have amassed billions of views across social platforms

Smaller brands struggle to match this level of infrastructure, while premium players operate at higher price points with thinner geographic reach.

As growth in China’s freshly-made drinks market moderates, competition will only intensify—especially around:

• Unit-level store performance

• Consumer retention in a discount-heavy market

• Saturation in top-tier cities

Mixue’s focus on cost leadership, digital operations, and global expansion provides a roadmap to maintain its leadership position. But failure to adapt in an increasingly complex and competitive environment could materially affect future margins and growth trajectories.

Financials

Mixue's top-line has grown rapidly, fueled by surging demand for affordable, high-frequency beverages:

• 2022 revenue: RMB13.6B (+31.2% YoY)

• 2023 revenue: RMB20.3B (+49.6% YoY)

• 9M 2024 revenue: RMB18.7B (+21.2% YoY)

This growth tracks closely with expanding drink volume—7.4B cups sold in 2023 and 7.1B in the first nine months of 2024—reinforcing Mixue’s dominance in the mass-market segment.

In 2023, Mixue was the #1 freshly-made drinks brand in China by store count and volume, and #2 globally by cups sold, according to CIC.

Store Network Flywheel

Mixue operates an ultra-scalable franchise model, with over 45,000 stores across China and 11 international markets. This footprint includes 40,000+ locations across every Chinese province and ~4,800 international stores spanning Southeast Asia and beyond.

Franchisees drive the business:

• >99% of stores are franchised

• Franchisees purchase ingredients, equipment, and supplies directly from Mixue

• Revenue from franchise services (fees, training, etc.) accounted for only ~2.4% of total revenue in 9M 2024

This asset-light, interest-aligned model has enabled rapid, capital-efficient expansion, particularly into lower-tier Chinese cities (57.2% of stores as of Q3 2024).

Gross Margin & Profitability

Despite its low-price product positioning, Mixue maintains healthy profitability:

• Gross margin: 32.4% in 9M 2024

• Net income: RMB3.5B in 9M 2024 (+42.3% YoY)

• Net margin: 18.7%

Gross margins remained stable throughout the Track Record Period due to tight control over raw material procurement, selective in-house production, and an end-to-end digitalized supply chain.

Cash Flow

Mixue consistently generates strong cash flows from operations:

• 2021: RMB1.7B

• 2022: RMB2.4B

• 2023: RMB3.8B

• 9M 2024: RMB5.1B

The franchise model enables working capital efficiency: inventory risk is minimal, and revenues are primarily product-based.

Capex is centered around strategic production and logistics upgrades—not store operations—allowing reinvestment into supply chain digitization and R&D.

Supply Chain Leverage

Mixue operates the most extensive vertically-integrated supply chain in China’s freshly-made drinks sector. This system underpins cost control, speed, and quality:

• Global sourcing from 38 countries

• Five large-scale factories built to international standards

• Digitalized logistics linking nationwide warehouses to franchise locations

• In-house R&D and QA systems that support consistent innovation and cost-efficiency

Cost of sales accounted for 67.6% of revenue in 9M 2024, down from 70.5% in 2023, reflecting improving economies of scale.

Market Trends

China’s mass-market freshly-made drinks segment is expected to grow at a 22.2% CAGR from 2023 to 2028—outpacing the broader market’s 17.6% CAGR. Internationally, Southeast Asia is growing at nearly 20% CAGR, with Mixue already holding the leading store footprint in the region.

Key growth drivers:

• Rising urbanization

• Increased chain-store penetration

• Brand consolidation in the mass-market beverage space

• Untapped international markets with favorable demographics

Mixue is doubling down on scale, efficiency, and brand affinity:

• Expanding store footprint in both domestic and overseas markets

• Enhancing automation, robotics, and smart factory upgrades

• Deepening digital integration across logistics, franchise ops, and R&D

• Reinforcing its value proposition—high-quality, low-cost drinks—to remain the brand of choice in mass-market beverages

Closing thoughts

Mixue is entering the global spotlight as a dominant, capital-efficient consumer brand—one that combines affordability, scale, and profitability in the fast-growing freshly-made drinks market. With over 45,000 stores across China and 11 countries, and more than 7 billion cups sold annually, Mixue isn’t just a tea and coffee company—it’s a low-cost beverage infrastructure play with outsized consumer reach.

The fundamentals are compelling. Mixue posted RMB18.7 billion in revenue and RMB3.5 billion in net profit in the first nine months of 2024—powered by a 99% franchised store network, vertically integrated supply chain, and consistent gross margins above 30%. Its value proposition—high-quality drinks for ~RMB6 ($1)—continues to drive mass-market loyalty at scale, both in China and across Southeast Asia.

This is a business built for compounding. The franchise model enables rapid expansion without balance sheet risk. Operational leverage is embedded in the supply chain. And digitization across procurement, logistics, and training strengthens long-term margins.

The next chapter hinges on international growth, brand expansion, and maintaining cost leadership. But in a market searching for high-margin, defensible consumer platforms, Mixue’s numbers and model speak volumes. It’s rare to find a scaled retail brand this profitable, this fast-moving, and this aligned with everyday consumer demand.

Here is my interview with Hugo Gomez, co-founder and CEO of Bourgeois Bohème (BoBo), a fintech that caters to the unique needs of (U)HNWIs. Hugo has over 15 years of experience in traditional banking, including roles at HSBC and Banistmo

In this conversation, Hugo and I discuss:

• How does BoBo’s approach differ from traditional private banking services

• How should people diversify their wealth?

• How does BoBo address the cross-border financial needs of clients?

If you enjoyed our analysis, we’d very much appreciate you sharing with a friend.

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  And that’s it from me. See you next week.

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