Chinese bubble tea chain with more stores than McDonald’s wants to conquer the world

{"text":[[{"start":11.1,"text":"At an upscale shopping centre on São Paulo’s Paulista Avenue last month, dozens of customers queued up for a new Chinese brand offering ice cream for less than a dollar."}],[{"start":20.6,"text":"The store is the first in Brazil for Mixue, a food and beverage chain that remains little-known outside China but has more stores globally than McDonald’s. With 60,000 outlets — mostly in the mainland — its bubble and milk tea is now available in cities from New York to Singapore."}],[{"start":37.150000000000006,"text":"“I think it will take off in Brazil,” said Jhonny Michel, a 37-year-old businessman carrying three bags full of lemonades, a sundae and toy souvenirs that cost a total of R$84 ($17). “The prices are fair.”"}],[{"start":51.900000000000006,"text":"At home, its cut-throat pricing and efficient supply chains have posed a challenge to established western brands such as Starbucks, as a desire for affordability sweeps across a slowing economy."}],[{"start":64.5,"text":"Its global ambitions are now extending that challenge further afield, adding to a wave of similar Chinese overseas expansions by companies including Luckin Coffee."}],[{"start":null,"text":"

"}],[{"start":76.5,"text":"Last year, Mixue launched in the US, where its signature king cone costs $1.19. While it closed a net 428 international stores in 2025, many of them in south-east Asia, it has developed supply chains in the region and is entering new markets such as Kazakhstan."}],[{"start":94.2,"text":"It has seven logistics warehouses across four south-east Asian countries — the forefront of its international expansion following the launch of its first overseas store in Hanoi in 2018 — and hopes to open a factory in Brazil to supply stores in the Americas."}],[{"start":110.95,"text":"It is also aiming for 500 to 1,000 stores in Brazil by 2030."}],[{"start":116.45,"text":"“There are other Asian brands operating in Brazil, operating as franchises, but not with this ambition in terms of the number of units and investment exposure in the market,” said Lyana Bittencourt, chief executive at franchising consultancy Bittencourt Group."}],[{"start":131.25,"text":"Mixue, which translates to “honey snow”, was founded as a shaved ice stall in Zhengzhou, the capital of central China’s Henan province, in 1997 by Zhang Hongchao. It later expanded to beverages including coffee."}],[{"start":145.15,"text":"In China, its franchise model has expanded at an exponential rate on the back of demand for affordable products as the economy slows."}],[{"start":153.8,"text":"Mixue now has more than 55,000 stores on the mainland, the majority of them in smaller cities. Its total stores are up sixfold from 2020 and around a third higher than the amount disclosed ahead of its listing in Hong Kong in March last year."}],[{"start":null,"text":""}],[{"start":169.5,"text":"On a rainy afternoon last month, dozens of customers and a handful of prospective franchisees — a core part of its expansion — had flocked to the company’s headquarters in Zhengzhou."}],[{"start":182.4,"text":"“It has grown very quickly,” said 24-year-old Wu Baijian, a prospective franchisee who had travelled from Fujian province with his brother. “There’s something almost magnetic about it that makes you want to join.”"}],[{"start":195.9,"text":"Wu said that people in his hometown of Nanping “are not especially well-off”. The only branded beverage chain with an outlet in the city of 2.7mn was coffee chain GoodMe. “I ordered a drink and found there were 80 cups ahead of mine,” he said of that store."}],[{"start":210.45000000000002,"text":"Wu estimated it would cost Rmb300,000 ($44,000) to open a Mixue outlet and take two years to break even. “The average spend per customer is relatively low.”"}],[{"start":222.8,"text":"The bargain prices — an ice cream cone can cost as little as Rmb2 (29 cents) — are facilitated by the company’s model of bringing much of its supply chain in-house. At its headquarters, Mixue has a miniature display of its own cow and lemon farms, and outlines a logistics system with 29 warehouses that serve hundreds of cities."}],[{"start":243.20000000000002,"text":"Lina Yan, a consumer analyst at HSBC, estimates that more than 60 per cent of its ingredients are self-produced, which lowers procurement costs, and added that the company could further deepen integration by bringing equipment supply in-house as well."}],[{"start":258.15000000000003,"text":"Other businesses in China, such as hotel chain H World, have expanded rapidly through a similar franchise model, especially in smaller cities. As well as an initial investment to open the store, franchisees purchase ingredients and other materials from the company."}],[{"start":273.65000000000003,"text":"Last year, Mixue’s revenue rose 35 per cent to Rmb33.6bn, while its net profit rose by a third to Rmb5.9bn, alongside its rapid store openings."}],[{"start":286.35,"text":"However, its stock market performance since listing raises questions over its strategy, with shares down about 30 per cent this year."}],[{"start":null,"text":""}],[{"start":293.85,"text":"Chris Pereira, founder of consultancy iMpact, said industries in China “have a history of overexpansion and contraction then stabilisation. If they stay where they are, someone might speed ahead of them and take the market ahead of them.”"}],[{"start":308.5,"text":"The question is whether Mixue can replicate this pace of expansion — as well as its supply chain integration — overseas."}],[{"start":317.1,"text":"Store closures in Indonesia and Vietnam reflect a “restructuring process”, according to Yan at HSBC. “Some early franchisees no longer met Mixue’s evolving requirements around store location standards and operational capability,” she said, adding that its overseas supply chain integration “lags China”."}],[{"start":336.65000000000003,"text":"Mixue operates the first Brazilian store, but Tian Zhezhong, head of operations in the country, said it had received inquiries from nearly 300 prospective franchisees. The company aims to add 60 to 100 franchisees this year as it chases its 2030 store target."}],[{"start":354.1,"text":"Bittencourt described the target as “daring” and suggested Mixue would benefit from its affordable prices, but faced limits in persuading wealthier, health-conscious consumers."}],[{"start":364.5,"text":"Pereira suggested the company’s integrated supply chains approach might pose a challenge internationally. “They definitely don’t make their own lemons in New York,” he said. “The farther away from China they go the more risk there will be.”"}],[{"start":null,"text":""}],[{"start":377.9,"text":"Additional contributions from Wang Xueqiao in Shanghai and Beatriz Langella in São Paulo"}],[{"start":391.65,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1778395952_1046.mp3"}