This bubble tea chain is the 'largest brand nobody's ever heard of,' with more stores than McDonald's

CBC

04-03-2025

For those of you who thought McDonald's and Starbucks are the world's biggest food and beverage chains by number of locations, think again.
Turns out China's largest bubble tea and drinks chain, Mixue Ice Cream and Tea, which may be unfamiliar to many, boasts more outlets than either of the better-known chains.
The company saw its stock soar more than 40 per cent following its $444 million US debut on the Hong Kong Stock Exchange on Monday.
Through a major franchise network, Mixue has more than 45,000 stores spanning China and 11 overseas countries including Thailand, Singapore and Australia, as of last September.
In comparison, burger chain McDonald's has over 43,000 restaurants across more than 100 countries, while coffee giant Starbucks has roughly 40,000 outlets worldwide.
Humble origins, low prices
The budget-friendly chain was started by founder Zhang Hongchao in 1997 as a small shaved ice shop with a homemade machine in the northern city of Zhengzhou. The chain has capitalized on the growing thirst for bubble tea in China and elsewhere, helping it grow into the franchise giant it is today.
"It's the largest brand that nobody's ever heard of," said Robert Carter, restaurant industry analyst at StratonHunter. "They've just exploded."
Mixue has become a national icon among Chinese consumers and its catchy jingle translates in English to, "I love you, you love me, Mixue Ice Cream & Tea," set to the tune of the popular American song Oh! Susanna.
WATCH | Mixue's catchy jingle:
Its full name, Mixue Bingcheng, translates to "sweet snow palace" according to the company's website. Famous for its playful snowman mascot called Snow King, who wears a crown and a red cloak, Mixue has become popular among young consumers for selling fruit and tea drinks, coffee and ice cream, at a low price — typically about $1.
"They've got a really interesting pricing strategy. They keep things very low, but their product quality is high," Carter said. "So that's also allowed them to grow really dramatically and get a lot of younger consumers from that price point."
Bubble tea is one of the few bright spots on the consumer front in China, with low-price operators doing particularly well.
Mixue controls its own supply chain
By the end of September 2024, over 99 per cent of the company's more than 45,000 stores were franchised, Mixue's regulatory filings showed. Nearly all of its stores are run by franchisees, unlike Starbucks, which operates 53 per cent of its stores directly.
However, Mixue does not primarily depend on franchise fees for its income, and franchise fees made up just 2.4 per cent of its total revenue in the first three quarters of 2024, according to its filings.
Though many see the brand as a traditional beverage retailer, it operates more like a raw-material supplier, selling food materials, packaging, and equipment to thousands of franchisees, according to its filings. The bulk of its revenue comes from the sale of merchandise and equipment to franchised stores, which are required to buy these items from Mixue.
"They're not making money just off the franchise model," Carter said. "They're also making it because they control the supply chain and drive profits from selling the product to their network."
Is North America next?
In its IPO filing in January, Mixue said it planned to keep growing, while acknowledging that its strategy to expand its store network "may lead to competition both among our existing stores and against our competitors."
Carter believes Mixue could come to North America because it's an area of opportunity for them.
"I would expect that they will look at North America. Canada and the U.S. alone is a trillion dollar restaurant segment," he said.
CBC News reached out to Mixue but did not immediately hear back outside of office hours.
"I wouldn't rule it out … with so much immigration from Asia, this brand could have immediate brand recognition in the right locations," said Vince Sgabellone, a food service industry expert at market research firm Circana. "The challenge will be in meeting their low price point model."
And though the boba chain has more outlets than American fast-food giants McDonald's, Starbucks and Subway globally, Mixue's sales still trail Starbucks, Inspire Brands, which is the owner of Dunkin' and Baskin-Robbins, and Tim Hortons, according to Singapore-based research firm Momentum Works.