- Mixue, the world’s largest fast-food chain, had a blockbuster first day as a publicly traded company.
- The company’s shares jumped 30% from its IPO price when markets opened.
- The chain has over 45,000 stores and has attracted customers with cheap ice cream and bubble tea.
A bubble tea chain from China just went public, and it’s clinched the spot as the world’s biggest fast food company.
Mixue, a bubble tea and ice cream chain founded in 1997 in China’s Henan province, went public on Monday in a splashy Hong Kong IPO. It offered close to 17.1 million shares, amounting to 3.45 billion Hong Kong dollars, or $444 million.
Mixue had over 45,000 stores globally — franchisees and self-owned — as of September last year. It has outpaced Starbucks and McDonald’s retail footprints, which have around 40,000 and 41,000 outlets worldwide, respectively.
The stock jumped more than 30% to $262 when markets opened on Monday, the first day of trading in Hong Kong. When markets closed on Monday, it was trading at $294, 45% higher than its IPO price.
The chain’s founder, Zhang Hongchao, and his younger brother, Zhang Hongfu, have a combined net worth of $8.1 billion after the share sale, Bloomberg reported on Sunday, citing its billionaires index.
$1 ice cream, $2 drinks
Mixue’s main draw is its cheap products, customers told Business Insider.
The chain has around 20 outlets in Singapore, all operating as to-go counters. When BI visited an outlet near Singapore’s Central Business District at around noon on Monday, there were around five people in line.
The storefront’s most prominent visual was the brand’s “Snow King” mascot — a snowman wearing a crown.
The cheapest item at the store BI visited was the $1.10 Signature King Cone ice cream, while the most expensive item was the Cheese Strawberry drink, priced at $3. Most of the store’s drinks were sold in the $2 range.
Eden Loke, 23, a communications executive, said she first heard of Mixue when someone wearing the brand’s inflatable “Snow King” mascot was filmed prancing around at a shopping complex in Singapore. The mascot’s shenanigans at the mall — including a dance-off with another brand’s mascot — went viral on TikTok.
“The viral marketing, likable branding, word of mouth from family, and unbeatable prices resonated with me,” Loke said.
She said her go-to drink is Mixue’s Kiwi Oolong Tea, which costs $2.60. Loke said the low price was the biggest factor in making her pick the brand over other stores.
Eli Tun, a student waiting for his regular order — a $2.20 Taro Milk Tea — said he first spotted the brand in Malaysia last year and realized how cheap the drinks were.
Since then, he’s switched from buying from other popular bubble tea brands in Singapore, like LiHo Tea or KOI Thé, saying he would rather pay $3 at Mixue than $6 for a similar drink elsewhere.
“I’m not looking for the cream of the crop of drinks, just something to drink while going home,” Tun, 19, said.
Nathanael Chow, an investment consultant, said he always gets the Signature King Cone at Mixue — vanilla soft-serve ice cream in a tall waffle cone.
Chow said he was drawn to the brand because of the brand’s catchy jingle, which is set to the tune of “Oh! Susanna.” Some Mixue outlets play the jingle at the store, though the shop BI visited did not.
Mixue’s success lies in courting China’s cost-conscious buyers
Jason Yu, the managing director for Greater China at the UK-based consumer research group Kantar Worldpanel, said Mixue’s edge in China’s highly competitive bubble tea market is that most of its products are priced under RMB 10, or about $1.40.
“This is very attractive to consumers in the lower tier cities and towns,” Yu said.
Alexandra Leung, the founder of Monogic, a food and beverage marketing and public relations agency in Singapore and Hong Kong, said Mixue’s success can be attributed to having small shops in high-traffic areas, particularly around campuses.
“This approach not only captures a significant customer base but also ensures high foot traffic and brand loyalty, especially among students who frequently consume their products,” Leung said.
While other bubble tea brands have been focusing on premium positioning with prices above RMB 20 in tier 1 cities like Beijing and Shanghai, Mixue “successfully established its presence in lower-tier cities where competition is less intense,” Leung said.
China has seen a bubble tea IPO boom.
Earlier in February, Guming Holdings had its Hong Kong IPO. Sichuan Baicha Baidao Industrial Co — also known as Chabaidao — went public in Hong Kong last April, although its stock is trading well below its IPO price.
Representatives for Mixue did not respond to a request for comment from Business Insider.
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