Mixue's Global Success: Lessons from the World's Largest Fast Food Chain
Having posted about Gregg’s struggles earlier this week, and in light of their Hong Kong Stock Exchange debut on Monday, I have been thinking a lot about Mixue’s success. For those of you who have never come across Mixue – it is currently the world’s largest fast food chain you have probably never heard of. They sell ice cream, smoothies, and bubble tea, and they have more locations than McDonald's - about 45,000 stores mostly in China. Mixue recorded over $2.6 billion in revenue in the first 9 months of 2024, which feels impressive particularly in the context of China’s wider economic picture. Their stores are typically found in key urban locations (transport hubs, malls, downtown areas, etc.), with a core budget-conscious student and young professional Gen Z customer base and a strong presence in lower tier Chinese cities.
With Mixue reportedly having its eye on global expansion, what can we learn from Mixue’s success?
Mixue really understands its core customer and delivers genuine value to them. Whilst its products are undoubtedly cheap - ice creams and drinks sell for an average of six Chinese yuan ($0.82; £0.65) - the menu price point enables their core consumers to pick whatever they want from the menu and know it will be within budget. Mixue has rejected the premium positioning that many of their bubble tea competitors are taking because they understand that their customer base is not necessarily looking for the best quality product – they want something fun and affordable.
Mixue excels in offering limited editions and seasonal menu items, consistently introducing new tea and ice cream products for every festival, significant date, and holiday. This means there is always something new to try, keeping things feeling fresh and exciting. Their limited-time offers (LTOs) and promotions are highly tailored to their core audience of younger customers, their key tea/ice cream occasions, and what they want from these moments. This week, they are offering a whole line of pink lychee drinks for International Women’s Day along with a promotional gift (a pocket mirror) if ‘you and your bestie’ buy two drinks. They understand that bubble tea is often enjoyed with friends and leverage promotions to drive visits to the store. From my research over the years with Gen Z, in the UK, we still see a lot of unaddressed desire for seasonality – going beyond the standard Pumpkin Spice and Christmas ranges to create a bigger sense of occasion and drive visits to store between typical seasonal beats.
They are finding low risk ways to innovate. They run something called ‘3-week flavor’ where 3 limited edition soft serve flavours are sold for a week each – for November 2024 in Sydney stores, this was Taro, Honey Dew or Matcha. Flavours that sell well during that time are sometimes brought back permanently - sort of A/B testing for ice-cream. This allows Mixue to also test flavours that sell well in some geographies (like Matcha and Taro that sell well in China) in new ones like Australia.
The Mixue menu feels massive and chaotic by UK standards, but it is able to offer more choice by ensuring operational efficiency. It standardizes ingredients and preparation methods which helps to control costs and maintain quality across tens of thousands of franchise stores. Most of their products are made of the same ingredients, in different combinations which creates a sense of limitless choice whilst maintaining the core of their offer.
Whilst what works in China is clearly not fully replicable to the UK, but Mixue’s story is a powerful reminder that in the midst of difficult economic conditions, delivering genuine value isn’t just about keeping prices low. It comes from really knowing your customer and then using that understanding to ensure that you are relevant and resonant, making sure every yuan or pound feels like money well spent.
Credit: https://commons.wikimedia.org/wiki/File:Mixue_in_karawachi.jpg
