Mixue outshines Starbucks with 40% stock surge on Hong Kong debut

Mixue Ice Cream and Tea, a Chinese bubble tea chain largely unknown outside Asia, saw its shares soar over 40% on its Hong Kong Stock Exchange debut on Monday, early March 2025. Boasting more than 45,000 outlets across 12 countries—surpassing giants like McDonald’s and Starbucks—the company raised $444 million in the financial hub’s largest initial public offering (IPO) of the year. Founded in 1997 by Zhang Hongchao as a part-time gig to support his family, Mixue has become a sensation amid China’s economic struggles, offering ice creams and drinks at an average of 6 yuan ($0.82). The blockbuster debut signals investor appetite for brands thriving in tough times, with Mixue eyeing further global expansion.

The chain’s rise comes as China grapples with a property crisis and faltering consumer and business confidence. Operating almost entirely through franchisees—unlike Starbucks, which runs over half its stores directly—Mixue functions more as a raw materials supplier, slashing costs and fueling its vast reach. Spanning nations like Singapore and Thailand beyond China, the chain features its Snow King mascot and a looping theme song, cementing a distinct identity. While competitors like Guming and Chabaidao saw share dips on their debuts, Mixue’s $444 million IPO underscores its unique strength in a crowded market.

Outpacing McDonald’s (over 43,000 locations) and Starbucks (40,576 outlets), Mixue’s valuation spike reflects faith in its low-price, high-volume model. Starting as a humble stall in Zhengzhou, the company now challenges Western titans in the beverage and ice cream sector. With expansion plans in motion, Mixue could reshape the global market, leveraging its affordable offerings and massive scale to compete in an industry dominated by premium brands.

Humble beginnings to massive growth

Zhang Hongchao, a student at Henan University of Finance and Economics, launched Mixue in 1997 as a side hustle to ease his family’s financial strain. What began as a modest cold drink shop in Zhengzhou has ballooned into a network officially named “Mìxuě Bīngchéng” (honey snow ice city). Its strategy of selling bubble teas and ice creams for an average of 6 yuan—less than $1—won over China’s cost-conscious youth, driving explosive growth.

By 2025, Mixue’s footprint exceeds 45,000 stores, outstripping McDonald’s and Starbucks in sheer numbers. Unlike its Western rivals, which rely heavily on corporate-run outlets, Mixue thrives on a franchise model, supplying ingredients and support to local operators. This approach has fueled rapid expansion, particularly in China’s smaller cities, where affordable options resonate amid economic slowdowns.

A distinctive business model

Operating as a raw materials supplier sets Mixue apart. While Starbucks manages over 50% of its stores directly, investing in staff and branding, Mixue delegates nearly all operations to franchisees, cutting overhead and speeding growth. This contrasts with peers in the bubble tea space like Guming and Chabaidao, which compete but lack Mixue’s scale or IPO success.

The chain’s branding is unmistakable, with the Snow King mascot adorning cups and storefronts, and a catchy theme song playing on repeat. Its lineup—bubble teas, iced drinks, and creamy ice creams—targets young consumers seeking budget-friendly treats as China faces a property slump and shaky confidence, making Mixue a standout in a price-sensitive market.

Stellar Hong Kong stock debut

Soaring over 40% on its Hong Kong debut highlights Mixue’s investor appeal. The $444 million IPO, the year’s biggest in the city, defied a volatile global market, unlike rival Guming’s February slide or Chabaidao’s lackluster launch last year. The funds are earmarked for international growth, with Mixue poised to expand its footprint beyond its current 12-country reach, including Singapore and Thailand.

The cash injection will bolster logistics and new store openings, targeting emerging markets where bubble tea is gaining traction. Outnumbering Starbucks’ 40,576 stores and McDonald’s’ 43,000-plus locations, Mixue’s market entry signals a shift, with investors betting on its resilience against economic headwinds.

Economic backdrop and consumer draw

China’s economic woes—sparked by the 2021 Evergrande collapse—have crimped spending power, yet Mixue thrives. With property values tanking and confidence low, its 6-yuan price point (under $1) appeals to millions, especially younger urbanites in secondary cities. The bubble tea market hit $20 billion in China in 2023, fueled by affordable brands like Mixue.

The chain’s low-cost model taps into a growing demand for value-driven options. While premium players like Starbucks charge around $5 per item, Mixue delivers quality at a fraction of the cost, cementing its dominance in a sector where price increasingly dictates preference.

Mixue’s expansion timeline

Mixue’s journey reflects steady ascent. Key milestones include:

• 1997: Zhang Hongchao founds Mixue in Zhengzhou, China.
• 2023: Surpasses 40,000 stores, overtaking Starbucks in count.
• Early March 2025: Shares jump 40%+ on Hong Kong IPO debut.

These steps trace its rise from a local venture to a global contender in the beverage and ice cream arena.

Standing tall against global giants

Outnumbering McDonald’s and Starbucks in outlets is no small feat. McDonald’s boasts over 43,000 locations, Starbucks 40,576, yet Mixue’s 45,000 stores—mostly in China—give it an edge in scale. Unlike Starbucks’ premium focus, with items averaging $5, or McDonald’s’ hybrid approach, Mixue bets on affordability, keeping prices below $1.

Its franchise-heavy model diverges from Starbucks’ direct control of over half its stores and McDonald’s’ mix of corporate and franchised units. By empowering franchisees with supplies and branding, Mixue scales fast, leveraging local investment to blanket markets where cost trumps luxury.

Global ambitions on the horizon

Expanding beyond China is Mixue’s next frontier. Already in 11 countries like Singapore and Thailand, the chain eyes further growth with its $444 million IPO haul. The funds will enhance logistics and fuel new outlets, prioritizing Southeast Asia, where bubble tea’s global consumption hit 5 billion cups in 2024, with 20% from the region.

While Asia remains the core, Mixue hints at broader horizons. Its low-price, high-volume playbook could challenge Starbucks in new territories, though it’s likely to hone its dominance in emerging markets before a full-on Western push.

Reshaping the beverage landscape

Mixue’s 40% stock surge contrasts sharply with Guming and Chabaidao’s debut stumbles, signaling investor faith in its recession-proof model. Leading China’s $20 billion bubble tea market, it pressures premium brands like Starbucks to rethink strategies in a cost-conscious world shaped by post-pandemic shifts.

With 45,000 stores, Mixue not only rules its home turf but also poses a global threat. Its blend of affordability and scale could inspire a wave of value-driven chains, redefining how beverage giants compete in an era where every dollar counts.