Hong Kong (AFP) – Chinese drinks company Mixue Group, which has surpassed McDonald’s and Starbucks in store count to become the world’s largest food and beverage chain, reported a spike in profits on Wednesday as it laid out further expansion plans. The results came after Mixue raised $444 million in a bumper Hong Kong listing, with the stock jumping more than 40 percent on its March 3 debut and trading at around double its offer price this week.
The firm — known for beverages usually priced around $1 — had 41,584 stores in China and another 4,895 spread across 11 countries as of the end of last year, Mixue said in an exchange filing on Wednesday. Revenue increased 22 percent to $3.4 billion in 2024, which the company attributed mostly to “increased revenue generated from sales of goods and equipment, and to a lesser extent, from franchise and related services”. Profit for the year jumped 40 percent to $613 million.
Mixue, whose name translates to “honey snow ice city”, was founded by two brothers in the Chinese hinterland province of Henan in 1997 as a shaved ice shop. The Zhengzhou-headquartered firm quickly expanded across China and became a hit with frugal young consumers, disrupting a sector once dominated by premium brands. Mixue stores — recognisable by their bright red signs and smiling snowman mascot — became ubiquitous in lower-income Chinese cities, offering freshly made fruit drinks, tea drinks, ice cream and coffee.
Nearly 60 percent of Mixue stores in China are in cities categorised by the company as “third-tier or below”. Mixue says it relies on a franchise model to grow its brick-and-mortar network, but “franchise and related service fees are not our primary sources of revenue”. Instead, it makes most of its money from supplying food materials, equipment and packaging needed to run its stores.
The company said Wednesday that it will “continue to elevate the breadth and depth of our supply chain” in China, while remaining “focused on cultivating the Southeast Asia market”.
© 2024 AFP
