Mixue Bingcheng Surpasses McDonald’s as World’s Largest Fast Food Chain

BEIJING, China – Mixue Bingcheng, a bubble tea and ice cream chain, has officially surpassed both McDonald's and Starbucks to become the largest fast food chain in the world by number of locations, with over 45,000 outlets globally as of September 2024.

Despite nearly 90% of its stores being located in China, the company has begun to make its mark in the Asia Pacific region, opening locations in countries such as Indonesia, Vietnam, and Malaysia. The announcement comes at a time when Mixue is making waves on the stock market, having raised $444 million in its initial public offering last week, marking the largest listing in Hong Kong for the year.

Devi Subhakesan, co-founder of the equity research firm Investory Pte., expressed excitement about Mixue’s stock performance, noting, “The demand from retail and institutional investors has been strong, as was expected.” The chain’s expansion appears driven by its low prices, with ice cream cones priced at just 1 yuan (approximately 15 cents) and drinks ranging from 2 to 8 yuan ($0.30 to $1.20), appealing to cost-conscious consumers.

Other fast-food giants such as Starbucks and Inspire Brands, which owns Dunkin’ and Baskin-Robbins, still outperform Mixue in terms of sales. According to a report from Momentum Works, while Mixue leads in store count, it has yet to catch up in revenue generating.

Mixue’s popularity can be attributed to its effective business model, with 99% of its stores operating on a franchise basis. The company also supplies ingredients and equipment to its franchisees, which allows it to maintain a steady revenue stream. Kenny Ng Lai-yin, a strategist at Everbright Securities International, explained the advantages of this structure: “As market capacity can be uncertain in the fresh-drinks industry, the fact that Mixue can sell raw materials to its own franchisees and have a clear understanding of their demand gives it a lot of agency compared to others.”

Founded in 1997 by Zhang Hongchao, Mixue has ingrained itself into Chinese pop culture through its unique branding, including a catchy theme song and a snowman mascot known as the Snow King. Zhang, who started the business to improve his family’s finances, has maintained a simple yet ambitious vision: “Let people around the world eat well and drink well for just two American dollars.”

As Mixue eyes further expansion, its imminent entry into the U.S. market poses potential challenges for established American fast-food chains. With its extensive menu featuring ice cream cones and bubble tea, the chain may attract shoppers in the West looking for affordable dining options amid rising costs.

The future of Mixue Bingcheng looks bright, largely due to its innovative supply chain strategy, affordability, and brand recognition. As it continues to grow, the fast-food landscape may face significant changes, and experts believe that Mixue has the potential to carve out a substantial market share in the United States.