Mixue’s Sweet Surge: Is This Bubble Tea Chain the Next Starbucks?

In a world where coffee chains dominate the beverage landscape, a new contender has emerged from China: Mixue Ice Cream and Tea. This bubble tea chain is not just making waves; it is creating a tsunami of interest among investors and consumers alike. With more outlets than McDonald’s and Starbucks combined, Mixue is positioning itself as a potential global giant in the food and beverage industry.

The company was founded by billionaire brothers Zhang Hongchao and Hongfu in 1997, initially as a part-time endeavor to support their family’s finances. Over the years, Mixue has transformed into a powerhouse, boasting an impressive 45,000 outlets worldwide, with nearly 90% located in China. This rapid growth has allowed the brothers to amass a combined fortune of $11.6 billion, largely from their signature $1 freshly-made drinks.

Mixue’s journey began with a focus on ice cream, but as the popularity of bubble tea surged across China, the company quickly adapted its menu to include this trendy beverage. In 2017, they further diversified by introducing a coffee brand called Lucky Cup. This ability to pivot and cater to consumer preferences has been a cornerstone of Mixue’s success.

On March 3, 2025, Mixue made headlines with its initial public offering (IPO) on the Hong Kong Stock Exchange, where its shares skyrocketed by more than 40% on debut. This remarkable performance not only highlighted the company’s financial strength—reporting a 42% increase in net profit to 3.49 billion yuan ($479 million) in the first nine months of 2024—but also positioned its founders as wealthier than former Starbucks CEO Howard Schultz.

Mixue’s business model is intriguing. Unlike Starbucks, which operates a significant number of its stores directly, over 99% of Mixue’s outlets are franchised. This model generates most of the company’s revenue through the sale of food materials, equipment, and packaging to franchisees, allowing for rapid expansion without the overhead costs associated with direct ownership.

The bubble tea market in China is projected to grow to $66.5 billion by 2027, presenting a lucrative opportunity for Mixue’s continued expansion. The company is not just resting on its laurels; it is actively pursuing growth in Southeast Asia, with plans to penetrate markets in Indonesia, Vietnam, and Malaysia. However, challenges remain, particularly in tier-one cities where established competitors like Nayuki and Heytea dominate.

Mixue’s marketing strategy has also played a significant role in its rise. The brand is recognized for its catchy theme song and Snow King mascot, which resonate with younger consumers. This clever branding, combined with their affordable pricing—drinks range from 2 to 8 yuan (30 cents to $1.20)—makes Mixue an attractive option for budget-conscious consumers.

Despite its impressive growth, Mixue faces hurdles in brand recognition outside of Asia. While it has established a strong presence in countries like Australia, its name is still relatively unknown in the United States. However, the overwhelming demand for Mixue’s shares during its IPO indicates strong investor interest in the bubble tea market, suggesting that the company may soon become a household name globally.

In conclusion, as Mixue continues to expand and adapt to changing consumer preferences, the question arises: could it become the next Starbucks? With its unique business model, aggressive expansion strategy, and ability to offer affordable, quality beverages, Mixue is certainly on the path to becoming a significant player in the global beverage market. The coming years will be crucial in determining whether this bubble tea chain can sustain its momentum and achieve the iconic status of Starbucks.

In the words of Zhang Hongchao, “Our mission is to provide affordable food and drinks globally, making quality beverages accessible to all.” With this vision driving its operations, Mixue’s sweet surge may just be the beginning of a new chapter in the beverage industry.