The Rapid Growing of Chinese Ice Cream Store and Its Implication in the Future: Mixue

Case

Chinese ice cream and tea chain, Mixue, has dominated nearly all over Southeast Asia.
There are currently more than 21,000 stores in China, with approximately 1,000 stores available
in several Southeast Asian countries like Vietnam, the Philippines, Thailand, and even Indonesia.
This massive growth has raised a discourse in society on how it becomes a trend within just a
few years and its implication against the highly competitive market.

Mixue and Its Presence

Mixue was established in 1997 by Zheng Hongchao from Zhengzhou, China. Before
becoming a successful chain, it was only a small ice cream stall managed by a student. In 2006,
the ice cream stall hit its peak and started to become more popular then decided to start a
partnership in 2007. Through the years, the business owner also built its franchise company,
Bingcheng Co., and turned Mixue to be under its management.
Furthermore, Mixue was expanding its presence by opening stores overseas like in
Southeast Asia, including Indonesia where in 2020, Mixue opened its first store located in
Bandung city. Although generally similar stores and startups experienced a decline in profit
caused by the Covid-19 pandemic, which impacted its growth, it seemingly did not happen in
Mixue outlets. Since its first opening in Bandung, Mixue did not stop its expansion by opening
other outlets in other cities in Indonesia. By early 2022, Mixue has 317 stores spread across the
country. Mainly, Mixue has added more than 7,000 stores in the last three years.
A scholar, Beini Li, explained this significant growth of Mixue as the influence of social
media utilization toward the chain to develop brand awareness and boost sales from 2019.
Besides, Mixue also sets low prices ranging around US$ 0,4 to US$ 1,5 only for its products
which allows it to engage larger segments of society as its marketing strategy. Mixue constantly
enhances its approach to society that become its consumers by opening new stores even in the
middle to small city level. The expansion of franchises supports the selling frequency and
increasing sales volume of the company while pressing the production costs by creating its own
supply chain and managing its raw material. In its origin country, China, Mixue is a well-funded
business receiving around US$ 3 billion with revenue of approximately US$ 1,4 billion annually.
In Southeast Asia, like Vietnam or Indonesia, Mixue became recognized as a trend in social
media platforms like TikTok and Twitter which boosted its sales and popularity by instantly
reaching US$ 3 Million. By the raising of its store and achievement, many people support the
presence of Mixue since it also helps the major problem in the country, which is unemployment
by recruiting local laborers as its employees.

The Implication of Its Domination

Although the presence of Mixue business seems generally going positive, it has different
impacts on local enterprises especially when it comes to the micro, small and medium enterprises
(MSMEs) in the food & beverage field.
In Indonesia, MSMEs have a crucial spot in the country’s economy by contributing at
least 60% to the Gross Domestic Product (GDP). Currently, MSMEs dominate the amount of
business that exists in Indonesia which shows how high the competitiveness in the market is.
Like nearly the rest of the world, Indonesia’s economy is still in the phase of recovery after the
pandemic which implies the operation of MSME itself. Within the condition, the presence of
Mixue surely generates an impact on the MSMEs’ role.
Mixue has dug a large amount of profit despite the decrease in society’s spending on
tertiary products like ice cream in 2020 while MSME is still struggling to stabilize its income
and compete with other business organizations like startups and big companies in the same field.
This creates concern for the local MSMEs owners and no exception for the local startups with a
similar business strategy like Haus and Kopi Kenangan. Its successful growth and massive
expansion in Indonesia arguably became a new China domination and even called it a modern
‘colonization’.
Moreover, the presence of Mixue predictably enhances the negative sentiment towards
China. It is related to the absence of halal certification in the product which after all creates
concern and doubts in the public towards the company’s priority of the consumers’ needs,
especially in Indonesia.
Despite its controversies, Mixue still snatched the company with the most bubble tea
outlets in Southeast Asia replacing its competitors like Chatime and KOI and even at the fifth
rank as the largest franchise in the world competing with big companies like McDonald’s and
KFC. The achievement shows its powerful strategy to keep expanding and boost its sales
volume. In September 2022, the Mixue leader planned to set Initial Public Offer (IPO) by
applying on the main board of the Shenzhen Stock Exchange and making it the first ice cream
and tea chain to go public in China after previously exploring the Hong Kong IPO. Additionally,
Mixue plans to expand its outlets in bigger countries such as South Korea and Japan.

Conclusion

According to its consistency in uplifting its level of business, Mixue has a big probability
to extend its domination all over Asia. However, the culture of business utilizing trends in
society, the controversies, also the implication should be considered further and become the
company’s concern in the first place since it possibly becomes a downfall of the business growth
and even worse to the locals.