Crossing the consumption cycle, there are no secrets for Mixue Bingcheng.

Text | Yang Yafei 

Where is the ceiling for opening stores of freshly made beverages? Some clues can be seen from the Snow King.  

2024 has just passed, and Mixue Ice Cream and Tea has presented an outstanding report card: According to the latest disclosed prospectus, as of the end of September, Mixue Ice Cream and Tea has 45,000 stores worldwide, exceeding Starbucks' 40,200 stores worldwide during the same period, becoming the largest brand in the global freshly made beverage industry in terms of scale. It must be said that the Snow King's 2024 is quite impressive.  

Mixue Ice Cream and Tea's store network in China and overseas, as shown in the prospectus 

"45,000 stores, covering 11 countries in China and overseas", is of great significance for Mixue Ice Cream and Tea and the entire freshly made beverage industry. This time, Mixue Ice Cream and Tea has become the largest coffee and tea beverage brand in terms of store scale in the global market, and it has achieved this under the background of high growth: From January to September this year, Mixue Ice Cream and Tea has added 7,737 stores, with an average daily net increase of about 28.7 stores (calculated based on 270 days).

From an industry perspective, what level is this store opening speed?  

Before Mixue Ice Cream and Tea, Guming and Auntea have recently updated their prospectuses. Public information shows that Guming added 777 stores in the first three quarters of 2024, and Auntea added 648 stores in the first half of the year. Another leading brand, Chabaidao, added 581 stores in the first half of the year. These three are all top players, and their store scales are among the top 5 in China's freshly made beverage industry.  

Even as industry leaders, Mixue Ice Cream and Tea can still maintain an independent expansion rhythm, indicating that they are not "pigs on the wind", but rather have achieved this under the increasingly fierce market competition.  

In 2023, many leading brands once shouted the slogan of reaching 10,000 stores, and the market was also optimistic that the "10,000-store era" would soon arrive. However, the actual situation is not so. In the past 2024, the days of freshly made beverage brands have not been easy. The overall scale growth has slowed down, shifting from incremental expansion to stock competition, and there are even voices of "reaching the industry ceiling" and "industry winter".  

The rapid change in the market situation has made even the top players with thousands of stores unable to resist, and they have actively slowed down and turned to focus on the operation of existing stores to deal with many uncertain factors from the outside.  

However, Mixue Ice Cream and Tea is a special existence in the industry. Although its scale and volume have been leading the way for a long time, in the past year or so, it has quietly further widened the gap. As of September 2024, Mixue Ice Cream and Tea has opened more than 9,000 stores in one year. In just one year, it is almost the size of an industry-leading brand.

The market situation is both good and bad. For most people, it is already quite challenging to simply follow the trend and not be eliminated from the game. Facing the same market challenges, Mixue Ice Cream and Tea can still maintain high growth, which has some unique aspects. In the words of a catering industry insider, when it comes to opening stores, "In the tea beverage brand, there are Mixue Ice Cream and Tea and others."

From the low-end market to multi-brands, the ceiling for opening stores has not yet been reached

The growth of a chain brand cannot only depend on the absolute number of stores, and the quality of store opening also varies. It seems that Mixue has not simply "made up the numbers" in this regard.  

Judging from the data disclosed in the prospectus, Mixue Ice Cream and Tea's various operating indicators have continued to improve overall: From January to September 2024, Mixue Ice Cream and Tea's GMV reached 44.9 billion yuan, an increase of 21.4% year-on-year; its operating income was 18.7 billion yuan, an increase of 21.2% year-on-year; and its net profit was 3.5 billion yuan, an increase of 42.3% year-on-year.  

Having more stores than Starbucks is obviously not the deliberate pursuit of Mixue Ice Cream and Tea. In other words, they not only pursue "scale quantity", but also pay attention to "scale quality".  

For example, while opening a large number of new stores, the old stores of Mixue Ice Cream and Tea have not been greatly affected, and the single-store sales continue to increase. The average daily GMV per single store of the old stores that opened before 2021 increased from 4,144.6 yuan in 2021 to 4,492.8 yuan in 2023, and further increased to 4,746.2 yuan from January to September 2024.

There is only one possible reason for this result, that is, the expansion of Mixue Ice Cream and Tea is not purely dependent on densification. How did they achieve this? The core lies in the low-end market.  

Whether it is tea beverages or coffee, the exploration of the low-end market for freshly made beverages is no longer a new topic. More bluntly, the low-end market is the common foundation for leading brands. Then, what is the difference between Mixue Ice Cream and Tea's exploration of the low-end market and that of other brands?  

According to the prospectus, in the mainland Chinese market, as of January to September 2024, Mixue Ice Cream and Tea has 23,000 stores in third-tier and lower-tier cities, accounting for 57.2%, while in 2023, this proportion was 56.8%. Obviously, The low-end market is still the focus of Mixue Ice Cream and Tea's efforts in 2024.

The distribution of Mixue Ice Cream and Tea stores in mainland China by city tier

But "third-tier and lower-tier cities" is only a rough geographical scope. According to 36Kr's understanding from an insider close to Mixue Ice Cream and Tea, Mixue Ice Cream and Tea's internal definition of the low-end market is not the "third to sixth-tier cities" in the industry sense. They believe that the urban market is only a basic definition, "Counties and towns are the low-end market in Mixue Ice Cream and Tea's eyes."

This can also be seen from the prospectus. As of September 2024, Mixue Ice Cream and Tea's store network has entered 4,900 towns, while a year ago, this number was only 3,100. That is to say, They have newly developed 1,800 town markets in one year. According to 36Kr's understanding, in the one year as of September 2024, more than half of the over 9,000 new stores opened by Mixue Ice Cream and Tea come from the newly entered town markets.  

From this perspective, Mixue Ice Cream and Tea's exploration of the low-end market is not only in breadth but also in depth.  

The town market is one of the few blue ocean markets for freshly made beverages. There are more than 30,000 towns in China, but this is also a "tough nut to crack". The lower the store is expanded, the higher the difficulty of the logistics and supply chain behind it. Therefore, the exploration of the low-end market can only be carried out step by step - only when a firm foothold is established in the county-level administrative units, can the exploration of the town market be possible.  

To be able to open stores in towns, Mixue Ice Cream and Tea relies on the layout of its logistics network. As of September 2024, Mixue Ice Cream and Tea has achieved a 12-hour delivery in more than 90% of the county-level administrative regions in mainland China, and has achieved cold chain logistics coverage in more than 97% of its stores. In the year of expanding into towns, their cold chain logistics coverage has increased by 7 percentage points.  

The logistics of these stores is completed by 27 warehouses built across the country. According to 36Kr's understanding from industry insiders, although the number of large warehouses remains the same as last year, a new change this year is that Mixue Ice Cream and Tea has moved some warehouses forward to make them closer to the consumer market. With the continuous exploration of the town market, the logistics cost also has the opportunity to be further spread.  

Mixue Ice Cream and Tea's warehouse and distribution network, as shown in the prospectus

From the low-end market to the even lower-end town market, Mixue Ice Cream and Tea's store opening has not yet reached the ceiling. As the second curve, the freshly ground coffee sub-brand "Lucky Coffee" has also maintained a growth trend this year. According to 36Kr's understanding from industry insiders close to Lucky Coffee, in the past 2024, Lucky Coffee has opened more than 1,000 new stores, and the total number of stores has exceeded 4,000.  

The low-end market is also the focus of Lucky Coffee. According to CIC statistics, as of 2023, the proportion of Lucky Coffee's stores in third-tier and lower-tier cities has reached 61.5%, and it has also ranked fourth in the store scale of freshly ground coffee in China.  

However, Lucky Coffee's status in the coffee industry is far less prominent than that of the main brand. Ruixing Coffee and Cotti Coffee have both exceeded 10,000 stores, and the 9.9 price war has not yet ended. The future of Lucky Coffee has more uncertainties.  

The only fortunate thing is that they have at least achieved a two-legged walk.

With 45,000 stores, Mixue Ice Cream and Tea has no secrets

In the current highly competitive market, Mixue Ice Cream and Tea also faces considerable competitive pressure in the low-end market. Judging from the prospectuses previously disclosed by Guming and Auntea, the low-end market is the direction that everyone is working towards. Auntea has also launched several sub-brands that follow the cost-effective route, and its intention is obvious, that is, to also cut a piece of the "cost-effective cake".  

The price war is an unavoidable topic for freshly made beverages. According to CIC statistics, there are about 660,000 freshly made beverage stores in China, but the price range of most brands is clustered between 10 yuan and 20 yuan. This is the largest piece of the entire cake, but Mixue Ice Cream and Tea has not touched it. They are the only brand among the top 5 freshly made beverage brands with the main product priced in single digits. Most products are only sold for 2 - 8 yuan, which is almost the price of a bottle of beverage.  

Mixue Ice Cream and Tea's main products and prices, as shown in the prospectus 

In terms of affordability, Mixue Ice Cream and Tea has been doing it for a relatively long time. China's total retail sales of consumer goods have jumped from 2.68 trillion yuan in 1997 to more than 47 trillion yuan in 2023, but the product prices of Mixue Ice Cream and Tea have always remained relatively low. The price of the big-selling ice cream has only increased from 1 yuan when it was launched in 2005 to 2 yuan now.  

The early layout has also given them an advantage in scale. According to CIC, in terms of the number of drinks sold in 2023, Mixue Ice Cream and Tea's Iced Lemonade, Ice Cream, and Pearl Milk Tea are the top 3 best-selling items in China's freshly made beverage industry.  

However, Mixue Ice Cream and Tea's "cost-effective" business is not only at the store level, but also in the upstream. Lemonade is the most typical example.  

According to CIC, more than 8 out of every 10 freshly made lemonades in China in 2023 come from Mixue Ice Cream and Tea. After launching this big-selling item in stores in 2013, Mixue Ice Cream and Tea simultaneously布局 upstream, purchasing lemons from Anyue in Sichuan, Tongnan in Chongqing and surrounding areas. With the growth of the store scale, Mixue Ice Cream and Tea's purchase volume in 2023 has reached about 115,000 tons.  

A cup of lemonade priced at 4 yuan has made Mixue Ice Cream and Tea the largest lemon purchaser in China.  

Mixue Ice Cream and Tea's global purchasing network for bulk food, agricultural products, and auxiliary materials, as shown in the prospectus

The large-scale purchasing of core raw materials has also given Mixue Ice Cream and Tea bargaining power in the upstream. For example, according to its prospectus data, In 2023, the purchasing cost of the same type and quality milk powder and lemon for Mixue Ice Cream and Tea is about 10% and more than 20% lower than the industry average, respectively. This price advantage will also be reflected in consumers' orders.  

Cost-effectiveness can also be replicated. In July 2024, Mixue Ice Cream and Tea launched a new product, "Jasmine Milk Green Tea". In the first month of its launch, it sold more than 100 million cups in the Chinese market. This new product also follows the cost-effective route, priced at 6 yuan, and consumers can get a 1 yuan discount by singing a few lines of the folk song "Jasmine Flower". While similar products on the market are mostly in the 10 - 20 yuan range.  

The raw material formula of this new product seems simple, using freshly brewed jasmine tea and fresh milk base, but in fact, Mixue Ice Cream and Tea has put a lot of effort into the supply chain end. According to 36Kr's understanding, They do not directly purchase ready-made tea leaves from the outside, but start from the jasmine scenting process and