Mixue Ice Cream and Tea, a bubble tea chain that has outpaced major competitors like McDonald's and Starbucks in terms of the number of outlets, saw its shares surge by 40% upon debuting on the Hong Kong Stock Exchange. This spike enabled the company to raise an impressive $444 million (£352 million), marking this year's most significant initial public offering (IPO) in the financial hub.
Founded in 1997 by Zhang Hongchao, a student at Henan University of Finance and Economics, Mixue is keenly popular, especially during tough economic times in China, characterized by a property crisis and low consumer confidence. Offering ice creams and drinks at an average price of six Chinese yuan (approximately $0.82; £0.65), the brand has more than 45,000 stores across China and 11 other countries, including Singapore and Thailand, and plans to expand further.
Mixue operates significantly differently from traditional brands. It has been termed as China’s largest bubble tea, iced drink, and ice cream outlet, yet most of its franchises are owned by independent operators, contrasting with Starbucks' business model, where over half of its stores are corporate-owned.
The strong debut of Mixue is a departure from trends seen with smaller bubble tea chains, such as Guming, whose shares fell after its first trading day in February. The anticipation now builds around the sustainability of the bubble tea market amidst broader economic challenges in China.
