The widely rumored Chinese chain tea drink brand Mixue Ice City is set to make its debut in Hong Kong next year, with its first store opening in Mong Kok. This follows other Chinese chain restaurant brands like “Lemon Mon Lemon Tea” and “COTTI COFFEE” entering the Hong Kong market. Mixue Ice City’s first Hong Kong outlet is located on Nathan Road, Mong Kok, in the Bank Centre Plaza, near the MTR Mong Kok Station E2 exit. The store is currently under renovation, with signs announcing “Hong Kong First Store Opening Soon” and featuring their signature products such as “Ice Fresh Lemon Water” and “Fresh Ice Cream.”
Mixue Ice City, a chain brand focusing on ice cream and tea drinks, targets lower-tier markets with a budget-friendly approach. Its products are priced below 10 RMB, including 3 RMB ice cream, 4 RMB lemon water, and milk tea under 10 RMB.
Earlier, reports indicated that Mixue Ice City plans to list in Hong Kong next year, raising approximately 1 billion USD (about 7.8 billion HKD). Bank of America, Goldman Sachs, and UBS are joint sponsors for Mixue Ice City. The company had initially planned to list on the Shenzhen Stock Exchange but later withdrew the process. In 2020 and 2021, Mixue Ice City’s revenue grew by 82% and 121% year-on-year, respectively. As of the end of March last year, the company had 2,276 stores.
Mixue Ice City’s A-share listing application was accepted earlier and its prospectus has been pre-disclosed. The company plans to list on the Shenzhen Stock Exchange’s main board and could become the “national chain tea drink first stock.” According to the prospectus, GF Securities is the lead underwriter for Mixue Ice City’s listing.
The prospectus shows that Mixue Ice City’s revenue has grown rapidly, with revenues of 4.68 billion RMB and 10.35 billion RMB in 2020 and 2021, respectively, reflecting growth rates of 82.38% and 121.18% year-on-year. By the end of March 2022, the company had a total of 22,276 stores, making it the largest chain in China’s made-to-order tea drink industry. Its store network spans all 31 provinces, autonomous regions, and municipalities in China, as well as countries such as Vietnam and Indonesia.
In recent years, Mixue Ice City’s brand influence and recognition have increased, and with continual updates to their drink offerings, the company’s business has accelerated. The prospectus reveals that the number of franchise stores and single-store sales have been growing, becoming major factors in the company’s revenue growth.
Mixue Ice City has developed a “research and production, warehousing and logistics, and operation management” integrated industry chain, and operates under a “direct chain as guidance, franchise chain as main body” model. It runs the tea drink chain “Mixue Ice City,” the coffee chain “Lucky Coffee,” and the ice cream chain “Jilatu,” providing a range of fresh drinks and ice cream.
The company adheres to its mission of “letting everyone in the world enjoy high-quality, affordable deliciousness” with an average product price of 6-8 RMB. This pricing strategy attracts consumers to increase their purchase frequency and supports rapid expansion into more lower-tier cities, making Mixue Ice City a popular national chain tea drink brand.
Since 2021, as the national economy has stabilized and consumer demand has increased, Mixue Ice City has achieved impressive revenue growth due to its “high quality, affordable” product concept. This success reflects both the effectiveness of its “low-margin, high-volume” pricing strategy and the trend of increasing domestic demand.
Moreover, the company keeps track of consumer preferences, continually introducing new products that align with popular tastes. By combining introductory and profitable products, it optimizes its product structure to effectively increase profit margins. According to the prospectus, the company’s net profit attributable to shareholders was approximately 1.845 billion RMB in 2021, a 106.05% increase from the previous year. The company has developed popular products such as Magic Crunch Ice Cream, Shaky Milkshake, Ice Fresh Lemon Water, and Pearl Milk Tea, and launched store cold chain drinks in 2021, enhancing store sales.
The prospectus also highlights Mixue Ice City’s complete industry chain advantage, including self-built production bases, raw material production factories, and warehousing and logistics bases across various locations. This setup ensures the safety of food raw materials while keeping costs low and supporting the company’s pricing advantages.
In production, the company has established factories in key raw material production areas to reduce material transport loss and procurement costs, enhance supply speed, and maintain quality and affordability. In logistics, as of March 2022, the company had set up warehousing and logistics bases in 22 provinces and has built a nationwide logistics network, improving efficiency and reducing delivery times.
Additionally, Mixue Ice City has established a comprehensive quality control and food safety management system, including strict supplier selection, equipment and personnel management, uniform material supply, and supervision of stores.
The company has developed a robust brand marketing matrix, utilizing both online and offline channels. It has created the Mixue Ice City theme song and the “Snow King” IP, becoming a favorite among consumers. The “Snow King” videos have received over 1 billion views, and the theme song has over 4 billion plays. This summer, the hashtag “Mixue Ice City Blackened” topped the hot search list on Weibo. The company’s online marketing efforts have significantly expanded its brand influence, with a total of approximately 30 million followers across its WeChat, Douyin, Kuaishou, and Weibo platforms.
According to iMedia Consulting, China’s made-to-order tea drink market grew from 29.1 billion RMB in 2016 to 279.6 billion RMB in 2021, with a compound annual growth rate of 57.23%. The market is expected to further expand to 374.9 billion RMB by 2025. The fresh coffee and ice cream industries also have substantial growth potential.
Post time: Aug-16-2024