Mixue Bingcheng Co. Ltd. (MXBC), a Chinese ice cream and tea franchise that sells $1 bubble teas, has outgrown its rivals and become the top bubble tea brand in China.
MXBC, which is represented by a snowman-logo and has over 21,000 locations in China, was first founded by Zhang Hongchao in Zhengzhou, Henan province, in 1997. From the beginning, the brand marketed to lower-tier markets, targeting price-sensitive students and workers. The brand was established in 1999, and in 2006, it found its place in the market by selling 2 yuan (approximately $0.30) ice cream cones. By selling items priced lower than most brands, MXBC soon became the bestselling bubble tea brand in China.
In 2021, MXBC was estimated to hold a valuation of 20 billion yuan (approximately $2.8 billion), beating premium bubble tea brands such as Nayuki’s Tea and Hey Tea. Last year, the brand earned a revenue of 10.3 billion yuan (approximately $1.4 billion). Today, their bubble milk tea sells for 7 yuan (approximately $1).
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While other brands operate spacious dine-in stores, MXBC operates shops in small cities with lower income levels and mostly serves takeout only. The company established its own central factory and R&D center to self-produce most of its core ingredients, keeping their production costs at a minimum.
“Our own Research and Development Center makes the best products possible,” the brand wrote on their website. “We source high-quality ingredients globally. Our patents and cutting-edge know-how enable us to produce core ingredients independently with strict standards applied.”
The brand’s success reflects on the cost-conscious Chinese citizens, especially during the nation’s strict zero-COVID approach. As the pandemic brought on unemployment, MXBC emerged as an employer for those in lower-tier cities.
The company has since applied for an initial public offering on the Shenzhen Stock Exchange. MXBC has also expanded abroad by opening in Vietnam and Indonesia, where it operates a total of nearly 600 stores. The brand has also registered its trademark in about 30 markets, including the U.S., Europe, Japan, Kyrgyzstan and Uzbekistan.