Mixue Ice City is finding new growth drivers

If you are still looking at Mixue Bingcheng with the old perspective, you will undoubtedly be unable to grasp the development logic of this enterprise. Flipping through the latest performance report released by Mixue Bingcheng, we can clearly see that this company, which has nearly 60,000 stores, is embarking on a brand new transformation and upgrade. This transformation and upgrade are finding new support points for the development of Mixue Bingcheng.

The real confidence for Mixue Bingcheng to make changes comes from its exceeding expectations in revenue and profit growth. The financial report shows that during the reporting period, Mixue Bingcheng achieved revenue of 33.56 billion yuan, a year-on-year increase of 35.2%; net profit attributable to shareholders was 5.88 billion yuan, a year-on-year increase of 32.7%. It can be said that in today’s increasingly fierce competition in the new tea drink sector, achieving such impressive growth is quite a challenge for Mixue Bingcheng.

The reason Mixue Bingcheng can achieve growth against the trend is primarily because, after occupying a market position with scale and low prices, it began actively maintaining its existing advantages while seeking new growth support points. By seeking new growth points, Mixue Bingcheng has started to open a new chapter in development with a long-term perspective.

1

In many people’s impressions, Mixue Bingcheng is a popular new tea drink brand found everywhere on the streets. In fact, in addition to Mixue Bingcheng, it also has two “brothers,” Luckin Coffee and Fulu Family. Unlike Mixue Bingcheng, which focuses on new tea drinks, Luckin Coffee provides freshly brewed coffee services to a broad audience, while Fulu Family offers freshly brewed beer services. According to the financial report released by Mixue Bingcheng, the total number of stores for these three “brothers” has approached 60,000, covering 13 countries and regions worldwide.

With such a vast number of stores, saying that Mixue Bingcheng is a “giant” in the new tea drink sector is not an exaggeration. However, with market saturation, if it continues the previous strategies of scale growth and low prices, it will inevitably face increasing difficulties and challenges. For this reason, Mixue Bingcheng has early on focused its development gaze towards a more long-term-oriented direction.

For instance, at Mixue Bingcheng’s earnings conference, CEO Zhang Yuan stated that 2025 is a year full of opportunities and challenges, and we will continue to focus on three main lines: strengthening the supply chain, building brand IP, and optimizing store operations, striving to achieve “leading total cost in a three-in-one manner” to maintain steady growth for the group overall.

Ultimately, Mixue Bingcheng has begun to focus more on building its own supply chain, improving store operational efficiency, and deeply exploring brand IP, based on its market advantages. If we previously summarized Mixue Bingcheng’s development as “seeking outward,” then entering a new development stage, Mixue Bingcheng has begun to “look inward,” finding more new development possibilities by continuously digging deep into its own territory.

In the current era of digitalization in the industry, Mixue Bingcheng’s pivot can be seen as seeking new support points for its growth.

2

Let’s turn our attention back to the time when Mixue Bingcheng went public. Through the prospectus, we see that Mixue Bingcheng’s true profit points lie not only in the quantity of drinks sold in stores but also in various aspects such as the supply of raw materials to stores, equipment transformation, and upgrades. Ultimately, Mixue Bingcheng’s real strength comes from its powerful supply chain, while the stores spread across the streets merely reflect Mixue Bingcheng’s strong supply chain capabilities.

As store expansion enters a new stage, relying solely on a development model based on scale expansion is beginning to encounter more and more difficulties and challenges. Meanwhile, user and consumer demands are subtly changing. Therefore, on the basis of maintaining the existing market scale, strengthening and upgrading its own supply chain to find more new growth possibilities has naturally become an important issue that Mixue Bingcheng must focus on.

It is at this time that Mixue Bingcheng proposed a “True Fresh Pure” strategy. Around this new strategy, it began upgrading the supply chain of its stores. For example, it upgraded the conventional milk to cold chain raw materials, and regular milk and coconut milk to cold chain fresh milk and cold chain coconut milk. At the same time, the company also synchronously transformed the production line and the cold chain warehousing and distribution system. According to reports, the company plans to invest approximately 1.8 to 2 billion yuan in 2026 for domestic supply chain upgrades and overseas base construction.

It is clear that Mixue Bingcheng is undergoing a comprehensive and in-depth upgrade of its previously leading supply chain system. Through this upgrade, Mixue Bingcheng can completely replicate its past successful experiences and thus rebuild a brand new Mixue Bingcheng. For Mixue Bingcheng, this is undoubtedly an internal transformation, and behind this transformation, new growth is bound to accompany it.

3

When the number of stores reaches a certain quantity, continuing the previous development inevitably faces difficulties. Many see this stage as a saturation phase. In this phase, achieving growth requires significantly higher costs, which will also impact the interests of existing stores and franchisees. At this point, Mixue Bingcheng began to no longer simply pursue the number of stores or market scale, but rather focused more on the digital upgrading of stores and refined operations, using these methods to enhance store operational efficiency and find new growth points.

If we view Mixue Bingcheng’s past development as relying on standardized and digital systems to achieve relatively stable product output in large-scale stores, then with the arrival of the digital intelligence era, promoting store operational efficiency through newer and deeper digital capabilities will become key to Mixue Bingcheng realizing new growth.

We all know that when the number of stores reaches a certain scale, especially after changes in consumer behavior and habits, the number of customers visiting stores will inevitably decrease. However, the decrease in customers is not solely due to reduced demand; it is also because their consumption methods have changed. Therefore, how to meet the changing consumption habits of consumers through digital transformation and upgrades, enabling them to continue consuming even without visiting stores, becomes one of the directions for store digital upgrades.

In addition, Mixue Bingcheng will also upgrade its stores. Specifically, this means developing more refined regional strategies based on single-store revenue and store density, expanding store types in traffic hubs, scenic spots, and other scenarios, while promoting the diversification upgrade of store models and consumption scenarios. On this basis, Mixue Bingcheng will also achieve comprehensive upgrades from menu, raw materials to packaging, and incorporate AI robots and digital systems to enhance store operational efficiency.

When digital intelligence becomes the engine for Mixue Bingcheng to achieve new growth, especially when Mixue Bingcheng finds a new breakthrough for growth under the new era background, we have reason to believe it can find new support points for its development. If we view Mixue Bingcheng’s rapid development in the past as driven by standardization and digitization, then now, deeper digital intelligence represented by AI will become the new engine driving its realization of new growth.

4

As mentioned above, Mixue Bingcheng has two other “brothers,” one is Luckin Coffee and the other is Fulu Family. While upgrading Mixue Bingcheng itself and finding new growth points, these two are also breakthrough points for Mixue Bingcheng to achieve new growth in the future. Taking Luckin Coffee as an example, we can see its unique advantages within Mixue Bingcheng’s overall strategy.

We all know that unlike the red ocean of the new tea drink sector, the coffee penetration rate in the Chinese market still has room for growth. However, with the continuous entry of new and old players, simply relying on traditional store expansion and price competition has become ineffective. To make Luckin Coffee a support point for driving Mixue Bingcheng’s new growth, new strategies are necessary.

At this time, we see Luckin Coffee starting to “upgrade coffee.” For instance, some stores have begun to offer low-temperature milk for better taste. Additionally, Luckin Coffee is gradually upgrading from traditional American coffee and milk coffee to specialty coffee and hand-brewed coffee to meet the more refined demands of customers.

Along with product upgrades, new raw materials as matching components are still needed. For example, in terms of fresh beans, Luckin Coffee will lock in the original flavor of coffee by significantly compressing the cycle from roasting to grinding. Furthermore, comprehensive upgrades and transformations have been made to core ingredients such as coffee, milk, fruit, and sugar. In addition to upgrading raw materials, Mixue Bingcheng has also revealed plans to invest 100 to 200 million yuan to upgrade store equipment and strengthen training for store baristas, combined with digital management systems and automated equipment to create a fully upgraded Luckin Coffee from the inside out.

It can be said that Luckin Coffee, as a representative of Mixue Bingcheng’s sub-brands, is becoming a new support point for growth. With the support of these brands, especially as they carry on Mixue Bingcheng’s experience, they will inevitably bring a new growth point for Mixue Bingcheng that is as imaginative as itself.

Conclusion

As Mixue Bingcheng’s scale strategy comes to a close, it is finding new growth points for its development. Unlike Mixue Bingcheng’s previous outward-focused development, now its development is more inward-focused. This is a new exploration that is more imaginative than before. For Mixue Bingcheng, it is not only reshaping itself but also reshaping the relationships it builds with the market and users. Once this new relationship is established, Mixue Bingcheng’s boundaries will further expand, opening up a new world that is more imaginative than ever before.