Mixue sells supplies, not drinks: how the ¥1 ice cream chain became the world's biggest

Mixue's promise is extreme cheapness — soft serve at ¥1 when cones sold for ¥4–5, lemonade at ¥4. At those prices a milk-tea shop barely earns anything. By March 2022 the chain had 21,582 franchised stores and only 37 it ran itself.

Don't sell drinks — sell the supplies. Franchisees must buy syrup, cups and machines from Mixue's own factories; the ¥1 cone is the ad, ingredients are the margin.

Franchising began in 2007, with brother Zhang Hongfu standardizing it. Mixue integrated upward — up to 60% of ingredients self-produced, 100% for core items — and in 2014 built its own logistics network with free delivery for franchisees. Franchise fees run just ¥7,000–11,000 a year, but stores must buy their ingredients and equipment from Mixue, which brought in 94–96% of revenue.

Revenue rose from ¥2.57B in 2019 to ¥10.35B in 2021 at 13–18% net margins, earned almost entirely on sales to franchisees. By 2025 Mixue had 46,000-plus stores — more than McDonald's — making it the world's largest fast-food chain by store count, with 2024 revenue of ¥24.8B, up nearly 40% year on year.

Mixue's front door is a ¥1 ice cream cone. Launched around 2005, when cones typically sold for ¥4–5, it became the chain's signature and set the tone for a menu where many items cost about a dollar. That pricing made Mixue beloved across China's smaller cities — and made the stores themselves nearly unprofitable. The company's answer was to stop treating the drinks as the product.

The model, built from 2007 onward, makes each franchisee a captive customer of headquarters. Franchise fees are deliberately small — ¥7,000–11,000 a year by city tier, plus a ¥20,000 deposit — but stores must buy their ingredients, packaging and equipment from Mixue, which produces up to 60% of ingredients itself and, since 2014, ships them free through its own logistics network. By its IPO filing this was 94–96% of total revenue; ingredients and packaging alone were about 88%. The few showcase stores Mixue runs itself run at near-zero gross margin — demonstrations, not profit centers.

The compounding shows in the numbers. Revenue grew from ¥2.57B in 2019 to ¥10.35B in 2021 with net margins of 13–18%, while store count snowballed to 36,000-plus by the January 2024 filing and 46,000-plus by 2025 — past McDonald's, making Mixue the world's largest fast-food chain by store count. Its vertically integrated supply chain and proprietary logistics hold costs to about 30% of revenue against an industry average of 45–55%, which is exactly what keeps the ¥1 cone possible.

Ultra-low prices are marketing the franchisee pays for: every ¥1 cone sold pulls another supply order from that store.

Franchisees are captive customers, so revenue compounds with store count rather than same-store sales.

Self-produced ingredients and an owned logistics network remove supplier margins and fund prices rivals cannot match.

Tiny franchise fees keep the entry barrier low, maximizing store growth — which grows the real business: supplies.

Price the product like advertising, then monetize the required consumables. Controlling the inputs of thousands of independent shops turns a drink brand into a supply-chain business.

Mixue listed in Hong Kong in March 2025, with Reuters clocking a 47% first-day pop; by June 2025 the stock had run from about HK$290 on debut to HK$584.50. Growth kept compounding — over 10,000 new stores and 4,192 new franchisees in 2024 alone, with a 3.5% closure rate. The model has sharp edges: gross margin slides as prices fall, franchisees' thin earnings draw scrutiny, and food-safety lapses at franchised stores, like a 2021 fine over expired toppings, land on the brand. In 2024 it still earned ¥4.4B on ¥24.8B of revenue, up 40% year on year.