Bubble Tea Giant Mixue Makes a Splash on Stock Market Debut

Mixue Ice Cream and Tea, a notable player in the bubble tea market, saw its shares surge by 40% upon debuting on the Hong Kong Stock Exchange, making headlines with its impressive IPO amidst ongoing economic challenges in China.

Mixue Ice Cream and Tea, a controversial but popular bubble tea chain that dwarfs giants like Starbucks and McDonald’s in store count, outperformed expectations in its recent stock market debut. Launching on the Hong Kong Stock Exchange, Mixue’s shares rose by an impressive 40%, propelling the company to raise around $444 million (£352 million) through the year’s largest initial public offering (IPO).

Founded in 1997 by Zhang Hongchao, a student at Henan University of Finance and Economics who aimed to support his family financially, Mixue has transcended boundaries with over 45,000 outlets in China alone and an international presence in 11 other countries including Singapore and Thailand. The firm sells its beloved ice creams and drinks at an average price of just six Chinese yuan ($0.82; £0.65), making it an accessible treat for many amidst China's current economic hurdles characterized by a property crisis and fluctuating consumer confidence.

Distinguished by its distinctive branding, with locations festooned with the form of its Snow King mascot and a catchy theme tune played endlessly in-store, Mixue operates differently than traditional chains—nearly all its establishments are franchises, contrasting with Starbucks' model of direct store operations. While this strategy may seem unconventional, it has evidently paid off, marking a strong market presence in the bubble tea landscape.

Mixue’s robust debut stands in stark contrast to the struggles of its competitors like Guming and Chabaidao, whose shares stumbled upon their respective market launches. As the bubble tea phenomenon burgeons in China, many observers are left wondering if this growth is sustainable or if the industry could face challenges ahead.