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Mixue Business Strategy: How a Supply Chain Model Beats Fast Food Giants

Discover how Mixue transformed from a small shaved ice shop into a global franchise powerhouse with over 10,000 outlets worldwide, using a unique supply chain-driven strategy.

Introduction

Mixue may be famous for its affordable ice cream and bubble tea, but behind the scenes, it is not just an F&B company. Mixue’s real strength lies in its supply chain strategy. Unlike typical food brands that profit directly from product sales, Mixue earns most of its revenue from selling ingredients, machines, and packaging to its franchisees. This innovative approach allows the company to scale rapidly and compete with fast-food giants like McDonald’s.

The Origin Story of Mixue

Mixue was founded in 1997 by Zhang Hongchao, who borrowed just 7 million rupiah from his grandmother to start a shaved ice business. The initial strategy was simple: sell delicious ice desserts at extremely low prices. By 2007, Mixue experimented with franchising, opening 27 outlets in under a month.

From F&B to Supply Chain

This was the turning point. Zhang realized that profitability could not come from cheap ice cream alone. Instead, the company evolved into a supply chain enterprise, focusing on economies of scale, cost reduction, and centralized ingredient distribution. Today, less than 1% of Mixue’s revenue comes from selling ice cream directly, while over 70% comes from ingredients and 15% from packaging.

Economies of Scale: The Growth Engine

Mixue’s success hinges on economies of scale. By producing and distributing on a massive scale, the company slashes costs while maintaining consistent taste and quality. This allows them to:

• Offer extremely low prices to attract mass-market consumers
• Support franchisees with affordable raw materials and equipment
• Expand aggressively in tier 3 and tier 4 cities across Asia
• Continuously lower costs as volume increases

“Mixue proves that a food brand doesn’t have to profit from food sales—it profits by supplying the food business itself.”

Franchise Model That Fuels Expansion

Unlike many global franchises, Mixue adopts a franchisee-friendly approach. Here are the key features:

• No revenue sharing with Mixue—franchisees keep 100% of sales
• Management, staff, and daily operations are fully handled by the franchisee
• Mandatory store design and contractor standards from Mixue
• Initial costs: around 700 million IDR including machines, renovation, and ingredients
• Ingredients and equipment must be purchased directly from Mixue
• No minimum distance rule—multiple Mixue stores can operate in the same area
• Price control on delivery apps (prices can only be raised by max IDR 2,000)

Why This Model Works

This system ensures that Mixue earns steady revenue from every franchise, regardless of store profitability. Franchisees buy ingredients and machines directly from Mixue, locking them into the supply chain. As a result, Mixue acts more like a B2B supply chain giant than an ice cream retailer.

Global Expansion and Future Outlook

Mixue began international expansion in 2018 by entering Vietnam, followed by Indonesia in 2020 (first outlet in Bandung). Its strategy relies on replicating the success in markets with similar consumer behavior—low to middle-income demographics, high demand for affordable treats, and large populations. Upcoming expansion may include the Philippines and Thailand.

The company has also raised funding from investors like Meituan and is planning an IPO to raise up to 14 trillion IDR, signaling its ambition to dominate the global F&B landscape.

Lessons Entrepreneurs Can Learn from Mixue

• Redefine your industry: Don’t just sell products—own the supply chain.
• Scale smartly: Low margins can work if paired with massive volume.
• Think beyond F&B: McDonald’s thrives on real estate, Mixue thrives on supply chain.
• Franchise wisely: Create a system where partners succeed while ensuring recurring revenue for your business.

Conclusion

Mixue’s journey shows that success comes not from sticking to conventional industry rules but from rewriting them. By turning a simple ice cream shop into a global supply chain empire, Mixue has redefined how F&B businesses can grow. Whether you’re building a café, a fashion brand, or a tech startup, the core lesson is clear: think differently about where your real revenue streams lie.

What do you think about Mixue’s strategy? Share your thoughts in the comments, spread this article to fellow entrepreneurs, and keep learning how global giants build their empires.

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References:

Video: Belajar Strategi MIXUE Dominasi Franchise FnB (MCD Hampir Kalah) #BedahBisnis
Channel: Raymond Chin
Source: https://www.youtube.com/watch?v=AntUhIyhddc