This is an English adaptation of a FoodBud historical article originally published on July 19, 2022.
Founded in 1997, Mixue Bingcheng had been operating for 25 years by the time this 2022 article was published. Brothers Zhang Hongchao and Zhang Hongfu started from a rural background and, at the outset, could hardly have imagined building a chain with more than 20,000 stores.
Zhang Hongfu, Mixue Bingcheng’s CEO, described an ambition for annual company revenue to reach US$100 billion. At the time, McDonald’s was the only global foodservice company near that scale: its 2021 annual report showed US$112.5 billion in systemwide sales and 40,031 restaurants at the end of 2021. Jihai Brand Monitoring data put Mixue Bingcheng’s store count at 21,510.
The company’s founding impulse was simple: why are ice cream and drinks so expensive? Zhang Hongfu’s stated mission was to make high-quality, affordable ice cream and drinks available to everyone, make the brand stronger, and make partners wealthier.
This adaptation summarizes selected parts of Zhang Hongfu’s internal account of Mixue Bingcheng’s first 20 years, from 1997 to 2017.
Zhang Hongfu often told newer founders that Mixue’s early pace was far slower than outsiders imagined. When entrepreneurs asked how Mixue opened thousands of stores, he replied that they were fortunate if they had opened a dozen stores in year one: Mixue took its first ten years to build one store, and by the time of his account the business had been running for 22 years.
He called himself Mixue’s “generation 1.5” founder. Zhang Hongchao started the business in 1997; Zhang Hongfu joined ten years later. The family background was ordinary, the elder brother was intensely driven, and the early team was grassroots. That origin shaped the company’s view of thrift, education, resilience, and low pricing.
Zhang Hongfu credited education with allowing the brothers to leave their village. His father insisted that the children study, even though the family farmed more than 20 mu of land and rural families around them often expected children to leave school early and work.
He remembered his father teaching him to write at age five or six, creating math problems for him around age ten, and introducing English before middle school, while both parents worked in the fields under the sun. The household’s emphasis on study eventually led Zhang Hongchao to Zhengzhou, where he studied and supported himself through part-time work and small business.
Zhang Hongfu framed education as a kind of R&D investment: it may not produce immediate returns, but without it there is no output. He also linked early reading and storytelling to later leadership. As a child he read magazines, newspapers, mythology, joke collections, essay books, and middle-school textbooks from boxes at home. He became known among village children as a “story king,” and later saw storytelling as a way to organize people around a shared vision.
In 1997, when Zhang Hongfu was in fifth grade, he heard that Zhang Hongchao planned to open a cold-drink shop in Zhengzhou and had asked the family to raise some money.
That summer, Zhang Hongfu visited the shop with his father. The store at the entrance of Baimiao Farmers’ Market near Dongfeng Road and Wenhua Road was roughly two square meters. It contained a freezer, a table, a shaved-ice machine, a cutting board, basic tools, a small plastic fan, a cassette player, a homemade amplifier, and a loud speaker playing pop music.
Zhang Hongchao served two iced drinks in glass cups. Zhang Hongfu remembered them as perhaps mint or orange flavored and as the best drinks he had tasted up to that point.
The Baimiao shop was not the first location. Zhang Hongchao’s first shop had been in Yanzhuang on Jinshui Road in eastern Zhengzhou, now the Zhengzhou Manhattan commercial area. He had chosen shaved ice because he had seen it near the Shangqiu stadium while studying there: large ice blocks were shaved into snow, topped with syrup, raisins, crushed peanuts, hawthorn strips, and sugared seasonal fruit. He had not seen the same product in Zhengzhou and decided to introduce it there.
With only RMB 3,000 in startup capital from his grandmother, Zhang Hongchao bought secondhand equipment. A used freezer cost RMB 800. Because there was no ready-made shaved-ice machine available, he bought a motor, welded a frame, added an adjustable screw, made an ice-holding disc, and built the machine himself. He also made syrups by cooking fruit and sugar at home, then transported them to the store by tricycle.
The first brand name was Hanliu Baobing, or “Cold Current Shaved Ice.” Products sold for RMB 0.50 to RMB 1.50. Daily sales could exceed RMB 100, and after rent and ingredients he could net nearly RMB 1,000 a month, compared with his sister’s wage of RMB 200 at the time.
The work was physically extreme. Zhang Hongchao slept only three or four hours, ran the stall alone, made products, cleaned, cooked syrup at night, and hauled large ice blocks in the morning from Zhengzhou Meat Processing Factory near Nanyang Road and Qunying Road. The blocks were roughly 1.2 meters long, 60 centimeters wide, and 30 centimeters thick. On one trip he carried three sections by bicycle, fell in traffic, and had to reload the ice under the sun. Long-term handling of ice without gloves later left his finger joints swollen.
Zhang Hongfu described 1997 as “three deaths and three rebirths.”
The first Yanzhuang shop did well for about a month but then slowed. The foot traffic looked strong, but it was mostly the same few hundred residents moving in and out of the urban village. Many had low incomes and treated drinks as nonessential. The store became unprofitable and closed.
The second shop, at Nanyang Road and Cuihua Road, was near two schools and started well, but the summer vacation reduced demand. Then road construction closed Cuihua Road, ending the site’s future.
The third Baimiao shop worked through warmer months but suffered as autumn arrived and demand for shaved ice fell. To survive the winter, Zhang Hongchao pooled shop proceeds, his sister’s savings, and money from the family’s grain sale to raise RMB 10,000 and partnered with a fruit seller to sell oranges. The orange business produced no profit for him.
In 1998, he resumed cold drinks. In autumn he rented the shop temporarily to a Fujian gold-jewelry operator and went to Hefei to sell candied hawthorn under the brand Zhang Laotai Tanghulu. The product used three layers of packaging: glutinous rice paper, a plastic box, and a plastic bag. Hefei’s damp winter caused the sugar coating to melt, and he returned to Zhengzhou in spring 1999 without making money.
In spring 1999, Baimiao Farmers’ Market was demolished as the nearby technology market expanded. Zhang Hongchao moved near Wenhualu and Bosong Road, beside the Coal Hospital, and opened a larger store of more than 60 square meters with six or seven folding tables.
The product line moved from cup-served shaved ice to plate-served snow ice and added items such as banana boats, milkshakes, soda-style drinks, and punch-style drinks with ice cream balls. The name changed to Mixue Bingcheng. “Mixue” referred to sweet syrup over snow-like shaved ice; “Bingcheng,” or “ice city,” reflected a product range of roughly 100 ice items.
The first sign was printed as the wrong-character “Mixue Bingcheng” rather than the intended “Mixue Bingcheng,” because the sign maker used the wrong Chinese character. Correcting it would cost more, so Zhang Hongchao accepted a RMB 200 discount and kept the sign.
The store performed well enough that a loyal customer opened a franchised store in Jiaozuo called Tianwaitian Mixue Bingcheng. Zhang Hongchao later expanded into the neighboring unit by knocking down the wall with employee Yatao over two sleepless nights, then repaired the wall and extended the bar counter.
In spring 2000, municipal policy encouraged schools and public institutions to remove perimeter walls and roadside storefronts to expose greenery. The newly enlarged shop was forced to close.
Zhang Hongfu tied Mixue’s low-price model directly to Zhang Hongchao’s own experience of hardship. In a later store at Wenlao Road and Wenhua Road, pricing was deliberately low: RMB 3 hamburgers, RMB 1.50 fries, RMB 2.50 Yangzhou fried rice, RMB 1.50 sour-spicy shredded potatoes and cabbage, and RMB 5-6 meat dishes.
The store still made money because Zhang Hongchao calculated costs obsessively. For a RMB 3 hamburger, he counted the bread, chicken breast, homemade coating, oil, and wrapper, while relying on high volume to absorb labor and utilities. Chinese dishes were calculated in the same way by grams of vegetables, oil, and supporting ingredients, with portion and ingredient standards higher than nearby competitors.
The principle was low gross margin plus high efficiency. The team worked close to 20 hours a day, slept on the store floor after closing, and operated like a family. Chen Ping, Xiaohua, Yanzi, Yatao, and others handled service and production in cramped, hot conditions. Zhang Hongfu recalled one severe accident in which Chen Ping’s hair was caught by the moving shaved-ice machine shaft, tearing off a patch of scalp; after crying from the pain, she tied on her apron and continued working.
For operators, Zhang Hongfu’s lesson was direct: affordable pricing was not a slogan. It came from self-imposed cost discipline, operational intensity, and a willingness to accept thin margins.
In July 2008, many franchise stores from the prior year had failed to survive into spring, so the company had fewer active shops to inspect. Zhang Hongfu spent more time in his own store, located in a stairwell at the east gate of Yingbin Market.
At the time, Mixue’s core product was ice cream. As temperatures rose after May, customers wanted more thirst-quenching drinks. The main store and second store introduced ice porridge and iced fruit juice. Ice porridge sold for RMB 3 a bowl, but volume was only around 100 bowls a day per store.
In June, Zhang Hongchao revived a fruit-juice formula from the company’s earliest days, with orange and green-apple flavors. Sold from refrigerated drink dispensers in 8-ounce red cola cups at RMB 1 per cup, the drinks sold extremely well.
Zhang Hongfu bought a secondhand Dongbei double-tank drink dispenser after initially hesitating over equipment cost. He found that around 80% of customers chose orange, while green apple moved slowly and lost aroma. Searching for another flavor, he found half a box of Nestle pure coffee powder in Zhang Hongchao’s basement. He mixed water, sugar, non-dairy creamer, and coffee powder, filled a dispenser tank, and handwrote a label: “Cappuccino Coffee, RMB 1 per cup.”
He did not know how cappuccino was properly made; he chose the name because it sounded romantic and familiar from Elva Hsiao’s song “Cappuccino.” The drink immediately took off among students. At peak, the store sold more than 800 cups in a day. Zhang Hongfu believed it may have been the highest-volume coffee product in the Henan market at the time, before Starbucks had entered Henan and when McDonald’s and KFC coffee sales were limited. Iced coffee remained Mixue’s best-selling summer item until 2011.
By spring 2009, the family-run model was showing limits. The company decided to bring in outside managerial capability.
A purchasing colleague, Tao, introduced a classmate surnamed Zhang who lived in Shanghai and worked in sales management at a sizable flooring manufacturer. He knew national markets, had led large teams, and had relatives operating Mixue franchise stores. After discussions, he resigned from his Shanghai job and joined Mixue in Zhengzhou.
To create stronger incentives, Zhang Hongchao redesigned the equity structure from sole ownership into a four-person partnership. The new manager, Zhang Zong, became the largest shareholder; Zhang Hongchao and Tao held parallel stakes; Zhang Hongfu ranked third.
Zhang Zong first upgraded the logo. The old logo had been an ice-cream vector graphic Zhang Hongchao found online. Zhang Zong believed the next phase needed a broader sweet-drink identity rather than only ice cream. A designer surnamed Zhang from Shang Hai Design created a new logo for RMB 800, with no extended applications. Mixue used that logo for ten years, until 2018.
He also introduced early corporate-culture language:
He had the first company website designed by Jueshi Design Studio, set up departments for franchise recruitment, operations, planning, finance, and distribution, and brought in more mature tea-drink market experience from Shanghai. This helped Mixue start looking more like a company than a workshop.
After Zhang Zong joined, Zhang Hongchao stepped away from day-to-day corporate affairs to run the Mixue home-style restaurant business. Tao handled procurement, logistics, and external affairs. Zhang Zong handled strategy, development, and franchise recruitment. Zhang Hongfu handled planning, promotion, and store operations.
The office was in Antai Wenyuan, a residential compound near Wenhua Road and Sanquan Road, in an apartment Zhang Hongchao had bought for personal use. During franchise peak season from February to May each year, the sixth-floor office received heavy traffic; around 90% of annual store openings came from those months.
After May, consultations slowed, and by July there were few new stores. Managers went out to inspect shops with notebooks, checking product preparation, hygiene, service, and marketing. Zhang Hongfu admitted the inspection process lacked teeth: they talked repeatedly but rarely issued fines, and he could not remember issuing one real penalty in those two or three years. He later concluded that penalties, though unpopular, were the most effective corrective tool.
Zhang Hongfu’s own shop functioned as an experiment station. In winter 2008 he tested milk tea; in winter 2009 hot coffee and red-date milk; in winter 2010 candied hawthorn and jasmine green milk tea. He also tested juices, coconut milk, almond drinks, and other formulas, then pushed successful items back to the company.
Because new products needed posters and flyers, he taught himself CorelDraw and Photoshop to reduce turnaround time. His self-made materials were not refined, but they were fast, clear, and easy to revise.
By 2010, Mixue had been franchising for three years and had some savings. Zhang Hongfu’s own store had ice cream and coffee as signature products and enough staff that he did not need to stay there constantly.
At the same time, the team had seen more polished brands outside Zhengzhou. In Hangzhou, they saw Miguo and Guomai, with prices from RMB 8 to RMB 16 and fresh ingredients such as small green citrus, lemon, and passion fruit. In Shanghai, they saw Happy Lemon, with bright yellow stores, a cartoon logo, memorable branding, and lemon-heavy product lines. In Zhengzhou, they studied Shishi Tangyu, with prices from RMB 4 to RMB 15, fashionable decor, polite staff, and queues. Dairy Queen entered Zhengzhou with stores at MixC and Guangcai East Gate, selling products at RMB 5 to RMB 25.
By comparison, Mixue’s stores sold RMB 1 ice cream, RMB 1 juice, and RMB 1 iced coffee from small, rough locations near schools, temporary buildings, or markets. The team wanted a higher-end brand to capture what they saw as future consumption upgrading.
Zhang Hongfu chose a site at Wenhua Road and Jianxue Street, near Zhengzhou Experimental Middle School and Zhengzhou No. 9 Middle School, where student spending power was higher. He hired a designer, studied brands such as Guomai and Happy Lemon, photographed Shishi Tangyu, and sent people to work there to learn operations. He learned that professional tea-drink shops weighed tea by the gram, measured water by milliliter, and used measuring cups for syrups and milk.
He also worked undercover at Dairy Queen to learn how its Blizzard-style product could be inverted without spilling. For the new store, he bought premium ingredients, used cold chain where possible, chose fresh fruit over jam, used ComPac dairy mix instead of the old ice-cream powder, and bought a Taylor ice-cream machine.
The store opened strongly with high gross margins but soon declined. A Guangxi brand, Dawei Drinks, opened nearby with fresh mango smoothies and drew loyal customers. Zhang Hongfu’s store fell near break-even.
He then opened larger campus stores, including a 100-square-meter store at Henan University of Economics and Law after its 2011 merger, followed by stores at Zhengzhou Institute of Aeronautical Industry Management, Henan University of Economics and Trade, and Zhengzhou University. These larger campus stores had far higher sales than the Jianxue Street high-end store.
In September 2011, after two slow summer months and facing a rent increase, Zhang Hongfu closed the Jianxue Street store. Finance reviewed the two-and-a-half-year result from 2009 to 2011: total profit was RMB 6,100.
His conclusion was that “high-end” had been partly driven by operator vanity. Consumers may upgrade, but the more important upgrades are product and experience, not simply price. High-end also brings higher requirements across decoration, equipment, staff, uniforms, ingredients, packaging, and marketing, so net profit can remain low. The experience still helped him develop store-opening capability for later years.
At one point, Zhang Hongchao suggested that Zhang Hongfu conduct a major store inspection. Zhang Hongfu arranged a Toyota Coaster minibus and took roughly a dozen senior managers northward.
Their first stop was a long-running franchisee in Anyang that Zhang Hongfu had considered a benchmark. The front of house looked busy, but the back kitchen shocked the team: sticky black floors, disorganized cleaning tools, and poor food-safety practices. A large red plastic barrel held diluted syrup for lemonade, apparently 100-200 kilograms of liquid. Zhang Hongfu tasted sourness and found the store had created its own preparation ratios. Instead of muddling 28 grams of lemon slices in each cup according to company standard, the store crushed lemons in bulk in a roughly 20-kilogram bucket, filtered the juice, stored the slices separately, and assembled drinks by its own method.
In Xingtai, Hebei, and nearby county markets, the team found similar issues: stores shared the signboard but often not the same standards. Some stores were barely surviving. In Beijing and Tianjin, conditions were not much better. In Shandong’s Jining, the competitive environment was tougher, and many stores had both poor sales and poor hygiene.
The team also saw stores preparing hundreds of cups of lemon slices in advance, sometimes storing them at room temperature and selling overnight lemon slices. Zhang Hongfu described feeling unworthy of being called “Zhang Zong” during the trip.
In Huanghua, Hebei, they visited a franchisee who had previously delivered goods for Mixue and had sold his truck to start the business. That visit intensified Zhang Hongfu’s sense of responsibility: most franchisees were not wealthy heirs but people investing family savings and personal futures.
After the trip, the team went to Baligou in Xinxiang for outdoor training, hiking, and reflection. They climbed roughly 30 kilometers of mountain road to an ancient village in the Taihang Mountains, stayed in a rural stone courtyard, and held a late-night meeting of criticism and self-criticism. They decided to stop signing new stores temporarily, refocus on operations, and stop growing for growth’s sake.
In spring 2016, Mixue set the annual theme as “Pangen,” or putting down roots. After excessive speed in prior years, the company planned to slow new-store openings, improve operations, and raise single-store profitability.
The correction went too far. New-store targets were set very low, direct stores largely stopped opening, and franchise approval standards tightened. But the company did not create sufficiently effective operating training or development programs. Staff morale suffered because rapid expansion had previously created promotion opportunities. With fewer new stores, employees stayed in roles longer, growth slowed, raises and promotions became less frequent, and doubts spread internally.
A new Ningbo brand entering Henan then poached a respected middle manager with offers including a car, dry shares, and promised dividends. He left with more than a dozen people from market operations and several people connected to a franchise-recruitment supervisor. The competing brand contacted Mixue franchisees nationwide, some changed signs, and others faced stores opening nearby with similar products, similar positioning, similar prices, and aggressive promotions.
Zhang Hongfu did not believe an attack-led brand could build durable success, but he acknowledged the larger question: when would Mixue itself improve?
On March 10, 2016, Mixue held its second Entrepreneur Annual Meeting at the Henan People’s Hall under the theme “World Matcha Originated in China.”
A 2015 matcha product had not sold strongly, and Zhang Hongchao was dissatisfied with using Sola Aoi to promote matcha. After research, he concluded that matcha originated in China rather than Japan, and that China was still the largest producer. The company reformulated and relaunched matcha ice cream powder at the meeting. It invited 2,400 franchisees and store managers and gave each attendee two bags of matcha ice-cream powder.
The meeting also marked Zhang Hongchao’s return to product and craftsmanship. He introduced a newly established R&D center and young R&D colleagues including Dada, Ruirui, Lulu, Shasha, and Li Da. Li Da’s line stayed with Zhang Hongfu: some people say dreams wake them up, but he said they had not slept.
Mixue also released a new image upgrade and introduced new brand-building leadership. It was the first time the company invited an international supplier to speak on stage; a Dutch supplier representative drew a strong reaction from the audience. LeTV televisions were used heavily as awards.
From the 2013 launch of lemonade to 2016, Mixue had not produced another sustained hit. After Zhang Hongchao returned to R&D, the company’s product pipeline expanded, creating a new conflict: too many rapid launches for stores with weak operating capability. Product manuals changed more than twice a month, new syrups had similar names, stores had to cook pearls and learn more manual preparation steps, factories received more new raw-material orders, and marketing could not go deep enough on each launch.
Zhang Hongfu later saw both sides more clearly. The back end wanted to close the gap with mainstream tea-drink chains such as Coco and Yi Dian Dian, while the front end was responsible for more than 2,000 franchise stores whose teams had not been trained for that complexity. He concluded that his own mistake was viewing the business from current constraints rather than future customer needs.
At Christmas 2016, Zhang Hongfu wrote that the company should, ten years later, let at least 1 billion people share “sweetness, nutritious sweetness.”
By 2017, Mixue Bingcheng was 20 years old. Zhang Hongchao had been building the business for 20 years, and Zhang Hongfu had been an operator for ten years since opening his first franchise store in 2007. Zhang Hongfu told a younger founder who asked how to open more than 1,000 stores that Mixue took ten years to open its first store, and 17 years to exceed 1,000.
By then the company had experienced both the pain of overexpansion and the damage caused by stopping growth too sharply. Its 2017 decision was to move at a normal, neither-too-fast-nor-too-slow pace.
Note: all forward-looking goals, revenue ambitions, store counts, equity references, and incentive details above are historical statements from the 2022 source article.