This is an English adaptation of a FoodBud historical article originally published on November 16, 2023.
According to reporting by Zhitong Chuhai, Mixue Bingcheng’s store count in Vietnam and Indonesia had recently reached about 1,300 and 2,300 stores, respectively. That was only five years after Mixue opened its first overseas store in Hanoi, Vietnam.
The Economist attributed Mixue’s success to four factors: supply chain, price, franchising, and communication. Zhitong Chuhai’s account focuses mainly on how the company built its franchise system in Southeast Asia.
Mixue opened its first company-owned overseas store in Hanoi in September 2018. At the time, the move was not yet a group-level international strategy.
A source identified as Li Yuan told Zhitong Chuhai that Mixue’s Southeast Asia push began as an experiment by the Chengdu branch after expansion capacity in southwest China had started to peak. Headquarters reportedly provided only RMB 4 million in startup funding, transferred several mid-level managers from Chengdu, and gave the overseas project relatively little attention in its early phase.
The timing was favorable. Vietnam’s milk tea market was growing quickly in 2017-2018. Data cited from the Vietnam Association of Small and Medium Enterprises said the country had 2,000 milk tea shops in 2018, with a new shop opening every four days. At the time, an investor in a milk tea shop in Vietnam could reportedly recover costs in less than a year.
Media reports cited by the article said Mixue’s first Vietnam store generated RMB 9,681 in sales on opening day, sold nearly 1,400 cups, and reached RMB 210,000 in sales that month. Against local consumption levels, that was attractive to potential franchisees.
By the time Mixue filed its prospectus in September 2022, the overseas business had become more visible: as of March 2022, it had 249 stores in Vietnam and 317 in Indonesia.
Li Yuan attributed Mixue’s early overseas momentum to three factors: entering at the right time, transplanting a franchise system backed by a strong supply chain, and finding the right people.
In 2018, Vietnam’s milk tea market was active but still offered room for new entrants. By 2019, more than 100 local brands had appeared, including brands with Chinese backgrounds. Mixue moved earlier than many Chinese peers. Heytea and Nayuki focused on Singapore, while brands closer to Mixue’s mass-market positioning, such as Chazhuzhang and Shuyi Shaoxiancao, entered later.
Mixue’s model differed from overseas strategies built around company-owned or joint-operation stores. The company’s economics depended heavily on selling ingredients, packaging materials, equipment, and store supplies to franchisees, so opening more stores was central to the model.
When Mixue entered Vietnam, the market was dominated by Taiwan milk tea brands such as Ding Tea and Gong Cha, and local awareness of Mixue was low. According to Li Yuan, the first batch of franchisees totaled 12 people, six of whom were Chinese.
To recruit franchisees, Mixue kept the entry bar low. A store could be opened for VND 600 million-700 million, or roughly RMB 180,000-200,000, and could be as small as 30 square meters. Li Yuan said the company relaxed domestic review standards overseas: if there was a location, a store could be opened. That aggressive policy later extended into other Southeast Asian markets.
Early in Vietnam, Mixue also used targeted incentives to secure strong franchisees in northern Vietnam. Policies included waiving franchise fees and discounting management fees, helping capable operators open 40-50 stores at once and establish a foothold in the north.
The overseas team also had unusual autonomy. Li Yuan said Vietnam franchise policies could be implemented without headquarters approval. Between early 2019 and late 2020, the policy changed seven or eight times, with each version usually valid for two to three months. At the most favorable point, Mixue waived two years of franchise fees and one year of management fees, worth about RMB 50,000.
The same aggressive logic appeared elsewhere. In Kuala Lumpur and Selangor, Malaysia, existing franchisees opening new stores could receive two years of franchise fee waivers, while new franchisees could receive one year.
One early Vietnam franchisee, identified as A Long, became a key example. A Long was one of the original 12 franchisees. He first opened two stores, one of which performed well. Mixue sent two people to support him with promotions and operations.
After making money and gaining confidence, A Long reportedly sold family land for RMB 6 million and put the proceeds into Mixue franchises. Mixue gave him significant support in site selection and promotion. He later opened six or seven stores and earned more than RMB 100,000 per month, while Vietnam’s average monthly wage was about RMB 2,000.
According to the article, around 30% of stores near Hanoi and Ho Chi Minh City were owned by A Long and his friends, with additional stores in Bac Ninh, Thai Nguyen, and surrounding counties. His success helped attract more local franchisees.
Mixue also used recruitment bonuses. In Vietnam, it prioritized hiring people with local networks, including employees from China Construction and J&T Express. Staff were rewarded for franchise recruitment: VND 1 million, or about RMB 300, for the first franchisee signed in a month, VND 2 million for the second, and so on. Someone signing 10 stores in a month could earn RMB 10,000-20,000 in bonuses.
At its peak, Mixue’s Vietnam operations department had more than 20 people, making it the largest local department. By the second half of 2020, signed stores in Vietnam had grown to more than 200, and the company could receive up to 20 franchise applications per month without active recruitment. The Vietnam recruitment bonus policy was canceled in the second half of 2020.
Mixue opened its first Indonesia store in Bandung in 2020. By the end of March 2022, according to the prospectus cited in the article, Indonesia had 317 Mixue stores, while Vietnam had 249, even though Indonesia started two years later.
Part of the reason was that Vietnam had already helped prove the model and build the brand. Another factor was people and networks.
As in Vietnam, headquarters reportedly provided only several million yuan in startup funding for Indonesia. Early expansion relied heavily on what the article calls the “OV system,” referring to OPPO and vivo.
vivo entered Indonesia in 2015 and built its own production and sales system. In its first three years, it maintained annual growth of more than 30%. By 2018, it was Indonesia’s fourth-largest mobile phone brand, and by the first quarter of 2020, its market share had risen to No. 1.
OPPO entered Indonesia earlier, in 2013, and began building offline service outlets and sales teams. By 2015, OPPO’s green logo was visible from Jakarta to provincial capitals and lower-tier counties and towns. OPPO said in 2019 that it had about 27,000 retail stores in Indonesia. By 2023, it had more than 20,000 employees, with a high degree of localization.
Media reports cited in the article said J&T Express, Indonesia’s largest and Southeast Asia’s second-largest express delivery company, developed early on the back of OPPO’s mobile phone distribution business in Indonesia, with OPPO as one of its major customers.
For Mixue, cooperation with OPPO and vivo networks helped clear early obstacles in funding, store expansion, warehousing, and logistics. More importantly, Mixue built its own franchisee base on top of these dealer systems.
Li Yuan said many phone agents in the OPPO and vivo ecosystem had capital and trusted recommendations from those networks. Mixue selected a few out of hundreds of mobile phone dealers, opened 30-50 stores first, and used that base to build brand momentum. In his view, once a tea-drink brand reaches 20-30 stores, growth can accelerate quickly.
Indonesia also used aggressive recruitment incentives. Li Yuan said one junior assistant who had worked at Mixue for half a year recruited relatives and friends to open more than 200 stores. That policy continued until the first half of 2023.
After Vietnam and Indonesia scaled, Mixue’s broader Southeast Asia expansion became easier. After 2021, it entered Laos, Cambodia, Singapore, Malaysia, the Philippines, and Thailand.
This coincided with accelerated store openings in China. Mixue added about 6,000 stores in 2020, about 5,000 in 2021, and about 10,000 from March 2022 to October 2023.
After overseas stores exceeded 1,000, founder Zhang Hongchao set a future vision: “Two dollars to let people around the world eat and drink well.” LatePost reported that in early 2022, general manager Zhang Hongfu told a management meeting: “We want to open 1 million stores.”
Mixue Group vice president Bai Di said in a Xinhua TV interview that Mixue had reached 32,000 stores globally. Behind that number, the company’s regional protection radius had narrowed over time: from 1-2 kilometers in 2008, to 1 kilometer, 500 meters, 100 meters, and eventually zero protection, meaning any good location could host a store.
Bai also said overseas stores had approached 4,000, compared with more than 1,000 the previous year. In October 2023, Vietnam franchisees began protesting. In addition to complaints that price cuts squeezed their margins, they said stores were sometimes only 50 meters apart and were too dense.
By 2023, Mixue’s domestic store-opening pace had started to slow, but the company remained far from its 1 million-store target. The article concludes that its overseas expansion may continue.
Note: IPO disclosures, store counts, incentive policies, and forward-looking targets in this article are historical figures from the 2023 source.