FoodBud

Before the Castle, Part 4 — 2003–2006: The Compound, the Competitors, and the First Cone ### 2003–2006：小江湖、超级冰堡与第一支甜筒 **A FoodBud translated & annotated edition of Mixue co-founder Zhang Hongfu's first-person memoir**

*Series: "Before the Castle — How Mixue Was Really Built, 1997–2017" · Article 4 of 12 · FoodBud /insights*

1. FoodBud Editor's Note

Article 3 ended with an abandoned aluminum-products factory being turned into Mixue's largest operating base to date. Article 4 stays inside that compound. It is less about a single dramatic founding moment and more about how a small restaurant becomes a real operating organism: morning vegetable runs, lunch and dinner wars, blocked toilets, customer fights, competitor attacks, supplier credit, local administrative pressure, and the slow reappearance of the product that would pull Mixue away from home-style food and back toward ice cream.

The key strategic turn is this: by 2006, the restaurant business was stable and profitable, but Zhang Hongchao felt something was missing. What was missing was the delight of selling ice products. The Super Ice Castle began as a corner beverage bar inside the home-style restaurant. It then produced ice porridge, then a two-yuan fresh cone ice cream, then a four-square-meter second store where customers surrounded the window in layers. This is the bridge from the 1997 shaved-ice stall to the later franchise system.

2. Why This Installment Matters

Mixue's later scale is often explained through supply chain, franchise density, and low prices. This installment shows those forces in miniature. The compound restaurant teaches the team how to operate high-volume, low-margin foodservice. The competitor stories teach that low price without quality collapses. The first cone teaches the opposite: when a product is genuinely good, large, cheap, and easy to understand, the customer does the selling.

—— FoodBud English Translation of the Source · Part 4 Begins ——

The Little Jianghu (Part I)

Thin margins with high volume, genuine goods at fair prices, no deception of old or young, sustained operation — Zhang Hongfu says these are merely the most ordinary great principles.

He wanted to post photos of the stores from that time, but had been too busy recently to go to his brother's home to collect them, so he used a few photos from around 2009 found online. The layout was not very different from the store when it first opened in 2003. Given its era, positioning, and investment, he asks readers not to judge it by today's eyes as shabby. At that time, it was genuinely one of the most fun places in Jinshui District. This was the longest-surviving store, operating from 2003 to 2014.

Where there are people, there is a jianghu — a small world of interests, rivalries, and unwritten rules. And this was an increasingly popular compound.

Start with daily operations. From 2003 to 2007, before the ice cream appeared, this home-style restaurant was the only battlefield where Zhang Hongchao and his partners struggled. The store looked better and newer than the later photos. WeChat did not yet exist, so relationships between people were still maintained mainly through meals. Students had little living allowance, and Zhengzhou had not yet developed shopping malls. After class, coming out for a meal was a necessary activity for students from the nearby colleges.

Zhang Hongfu would help at the store on weekends after school. What he remembers is that every peak period felt like a battle. The dining hall could seat nearly 300 people and would be completely full, with another hundred or so waiting in line outside.

Every day at four or five in the morning, his father and Xiaokai went to the market to buy vegetables. At seven or eight, the produce came back. The chef led helpers in rough processing at the prep station. By about eleven everything was ready, and customers began arriving one after another. His sister-in-law was busy at the front counter collecting money and serving cold dishes. His brother led the cooks in the back with clanging woks; or, if there were problems with water, electricity, or air-conditioning, he would take Dapeng and Xiaokai to repair them. In the vegetable-prep room, Zhang Hongfu's parents and his sister-in-law's parents were constantly picking and washing vegetables. This group worked from 11:30 to 2:30 for lunch, rested briefly, prepared again for dinner, began taking customers around five, and kept going until after 10:30 at night.

Year after year, day after day, beyond the normal operating work there were all kinds of abnormal work. Young employees fell in love, lived together, became pregnant; Zhang Hongchao and his wife had to act as counselors and doctors. The public toilet outside, used by drunken customers from the whole compound, would get blocked with vomiting and diarrhea; Dapeng and Xiaokai had to take tools to clear it. It was an old-style trench toilet, and every time it blocked, both the men's and women's sides filled together. Zhang Hongfu jokes that Mixue people became capable because once you have cleared cesspits, you can do anything. Customers who had drunk too much would fight because someone at the next table looked at them one time too many; the team had to mediate or call the police. Industry and commerce bureaus, tax authorities, street offices — all of them came. Add to this the fact that Mixue Bingcheng Home-Style Restaurant was cheap: for the same sales, it had to serve three times as many dishes as others. The money it made was extremely hard-earned. Later Zhang Hongchao would say that if any of his children wanted to work in foodservice, he would use a cane to break their legs.

Yet there are always people who do not believe in that hardship. They see only the queue at the door and do not know how much worry sits behind it. As the saying goes, they see the thief eat meat but not the thief get beaten. Challengers came one after another.

About half a year after the store opened, the other half of the factory building Zhang Hongchao rented received a new restaurant: Jiliya Sunshine Restaurant.

Sunshine melts ice and snow. Yes — it was aimed directly at Mixue Bingcheng. The backer was reportedly a teacher from a nearby school. The menu copied Mixue Bingcheng Home-Style Restaurant completely, with the same prices. The difference was that from the renovation stage it began advertising: a three-week opening promotion, 20% price in the first week, 30% in the second, 50% in the third.

It was aggressive and fierce.

Knowing its motive, Zhang Hongchao had to find a response. First: since the competitor wanted a price war, Mixue would not follow. Its own prices were already low and could not afford to go lower. Instead, it would raise prices in a high-profile way. Given students' price sensitivity, each dish would rise only by fifty fen. They made a giant three-meter-by-four-meter printed banner: "Mixue Bingcheng is raising prices!" Underneath, smaller text explained that to provide better service over the long term, and because ingredient prices had recently risen, every dish would increase by fifty fen — but portions would also increase, and Mixue Bingcheng would always be the students' own store and never let students lose out.

Why fifty fen? Zhang Hongchao analyzed that students would not feel fifty fen was expensive, but it was a loud memory point. It would create curiosity and understanding.

Second, all dishes increased in portion, especially meat dishes. For best sellers such as fish-fragrant shredded pork, green-pepper shredded pork, and kung pao chicken, ordinary restaurants generally used two to three *liang* of raw meat. Mixue previously used four *liang*. Now it raised that to five or even six *liang*.

So Mixue openly raised prices, but in reality sharply increased cost. It was a disguised price cut that did not quite lose money. They did not shout that they had cut prices; they left the opportunity for students to feel it themselves. At that youthful age, students were not dieting. It was the great age for eating meat — especially when in school canteens, meat always seemed to float on top of the dish and never actually land in your bowl.

Third, all dry ingredients and seasonings were bought at the best quality. Zhang Hongfu's father bought Lee Kum Kee and Haitian oyster sauce and soy sauce, Totole chicken essence, and top-grade Sichuan pepper, fennel, and other dry spices. Even a higher-end restaurant at the compound entrance, Kouwei Factory, charged three to four times Mixue's prices but used second-tier seasonings. As for vegetables, sides, and raw meat, Mixue bought the best in the entire market. His father's view was simple: good ingredients make good dishes. Cheap ingredients may look cheap when bought, but after sorting, the yield is low, the taste is poor, the appearance is poor, and customers dislike them — so they are expensive to use.

Fourth, spend ten yuan and receive a bowl of rice. At that youthful age, people could eat. Rice was not expensive, but if rice was filling, it was very competitive. In practice, because they steamed it themselves and bought in larger quantities, the ingredient cost was just over three *mao* per bowl. The rice they gave away was still Wuchang rice from Heilongjiang: fragrant, sweet, translucent, and chewy.

After Jiliya Sunshine Restaurant opened, its steep discounts did indeed intercept many students at first. Students went in excited and came out disappointed, because a plate of fish-fragrant shredded pork contained only a few strips of pork; the green-pepper shredded pork looked like a lush green field of spring.

The discount was too heavy and students flooded in, but the owner could not bear to add lots of meat. He could only reduce cost. Once cost was reduced, even a fool could taste it.

The result is easy to imagine. It had some traffic at the beginning. As the discount reduced, traffic worsened. There were no repeat customers. After three weeks, when it returned to original prices, there was not a single customer. It had to keep offering 50% off, but with 50% off it had to keep cutting corners. Eventually no one went even at half price. A meat dish at half price contained only one-quarter the meat of Mixue's dish. Customers understand the math. And if the visible meat was reduced, the invisible seasonings were probably worse too; the taste was poor.

Mixue, with good ingredients and full portions, saw business improve further. That in turn increased procurement volume and reduced cost. At that time they were already VIP customers of Lee Kum Kee and Haitian.

After two or three months, seeing no hope, Jiliya Sunshine Restaurant closed.

Looking back, Zhang Hongfu says that from the naming and project decision onward, one's motives must be upright. Jiliya was not killed by Mixue; it killed itself. Mixue simply prepared itself not to be killed.

Thin margins with high volume, genuine goods at fair prices, no deception of old or young, sustained operation — these are ordinary principles. Everyone understands them and has seen them, but not everyone does them. Even when someone does, others still do not believe it, always imagining some deep conspiracy behind it.

The Little Jianghu (Part II)

Do not chase what is outside; do yourself well; hold to the original intention. This was important.

Zhang Hongfu then tells two more cases in the compound, one negative and one positive. The negative case was around 2010, when a buffet restaurant opened on the right side near the entrance: Good Barbecue. It came from a team that had split off from the then-popular Golden Hans barbecue buffet model. Its products and model were the same: various grilled meats and craft beer. At 48 yuan per person for full food and drink, that price was profitable then.

The restaurant renovated two floors, with a European style. The dishes were good, and the model was still fresh. Its former parent, Golden Hans, was also very popular.

So when Mixue received friends or rewarded its own employees, they often went to eat there. After eating their own food for too long, they needed a change. Some nearby students with better family conditions would also treat guests there: meat, beer, European environment — a different kind of dining happiness.

Just as this restaurant was steadily growing, its leadership made two wrong decisions that directly led to a quick death.

First, it over-saved expenses that should have been spent. Business was not yet strong in the early stage, and it was still cultivating customers. Every time Zhang Hongfu went, the restaurant had two floors but opened only the first. The reason was obvious: management worried that if there were not enough customers, opening the second floor would increase lighting, air-conditioning, and service labor costs. Closing that floor directly saved manpower and materials. The result was that until it closed, the second floor never opened. The team became used to that inertia, and customers became used to it too, feeling the restaurant was only that large. Large group meals simply went elsewhere in the compound.

Zhang Hongfu is not sure how to explain the principle, but his feeling is that when you open the door for business, you must have confidence. Creating the best dining environment for customers is the enterprise's responsibility. Saving money is the owner's need, not the customer's need. If you only know how to save money, employees will get used to it, customers will get used to it, and everyone will feel the store is not a prosperous one. When you think of your own business as small and barely surviving, one day it may truly become barely surviving.

Second, it failed to keep doing itself well. Because large numbers of students went inward at meal times to Mixue Bingcheng or Xinmaidao, while Good Barbecue had only one floor open, its revenue stayed very tight even when that floor was full. In the end, management got envious and anxious, and launched an ultra-low-price strategy that caused rapid death.

The move was to change the buffet price from 48 yuan to a student special of 26 yuan. That price was extremely lethal, because Mixue's per-customer spending was also in the twenties then. In the short term, student traffic surged. As already said, students are best at eating meat. Male students after basketball might eat two *jin* of beef each. Obviously, the restaurant would lose badly. Owners do not want to lose money, so they find ways to save. Where to save? Ingredients.

In its early days, Good Barbecue served genuine grilled meats. Zhang Hongfu still remembers the charcoal-grilled steak, beef tongue, lamb leg, garlic pork, German sausage, honey pork shoulder, paired with their freshly brewed beer — a pleasant life.

Later, when it saved on ingredients, all those meats disappeared and were replaced by cheap hot-pot meatballs, bought wholesale at five or six yuan per *jin*, filled with flavoring and coloring, with almost no meat.

The last time Zhang Hongfu and his brother ate there, his brother tasted the grilled meatballs and said the store probably could not last two months.

Customers are not fools. Very quickly, business went from explosive to a cliff drop, then the restaurant closed. The whole process took about a month.

Do not chase what is outside; do yourself well; hold to the original intention. Good Barbecue destroyed itself this way.

The positive case was the restaurant directly opposite Mixue: Xinmaidao.

Xinmaidao did not use a factory building. It was probably the old factory command office, a two-story building with a small courtyard. Its owner was a very forthright older brother everyone called Brother Kang. Brother Kang was talented; in appearance and comedic ability he resembled Guo Degang.

First, Brother Kang decorated the store like a Chinese-style club, with white walls and black-tiled eaves, forming a direct visual contrast with Mixue across from it.

Second, the building did not have many rooms, so its reception capacity could never compare with Mixue's hundreds of seats. Brother Kang therefore turned all rooms into private rooms, planted willows in the courtyard, and made an open-air summer food square outside. Inside the building was private-room service. The customer spend was a little higher than Mixue's, avoiding low revenue.

Finally, Brother Kang put serious effort into the product. He came from a chef background. In summer the courtyard became a night-food stall with river snails and prawns; in the private rooms were Xinmaidao's "five big baskets," big-basket fish, big-basket chicken, big-basket shrimp.

With this differentiation, they did very well across from Mixue. The two stores had a very good relationship. Employees interacted often, and when one store ran out of rice or ingredients, the other would lend some. These two stores lasted until the compound itself was demolished.

Besides daily operations, two small matters are worth recording. First, not long after this store opened, the landlord of the previous demolished store still owed rent that had not been returned. Once Zhang Hongchao had energy to spare, he had to find a way to collect the debt. The landlord was a local from a Zhengzhou suburban urban village, and simply refused to pay, delaying in all kinds of ways. Relying on being local, he spoke arrogantly on the phone.

Driven to urgency, Zhang Hongchao used one move and got the rent back. One night he bought several gift packages, found out the landlord's home address, and waited at his doorway with the gifts.

When the landlord came home and saw Zhang Hongchao collecting debt at his door, he gave him the money directly.

Zhang Hongfu was especially surprised and asked why he paid so quickly. His brother said everyone has a weak spot. Their own weak spot was being outsiders: without fixed residence, drifting, easily bullied. Locals also have weak spots: once you know their home, they cannot move. No one wants to bring risk onto himself.

Second, after the compound became popular, certain dedicated administrators from official bodies would often come to eat, take, and demand things. Poor business owners in the compound paid money to settle matters and avoid trouble, giving gifts, cash, and stored-value cards for bathhouses. The other side only became more demanding and asked more frequently.

Once, only a few days after the previous "tribute," someone again made trouble. It was unbearable. Zhang Hongchao called the person and spoke very politely for a while. The other side kept acting delicate and unreasonable. Then there was no need to endure.

Zhang Hongchao said: all the bosses in this compound who have given you bathhouse cards, including the women who have served you, we all know them, and our relationship is very good. Shall we go together to sit in your office?

For the next several years, that person never caused trouble again.

A businessperson's weak spot is usually not wanting to make trouble. Their weak spot is not wanting to lose an iron rice bowl. We can live in this world politely and courteously, but we must not lose upright and brave bones.

Mixue Bingcheng Super Ice Castle

Zhang Hongchao always felt they should create more products that were simple to make, tasty, cheap, capable of selling hot, and able to make customers remember them.

By the spring of 2006, the store had been operating continuously for almost three years. Business was strong and income stable. Zhang Hongchao was married, had bought a home, had a big chubby son, and had bought a cargo van. The restless young man could not sit still.

When people are hungry and afraid, they may temporarily forget their original intention and only know to seek good fortune and avoid danger, moving toward whatever earns more. But once the problem of food and clothing is solved, the original intention is picked up again.

Mixue Bingcheng Home-Style Restaurant had started from shaved ice and cold drinks. But by 2006 it had almost no cold-drink products left. It was all hot pot, stir-fry, beer, and gatherings. Business was thriving, the weather in April and May was warming, but Zhang Hongchao kept feeling something was missing.

What was missing? The exhilaration of selling ice products back then.

At the time, Zhengzhou's streets had almost no cold-drink shops in summer. Mixue Bingcheng had transformed into a home-style restaurant. For people seeking relief from heat, apart from popsicles and soda in freezers, there seemed to be little else.

Zhang Hongchao decided to build a water bar inside the restaurant. In Zhang Hongfu's understanding, a water bar meant adding one more menu to the counter. But his brother wanted to make it big: an independent bar outside the restaurant itself. He hoped customers could order all kinds of drinks there, enjoy a romance different from the Chinese restaurant, take them away, or carry them into the restaurant while eating. The name was already chosen: Mixue Bingcheng Super Ice Castle.

Once he decided, he did it. At the end of May, a huge Super Ice Castle appeared. It sat in the northeast corner of the store, half inside and half outside. From the compound gate it could be seen in the distance, like an independent dessert station. Its main products were traditional shaved ice, snowflake ice, three-in-one coffee, and other bottled drinks. Business was good, partly because the products were novel, and partly because the home-style restaurant ran marketing activities such as giving a one-yuan voucher for every ten yuan spent.

But Zhang Hongchao was not satisfied. He always felt they should create something simple to make, tasty, cheap, hot-selling, and memorable. Just then, Holiland's ice porridge began to become popular. It tasted good but was expensive. Imitations in the streets were cheaper but tasted terrible. After trying it several times, Zhang Hongchao felt the product was good, but young people could not afford a bowl priced at over ten yuan.

Where there is excess profit and imbalance, there is the possibility of revolution.

Back at the store, he began researching. After several days and nights of tinkering, their own ice porridge came out: seven flavors, any choice, all sold for three yuan. It contained large amounts of freshly cut fruit; the soup base was boiled from natural seaweed gum and also used sea-buckthorn fruit for acidity. The seaweed jelly was tender, smooth, and cold; the fruit and sea-buckthorn were sweet and sour; the red beans and kidney beans they cooked themselves were soft, glutinous, and sweet. Zhang Hongfu says it absolutely surpassed Holiland's original.

At three yuan, the profit was very low. Why did Zhang Hongchao dare set that price? Because his target was more than 500 bowls a day. On launch day, they promoted tasting and sampling aggressively at the door, rolled out a red carpet, put up big posters, and used vouchers to drive traffic. At night, when they closed the books, they had sold 700 bowls.

They tasted sweetness for the first time. Business was excellent for a period. But not long after, summer vacation arrived. In July and August, traffic dropped sharply, and Zhang Hongchao again tasted loneliness for the first time.

But he was not a person who adapted to loneliness. Every summer vacation, he would lead the store to start renovating and maintaining some areas. That year the work was bigger, because he took over a children's lunch-care space next door and turned it into three class-sized private rooms that could seat 150 people. That brought the operating area of Mixue Bingcheng Home-Style Restaurant to nearly 1,500 square meters.

While renovating the store, he also found time to go out and investigate commerce. But his horizon then was limited; he mainly went around Zhengzhou. One day, by chance, he went to a mall near his home, Huibao Mansion, near Dongfeng Road and Wenhua Road.

Inside he found an ice-cream shop whose product tasted very good and looked beautiful, like the torch of the Statue of Liberty. The brand was Rainbow Hat Ice Cream, and it sold for 20 yuan each.

The Birth of the First Cone Ice Cream

Zhang Hongchao said: let's do it. I want to be different.

His eyes suddenly lit up. This torch-style ice cream suited them. It was also a specialty of the pedestrian street entrance in their home county, Tongxu. In childhood memory, the greatest happiness of going to the county town was eating a fifty-fen ice cream: the ice cream on top was cold, sweet, smooth, and fine; the cone below was crisp and fragrant. He had never imagined that a brand could sell this thing at such a high price — reportedly it was a Japanese brand — and pair it with such a nice store in such an upscale mall.

He bought one and tasted it. It was indeed delicious. But the price hurt. He wondered whether he could introduce this into his Super Ice Castle.

Coincidentally, not long before, while browsing the secondhand market, he had seen a used soft-serve ice-cream machine. He suddenly thought of that machine. If they bought it and researched the formula themselves, could they reduce the cost to two or three yuan? Zhang Hongchao was a science-and-engineering man, good at calculating costs. He felt a carton of milk was only one or two yuan; one ice cream contained only half a carton of milk. How could the cost be especially high?

So they hurried to the secondhand market at Wangzhai, on Nanyang Road near the North Ring Road. Thank heaven, the machine was still there. No one who recognized its value had bought it. It was a Haichuan-brand 3036 soft-serve machine, producing 36 liters per hour.

The owner asked 2,000 yuan. After persistent bargaining, they got it down to 1,600 yuan, joyfully bringing home the ice-cream machine.

Back home, Zhang Hongchao began checking information. Baidu already existed then, so researching was much easier than it had been for him in the library years earlier.

With his talent and sensitivity for food, plus his sensitivity to physics and biology, he quickly worked out several formula options. He bought ingredients according to those plans, combined and boiled them, plugged in the machine, poured in the mix, pressed the production button, and waited for a miracle.

After several dozen minutes, the first batch came out, but it was not as tasty as imagined. He adjusted the formula and tried again. Still not as good as Rainbow Hat. He kept trying for several days. The restaurant's service partners tasted so much they developed psychological shadows.

Finally, effort did not betray the diligent. Several days later, they tuned a flavor everyone liked. One restaurant cook ate an entire basin in one afternoon — about three liters. That cook is still at the company today, Zhang Hongfu says, though he will not name him.

The ice-cream formula was settled. What remained was the cone. Zhang Hongchao found cone manufacturers online and called them. One cone cost more than one yuan. Forget it — they truly could not afford that.

So he went again to the Rainbow Hat store, bought another ice cream, immediately scraped off the ice cream on top, wiped the cone carefully with tissue, wrapped it delicately, and kept it as a sample.

Back home, he searched online for cone manufacturers. Finally he found one in the northeast. Only later did they learn that the factory was already close to closing down. After Zhang Hongchao contacted them, they said to send the sample over; perhaps they could make the cone they needed.

Their cone had some difficulty. Its appearance had a lotus-shaped raised edge, like the torch in the Statue of Liberty's hand, not a flat rim. Inside it was double-layered: one layer strengthened the cone; the other allowed it to steadily catch the ice cream as it was dispensed, improving the beauty of the finished product.

A week later, the manufacturer called and said they could make it, but the cost would be higher. Because Zhang Hongchao required a larger cone size, the same mold plate could open only 16 molds, while their traditional small cones could open 24.

Zhang Hongchao said: do it. I want to be different. I want to exceed the original in size. Our customers are young and eat a lot; a big one will definitely be liked, and holding it will feel impressive, like carrying the Olympic torch in a relay.

The manufacturer required full payment before production. They did not yet know how to use Alipay, so payment had to be sent directly to the other side's account. The other side could have taken the money and done nothing. After some hesitation, they still chose trust and sent the full amount.

After more than a month, the manufacturer contacted them and shipped the finished equipment. They excitedly unpacked, installed, connected natural gas, and prepared to make cones. But a new problem arose: how should the cone batter be made? They had forgotten this part and completely neglected to research a batter formula.

They suddenly remembered that when they were young, the ice-cream cones in their county town were delicious, though they did not know how they were made. Zhang Hongchao drove them back to their hometown to search for the root of cone-making.

Back in the county town, they went straight to the ice-cream selling point from their childhood. The stall was still there, but the taste in the mouth was no longer the childhood taste. Still, they knew nothing about cone batter, so they drew close and asked in all kinds of friendly ways how the cones were made. Finally the vendor said the cones were not made by them, but delivered by a specialized cone supplier. The supplier's workshop seemed to be in the county too, near the south gate.

They immediately drove to the southern outskirts, asked around from many sides, and finally found the family. It was only an ordinary farm courtyard, not the factory they had imagined. They talked a lot: why did today's ice cream not taste as good? Had their taste grown picky? The supplier said no. More than ten years earlier, cones were made with eggs. Later, everyone pursued low prices more and more, and the cost of eggs rose, so today's cones had no eggs, only flour and saccharin.

They asked how to make them taste better. The answer: add eggs, add white sugar, and the cones will be better than the ones on the market now. After much persuasion, they paid a high price to buy the formula and excitedly drove back to Zhengzhou.

Back in Zhengzhou, they could not bear to sleep. They tested through the night.

The first test batch was held to high standards. Zhang Hongchao added large amounts of eggs, cream, and white sugar, stirred carefully, connected the cone machine to power and natural gas, followed the instructions step by step, and finally poured in the batter.

With a hiss, steam rose. Soon the air carried a faint fragrance. About thirty seconds later, the machine was lifted and the cone released.

Perfect. Golden in color, crisp in texture. They quickly took a cone to the ice-cream machine and dispensed one. It looked ugly, but why was it so delicious?

This first cone may already have been among the best formulas in China at that time. As far as they knew, cones then sold on the market, including cones made using formulas provided by cone-machine manufacturers, did not contain eggs or cream; even some white sugar was replaced by cyclamate. The taste could not compare with what they made themselves.

And this first custom equipment was also high-spec. The four characters 蜜雪冰城 were stamped directly on top. Its height and diameter were more than 1.5 times larger than common market cones, so it tasted good, looked good in the hand, and the ice cream made with it should obviously become a hit.

Fresh milk, fresh eggs, fresh cone ice cream. In late autumn 2006, the first cone ice cream went on sale at Mixue Bingcheng Super Ice Castle, priced at two yuan. Customers could use the one-yuan coupon issued by the home-style restaurant. And then, it became hot.

How hot? The ice-cream machine's capacity of 36 liters per hour simply could not keep up. The cone machine could make 16 cones per batch, and it too was basically always short. Fortunately, it was early winter, so customers' demand for ice products was not at its peak. They did not add more machines, selling while continuing to optimize formulas and explore the market.

At first, many customers buying ice cream used coupons from the restaurant. Later, many people specially came to Super Ice Castle in the afternoon to buy ice cream. Because of ice cream, Super Ice Castle changed from an attached water bar for redeeming giveaways into a direct destination for students. Going to Mixue Bingcheng was no longer only for eating. It was for that ice cream.

Zhang Hongchao vaguely felt the business could work. During that winter holiday, he said there was a temporary white plastic-steel-window room at the Dongfeng Road and Information College Road intersection, occupied by a milk-tea shop. He wanted to take it over and open a Super Ice Castle branch there. It would attract traffic to Mixue Bingcheng Home-Style Restaurant and also test whether ice cream had a larger market. He asked Zhang Hongfu to inquire about the transfer.

Zhang Hongfu went to the little plastic-steel window. It was long and narrow, about four square meters. A young man who looked five or six years older than him sat lazily inside. Behind him, simple wooden shelves held jars of milk-tea powder. On the window glass was a menu with different milk-tea flavors priced from two to three yuan.

Zhang Hongfu asked whether the store was transferring. The young man said yes. Transfer fee? Ten thousand yuan, and rent 2,500 yuan a month. Could it be cheaper? No, one price, no bargaining. Was business good? He said it was, selling three or four hundred yuan a day. Zhang Hongfu said he would think about it, then returned to report to his brother.

Hearing the situation, Zhang Hongchao's eyes shone. He said the place could work: the position was so good, right at the intersection, and every time classes ended, students from Light Industry College and Agricultural University's Taoliyuan dormitory crowded through on foot. After taking it over, they could sell Super Ice Castle products there: ice cream, milk tea, ice porridge. In winter they could sell roasted sausages, popcorn, and similar items. It should not lose money. If done well, perhaps it could sell more than 1,000 yuan a day. That would be 30,000 yuan a month. With two employees there — employees then earned about 800 yuan a month — it could earn monthly profit, advertise Mixue Bingcheng, and drive traffic into the home-style restaurant. This store absolutely could be taken.

That night the two went back. The young man changed his mind. Whether because he had learned Zhang Hongchao was the owner of Mixue Bingcheng, the transfer fee became 30,000 yuan. They were so angry their faces and necks reddened, and they walked away.

Back home, they thought about it and still wanted the shop. So they went back thick-skinned to keep negotiating. Zhang Hongchao deployed his usual "always has a reason" bargaining attack.

The young man was interesting. Zhang Hongchao asked why he quoted the younger brother a low price but raised it when the two came together. The young man said he could read faces, and Zhang Hongchao's face told him he would definitely make a fortune at that location.

Whether or not that laughable reason could be accepted, they finally bargained the transfer fee down only to 25,000. The young man acted as though they could take it or leave it.

Fine. They wanted the goods too badly. In the end, strangely and helplessly, they accepted this small temporary room with the inflated transfer fee.

Next, Zhang Hongchao poured energy into designing how this little room should sell goods most profitably.

A Place of Surging Crowds

The preparation for the Dongfeng Road Super Ice Castle second store was simple and complicated.

Simple: after the winter holiday, when students returned, connect the ice-cream machine, install the signboard, paste the posters, and open.

Complicated: there were not yet all kinds of service providers. How to wire the electricity, how to connect the ice-cream machine, how to design and hang the sign and posters, what size they should be, what content they should show — he had to personally participate in all of it.

Fortunately, the store was tiny, only a four-square-meter window, so it needed no renovation. Or rather, people then had no awareness of renovating such small stores. They simply believed that if the key storefront sign was done, goods could be sold.

Zhang Hongchao asked Zhang Li, who had designed flyers for him, to design the sign. They found a beautiful ice-cream vector image online as a logo — there was no copyright awareness at all then — and placed four large amber-font characters on the right: 蜜雪冰城. To emphasize the product, they abandoned "Super Ice Castle" and changed the smaller text to Fresh Ice Cream. Beside the small text was a sticker poster on the signboard that would not fade, showing a real ice-cream photo. Next to the ice cream was a big "1 yuan" as tall as the ice cream, with small words beside it: original price two yuan. After the design was finished, he copied the file onto a USB drive and went to Zhengzhou's Zhengbian Road advertising-materials market to find a vendor. At that time, the most popular premium sign was an acrylic blister lightbox: dense tubes, good light transmission, three-dimensional look, and expensive.

Because ice cream had already been selling at Super Ice Castle for a while, he had optimized the cost to under one yuan. So he planned to launch this store at a one-yuan price, then restore it to two yuan at the right time. He did not care that profit was low. He felt selling well came first; even if it did not make money, it could be advertising for the head store.

The ice-cream machine was another secondhand Haichuan 3036 bought from the Wangzhai secondhand market on Nanyang Road. Why secondhand? Because buying secondhand was his habit; it saved far more than buying new. After testing it at Super Ice Castle, they pulled it to the Dongfeng Road intersection. The electrical wiring was done entirely by themselves. The ice-cream machine had high electrical requirements and needed four-square-millimeter national-standard copper wire, so Zhang Hongchao bought the best Henan No. 3 Factory wire. That brand could guarantee all wires met national standards; other brands might shrink the specification, with a wire labeled four square actually only 2.5.

Once the sign was done, the ice-cream machine installed, and tests passed, he bought marker pens, handwrote two posters on site, pasted them to the window glass, and handed the stall to Tao, his wife's younger brother, for trial operation while he went to Rhine Printing to design the color window posters.

Designing posters at the print shop was slow. There were few professional designers then. Usually Zhang Hongchao pulled up a stool and sat beside a staff member skilled in Photoshop, telling them what he wanted while the staff adjusted layout on the computer. It was a design method where his mind directed and the designer's hand acted as the mouse.

While they were designing, Tao called: "Brother, customers are lining up for ice cream."

Zhang Hongchao was ecstatic. He told the layout designer to hurry: his store already had people lining up. Fortunately the poster design was simple. They quickly finished layout, printed a proof, made some modifications, sent it to the large machine, laminated it, picked it up, and rushed away by car.

When he reached the store entrance, he was stunned. It was not merely a line. People had surrounded the window in three layers inside and out. At that time, Zhengzhou had almost no soft-serve ice-cream brands. The only ice cream people could eat was the cones sold at McDonald's and KFC, and those were relatively expensive and small. The ice cream at this store was about thirty centimeters tall, like the Statue of Liberty's torch in the hand, two or three times the size of McDonald's, and tasted good. Add to that Mixue Bingcheng's already high student-circle recognition in the area, and most important of all: it cost only one yuan.

One yuan could not buy a loss or a trick. Fresh milk, fresh eggs, fresh cone ice cream — of course it was worth trying.

When the crowd eased slightly, they pasted the posters on the windows. The posters had been custom-sized to each glass pane. The signboard's "Mixue Bingcheng Fresh Ice Cream, only one yuan" echoed the product text on every poster. Since the store had only one product, every window poster showed the same product. In today's language, it was simple and violent repetition, repetition, repetition.

From the afternoon the posters went up, the trial operation never stopped lining up. That night, the books showed more than 800 yuan sold. Everyone was wildly happy: one machine, a four-square-meter store, one salesperson, one-yuan product — that turnover was already a miracle worthy of grinning until one's mouth could not close.

The next day, spring sunlight was bright and the weather was good. Students still wore padded jackets, but after being frozen all winter, they had long been suffocated by cold. Seeing a huge one-yuan ice cream, their eyes shone. From opening in the morning, the line began. Inside, Zhang Hongchao and the others took money and made ice cream, probably smiling while collecting cash. But near noon they discovered the problem: one machine's capacity could not keep up.

Zhang Hongchao quickly drove his van back to the secondhand market to look for another machine. While he was searching, employees called from the store saying the machine could not make firm enough ice cream; what came out was soft and soupy, not formed.

Fortunately, luck was good. The secondhand market actually had another machine of the same model. There were not many ice-cream-machine manufacturers on the market then; perhaps Haichuan had done thorough sales in Henan, because they somehow bought three machines of the same model. After a simple test showed no problem, they bought it immediately.

The machine was pulled to the store, another electrical line was run, power connected, cleaning and testing completed. By the time it could produce ice cream, the store had already closed for the night, so the new machine did not help that day.

That night, revenue was only 1,400 yuan, because one machine had reached its capacity limit.

No panic. There was tomorrow. The next day it was again three layers of people inside and out. Information spread quickly among students. There was no WeChat then, but young people always have ways to share and communicate quickly. Two machines ran simultaneously, yet the line remained uninterrupted. By the noon peak, the two machines again reached their limit.

They clearly could not produce enough, but customers still refused to leave, waiting at the entrance. They did not understand queue-number systems, and students' self-discipline was not yet high enough to line up one by one, so everyone squeezed in layers. Zhang Hongfu noticed several beggars coming from elsewhere to stay near the store, because the customers were students and very sympathetic, making the chances of receiving money high.

Li Ka-shing's investment law also applied to choosing a begging spot: where popularity is strong, gold can be earned by the ten thousand.

By evening, students began returning after buying, saying their phones had been stolen. Then others came back saying their wallets were gone. The team realized thieves had also set their eyes on this lucky place.

The thief's success law: where popularity is strong, gold can also be earned by the ten thousand.

They were excited and nervous. Excited because business was good; nervous because students kept losing things. Zhang Hongchao specially called over a server from the restaurant to stand at the entrance handing out flyers and watching for thieves.

The insufficient ice-cream-machine capacity was also making them nervous. By then, there were no more ice-cream machines at Zhengzhou's Wangzhai secondhand market. Zhang Hongchao quickly searched another secondhand market at Huanghe Food City but found none. At his wits' end, he suddenly thought: could he search online?

So he hurried to an internet cafe and searched Baidu. Sure enough, there were many listings for transferred ice-cream machines online. His ability to use the internet was trained from that time; before then, how would he have had time to go online?

But all those ice-cream machines were in other cities.

—— FoodBud English Translation of the Source · Part 4 Ends ——

3. FoodBud Notes

1. The compound is where Mixue learns operating pressure at scale. Before the beverage chain, there is a 300-seat restaurant with queues, clogged toilets, fights, family labor, and twenty-hour days. This is not romantic founder lore; it is training in throughput, hygiene, people management, and crisis response.

2. The competitor cases sharpen the low-price doctrine. Jiliya and Good Barbecue both confuse discounting with value. Mixue's response is different: raise prices visibly, raise portions and ingredient quality more than the price, and let customers do the math.

3. Super Ice Castle is a pivot hidden inside a restaurant. It starts as a side water bar, but the ice porridge and cone ice cream reveal a stronger model: simple product, clear price, high volume, and broad student appeal.

4. Product development is already vertically inclined. Mixue does not just buy an ice-cream machine. It studies formula, customizes cone equipment, buys a batter recipe, stamps its name onto the cone, and tests until the product wins. The later supply-chain system begins as this practical refusal to accept market-standard inputs.

5. One yuan is not just cheap; it is legible. The second store has one product, repeated posters, a giant price, and no complicated menu. The model is simple enough for customers to understand instantly and powerful enough for word of mouth to create a crowd.

4. Timeline (this installment)

  • 2003–2007 — The home-style restaurant in the aluminum-factory compound becomes the main operating battlefield before the ice-cream chain emerges.
  • ~2004 — Jiliya Sunshine Restaurant challenges Mixue with steep discounts, then collapses after cutting product quality.
  • ~2010 reflection — Good Barbecue and Xinmaidao serve as negative and positive examples of positioning and operational discipline in the same compound.
  • Spring 2006 — Zhang Hongchao feels the restaurant is missing its original ice-product excitement and creates Mixue Bingcheng Super Ice Castle.
  • May 2006 — Super Ice Castle launches as an independent dessert/water bar inside and outside the restaurant corner.
  • 2006 — Three-yuan ice porridge sells 700 bowls on its first day.
  • Late autumn 2006 — The first fresh cone ice cream launches at two yuan, redeemable with a one-yuan restaurant voucher, and becomes a hit.
  • Winter 2006 / early 2007 — Zhang Hongchao takes over a four-square-meter Dongfeng Road window stall and launches one-yuan fresh ice cream; crowds overwhelm machine capacity.

5. Pull Quotes (web-ready)

1. *"Thin margins with high volume, genuine goods at fair prices, no deception of old or young, sustained operation — these are ordinary principles."* — Zhang Hongfu (translated from the source text) 2. *"Saving money is the owner's need, not the customer's need."* — Zhang Hongfu (translated from the source text) 3. *"Where there is excess profit and imbalance, there is the possibility of revolution."* — Zhang Hongfu (translated from the source text) 4. *"Do it. I want to be different."* — Zhang Hongchao, as recalled by Zhang Hongfu (translated from the source text) 5. *"One product, one yuan, repetition, repetition, repetition."* — FoodBud rendering from the source sequence

Series navigation

*Before the Castle: How Mixue Was Really Built, 1997-2017 · Part 4 of 12 · FoodBud /insights*

*This is a translated and annotated edition, not an original FoodBud interview. Authorized translation: translated with permission from Zhang Hongfu's memoir (经授权翻译自张红甫回忆录). Original author/source: Zhang Hongfu (张红甫). The translated source is kept separate from FoodBud's Editor's Note, FoodBud Notes, timeline, and pull quotes.*

*Publication note: corporate data is primary-source-locked to HKEX filings where stated. Market capitalization and any FY2025 GMV / systemwide-sales figure are intentionally not stated. “Scale” means systemwide sales / GMV and store count, never company revenue. FoodBud is information only, not investment advice.*