Mixue Just Topped McDonald's in Store Count — But It's Quietly Closing Shops Overseas
Summary
The global fast-food landscape shifted on paper in 2025 when Chinese bubble tea group Mixue (蜜雪冰城) reported 59,823 total locations across its three brands, surpassing McDonald's 45,356 stores and staking a claim to the title of the world's largest fast-food chain by outlet count. Revenue reached CNY 33.56 billion with net profit of CNY 5.927 billion, growing 35.2% and 33.1% year-over-year respectively, while the company opened 14,496 new stores — averaging 37 new locations every single day. Yet in the very year this title was claimed, overseas stores declined from 4,895 to 4,467, a net loss of 428 locations or 8.7%, while franchise closures surged 57% from 1,609 to 2,527 — numbers that quietly undercut the "global conquest" narrative running across financial headlines. With 92.5% of all stores concentrated in mainland China and operations spanning just 13 overseas markets, the "world's largest" label demands serious scrutiny: four stores in Japan after three years of market entry, and a third of Hong Kong locations shuttered in the first half of 2026, expose the geographic limits of an ultra-low-price strategy that was engineered for Chinese market conditions and struggles to travel. The structural gap between Mixue's headline store count and its actual international reach reveals both the business model's inherent geographic constraints and the broader challenge facing Chinese consumer brands that seek physical-store footholds in markets where their core pricing advantage simply doesn't translate.
Key Points
The Reality Behind the "World's Largest" Title
Mixue Group reported 59,823 total store locations at year-end 2025, surpassing McDonald's 45,356 to claim the title of the world's largest fast-food chain by outlet count — but several layers of critical context get stripped away in that headline comparison. The 59,823 figure represents the combined total of all three Mixue Group brands: the flagship MIXUE tea-and-ice-cream chain, Lucky Cup (幸运咖) the coffee brand that surpassed 10,000 stores in 2025, and FULU Fresh Beer (福鹿家) the fresh beer brand. McDonald's 45,356 is a single-brand count, so comparing the two without flagging the difference inflates Mixue's apparent lead beyond what the facts support. Even stripping out Lucky Cup and FULU, the MIXUE brand alone with roughly 44,000 Chinese stores plus overseas locations technically still exceeds McDonald's — but the distinction matters for analytical clarity. On revenue, the gap is far more telling: Mixue's CNY 33.56 billion (approximately $49 billion) is roughly one-tenth of McDonald's approximately $48.4 billion — store count and revenue scale are pointing in different directions entirely. In terms of international reach, McDonald's operates across more than 100 countries with no single market dominating its footprint, while Mixue's 13 overseas countries and 4,467 international stores represent just 7.5% of total outlets. The "world's largest" label is mathematically defensible on one narrow metric — store count — while virtually every other measure of global scale and reach tells a different story. Investors and analysts relying on that single metric risk building an investment case on a foundation that is technically accurate but substantively incomplete.
What the Overseas Store Decline Actually Reveals
In 2025, Mixue's overseas store count fell from 4,895 to 4,467, a net decline of 428 locations or 8.7% — in the same year domestic China stores grew from 41,584 to 55,356, a gain of 13,772 or 33.1%. That simultaneous domestic explosion and overseas contraction isn't a coincidence; it's the business model operating at the extremes of what it can and cannot do. The HKEX filing made the admission directly: "In Indonesia and Vietnam, we focused on optimizing existing stores' operations... During the Reporting Period, the number of stores in these two countries decreased." The company entered Kazakhstan and the United States as new markets during the same period — and yet the total overseas count still fell. That means the losses in Indonesia and Vietnam were large enough to overwhelm whatever the new-country entries contributed. Overseas stores now represent just 7.5% of the group total, down from the already low baseline of the prior year. The company characterizes this as a shift to what it calls "refined operations," with Executive Director for Front-End Supply Chain Cai Weimiao noting, according to the company, that relocated stores saw daily average revenue increase by more than 50%. The problem is that the aggregate numbers do not support a "quality over quantity" narrative at this scale: when franchise closures jump 57% in a single year while you are simultaneously adding new-country entries and still finishing with a smaller overseas footprint, the simplest explanation isn't strategic refinement. The data pattern — explosive domestic growth, shrinking overseas reach, rising closure counts — points toward a model that works exceptionally well inside one specific market and struggles structurally outside it.
The Geographic Limits of the Low-Price Strategy
Mixue's entire competitive advantage rests on a price point that is almost impossible to replicate outside the specific cost environment of China's consumer market. In China, bubble tea sells for under 5 yuan — roughly $0.73 per cup. That price is built on in-house raw material production, an ultra-efficient domestic logistics network, extremely low franchise fees, and operating in a labor and real estate cost structure that makes the economics work at that price point. Cross any border into a market with materially higher costs, and the math breaks. In Japan, the same product sells for approximately 400 yen — about $2.46, more than three times the Chinese price. At that level, Mixue is no longer "insanely cheap." It's competing at a mid-price point against Japanese convenience store drinks, local café chains, and competing tea brands, with zero brand recognition and no pricing edge. The result in Japan is quantifiable: three years in the market, four stores nationwide, and an original target of 1,000 stores by 2028 now sitting at a 0.4% achievement rate. In Hong Kong, Mixue entered in late 2023, opened nine stores, and lost a third of them by the first half of 2026 — including locations in Tsim Sha Tsui, one of Asia's highest foot-traffic retail corridors. Consumer Alisa Lin captured the local reality in a single sentence: "It's not a very popular brand here. Only one of my friends in Japan has ever bought it." The structural problem compounds further in the United States, where franchise entry costs range from $270,000 to $840,000 — more than 100 times the roughly $2,600 Chinese franchise fee. A business model built on near-zero entry costs and ultra-low consumer prices cannot be transplanted into high-cost environments without fundamental reinvention. The evidence from Japan, Hong Kong, and early U.S. operations suggests that reinvention hasn't happened yet.
The Margin Paradox: Supply Chain Company or Franchise Company?
Mixue consistently presents itself as a supply-chain company rather than a traditional franchise operator — the argument being that the real competitive edge lies in in-house production of 100% of core ingredients, proprietary logistics, and the ability to deliver raw materials more cheaply than any competitor. More than 99% of stores are franchised, and the franchise fee represents just 2.4% of total revenue, lending some credibility to the supply-chain narrative. But the 2025 results introduce a significant complication: the gross margin for the merchandise-and-equipment segment — the supply chain business — declined from 31.2% to below 29%, driven by rising raw material procurement costs. This is the segment the company identifies as its core business and competitive moat, and its margin is contracting. At the same time, the gross margin for franchise service fees rose from 80.4% to 82.6%, moving in the opposite direction. Read plainly: the business Mixue claims as its core identity has a shrinking margin, while the franchise fee business it downplays has a growing margin. The gap between the supply-chain narrative and the actual profit structure is widening, not narrowing. This creates a strategic identity crisis: is the real moneymaker the supply chain or the franchise relationship? The answer has implications for how the company handles cost increases — if raw material costs keep rising, pressure either gets passed to franchisees (risking accelerated closures) or gets absorbed into corporate margins (risking the investment case). Neither path is comfortable, and the data suggests the company is navigating this tension without yet having found a durable resolution to the underlying paradox.
The Language of Retreat: "Refined Operations"
When businesses contract, the language they use to describe that contraction tells you something important about how accurately they are communicating with their investors. Mixue's framing of its overseas reduction as a shift to "refined operations" — a phrase the company has used to characterize the restructuring of its Indonesia and Vietnam presence — is a case study in corporate communication that uses precision language to avoid precision acknowledgment. The HKEX filing acknowledges the contraction plainly: "In Indonesia and Vietnam, we focused on optimizing existing stores' operations... During the Reporting Period, the number of stores in these two countries decreased." That sentence contains the admission clearly. But the surrounding framing — with Executive Director Cai Weimiao noting, according to the company, that relocated stores saw daily average sales rise by more than 50% — casts the contraction as a deliberate quality-over-quantity strategy. The scale of the franchise closure numbers makes that framing increasingly strained: 2,527 closures versus 1,609 the prior year is a 57% jump in a single year, and characterizing that as "quality improvement" rather than structural attrition requires significant rhetorical effort. When a third of Hong Kong stores close and Japan stays at four stores after three years, and the company's description is "refined operations" rather than "market recalibration" or simply "retreat," the signal investors receive is distorted from the one the data is sending. This matters because the investment case for Mixue's international growth story depends heavily on whether the overseas contraction is a deliberate, temporary pruning or an indication that the model simply does not work in markets outside its origin environment. The language of "refined operations" forecloses that question rather than answering it.
Positive & Negative Analysis
Positive Aspects
- Unmatched Domestic Expansion Velocity
The sheer pace at which Mixue is expanding inside China has no precedent in global quick-service restaurant history. Adding 13,772 net new stores in mainland China in a single year — from 41,584 to 55,356, averaging more than 37 new locations every day — is a growth rate that no other chain on earth has matched or is capable of matching in the near term. What makes this particularly significant is that roughly 60% of these new openings occurred in third-tier cities and below, meaning the expansion is actively deepening market penetration into smaller cities rather than simply filling already-saturated major urban centers. China's 33 provincial-level regions and 300 cities are covered by Mixue's supply and logistics network, and the company's infrastructure extends to 8 overseas countries for warehousing and delivery. At 3-5 yuan per drink, turning a profit requires that logistics and cost structure to be pushed to their absolute limits — and Mixue has demonstrably achieved that, including a digital system capable of delivering core ingredients to specific regional stores within four hours. The year-over-year 33.1% increase in mainland store count represents a deepening of market dominance that creates structural barriers to competition: a rival attempting to replicate Mixue's scale in China would need to match decades of supply-chain investment, logistics buildout, and franchisee network development. For as long as China's third- through fifth-tier city consumer base continues to grow and the price-sensitive demand for low-cost beverages remains strong, this domestic expansion engine provides a foundation that few businesses anywhere have the operational capacity to challenge.
- Vertically Integrated Supply Chain as Structural Competitive Moat
The ability to produce 100% of core beverage ingredients in-house is not merely a cost advantage — it is a structural competitive moat that fundamentally differentiates Mixue's business model from virtually every other franchise operator at scale. Most franchise systems are aggregators: they build brand, develop systems, and source from third-party suppliers. Mixue is vertically integrated from raw ingredient to cup — and that integration is what makes a 3-yuan ice cream commercially viable. Competitors attempting to match Mixue's price points would need to accept margin structures that their existing supply arrangements cannot support, making it structurally difficult to undercut Mixue on price without also building the same kind of vertically integrated production and logistics capability that took Mixue years to develop. The low franchise entry cost of approximately $2,600 in China — extraordinarily low by global franchise standards — is itself a product of this supply-chain efficiency: Mixue doesn't need high upfront fees because the ongoing raw-material supply relationship is where the margin is captured. Lucky Cup's coffee economics demonstrate that this supply-chain advantage extends beyond tea drinks: with coffee bean sourcing at RMB 69.5/kg versus competitors at RMB 90-120/kg, Lucky Cup generates Americano gross margins above 50% at a 6-8 yuan retail price — a result that competitors operating with third-party sourcing cannot easily replicate. The vertically integrated model also gives Mixue optionality: as it enters new product categories or geographic markets, the same supply-chain infrastructure can potentially be leveraged rather than rebuilt from scratch.
- Lucky Cup's Successful Diversification Play
The performance of Lucky Cup (幸运咖) in 2025 represents perhaps the most underappreciated element of the Mixue Group investment case, and it challenges the narrative that the group's growth story is entirely dependent on the bubble tea format. Launched in 2017 and operating on the same ultra-low-price, supply-chain-driven model as MIXUE, Lucky Cup crossed 10,000 stores in November 2025 to become China's third-largest coffee chain by location — an extraordinary achievement for a brand that had 1,000 stores just two years prior. In October 2025 alone, Lucky Cup opened 1,100 new stores, outpacing Luckin Coffee's 905 and Cotti Coffee's 597 for single-month new openings in China's coffee sector. The cost-structure advantage is real and measurable: coffee bean sourcing at RMB 69.5/kg versus sector competitors at RMB 90-120/kg, enabling Americano gross margins above 50% at accessible retail price points of 6-8 yuan. Lucky Cup's 2025 international debut — with first overseas openings in Malaysia and Thailand — also opens a second international growth track for the group at a time when MIXUE's international footprint is contracting, providing a degree of portfolio balance. If Lucky Cup can scale to 20,000 to 30,000 stores over the medium term, it meaningfully offsets the inevitable deceleration in MIXUE tea store growth as that format's domestic market approaches saturation. The broader strategic implication is that Mixue Group may be evolving from a single-format bubble tea operator into a multi-format beverage conglomerate capable of capturing a wider range of Chinese consumer occasions at ultra-competitive price points.
- Post-IPO Financial Runway and Investment Capacity
The March 2025 HKEX initial public offering gave Mixue Group a financial foundation that dramatically expanded its strategic options and its ability to absorb the costs of international trial-and-error without existential risk. The listing raised HK$3.45 billion (approximately $444 million), with retail subscriptions 5,258 times oversubscribed — a level of investor enthusiasm that reflected both the scale of the domestic growth story and the market's enthusiasm for Chinese consumer brand internationalization. The offering's first-day performance, with shares rising 43% above the HK$202.5 IPO price, confirmed robust market reception. Following the IPO, cash and cash equivalents grew 79.9%, from CNY 11.1 billion to approximately CNY 20 billion, providing substantial runway for supply-chain investment, overseas market development, new brand incubation, and strategic acquisitions. This financial position supports the BRL 3 billion ($600 million) Brazil commitment, the ApexBrasil supply agreement worth approximately RMB 4 billion, and the ongoing evaluation of Americas manufacturing infrastructure — investments that would be difficult to undertake from a position of constrained liquidity. Perhaps more importantly, the ~CNY 20 billion cash position allows Mixue to treat overseas market entry as a multi-year experiment rather than a short-term revenue requirement, enabling the kind of patient market development that successful international expansion in the food and beverage sector typically requires. The financial runway is a genuine advantage that materially reduces the risk that overseas challenges force a premature strategic pullback.
- The Emerging Market Potential
While Mixue's developed-market track record has been disappointing, the company's approach to emerging markets — where the structural economics of its low-price model align more naturally with local purchasing-power levels — represents a potentially underappreciated growth avenue. The April 2026 Brazil launch in prime São Paulo retail corridors, backed by the BRL 3 billion investment commitment through 2030 and the supply agreement with ApexBrasil worth approximately RMB 4 billion, signals a meaningfully different level of strategic seriousness than the Japan or Hong Kong entries. Brazil's price sensitivity, large young population, and strong tea and cold drink culture provide a more plausible market fit than Japan or Hong Kong. The plan to evaluate local Americas manufacturing infrastructure also suggests the company recognizes that an import-dependent supply chain is not viable for scale in distant markets — a lesson apparently learned from the Southeast Asia experience. Mixue's Indonesian market, which reached approximately 2,667 stores at its peak and established real operational infrastructure, provides a proof point that the model can achieve meaningful scale in an emerging market with the right price-point alignment. The MINISO precedent is also instructive: that Chinese budget-lifestyle brand reached 3,583 overseas stores by 2025 with international revenue at 44.2% of MINISO brand sales and U.S. same-store growth in the mid-20% range, demonstrating that Chinese low-price consumer brands can achieve genuine international traction when the format-market fit is right. Mixue's challenge is demonstrating that the same is achievable in food and beverage, where local tastes, regulations, and supply-chain economics create additional friction.
Concerns
- Structural Failure Pattern in Developed Markets
The evidence from Japan, Hong Kong, and early United States operations constitutes not a series of isolated early-stage challenges but a consistent structural failure pattern that points to a genuine limitation in the business model's international transferability. Japan: three years in the market, four stores nationwide, 0.4% of a publicly stated 1,000-store target for 2028. Hong Kong: nine stores opened in late 2023, a third of them shut down within roughly two years, including locations in Tsim Sha Tsui — one of Asia's highest-footfall retail areas. The United States: first location opened in Hollywood in December 2025, three years after the company was publicly discussing U.S. expansion ambitions. In each case, the failure pattern traces to the same root cause: a business model built on sub-$1 pricing in a low-cost operating environment encountering operating costs, consumer price expectations, and competitive landscapes that make that price point commercially unsustainable. The moment a 5-yuan bubble tea becomes a 400-yen bubble tea, the single most powerful thing about the Mixue brand — the "I can't believe how cheap this is" reaction from consumers — disappears entirely. What remains is an unfamiliar foreign brand competing at a mid-price point with no brand recognition, no established consumer loyalty, and no pricing edge over local competitors. That is structurally a very difficult position, and Mixue's developed-market results demonstrate that the company has not yet found a way out of it. The U.S. franchise entry cost range of $270,000 to $840,000 — versus roughly $2,600 in China — quantifies exactly how different the developed-market operating environment is from the one the model was designed for.
- Franchise Closure Acceleration and Sustainability Warning Signs
The jump in franchise closures from 1,609 in 2024 to 2,527 in 2025 — a 57% increase — while the total franchisee count grew from 20,976 to 27,450 simultaneously, creates a picture of a model that is expanding at the top while experiencing accelerating attrition from below. The net new store count of approximately 12,000 domestically looks impressive in isolation but becomes more concerning when you recognize that it required 14,496 gross openings to achieve, meaning closures consumed roughly 17.4% of gross openings in a single year. If that ratio continues rising — from 17.4% toward 20% and beyond — the headline expansion numbers begin to tell a less reliable story about underlying model health. The low franchise entry barrier that makes rapid expansion possible is the same feature that makes rapid exit easy: a franchisee who has paid $2,600 to enter faces a very different economic calculation about sunk costs than one who has invested $270,000. That structural feature makes the closure-to-opening ratio a particularly important metric for this company. Vietnam's unit economics make the franchisee profitability concern concrete: with $32,000 to $40,000 invested upfront and roughly $1,200 monthly net profit, the break-even horizon stretches to approximately three years. Reports of four to six Mixue locations per square kilometer in some Vietnamese areas creating intra-brand cannibalization further complicate the profitability picture. If franchisees systematically find they cannot achieve acceptable returns within a reasonable timeframe, new franchisee recruitment will slow and the closure rate will climb — creating a feedback loop that eventually constrains the expansion model itself.
- Supply-Chain Margin Erosion and Core Model Pressure
The decline in gross margin for Mixue's merchandise-and-equipment segment — from 31.2% to below 29% — is the most fundamentally concerning data point in the 2025 results because it signals pressure on the component of the business that is supposed to be the structural source of competitive advantage. If the supply-chain efficiency model is working optimally, this margin should be stable or expanding as scale increases and procurement bargaining power grows. Instead, rising raw material procurement costs have pushed it in the opposite direction. The dilemma this creates is straightforward but uncomfortable: to restore the margin, Mixue would need to either raise the prices it charges franchisees for raw materials (increasing franchisee cost burdens and potentially accelerating closures) or accept ongoing margin compression at the corporate level (eroding the investment case). Neither option is attractive, and the current trajectory — with franchise service fee gross margins rising from 80.4% to 82.6% while supply-chain margins fall — suggests the company may be managing the tension by relying more on franchise fee revenue to compensate for supply-chain margin loss. That would represent a shift in the business model's actual profit architecture away from the supply-chain narrative and toward a more conventional franchise revenue profile, even as the company continues to present itself as a supply-chain business. The ultra-low consumer price points that define the brand — 3 yuan for ice cream, under 5 yuan for bubble tea — create an additional constraint: passing cost increases through to consumer prices risks the single most important thing about the brand. The pricing floor is structural, which means cost increases have nowhere to go except into reduced margins or reduced franchisee economics.
- The Macro Risk of 92.5% Single-Market Concentration
A chain with 92.5% of its global store count in one country is not, in any meaningful operational sense, a global business — it is a domestic business that also has some overseas locations. The distinction matters enormously from a risk management perspective. McDonald's, with stores in more than 100 countries and no single market close to representing 92.5% of its footprint, can absorb a difficult year in any one market through resilience in others. Starbucks operates similarly. Mixue has no such buffer: if China's consumer market slows, tightens, or faces structural headwinds, there is no international portfolio to offset the impact, because the international portfolio accounts for just 7.5% of stores and that percentage is falling. Within China itself, the geographic concentration carries its own risks. The push of new openings into third-tier cities and below — where more than 57% of 2025 new stores opened — is the right strategy for near-term growth but may set up more challenging unit economics as the addressable market in those smaller cities becomes increasingly penetrated and intra-brand competition intensifies. China's broader fresh tea market growth rate has already decelerated sharply, from 24.9% annually over 2017-2022 to just 6.4% in 2024. If that deceleration continues, or if macroeconomic conditions compress Chinese consumer discretionary spending, Mixue's concentrated exposure means there is no portfolio diversification benefit to absorb the impact. The 92.5% figure also increasingly complicates the "world's largest global chain" narrative — at some point, the concentration makes the global label structurally indefensible regardless of total store count.
- The "World's Largest" Label and the Expectation Gap It Creates
The "world's largest fast-food chain" title — while technically defensible on the narrow basis of total outlet count — has created an expectation gap between what the label implies and what the company's actual global profile resembles, and that gap carries real risk. The title implies not just a large number of stores but a genuinely global operational presence with broad international brand recognition, meaningful revenue contribution from multiple markets, and a proven ability to operate profitably across diverse regulatory, cultural, and economic environments. On every one of those dimensions, Mixue falls substantially short of what the label implies. The gap between the label and the reality is illustrated starkly by the Japan situation: a company publicly targeting 1,000 stores by 2028 in a major developed market, after three years achieving 0.4% of that target, while continuing to carry the "world's largest" designation. This kind of expectation gap creates multiple risks. For investors, it risks inflating the valuation premium on international growth potential that may not materialize. For the company, it sets up future headline risk when the gap between "world's largest" claims and measurable international performance becomes impossible to manage with "refined operations" language. For the brand itself, failed international ambitions — when they become widely known — can retroactively undermine the domestic narrative as well. Managing expectations toward what the company actually is — the dominant player in one of the world's largest consumer markets, with an ambitious but so far largely unsuccessful international experiment attached — would be both more accurate and more strategically sustainable than continuing to compete for global headline supremacy on a metric that obscures as much as it reveals.
Outlook
Let me start with where the stock is right now, because the market has already been doing some of this work. As of August 3, 2026, shares trade at HKD 223.80 — roughly 55% below the 52-week high of HKD 502.50, and only about 10% above the IPO price of HKD 202.5. The first-day 43% pop in March 2025 has nearly completely unwound across 17 months. Market cap sits at approximately HKD 84.96 billion (around $10.9 billion), with a P/E ratio of 12.85x — a notably compressed multiple for a company opening 37 stores per day. What the market is telling us is simple: it's already applying a meaningful discount to the "world's largest" narrative, and the core basis of that discount is the overseas retreat story. A chain that should be commanding a premium growth multiple is trading at a value multiple, and that's not a market mistake — it's the market reading the overseas signal correctly.
Over the next six months, the most important number to watch will be what Mixue's first-half 2026 results reveal about the overseas store trajectory. The 428-store net decline in 2025 is already compounding: we know Hong Kong alone closed roughly a third of its locations in the first half of 2026. The directional case for an accelerating overseas decline in the 2026 data is strong. Domestically, the 37-stores-per-day pace could continue, but the industry backdrop is increasingly difficult. According to Daxue Consulting, through May 2026 across an eleven-month window, China's fresh tea market saw 174,000 new openings and 137,000 closures — a closure-to-opening ratio approaching 79%. The sector's compound annual growth rate decelerated from 24.9% over 2017-2022 to just 6.4% in 2024. Mixue's own franchise closure rate jumped 57% in a single year, and the world's largest bubble tea chain is not insulated from its industry's structural deceleration.
Over the medium term, the ceiling on China's domestic market is what concerns me most. Mixue's 55,356 mainland stores in 2025 is an extraordinary concentration of outlets, and pushing from there toward 60,000 or 70,000 requires expansion into progressively smaller markets. More than 57% of new store openings are already occurring in third-tier cities and below. Macquarie initiated coverage in September 2025 with an Underperform rating and a HKD 279 price target, flagging exactly this dynamic as a core risk: intensifying competition in sub-tier cities, combined with the possibility of delivery platform subsidy withdrawal hitting same-store sales. Competitor Guming (古茗) posted 46.9% revenue growth in 2025 to CNY 12.9 billion with 13,554 stores, pushing into the same sub-tier market. Chabaidao (茶百道) holds steady at 8,621 locations. Even HEYTEA — with around 4,300 stores plus 100-plus international locations — has announced it will deliberately slow expansion in saturated Chinese city markets. Analyst consensus for Mixue's 2026 revenue growth sits around 11% — less than half the three-year average of 25%. The consensus price target has already been revised down 14% following the March annual results release, reflecting that the market has broadly accepted meaningful deceleration as the base case.
One variable that genuinely changes the medium-term picture is Lucky Cup (幸运咖). This coffee brand hit 10,000 stores in November 2025, achieving China's third-largest coffee chain by location count. In October 2025 alone it opened 1,100 new stores, outpacing Luckin Coffee's 905 and Cotti Coffee's 597 for that single month's new-opening count. The unit economics are compelling: coffee bean sourcing at RMB 69.5/kg versus competitors at RMB 90-120/kg, with Americano gross margins exceeding 50% at 6-8 yuan retail price. The same supply-chain model that made MIXUE dominant in tea is proving viable in coffee — and Lucky Cup also opened its first overseas locations in Malaysia and Thailand in 2025, establishing a second international track while MIXUE's is contracting. If Lucky Cup scales to 20,000 to 30,000 stores over the medium term, it provides meaningful offset against the inevitable deceleration in MIXUE's domestic growth. The significant complication: Luckin (approximately 29,000 stores) and Cotti (approximately 18,000 stores) are formidable competitors fighting for the same sub-tier-city customer.
For the bull scenario to materialize, three conditions need to line up simultaneously. Chinese third- to fifth-tier city consumption needs to sustain momentum, supporting group-wide expansion toward 80,000 to 90,000 total stores. Lucky Cup needs to successfully close the gap on Luckin and serve as the group's next primary growth engine. And at least one emerging market — most likely Brazil — needs to demonstrate that the Mixue physical-store model can generate a sustainable, scalable footprint outside China. Brazil is a materially different bet from Japan or Hong Kong: dual April 2026 openings in prime São Paulo retail corridors, the BRL 3 billion ($600 million) investment pledge through 2030, the ApexBrasil supply agreement at approximately RMB 4 billion ($556 million), and active evaluation of a local Americas manufacturing facility signal strategic seriousness at a different order of magnitude. It's also worth noting that MINISO — another Chinese budget brand — has achieved genuine international traction, with 3,583 overseas stores in 2025, international revenue at 44.2% of MINISO brand sales, and U.S. same-store growth in the mid-20% range. Chinese budget formats can succeed internationally. The open question for Mixue is whether food and beverage face a fundamentally higher wall than lifestyle products.
Analyst targets on the stock vary widely — which is itself informative. The 18-institution average price target is HKD 386. Simply Wall St's aggregation shows HKD 424. Stockopedia places it at HKD 437. StockAnalysis cites HKD 368. A spread of that magnitude, implying anywhere from 64% to roughly 95% upside from current levels, signals that the market has no real consensus on where this company goes. What is consensus: top-line growth will compress significantly, and the 35.2% revenue growth of 2025 is not a repeatable number.
The base case, as I see it: domestic China continues growing but at a decelerating rate, with the group reaching 80,000 to 90,000 total stores by 2028, and Lucky Cup emerging as the primary growth driver rather than MIXUE tea. MIXUE tea stores face gradually slower net additions as penetration in smaller markets deepens and intra-brand competition increases. Overseas, the Southeast Asian core — Indonesia at roughly 2,667 stores and Vietnam at approximately 1,304 stores as of late 2024 — holds roughly steady or recovers modestly from current levels. In Japan, Hong Kong, and the United States, locations remain in the dozens: brand-awareness flagships rather than scalable networks. Brazil reaches somewhere between 100 and 200 stores by 2030, well short of the 500 to 1,000 target, replicating the same gap between ambition and structural reality that the Japan 1,000-store goal exposed. In this scenario, Mixue Group holds the "world's largest by outlet count" title, but the title's meaning becomes increasingly synonymous with "China's largest by outlet count" with some offshore footholds attached.
The bear case already has several signals illuminated, and Macquarie's Underperform thesis with a HKD 279 target is its clearest articulation. If Chinese third-tier saturation arrives faster than expected, simultaneous pressure from Guming, Luckin, and Cotti could compress both domestic same-store sales and new-store economics. The supply-chain gross margin already below 29% is flashing the first warning on the business model's foundations. If raw material costs continue rising while retail prices are locked in by the brand's identity, franchisee profitability erodes further, accelerating the closure cycle that already jumped 57% in one year. A closure-to-opening ratio of 17.4% in 2025 (2,527 closures vs. 14,496 openings) crossing 20% in 2026 would be a serious signal. If overseas declines continue — with Indonesia and Vietnam in net decline, Japan and Hong Kong in near-collapse, and Brazil not yet at scale — group overseas store counts could fall below 3,000 by 2028, pushing China concentration above 95% and making the "global chain" label functionally untenable.
Ultimately, three metrics will tell the real story over the next 18 months. First: overseas store net change. The 428-location decline in 2025 will either stabilize, reverse, or accelerate — and that number will definitively tell us whether "refined operations" is a genuine strategic pivot or a language game played for investor relations purposes. Second: the closure-to-opening ratio. At 17.4% in 2025, the threshold of concern is 20%. Crossing it signals that the expansion model's fundamental health is deteriorating faster than new openings can compensate. Third: supply-chain gross margin. Further compression below 29% tightens franchisee economics and risks amplifying the closure cycle in a self-reinforcing way that becomes very hard to interrupt.
These three numbers are all moving in the same direction right now, and they are all pointing toward the same conclusion: the relevant question for Mixue is no longer how fast it can expand — it's whether what has already been built is sustainable. Sixty thousand stores have been reached. The harder question is whether sixty thousand stores still exist five years from now. With roughly CNY 20 billion in cash, the financial runway is there to pursue the answer. The speed of expansion, which defined Mixue's first chapter, is no longer the right scorecard.
But there are two things money cannot buy: the taste preferences of consumers in markets where the low-price strategy evaporates, and a brand identity that resonates when you can no longer lead with the cheapest drink in the room. Solve those two problems and Mixue becomes a genuinely global chain. Fail to solve them and it goes down as the largest local chain ever built. Either way, this company's trajectory is worth watching closely — the story being told and the story actually unfolding are not, at this moment, the same story.
Sources / References
- Mixue Group Annual Results Announcement for the Year Ended December 31, 2025 (Stock Code 2097) — HKEX
- Mixue Group Reports CNY 33.56 Billion Revenue 2025, Accelerating Global Expansion — EqualOcean
- Can China's budget brands crack developed markets? Mixue shows it won't be easy — South China Morning Post
- Mixue trims abroad, doubles down at home, and brews up Lucky Cup's rise — KR-Asia
- Mixue IPO: Bubble tea giant soars on Hong Kong trading debut — CNBC
- How Mixue Became the World's Largest Fast-Food Chain Through Its Low-Cost Business Model — CKGSB Knowledge
- Mixue — Britannica Money
- Chinese Modern Tea Market Analysis — Daxue Consulting
- Macquarie Initiates Coverage on Mixue Stock with Underperform Rating — Investing.com
- Lucky Cup Surpasses 10,000 Stores — Dao Insights
- MINISO Group Full Year 2025 Financial Results — PR Newswire
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