How Much Does It Cost to Franchise a Mixue Ice Cream & Tea Store, and How Does Mixue Make Money?

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Recently, you can't escape mentions of Mixue Bingcheng when browsing Bilibili or Weibo. Mixue Bingcheng has won everyone's forgiveness with its catchy theme song. Just over a month ago, Mixue Bingcheng was exposed for food safety issues, but within a month, this theme song has completely washed away the previous disgrace.

However, the reason everyone can overlook Mixue Bingcheng's food safety issues isn't just because of the lyrics "You love me, I love you, Mixue Bingcheng is sweet," but because it's really cheap.

Affordable Pricing Strategy

Unlike Nayuki and HEYTEA, most Mixue Bingcheng stores are located in third and fourth-tier cities, commonly found in university towns, urban villages, commercial streets, shopping malls, and near stations. Their products are generally priced at 6-7 yuan. An ice cream costs as little as 3 yuan. Such prices are completely unseen in Nayuki and HEYTEA, where items typically cost over 20-30 yuan, allowing financially dependent and poor university students and other low-income groups to enjoy an ice cream or a cup of tea. Some consumers even commented, "At such a cheap price, what more could you ask for?" and "Mixue Bingcheng doesn't look down on you for being poor, so don't look down on it for being low-end."

How Does Mixue Bingcheng Profit?

So how does Mixue Bingcheng profit when its product prices are so low?

Controlling Costs from the Source

While tea beverage prices are becoming increasingly expensive, Mixue Bingcheng can maintain its prices primarily due to its business model of small profits but quick turnover. Secondly, to reduce costs, Mixue Bingcheng negotiates cooperation with tea farmers to secure low prices through stable purchasing volumes. In 2012, they established their own factory to achieve self-production of core raw materials. In 2014, they established their own warehousing and logistics center, gaining strong logistics support.

This approach of controlling costs from the source, shortening the supply chain as much as possible and keeping it under their own control, eliminates concerns about middlemen profiting from price differences. This prevents product prices from being significantly affected by market fluctuations and allows them to remain far below many internet-famous tea shops. In 2020, when many milk tea brands raised prices due to the pandemic's impact, Mixue Bingcheng decided not to increase prices. It is precisely because of this supply chain that Mixue Bingcheng had the confidence to say "We still won't raise prices."

It's precisely this reluctance to raise prices that has increased public trust in Mixue Bingcheng. And because of stable prices, people no longer纠结 about the taste. After all, at such low prices, what more could you ask for? However, this also means Mixue Bingcheng transfers the risk to franchise stores. Some franchise stores cannot withstand the cost pressure of not raising prices and instead tamper with food expiration dates or use stale ingredients.

Brainwashing Marketing

In 2018, Mixue Bingcheng didn't even need to pay endorsement fees, directly launching its new brand image - the "Snow King." They placed the Snow King image in the most prominent places on their products, such as store logos and milk tea packaging.

Later, they released a theme song. Because its melody is "Oh Susanna," which we've known since childhood, combined with simple lyrics, this song became memorable and went viral. On Bilibili, there's no shortage of content creators making derivative works based on it.

Even on Douyin, an app with nearly 700 million users, there's a popular topic called "Mixue Bingcheng Social Death Scene," filled with short videos of people singing the theme song at Mixue Bingcheng stores to get free orders. Many people have responded to the challenge and participated.

Although such social death activities can be awkward enough to make you want to dig a hole in the concrete floor, they have successfully brought a wave of traffic to Mixue Bingcheng.

Annual Franchise Fees

If you think Mixue Bingcheng can earn 6.5 billion yuan annually just from ice cream and milk tea, I can only say you're "too young, too simple, sometimes naive." Mixue Bingcheng's real source of income is the franchise fees it collects.

According to Mixue Bingcheng's official website, there are now over 10,000 franchise stores, with new ones continuously joining. According to Sina Finance's report on May 17, 2021, Mixue Bingcheng opened over 7,000 stores in three years. Mixue Bingcheng's franchise fees are divided into three tiers: provincial capital cities, prefecture-level cities, and county-level cities. In addition to annual franchise fees, management and consulting fees must also be paid annually.

When all these factors are combined, it's not difficult to see why Mixue Bingcheng was able to defeat Nayuki and rank second, following HEYTEA, in the 2020 China's Top Ten Tea Brands.

Finally, let's sing it again: You love me, I love you, Mixue Bingcheng is sweet!

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