Bubble tea chain bigger than Starbucks sees shares jump on debut

Mixue Ice Cream and Tea, a bubble tea chain from China, has made headlines recently for its impressive debut on the Hong Kong Stock Exchange. On Monday, the company's shares surged by over 40%, marking a significant milestone for the firm. Mixue raised approximately $444 million, making it the largest initial public offering (IPO) in Hong Kong this year. This success comes at a time when many people in China are facing economic difficulties, including a property crisis and low consumer confidence. Despite these challenges, Mixue has managed to capture the hearts of many with its affordable ice creams and drinks, which are priced at around six Chinese yuan, equivalent to about $0. 82 or £0. 65. The company was founded in 1997 by Zhang Hongchao, who was a student at Henan University of Finance and Economics. He started the business as a part-time job to support his family's finances. The full name of the company, Mìxuě Bīngchéng, translates to 'honey snow ice city' in English. The stores are easily recognizable with their cheerful Snow King mascot, which plays a catchy tune in the background. Mixue has expanded rapidly, boasting over 45,000 locations across China and 11 other countries, including Singapore and Thailand. The company has ambitious plans for further expansion, aiming to open even more stores in the future. In comparison, McDonald's has over 43,000 locations, while Starbucks operates around 40,576 outlets. Although Mixue is often regarded as the largest bubble tea and ice cream chain in China, its business model differs from that of Starbucks. While Starbucks manages more than half of its stores directly, nearly all of Mixue's outlets are operated by franchisees. This strategy has allowed Mixue to grow quickly and efficiently. The strong performance of Mixue's shares stands in stark contrast to that of its smaller competitor, Guming, which experienced a decline in its stock price on its first day of trading earlier this year. Additionally, last year, shares of Chabaidao, another bubble tea chain, also fell during its market debut.