Mixue's retail boundary extends beyond just cups of milk tea, coffee, or beer.

Ask AI · How does Mixue’s Trinity strategy break the profit dilemma in the takeaway war?

When the “supply chain - brand IP - store operation” trinity is established, and when “products - brands - channels” merge into a whole, retail will have no boundaries.

Text by Hu Hao

In 2025, the domestic platform economy will return to a highly competitive market state, where the three major instant retail platforms will focus their main battlefield on the ready-to-drink beverage industry (including freshly brewed tea and coffee) to regain online traffic resources, thus becoming the biggest external variable affecting industry development that year.

Stimulated by high-frequency consumer subsidies from platforms, the order volume in the ready-to-drink beverage industry surged, and the market size was significantly expanded again, with the entire industry’s retail scale growing to over 700 billion yuan; however, the flip side of this prosperity is that in the past nearly a year, the number of beverage stores nationwide has recorded a contraction of over 30,000, with many stores choosing to close or be eliminated, and the entire industry is accelerating its reshuffle.

The reason for the coexistence of prosperity and crisis in the industry is that, although short-term stores have seen a surge in orders and increased revenue, the increase in online transaction volume has led to profit being shifted to the platforms, causing stores to face a situation of increasing revenue without increasing profit.

Objectively, this macro environment is not particularly favorable for the overall development of the industry. While short-term prosperity benefits brand owners, steady industry development is more conducive to the sustained operation of franchisees and franchise stores.

In 2025, Mixue achieved revenue of 33.56 billion yuan (a year-on-year increase of 35.2%), a gross profit of 10.45 billion yuan (a year-on-year increase of 29.7%), and a net profit attributable to the parent company of 5.88 billion yuan (a year-on-year increase of 32.7%), maintaining a high growth trend overall.

Facing the opportunities and challenges of the industry, the new CEO of Mixue Group, Zhang Yuan, will focus the company’s future development on “continuously improving store operational efficiency and steadily expanding store scale,” solidifying the core competitiveness of the “supply chain reinforcement, brand IP construction, and store operation optimization” trinity.

Among them, improving store operational quality will be a key focus for Mixue in 2026, indicating that the company has recognized and is taking action to support the store system whose profits have been shifted by the takeaway war, which can be understood as a forward-looking development awareness and management layout.

In fact, when faced with the short-term sales growth dividend brought about by the takeaway war, brand owners’ choices regarding profit distribution can reflect the company’s pursuit of long-term value. Compared to short-term profit surges caused by external factors, the market is likely to place more importance on a company’s ability to balance internal interests for win-win relationships and its strategic will to achieve endogenous continuous growth.

This initiative by Mixue aligns more with the company’s long-term interest considerations in fierce market competition.

By the end of 2025, Mixue Group’s global store count has reached 60,000, with about 44,000 of those in China. This is not only Mixue’s absolute advantage in market competition but also its core foundation that contains immense retail capability and potential. The optimal way to manage/maintain/reinforce this vast retail network is to showcase a value system that shares corporate interests.

This article will explore the unique retail capabilities and potential embedded in Mixue’s “supply chain, brand IP, and store operation” trinity endowment in the face of future intense market competition, leveraging the operational measures and signals released during Mixue Group’s 2025 annual performance meeting.

Unlike most retail formats, Mixue showcases a closed-loop commercial self-circulation system. As long as it continues to strengthen the capabilities and endowments of the trinity, Mixue’s retail experience can form a retail methodology that helps it gradually expand into more diversified retail businesses, making it a very unique existence in the retail industry.

Capability Endowment: From Trinity to Building a Win-Win Ecological Closed Loop

Last year’s takeaway war accelerated the increase of the entire industry’s online transaction ratio to some extent. The result is that platforms took a larger share of transaction facilitation commissions, but this brought certain profit pressure to stores’ actual revenue rates. At the same time, as the takeaway war began to gradually recede from September last year, the industry’s revenue growth rate began to slow down, further amplifying this pressure.

Therefore, the entire industry needs to develop response plans for this long-term structural change to ensure sustainable future development. This tests the structural resilience of each brand company’s internal systems—how to release sufficient value gains through internal adjustments without changing the market space corresponding to the brand positioning.

Mixue’s response plan is to use the “supply chain reinforcement, brand IP construction, and store operation optimization” trinity method to continuously enhance the quality-price ratio of its brand foundation, strengthen consumer trust and consensus on the value of the Mixue brand, and build a value ecological closed loop of mutual benefit between consumers, franchisees, and the brand.

Taking recent changes in the domestic dairy market as an example, the entire dairy consumption market has been shrinking for two years, yet the market demand for fresh milk has continued to grow significantly, indicating that market demand is stratifying, and consumers are increasingly demanding high-quality products.

In fact, similar structural changes have also occurred in coffee and specialty coffee, beer and fresh beer, as well as ambient and fresh food markets, reflecting the overall consumer market’s emphasis on quality, which is increasingly becoming a new consumption trend.

However, objectively, the formation, dissemination, and generalization of trends require time to settle and space to expand. For the general consumer population, their demand for “fresh” is immediate, but the fulfillment of that demand is lagging—first due to pricing and commercial profitability factors, and second due to a relative lack of infrastructure in lower-tier markets, which further reinforces the “urban-rural duality” structure.

Against this backdrop, a significant feature of Mixue’s channel network is its coverage scale and delivery timeliness:

Approximately 60,000 stores worldwide, with over 55,000 stores of three brands in China, and 58% of domestic stores located in vast third-tier and below markets;

A supply chain circulation system covering over 300 prefecture-level cities, 1,700 county towns, and about 5,000 townships nationwide;

Core materials are typically delivered from Mixue’s factories to stores within 48 hours, with 97% of stores able to achieve 12-hour cold chain delivery.

With this, Mixue possesses the ability to become the new foundational infrastructure for the aforementioned consumer trends, with the core being the continuous deepening of the trinity’s capability endowment.

In 2025, Mixue launched a systematic quality upgrade strategy centered on “True Fresh Pure,” reinforcing the brand’s perception of “quality-price ratio” and trust in consumers through comprehensive upgrades of store products and front-and-back supply chains.

For example, Mixue will upgrade existing ambient fruit raw materials to cold chain raw materials, a method already applied to core products like “Smash Fresh Orange”; switching ambient milk and coconut milk to cold chain fresh milk and cold chain coconut milk, with some Lucky Coffee stores having introduced “Fresh Joy” fresh milk; introducing fresh coffee beans with a shelf life of 60 days and fresh fruits using HPP technology to expand the freshly ground coffee category.

To this end, Mixue plans to invest 1.6 billion yuan in 2026 for supply chain upgrades across all links, with 1.4 billion yuan allocated for deep transformation of the domestic supply chain and 200 million yuan for building overseas production bases, fully ensuring the implementation of the “True Fresh Pure” strategy.

Although this comprehensive improvement in quality and supply chain upgrades will put pressure on the company’s gross profit margin in the short term (including rising raw material costs and discounts to franchisees), it is viewed as a strategic move for the company to enter stable long-term development. The core remains the necessary resource and cost investment to strengthen the brand perception of the quality-price ratio and to build a mutually beneficial ecological closed loop for consumers, franchisees, and Mixue.

With the upgrade of the supply chain, Mixue’s three major brands (Mixue Ice City, Lucky Coffee, and Fresh Beer Fulu) will all benefit from supply chain reuse, synergy, and gain, thereby jointly diluting supply chain costs over the medium to long term.

For example, the collaborative development between Mixue Ice City and Lucky Coffee in the coffee segment has accelerated, as tea brands have been expanding into coffee categories recently—this presents a high-certainty and enormous commercial potential development opportunity. Mixue is capable of seizing the growth opportunity in this segment through a dual-brand collaborative development approach.

Specifically, Mixue Ice City focuses on freshly brewed tea, with coffee being a long-term product category that serves more as a menu complement, while Lucky Coffee is a specialized brand focusing on freshly ground coffee (with a multidimensional product matrix including Americano, fruit coffee, milk coffee, specialty, and hand-brewed). This is to accurately cater to consumers with clear coffee demands. Both will share supply chain resources, including large-scale centralized procurement, shared production lines, complementary production capacities, and Lucky Coffee reusing Mixue’s mature warehousing and distribution network, achieving “1+1>2” collaborative growth.

Similarly, Fresh Beer Fulu will also leverage Mixue’s mature supply chain, cold chain logistics, and franchise system to create a nationwide, standardized, and cost-effective freshly brewed beer brand.

While promoting the quality-price ratio, ecological closed loop, and brand synergy, Mixue will prioritize improving store profitability quality over large-scale development and focus more resources and energy on supporting the operations and profit enhancement of existing stores.

To respond to the trend of orders migrating from offline to online, Mixue will also undergo digital reconstruction, guiding consumers to enhance their stickiness with the brand through the foundation of brand quality-price ratio, gradually directing users from third-party platforms to its own online channels, while leveraging the company’s vast store network to encourage consumers to pick up orders in-store. Additionally, through refined operations of its membership system, it aims to create a closer connection between the brand and consumers.

In 2026, Mixue will also develop more precise regional development paths based on core indicators such as single-store sales growth and store layout density, systematically expanding into blank markets such as transportation hubs and scenic spots. At the same time, it will continue to advance store scene innovation and business model upgrades, achieving diversification of store types and scene coverage, further expanding customer reach and consolidating and enhancing the brand’s all-encompassing competitiveness.

By the end of 2025, Mixue has established “Mixue Ice City” flagship stores in 23 cities nationwide, creating a comprehensive innovative space that integrates brand display, consumer experience, and cultural dissemination by introducing specialty foods and “Snow King” IP cultural peripheral products. This diverse, multi-category, and multi-scene brand presentation method can continuously enhance the influence of the “Snow King” IP and the extension space of Mixue’s retail capabilities.

In fact, Mixue is continuously building the national influence of the “Snow King” IP through music short plays, animated works, IP collaborations, flagship stores, theme parks, and other multidimensional combinations, upgrading it from a single brand symbol to a popular cultural phenomenon and trend asset, providing strong communication leverage and synergistic gains for Mixue’s multi-brand ecology, cross-category expansion, and long-term value coexistence.

To more effectively practice long-termism, Mixue is making management adjustments at the strategic level for long-term corporate development. Former Mixue Group CEO Zhang Hongfu will continue as the company’s co-founder and co-chairman, focusing more on the group’s long-term strategic development, including the Snow King IP ecology, AI and embodied intelligence empowering the supply chain, green agriculture, social welfare, etc., making forward-looking explorations and layouts for the next thirty years of the enterprise.

Value Discovery: Mixue’s Retail Capabilities Extend Beyond Ready-to-Drink Beverages

One rarely discussed point about Mixue is what potential and development capacity its retail capabilities hold in the broader context of China’s physical retail industry, if one steps outside the single ready-to-drink beverage market.

Looking at the scale of terminal retail revenue, Mixue’s revenue from goods and equipment was 32.8 billion yuan in 2025. Roughly dividing it based on raw materials and the historical 60-40 value chain split between brand owners and franchisees, the entire terminal retail market scale for Mixue is at least over 80 billion yuan. This sales scale or GMV already places it among the absolute top tier of domestic physical retail formats, with only Walmart China, RT-Mart, and Mingming Huanman possibly ranking higher.

However, unlike other retail entities, which typically operate sales platforms or hypermarket business models, Mixue’s channel store network sells only its own products, representing an integrated retail model of “brand as channel, channel as product.” This is also the core source of business potential embedded in Mixue’s “supply chain, brand IP, and store operation” trinity.

The essence of this differentiated model lies in Mixue’s high degree of vertical integration and self-control over product research and development, raw material procurement and supply chain, pricing power and distribution rights, and consumer access—this grants it unique barriers in industrial efficiency, cost control, and market responsiveness that will be difficult to replicate effectively across the entire physical retail industry for a considerable period.

This highly self-controlled yet sufficiently flexible retail capability can assist Mixue in orderly practicing its “multi-brand, multi-category, multi-scene, and multi-channel” pan-retail strategic extension, achieving its diversified retail transformation by incorporating more retail products and formats, thus releasing sustained growth potential.

Currently, the Chinese retail industry is undergoing deep transformation and integration. From the perspective of the competitive relationship between channel merchants and brand owners,

Channel merchants are extending upstream into the supply chain and private label fields, while brand owners’ development space is being squeezed;

Competition among channel merchants is becoming increasingly fierce, with competitive dimensions extending to cooperative brand merchants, and large channel merchants will manipulate brand owners’ free development space through “either-or” or “resource tilt” methods;

Strong brand owners are reinforcing their retail infrastructure systems with proprietary channels and comprehensive layouts, while small and medium brand owners face the risk of being integrated or forced to downsize, or even being passively cleared out.

It is evident that internal friction in the retail industry is becoming increasingly apparent, ultimately requiring all parties to strive to secure more interests within the limited value segment. This growing intrinsic contradiction will ultimately hinder the continuous growth of both brand owners and channel merchants.

From this perspective, Mixue’s channel network and trinity endowment can enable it and its franchisees to escape the development restraints between the aforementioned brand owners and channel merchants as much as possible.

The essence lies in that Mixue’s channel distribution system is very flat, with only Mixue and franchisees involved in the value chain distribution, while in traditional platform-type and hypermarket retail business systems, there are more levels of product circulation, diluting the distribution benefits of participants at each link in the value chain.

Therefore, when facing cyclical changes in the macroeconomic environment, Mixue’s channel system will be more stable and controllable, which fundamentally reflects its unique retail capability.

Based on this flat retail channel structure, the trinity’s endowment will exhibit significant internal synergy benefits, forming a self-driven business closed loop.

In the supply chain, Mixue has extended to the fields of agricultural raw material production in rural areas, ensuring commercial certainty and economic benefits at the very upstream of raw material through stable, long-term, and large-scale direct procurement, thereby greatly ensuring the supply of high-quality and cost-effective raw materials at the top of the industrial chain. Through its own and self-built large factories, warehousing infrastructure, logistics, and cold chain distribution networks, it achieves low-cost price transmission and releases price space for the entire business system;

In terms of brand IP, the tangible “Snow King” image has been embedded in the public consciousness through a large-scale store network and product attributes. The consumer market has recognized “Snow King” as a brand IP with excellent quality-price ratio in the fast-moving consumer goods sector, and the value conveyed is no longer limited to the ready-to-drink beverage industry. More importantly, consumers have derived a brand trust from “Snow King” that emphasizes quality and affordability, forming brand equity that even becomes a part of popular culture and trends. This will provide synergistic gains and communication leverage for Mixue’s brand’s boundary-breaking and category-expanding strategies;

In terms of store operations, based on the flat channel structure, Mixue is able to offer franchisees a more competitive value chain distribution space, thereby continuously reinforcing and maintaining the fundamental base of its large-scale channel network. On this basis, by introducing new categories and formats, it creates possibilities and feasibility for franchisees to expand business margins and increase commercial benefits. At the same time, Mixue is also helping terminal stores achieve a healthier and more commercially beneficial online transaction ecology through its digital strategy (such as building mini-program entry points) to alleviate the profit margin pressures similar to those caused by the takeaway war on franchisees in the future.

As outlined, the trinity of endowment achieves low-cost price transmission through the supply chain, while the Snow King IP transforms into brand trust and cultural assets that transcend categories, and a healthy franchise business system continuously amplifies scale effects and retail boundaries, with the three forming a positive flywheel that jointly builds an irreplaceable internal gain closed loop.

In fact, in the ready-to-drink beverage industry, there are others also possessing the three elements, but currently, Mixue may be the only one effectively translating these three elements into capability endowments. The fundamental difference lies in brand building, corresponding scale, and effective demand.

Mixue’s brand positioning has always been very clear: to provide good and affordable products and experiences for the general consumer population. This has defined a market scale that is the broadest, accommodating more commercial possibilities from the very beginning;

The threshold for operating a brand IP is actually very high. Few consumer brands can extract a popular, tangible, and personified brand IP for continuous dissemination and successfully inject the core concepts and mindset of the enterprise into it. The current “Snow King” has achieved this effect: “Snow King IP = Mixue Brand = High Quality and Affordability = Simple Happiness”;

The “Snow King” IP has transformed into an emotional answer, and this consumption mindset or brand certainty makes it easy for the Mixue brand to transcend the category labels of cups of milk tea, coffee, or beer, as the daily dietary needs of the general consumer are numerous. They are more willing to pay for this emotional certainty, such as bottles of affordable fresh milk, bags of delicious snacks, and boxes of good and affordable cherries/strawberries/lychees, etc.

Retail knows no boundaries.

However, without a clear brand positioning, inability to cover the maximum common denominator of the consumer market, and failure to extract the emotional needs of the target demographic, the “supply chain, brand IP, and store operation” will remain at the level of production factors, making it difficult to translate into capabilities and endowments and to generalize into diversified retail capabilities.

In fact, Mixue is no longer just a beverage supply chain company; it has positioned itself as a food and beverage supply chain company. Although the difference is only two characters, it has released a significant commercial increment signal, and it is reasonable to believe that, relying on the aforementioned unique retail capabilities, Mixue’s diversified products will appear in more scenes and fields of people’s daily lives.

Cover image source: Visual China