Mixue Global Expansion: Why the Slowdown Is Not a Low-Price Problem
Key Takeaways
Mixue's overseas store count shrank a net 428 to 4,467 in 2025, but this was an active restructuring, not fading demand: new Southeast Asia stores now earn 1.7 times the revenue of old ones.
Low price was never Mixue's sin. It is an industrial output: self-built production bases, in-house core ingredients, and a cup cost of just over one yuan, so it profits from the supply chain, not from retail margins.
The slowdown has three real causes: a saturated home market, the bill for early rough expansion in Southeast Asia, and a cost-structure mismatch in developed markets.
The lesson: low price has its own playbook, but it only works in down-market, incremental markets. Move it into a developed, saturated market and it stops being an advantage.
Did the Store Count Really Signal a Failed Overseas Push?
The easy conclusion is that Mixue Global Expansion hit a wall. The company's own filing tells a different story. It describes the pullback in Indonesia and Vietnam as an active 'restructuring and optimization' of existing stores, not weakening demand. The group closed low-performing outlets and moved stronger ones to better locations. The result: new stores in Southeast Asia now earn 1.7 times the revenue of old ones, and the group's full-year revenue still grew 35.2% to 33.56 billion yuan with net profit up 33.1%.
That reframes the whole story. The store count fell, but the overseas business did not collapse. It traded quantity for quality, the same move a mature chain makes when it realizes that store count is not the same thing as store economics.
Low Price Was Never the Sin; It Is an Industrial Output
Calling Mixue a 'low-price brand' misses the point. Its cheap price is not a subsidy burned on marketing; it is an industrial output. The group runs a global sourcing network across 38 countries and its procurement cost runs 15 to 20 percent below the industry average. It operates five self-built production bases and produces its core drink ingredients in-house, with annual capacity of 1.65 million tons.
That vertical integration shows up in the numbers. Mixue's per-cup ingredient cost is just 1.2 to 1.8 yuan, roughly one third of a premium rival's, and its logistics cost is 3.8 percent of revenue against an industry average of 7 percent. Nearly all of its revenue comes from selling ingredients and equipment to franchisees, not from retail margins. In other words, Mixue does not lose money on cheap tea; it makes money on the supply chain that cheap tea keeps moving.
This is why low price was never the sin. The sin would be trying to run a low-price model without this industrial base underneath it. That is exactly what happens when the model leaves its home market.
So What Actually Slowed It Down?
The slowdown has three causes, and only one of them has anything to do with price. The first is the home market. China's fresh tea market has passed saturation: industry growth slowed to about 6.4 percent in 2024, and the market shed close to 40,000 stores over a single year. Mixue itself closed 2,527 franchised stores in 2025, up 57.1 percent year on year, while its gross margin slipped from 32.46 percent to 31.14 percent as delivery platforms pushed orders online and squeezed profitability. When the domestic engine that funds overseas expansion starts to cool, the overseas push feels it too.
The second cause is the bill for early rough expansion. Mixue entered Vietnam in 2018 and Indonesia in 2020 with an immature operating system, and it opened stores faster than it could place them well. By 2025, too many Southeast Asian outlets sat in weak locations and cannibalized each other. The 'restructuring' is really Mixue paying down that early debt: closing bad stores and relocating the good ones.
The third cause is a cost-structure mismatch in developed markets. A Hong Kong storefront in Mong Kok was estimated to need tens of thousands of cups a month just to cover rent, while Japan combines the world's highest retail costs with convenience stores selling cheap drinks on every corner. In those markets cheap is not a differentiator, it is the baseline. A 9 yuan drink has to beat not other tea brands but the vending machine and the family-run cha chaan teng next door.
Low Price Has Its Own Playbook, and Its Own Limits
The honest conclusion is that Mixue's model still works, just not everywhere. In Southeast Asia, a market with almost no established fresh tea or milk tea competitor, a 7 yuan drink opened a new category from scratch, and cheap became a real offer. In Hong Kong and Japan, where cheap drinks have been everyday staples for decades, the same price is nothing to notice. Low price wins in down-market, incremental markets; it loses in developed, saturated ones.
Nor is price the only thing that can go wrong abroad. The Molly Tea New York dispute showed a premium tea brand tripping on operating discipline, from disclosure documents to regional rights, and ending up in court with its own US partner. Cheap or premium, what kills an overseas push is usually the operating model underneath.
The wider lesson for Chinese consumer brands is this: before you go abroad, ask whether the market is incremental or saturated. In an incremental market, a supply-chain-backed low price is a superpower. In a saturated one, it is table stakes. The brands that keep growing abroad will be the ones that know which game they are playing, and choose the right playbook for it.
Double V is a cross-border operating partner and intelligence house for emerging consumer brands, based in Hong Kong and Shenzhen. We help brands connect China and the world through three businesses: Brand Operation (marketing and distribution for brands on retainer), Brand Incubation (sister company Glam Infinite and our own-built brands), and Industry Intelligence (cross-border research and reports). Talk to our team.
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