In 1997, college student Zhang Hongchao used money borrowed from his grandmother to open a small shaved ice shop in Henan, then one of the poorest provinces in China. Nearly 30 years later, Zhang and his brother Hong Fu, Michelle’s chief executive, are each worth about $8.2 billion. Zhang’s shaved ice shop, now called Mixue Ice Cream Tea Shop, is known for its soft-serve ice cream and drinks and has more locations worldwide (53,000) than McDonald’s (43,500). Its initial public offering (IPO) on the Hong Kong Stock Exchange in March raised HK$3.45 billion (US$450 million) – the fifth largest IPO in Hong Kong in the first half of 2025 – and was oversubscribed 5,000 times. Mixue has reportedly signed a 10-year lease on Canal Street and is expected to open its first U.S. location in New York.
Michelle’s rapid global expansion reflects the strength of its supply chain, growth through its franchise model and viral branding, but it also illustrates the extraordinary staying power of Zhang’s early decision to win over cost-conscious buyers with ice cream for just 15 cents.
For those who are familiar with it, Michelle’s store is instantly recognizable. On a Friday afternoon in November, its illuminated sign and signature red interior drew a huge crowd in Hong Kong’s central shopping district. In a city known for its luxury shopping, Michelle’s menu prices are also eye-catching: Juicy grape pops are $1.67, bubble tea is $2.06, and soft-serve ice cream is 64 cents, which is even cheaper than McDonald’s $1.09 sundae cone. On the poster, the brand’s mascot Snow King is holding milk tea and winking. “With Michelle in hand, I am extremely happy,” it read.
Michelle’s luck has been really good lately. In the first half of 2025, Mixue’s revenue was 14.9 billion yuan ($2 billion), an increase of 40% from the same period last year. Its first-half profit was 2.7 billion yuan ($370 million), a fraction of McDonald’s profit of $1.9 billion in the first quarter but up 44% from the previous year. (Michelle did not respond to a request for comment.)
Affordability has always been a big draw for Mixue — even if the price of its 15-cent cones has increased — but the ice cream and beverage chain’s offerings are much more than just cheap.
As Mixue expanded, it faced ingredient shortages, prompting Zhang to start sourcing the chain’s raw materials directly from farmers and producers. In 2012, it established a centralized factory and later warehouses and cold chain logistics to deliver raw materials such as frozen fruit pulp, fresh strawberries and mango chunks to franchisees. (It now has 23,404 stores worldwide.) This cuts out middlemen and helps Michelle keep prices low and products fresh. When Mixue went public in March, it said about 66% of the net proceeds from the offering would be used to broaden and deepen its end-to-end supply chain.
Michelle’s close relationships with ingredient manufacturers and suppliers give it a cost advantage that is difficult for competitors to replicate. Emil Fazira, Asia Pacific food insights manager at Euromonitor International, said: “When they open more stores, they can send out all these supplies, ingredients at once…so margins are quite tight and (food and drink) brands often find it challenging to manage that.”
Mixue’s franchise model is also a way to make money as it sells equipment and ingredients to franchisees. The company said such sales were the driving force behind its 40% year-over-year revenue growth in the first half of this year.
By offering both desserts and beverages, Michelle differentiates itself from competitors that only sell beverages. Fazira noted that sweets are one of the fastest-growing product categories in Asia Pacific and Southeast Asia.
While ice cream is generally considered a more luxury treat, Mixue’s soft-serve ice cream is more affordable and accessible than sit-down ice cream shops, making it “even more unique,” Fazira said.
Michelle’s marketing strategy is equally unique. In China, a store turned sales receipts into a serialized novel, printing 20 chapters of a captivating story featuring the mascot Snow King, sparking a nationwide craze.
Abroad, Mi Xue is attracting consumers through games and gifts. Malaysian video game streamer Andrian Lim joins Mixue Instagram September’s Reel challenge is to drink a mint lemonade in 45 seconds. The 31-year-old was one of dozens of people who braved brain-freezing pain to win an exclusive Snow King foldable bag.
“I like to push my limits, just for the fun of it,” said Lin, who “fell in love” with Mixue’s jasmine tea and its cheap price.
Going forward, Michelle plans to meet consumers’ beverage needs throughout the day by expanding independent coffee shops and introducing beer. Mixue’s coffee chain Lucky Cup, which sells freshly brewed coffee for 6 yuan (90 cents), recently entered Malaysia after building 8,000 stores in China. In September, Michelle Group acquired a 53% stake in Fulu Fresh Beer, a Chinese draft beer company helmed by Hongfu’s wife Tian Haixia.
“(Mixue) is trying to get into new opportunities … where it is interested in product diversification, or at least keen to understand,” Fazira said.
Of course, Michelle’s new beer will probably be cheap. Fuluxian sells for 7.9 yuan or US$1.11 per can.
This article appeared in the December 2025/January 2026 issue wealth The title is “Michelle’s Hotness.”
Asia’s booming sweets category drives Michelle’s rise
44%
In the first half of 2025, Mixue’s profits soared to 2.7 billion yuan ($370 million).
53,000
Michele now has more global stores than McDonald’s