Mixue trims abroad, doubles down at home, and brews up Lucky Cup’s rise

Mixue Group has released its midyear results for 2025, reporting double-digit gains across key financial metrics. Revenue for the first half of the year rose 39.3% year-on-year (YoY) to RMB 14.87 billion (USD 2.1 billion), while net profit increased 44.1% to RMB 2.72 billion (USD 380.8 million).

As of midyear, Mixue operated 53,014 stores worldwide, an increase of 9,796 outlets from a year earlier, already surpassing its full-year 2024 additions. Most of the expansion came from mainland China, where it added 9,668 locations YoY.

Store growth in China accelerated significantly. In the first half of 2025, Mixue’s domestic network expanded by about 16%, compared with 7% in the second half of 2024. Smaller cities drove much of this growth: 5,707 new outlets were added in third-tier and below markets, accounting for nearly 60% of total new stores.

Tea brands are intensifying their presence in lower-tier markets. Mixue has identified China’s roughly 30,000 township-level markets as a priority for future growth. GoodMe’s midyear results reflect the same trend: as of the first half of 2025, 81% of its stores were in second-tier and smaller cities, with township locations making up 43% of its network, up from 39% a year earlier.

Food delivery competition has also boosted sales for tea chains. While Mixue did not disclose same-store sales data, equity research firm Dolphin Research estimated its same-store growth at nearly 9% in the first half of 2025. GoodMe also saw gains, with gross merchandise value (GMV) per store averaging RMB 1.37 million (USD 191,800), up 20.6% YoY, driven by delivery growth and new product launches.

Rising coffee bean and lemon prices increased raw material costs across the industry. Even so, Mixue maintained a gross margin of 31.6% in the first half of 2025, down just 0.3 percentage points from a year earlier. CFO Zhang Yuan said at the earnings briefing that lower sugar and dairy prices, along with supply chain efficiencies, helped offset higher input costs. He added that Mixue aims to maintain a gross margin of about 30% over the long term.

In short, Mixue’s domestic business continues to benefit from scale advantages and supply chain strength. But with its stock among the year’s most closely watched, investors have questions. Six months in, how are its other growth drivers, namely Lucky Cup and overseas expansion, shaping up?

How much room does Lucky Cup have left to grow?

Lucky Cup has been one of Mixue’s fastest-growing units this year.

By July, the brand’s signed store count had surpassed 7,000, up from about 4,000 at the end of 2024. According to 36Kr, its 2025 target is 10,000 outlets, which would represent a 150% increase for the year.

Expansion has focused on first- and second-tier cities, particularly the Yangtze River Delta and Pearl River Delta regions. A person familiar with the company told 36Kr that top-tier city outlets have already proven profitable. “Urban outlets are about 20–30 square meters in size, mainly for grab-and-go sales. The average ticket is RMB 1 (USD 0.14) higher than in lower-tier cities, and the payback period is under one year,” the person said.

This urban push is testing Lucky Cup’s positioning and product mix. While the earnings report offered few specifics, executives shared insights during the briefing. Pan Guofei, China CEO of Lucky Cup, said the brand benefits from Mixue’s bulk procurement of coffee beans. “When Lucky Cup had only 100 stores, we already established direct sourcing channels in key coffee-producing regions such as Brazil and Colombia,” he said.

This scale advantage allows Lucky Cup to supply its franchisees with blended beans from six countries at RMB 69.5 (USD 9.7) per kilogram, compared with RMB 90–120 (USD 12.6–16.8) for other brands, according to 36Kr. The lower costs enable the brand to keep prices down while sustaining margins. Its signature RMB 5.9 (USD 0.8) Americano, made only with beans and water, generates a gross margin above 50%.

One challenge is potential overlap with Mixue Bingcheng, which also sells coffee. Pan argued that the two brands serve different purposes: Lucky Cup focuses on fresh-ground, semi-automatic coffee made from factory-roasted beans, while Mixue offers coffee as a menu add-on, using pre-ground powder for easier preparation.

To appeal to urban customers, Lucky Cup launched 32 new products in the first half of 2025, including 14 fruit-coffee drinks. Previously, its menu leaned heavily on Americanos and lattes, with less innovation compared with urban rivals. Like KCoffee, which built a sparkling coffee line around KFC’s soda machines, Lucky Cup’s fruit-coffee series leverages Mixue’s frozen fruit puree supply chain.

With more than 7,000 stores, Lucky Cup is already China’s fourth largest freshly made coffee chain. But its trajectory depends on the size of the low-priced coffee market. Rivals such as Luckin and Cotti continue to court middle-class commuters with RMB 9.9 (USD 1.4) pricing and urban branding. Lucky Cup, by contrast, is betting on coffee as a daily necessity rather than a lifestyle product, a strategy that could unlock longer-term growth.

Overseas recalibration, globalization continues

Another focal point in Mixue’s earnings was its overseas footprint.

In the first half of 2025, Mixue Bingcheng operated 4,733 stores abroad, up from 4,606 a year earlier but down from 4,895 at the end of 2024, reflecting a net decrease of 162 outlets.

Cai Weimiao, executive director and head of frontend supply chain, said the company closed underperforming stores in Indonesia and Vietnam, its two largest overseas markets. As of September 30, 2024, the countries had 2,667 and 1,304 Mixue Bingcheng outlets, respectively, according to its IPO prospectus. Cai said the closures were part of a shift toward “refined operations” that improved efficiency, with relocated stores in both markets seeing average daily sales rise by more than 50%.

Operational hurdles remain. An Indonesian service provider told 36Kr that training staff on hygiene and daily processes required sustained effort. “Employees often struggled to understand why cream past its expiry date couldn’t be used, or why floors needed daily cleaning. What’s routine in China takes much more education in Indonesia,” the person said.

To address these challenges, Mixue has brought overseas staff to China for training since late 2024. This year, it plans to establish a global business support center to strengthen back-end operations.

Despite adjustments, expansion continues. In April, Mixue Bingcheng opened its first store in Kazakhstan, extending its footprint into Central Asia. It also plans to enter Brazil this year. Meanwhile, Lucky Cup opened its first overseas outlet in Malaysia in August, marking the start of its international push.

On the supply side, Mixue’s new Hainan production hub began operations in the first half of 2025. The facility, the company’s second largest domestic base after its Wenxian, Henan plant, will serve as an export center for Southeast Asia, producing ingredients including sugar, milk tea, coffee, fruit, and grain. Depending on demand, Mixue may later consider building a plant in South America.

Despite short-term fluctuations in store numbers, Mixue Bingcheng remains the largest Chinese tea brand overseas by scale. Many competitors are still testing their domestic models or treating overseas ventures as marketing exercises rather than long-term supply chain commitments.

KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Zhong Yixuan for 36Kr.

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