Who’s the new largest fast-food chain in the world, surpassing McDonald's and KFC?
McDonald's, once the world's largest restaurant chain, has been overtaken by Mixue Bingcheng, a fast-growing Chinese bubble tea and ice cream chain. As of September 2024, Mixue has surpassed McDonald’s with over 45,000 locations worldwide, compared to McDonald's 41,800 stores. This marks a significant shift in the fast-food industry, as Mixue continues to expand its global footprint, despite McDonald’s long-standing dominance in the market.
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The rise of Mixue Bingcheng: A fast-growing bubble tea brand
Mixue Bingcheng was founded in 1997 by Zhang Hongchao in China. Initially a humble store selling shaved ice and cold drinks, the brand quickly grew into a global sensation. With over 45,000 outlets worldwide, Mixue has become a major player in the fast-food industry, especially in China. The chain is well-known for its affordable prices, such as one-yuan ice cream cones (about 15 cents) and drinks priced between 2 and 8 yuan (roughly 30 cents to $1.20).
Despite the vast number of stores, 90% of Mixue's locations are concentrated in China, with a few outlets in neighboring countries like Indonesia, Vietnam, and Malaysia. Notably, Mixue Bingcheng has no U.S. presence.
How Mixue Bingcheng’s business model fuels its growth
What sets Mixue Bingcheng apart is its franchising strategy. Over 99% of its stores are franchised, and the chain generates significant revenue by selling food materials, equipment, and packaging to its franchisees. This model has allowed the company to scale rapidly while keeping operational costs low.
Mixue Bingcheng has 45,000 locations worldwide, compared to McDonald's 41,800 stores. Photo: The Sun
Despite the massive number of locations, Mixue's revenue lags behind other drink giants like Starbucks and Tim Hortons. However, its rapid growth is undeniable. According to the company’s prospectus, Mixue’s net profit jumped by 42% to 3.49 billion yuan ($479 million) in the first nine months of 2024. This growth is reflected in its 21% revenue increase, reaching 18.7 billion yuan ($2.6 billion) during the same period.
Bubble tea is incredibly popular in China, where people often sip through straws from large plastic cups in high streets and shopping malls. This growing demand for sweet, milky beverages has fueled Mixue's expansion and solidified its place as a dominant force in the global fast-food sector.
McDonald's struggles amid industry challenges
While Mixue Bingcheng is thriving, McDonald’s faces challenges, including a recent E. coli outbreak linked to its Quarter Pounder burgers, which hurt sales. In February 2024, McDonald's reported a slight decline in its fourth-quarter net income, which dropped to $2.02 billion, compared to $2.04 billion the previous year.
Despite these hurdles, McDonald’s remains an iconic brand globally, especially in the United States, where its cultural relevance continues to shine.