Ask AI · How will Mixue’s new CEO respond to shocks to its most skilled pattern?

As the number of stores surpassed 60k and revenue crossed 30 billion yuan, Mixue’s high-speed “store-opening machine” began to slow down.

A recent financial report released by Mixue Group shows that, including overseas markets, Mixue Group closed 2,527 stores in 2025, up 57.1% year over year. Of these, overseas stores totaled 4,467, down 428 from the previous year. The company explained in the report that it was “operational readjustment and optimization” for the Indonesia and Vietnam markets. Combined with the fact that its coffee brand Luckin Coffee only started expanding overseas in August last year, the vast majority of the 428 fewer overseas stores should be from the main brand Mixue Bingcheng.

In 2025, the group’s full-year revenue grew 35.2% year over year, while net profit attributable to shareholders grew 32.7% year over year. For comparison, in 2023 its revenue and net profit growth rates were close to 50% and close to 60%, respectively; in 2024, the growth rates of these two core indicators fell to 22.3% and 41.4%. The group’s overall gross margin also dropped from 32.5% to 31.1% in 2025; the gross margin of core businesses—sales of goods and equipment—fell from 31.2% to 29.9%.

Previously, foreign institutions such as UBS, Goldman Sachs, and BOC International had all expressed concerns about Mixue’s same-store sales growth, and expected that in 2026 it could decline by 4%-5%.

Perhaps it was this anxiety that led Mixue Group to launch a new round of adjustments. On the same day the financial report was released, “Snow King” announced a management reshuffle. The new CEO, Zhang Yuan, born in 1991, holds a master’s degree in finance from Tsinghua University. He previously worked at BofA Securities and Hillhouse Investment, and had participated in Mixue’s early due diligence and investment decision-making; he joined Mixue in 2023 as CFO, and in June 2025 became Executive Vice President.

A finance-focused leader with strengths in investing now runs the broader market, and the scale story that the “Snow King” is good at is playing out on similar tracks. Mixue Group’s fresh-ground coffee brand “Luckin Coffee” and fresh beer “Fuluji” expanded rapidly last year. Mixue Group added more than 13k net new stores, nearly half of them from Luckin Coffee. In August last year, Fuluji had only 1,200 stores; by the end of February this year, it had already surpassed 2,000.

“Milk tea covers the student years, coffee covers beyond college and into the workplace stage, and beer extends to adult consumption; morning coffee to stay alert, afternoon tea drinks for a break, and at night fresh beer for a light buzz—fully covering a young person’s daily consumption.” Zhu Danpeng, an analyst in China’s food and beverage industry, summarized this as the “Five-More Strategy”: more brands, more product categories, more scenarios, more channels, and more consumer groups.

“This chessboard is huge, and it’s also very hard.” Zhu Danpeng said, which means that at this stage, Mixue Bingcheng must face competition from three different industries at the same time.

The capital markets clearly also had doubts about this new story. After the stock price rebounded on the day the financial report was released, it then fell for three consecutive trading days. By the close on March 27, the total market value had fallen back to 108.6 billion Hong Kong dollars, nearly cutting in half from its historical peak.

The most skilled pattern is hit

For the decline in overall gross margin, Mixue Group attributes it to “changes in revenue mix and increased costs for some raw material procurement.”

Looking at its revenue mix, more than 97% of revenue comes from sales of goods and equipment. In 2025, affected by extreme weather, the prices of lemons and coffee beans rose sharply, and fluctuations on the cost side directly pressured profits.

For a company built around an “extreme value-for-money” moat, any change on the cost side can amplify pressure across the entire industry chain.

Pressure was also felt at the store level. Mixue Bingcheng had been one of the winners in the food delivery wars, but as platform subsidies gradually tapered off, this company that is good at offline, in-store consumption began to feel the pressure.

At its first appearance at Mixue Group’s earnings call, Zhang Yuan also said plainly: “In the last quarter of last year, the growth in store revenue slowed somewhat compared with the first half and the third quarter. Orders accelerated shifting toward online channels, which reduced foot traffic for on-site dining. Because in-store operation for takeaway dining is the pattern the group has been best at, it was impacted accordingly.”

Against the backdrop of industry subsidies and price wars, “subsidies raise consumers’ expectations for value in quality and price.” This sentence in the financial report reveals the real situation: it’s not that Mixue Bingcheng has gotten more expensive; it’s that competitors have all been getting cheaper.

Li Weihua, an expert in chain operations, told Phoenix WEEKLY Finance that this reflects hidden risks accumulated during Mixue Group’s rapid expansion. On one hand, it needs to maintain store-opening speed to magnify scale effects and dilute supply-chain costs; on the other hand, when the number of stores grows too quickly, it leads to lower site selection quality, weakens store-level profitability models, and in some cases overwhelms certain franchisees in densely trafficked areas—“hollowing them out” through internal competition.

In response to the challenges above, at the earnings call Mixue Group for the first time clearly stated it would pivot—from prioritizing scale to prioritizing quality. Ma Junwei, Chief Executive Officer of Mixue Bingcheng’s China Region, said that in 2026 the company will proactively slow the pace of new store development and put more resources and effort into operational support and efficiency improvements for existing stores.

Who can become the new protagonist of the next story?

When growth for the main brand slows down, the answer the “Snow King” gives is to step up investment in its sub-brands, Luckin Coffee and Fuluji.

The financial report shows that in 2025 Mixue Group added more than 13k net new stores, nearly half of which came from Luckin Coffee. Its playbook is also “very Mixue”: when other brands collectively raised prices to above 10 yuan, its core products are priced at 4–10 yuan.

From the data, low pricing really helped Luckin Coffee break out. Over the past year, sales revenue for its flagship product coconut latte reached 400 million yuan, and its American-style coffee sold 370 million yuan—equivalent to a mid-sized regional tea-drink brand’s full-year revenue.

To ensure continued growth, in Mixue Group’s 18–60k yuan strategic investments planned for 2026, 14 billion yuan will be used for supply-chain transformation—specifically for upgrading fresh beans, fresh milk, and fresh fruit, mainly serving Luckin Coffee’s “three-fresh, one-instant” product strategy. In addition, there will be a special investment of 100–200 million yuan for coffee equipment, used for upgrading professional in-store coffee equipment and technical support.

Beyond opportunity, challenges are also obvious.

For Gu Ming Tea, another publicly listed tea-drink company, last year it rolled out its coffee category across the board. By the end of 2025, it had more than 12,000 stores equipped with coffee machines, and some product prices had already moved into the area where Luckin Coffee operates. This means Luckin Coffee is not only competing with Luckin, Kudi, and Nvwa, but also fighting tea-drink peers head-on in their own space.

Another challenge is how to maintain quality while keeping low prices. Because coffee has functional attributes, users demand even higher quality and consistency. On social media, some consumers have given feedback: “Compared with Luckin and Kudi, Luckin Coffee’s quality control is still a bit weak.” “It just tastes too sweet—even the least-sugar option is still sweet.”

Compared with Luckin Coffee’s planned acceleration, Fuluji is more like an “off-plan” variable.

In October 2025, Mixue Bingcheng held 53% equity in fresh beer brand Fuluji through acquisitions and capital increases. The financial performance was consolidated into the group’s statements. In pricing, Fuluji continues the value-friendly route: its basic German wheat fresh beer is about 5.9 yuan per cup, and its flavored fruit beer is about 9.9 yuan per jin.

Recently, Fuluji signed celebrity Lu Han as its first global brand ambassador. Just as outsiders believed it would use the traffic from the new endorser to kick off another round of rapid expansion, in March there were reports that Fuluji would pause some city-level franchising and instead conduct approvals by city and by region, prioritizing ensuring profitability for existing stores.

Some believe that some Fuluji stores have long been at breakeven; the surge in store openings has led to unstable service and inconsistent quality control. The entry of brands like U Brew, Helen’s, and traditional beer giants has also intensified competition.

“Compared with milk tea and coffee, beer is a business that relies more on scenarios—it has peak and off seasons, specific time slots, and also depends on a consumption atmosphere.” Li Weihua noted that this means Fuluji can’t simply copy Mixue Bingcheng’s logic of “buy anytime”; it must find its own consumption scenarios and domain, and run a workable single-store model.

Facing the complex chessboard of three business lines, Zhang Yuan highlighted two points in the earnings call: on one hand, continuously improving store operating efficiency to steadily expand store scale; on the other hand, sticking to a high-quality low-price strategy, and strengthening “supply chain + brand IP + store operations.”

“The three business lines are not competing on the same dimensions.” In Zhu Danpeng’s view, milk tea is a contest of efficiency; coffee is a balance of value-for-money and brand; beer relies more on scenarios and operational capability. How to divide responsibilities and coordinate matters is more crucial than developing each independently.

In the past, Mixue was a scale-driven company; now Mixue is transitioning toward being an efficiency-driven company. Expansion only needs to replicate proven experience, but improving efficiency means constantly denying the paths of the past.