Mixue strategy

I. What is MIXUE’s Strategy

The F&B industry is a very competitive industry. But Mixue has
made an unprecedented achievement when standing with big
brands that have undergone a long development process.

( Chart by Outlets 2021)

Mixue was established in 1997. At this time, the mixue only had
the main ice cream, shaved ice. Although the brand was very
small at the time, the founder of the mixue at the time – Zang
Hongchao defined the vision for the mixue and kept it
throughout its development.
“ Enriching our partners. Bringing high–quality and affordable
products to everyone around the world ”.
II. Mixue's Strategy Analysis
1. External: 5 Forces
According to a report by Fortune Business Insights, the milk tea
market size was valued at $2.2 billion in 2019 with an estimated
compound annual growth rate (CAGR) of 7.2% in the period
2020 - 2027. At the same time, the total price market value by
the end of 2027 is expected to reach 3.4 billion USD. Because it
is a fertile market, the competition for resources in this market
is quite large.
The potential danger from the appearance of a new opponent
The F%B market is an annual market growth rate of 7.2%, it is
becoming more and more common for new entrants to enter
the industry. Especially in the context that the products are not
too different, the recipe is no longer a business secret, and the
technological barriers are not great. In addition, the advantage
of scale does not make a big difference compared to small
businesses because these businesses have the necessary
flexibility for the field, and are close to potential customers, so
more and more businesses are in the field of F&B.
In the case of Mixue, the business also faced a lot of
competition from new competitors in the market from its
inception to the present. For example, Heytea with its
competitive advantage in high quality, professional process, the
company joined in 2012 but has opened up to 500 stores. Next
can be mentioned Nayuki, founded in 2018, the brand focuses
on the high-end customer segment, with the advantage of
innovation and creativity in products, Nayuki was valued at up
to 4 billion USD in June 2021, becoming a major competitor in
the industry.
The power of customers
The increase in beverage brands has rapidly increased
consumer power. Especially today with the explosion of
technology, the rights and protection of consumers are further
enhanced by functions such as evaluating a store's drinks and
sharing feelings on social networks.
Power of supplier
Increase in the brands that it is common for a supplier to sell to
many brands, and the power of the supplier is increasing and it
can be expressed in the actions of influence businesses such as:
+ Price Increase
+ Reduced Quality
+ Delivery not on time
Statistics from the Indian Tea Association show that the
average price of milk tea ingredients has increased from 25% to
40%.
Strength of opponents
From new competitors: The F&B industry in general and the
milk tea industry, in particular, have huge competition.
According to Reuters, the number of fast-drink stores can
increase by an average of 9% annually.
From the big players that have dominated the market: Some
brands that are leading the global milk tea market are Chatime,
Gong Cha, Coco Fresh Tea & Juice, Tiger Sugar, and Kung Fu
Tea... these “big guys” are investing heavily in the international
market to increase profit margins and find more potential
customers.
The power of alternative products and services
Existing products have very fast replacements in response to
changing customer tastes. For example, at present, the market
trend is towards healthy products such as tea lines, juices, etc.
Therefore, big brands like Mixue, Heytea, GongCha, etc. A lot of
money goes into R&D (Research and Development) to be able
to grasp the needs of customers in a timely manner, thereby
making timely changes in products.
 2. Internal

The internal factors that create the success of Mixue can be

divided into the following main items
• Prices Strategy: Focus on cheap products with good quality
Mixue's price is 20% - 40% cheaper than its competitors even
though it has the same quality as Goodme, Heytea, etc.
precisely because it has good quality but is much cheaper than
the market, Mixue has created a special attraction compared to
other brands, especially in difficult economic times, consumers
tighten spending.
• Customer strategy: Attack the right customer file:
Compared to other well-funded peers like HEYTEA and Nayuki,
Mixue took a different approach – by penetrating the mass
market / Tier 3/4 cities through an extremely low-cost / low-
price strategy, like VietNam and Indonesia.
 (U.N World Development Report)
It is the right decision to hit the affordable segment – the
segment with the largest market share of Mixue. With its low-
cost strategy but good quality, Mixue quickly expanded its store
chain.
Supply Strategy
Mixue has taken advantage of the "economics of scale",
promoting marketing along with the advantage of cheap prices,
thereby can push a large number of sales and increasing the
number of transfer partners.
Currently, the price of Mixue input materials is 20% lower than
that of competitors in the same industry, which contributes to
increasing the competitiveness of MIXUE.
This means that the larger the quantity sold, the lower the
input cost will be, from here the more partners will want to
receive the mixue franchise and the lower the price will be. This
is like a magic circle, creating rapid growth for Mixue.
Franchise Strategy
But certainly, only with competitive advantages in quality and
price, it is difficult to create the success of Mixue while this
brand continuously sells for only half the price of its
competitors. The true profit of Mixue is shown in this
company's report. Of the revenue of Mixue, 72 % comes from
selling ingredients, 15% comes from selling packaging, and less
than 1% comes from ice cream sales, so, basically, Mixue is not
just an F&B company, Mixue is a supply chain and logistics
company. Mixue is doing business with B2B (Business to
Business) model instead of B2C (Business to Customer).
Therefore, the more franchise stores, the more money Mixue
has.
This is a culmination of business strategy, this ingenuity has
brought Mixue to the level of major companies in the world.
The company is increasingly expanding into tier 3 and 4
countries where people are middle-income, using a proven
success model. The future of Mixue is forecasted to expand
with the growth rate of the F&B market
 Working Experience
Working as a data analyst in the strategic division of Mixue, I
was responsible for the main areas in the department
including:
- Data collection
- Data collection and analysis
- Planning strategy
- Survey and execute strategy
- Measure results
Although the array of tasks assigned is large and wide in scope,
it requires a lot of time and effort in the implementation
process. but this also means that I learn a lot of skills when
completing my assigned tasks. These include skills in how to
create tables to survey customers, and synthesize and analyze
the collected data, thereby finding the right strategy for the
situation inside and outside the company. In addition, soft skills
are also valuable things that I learned during my work. Skills
such as communicating between different departments with
different cultures, searching for information, etc., but the part I
found most helpful was learning how to analyze industry data
of the business using the 5-method method. the power of the
poster, understanding the theory of the method, and being
able to apply it in practice was a miracle to me. I really learned
a lot while working at Mixue.