Table of contents

Table of contents...................................................................................................................... 1
EXECUTIVE SUMMARY..............................................................................................................1
I. Introduction to Mixue Company............................................................................................1
II. Comparison and Selection of Markets..................................................................................2
2.1. Introduction of international market selection models.................................................2
2.2. Mixue’s market selection criteria...................................................................................3
2.3. Comparison of Chinese and Vietnamese market characteristics based on selected
criteria.................................................................................................................................. 3
2.4. Evaluation of reasons why Mixue chooses these 2 markets..........................................5
III. Analysis of Market Entry Modes Used in One of the Two Markets......................................6
3.1. Description of entry modes Mixue has used to enter Chinese/Vietnamese market.....6
3.2. Assessment of suitability of these entry modes............................................................6
3.3. Recommendations for alternative options....................................................................7
IV. Proposed Suitable Marketing Strategies for One of the Two Markets.................................7
4.1. Product Strategies......................................................................................................... 7
4.2. Pricing Strategies........................................................................................................... 8
4.3. Place Strategies............................................................................................................. 8
4.4. Promotion Strategies.....................................................................................................8
V. References............................................................................................................................ 8
 EXECUTIVE SUMMARY
This report provides a comprehensive global marketing analysis of Mixue, with a
focus on assessing overseas expansion opportunities in the Chinese and Vietnamese markets.
After introducing Mixue and its extraordinary growth, the report analyzes and compares
China and Vietnam across consumer base, growth potential, preferences, infrastructure, and
regulations using international market selection models like Porter's Diamond. Key criteria
driving Mixue's interest in these two enormous markets include their concentrated urban
consumers, rising middle classes, cosmopolitan Gen Z and millennial demographics, and
appetite for innovative food and beverage options. Mixue’s successful utilization of
franchising for rapid localization in Vietnam is examined, along with recommendations for
complementary partnership strategies. The report culminates with targeted product, pricing,
place and promotion strategies Mixue could deploy specifically in the Vietnamese market to
further growth by catering more deeply to local tastes, retaining value, expanding nationwide
through franchising, and creatively engaging Vietnam's dynamic youths.
MAIN CONTENTS
I. Introduction to Mixue Company

Figure 1. Logo Mixue Ice Cream & Tea

Mixue Ice Cream & Tea (蜜雪冰城) is a Chinese franchised chain selling soft serve
ice cream and tea beverages that was founded in June 1997 in Zhengzhou, Henan, China. As
of 2023, Mixue operates over 21,500 stores in China and at least 12 other countries in Asia-
Pacific (Mixue, 2023). The company is fully owned by the two Zhang brothers who founded
it.
Mixue specializes in ice cream products which grew out of the boom in maltose soft
serve ice cream in Zhengzhou starting 2006 (Mixue, 2023). Rising prices due to popularity
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led founder Zhang Hongchao to innovate the ice cream formula to sell it 20% cheaper than
competitors. The success selling ice cream led him to start franchising in 2008. Since the
2010s, Mixue has been established as an independent company by expanding franchises
nationally across China. Mixue also runs R&D ice cream centers in other parts of Henan and
is building a central warehouse and logistics hub to keep supply chain costs minimized.
In 2022, Mixue Bingcheng Co. Ltd announced plans to start publicly listing shares on
the Shenzhen Stock Exchange. By March 2022, over 21,000 Mixue stores were already
operating in 11+ Asian countries, mostly from tens of thousands in China plus thousands
opened since 2020 in parts of Southeast Asia.
II. Comparison and Selection of Markets
2.1. Introduction of international market selection models

Figure 2. Porter’s Diamond model

Porter’s Diamond model analyzes the factors that shape a nation or region’s
competitive advantage (Tran, 2022). The model identifies four interrelated determinants:
factor conditions (available inputs like labor, resources), firm strategy/rivalry (rules and
incentives driving competition), demand conditions (market demand size and sophistication),
and related/supporting industries (presence of capable local suppliers and clusters) (Tran,
2022). Two exogenous variables of government and chance also indirectly impact the
diamond (Tran, 2022). An attractive diamond featuring advanced, specialized factors, intense

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rivalry, sophisticated buyers, and interconnected clusters signifies a strong national business
environment conducive for competitiveness (Tran, 2022). Thus, the Diamond provides a
framework to assess the viability of countries/regions for business and expansion.
2.2. Mixue’s market selection criteria
As a rapidly expanding food & beverage franchise, Mixue considers several key
factors when selecting overseas markets to enter, including market size, growth rates,
consumer demographics and preferences, competition, infrastructure, supply chains, and
regulatory conditions (Jo Adetunji, 2023; Chen et al., 2023).
Market Size and Growth Potential: Mixue targets large population centers with
considerable consumer spending and rising disposable incomes to drive demand (Chen et al.,
2023). For example, when entering Vietnam and Indonesia, Mixue chose major cities like
Hanoi, Ho Chi Minh City, Jakarta, and Bandung which promise huge customer bases (Duc,
2023; Yingxue, 2022). Rapid urbanization also makes these markets ripe for growth.
Consumer Characteristics: Mixue analyzes consumer personas and food
consumption patterns when expanding abroad (Chen et al., 2023). They focus on younger
demographics like Gen Z and millennials who actively consume both soft serve ice cream
and bubble tea drinks that Mixue offers. Local taste preferences are also considered regarding
flavors and ingredients.
Competitive Landscape: Mixue evaluates direct and indirect competitors in target
overseas markets concerning pricing, products, brand awareness and other factors that impact
market share (Chen et al., 2023). This allows them to position their offerings and branding
appropriately to compete.
Infrastructure and Supply Chains: Markets with reliable infrastructure for storing
and transporting ingredients and finished products are favored, along with proximate supplier
networks to enable flexible sourcing (Jo Adetunji, 2023). Mixue’s existing China supply
chain provides an advantage in neighboring regions like Southeast Asia.
Regulatory Environment: Mixue reviews the policy, legal, tax and other regulations
in potential new markets, analyzing risks, barriers and operational impacts (Chen et al.,
2023). Requirements around health certificates, product testing, food safety standards, etc.
influence selection and entry strategies.
2.3. Comparison of Chinese and Vietnamese market characteristics based on selected criteria
 Market Size

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 Figure 3. The size of the population of Vietnam and China
China's massive population of over 1.4 billion represents an enormous consumer
market, especially in mega-cities like Beijing, Shanghai and Shenzhen where rising incomes
drive food service spending (Chen, 2023). In contrast, Vietnam has a smaller yet fast-growing
market of 100 million consumers, concentrated in urban hubs like Hanoi and Ho Chi Minh
City with youthful demographics (NIQ, 2023).
 Growth Potential
Both markets offer considerable growth potential given economic expansion and a
burgeoning middle class. China’s ice cream market alone is forecast to grow at a CAGR of
over 3% from 2023-2027 to reach $12.5 billion in value, while Vietnam’s ice cream and cafe
industry is projected to increase at an 8% CAGR (Future Tech-trends & Updates, 2023; Duc,
2023).
 Consumer Preferences
Chinese consumers have traditionally preferred milk-based ice cream, but are
developing a taste for more novel products like soft serve and frozen yogurt (Chen, 2023).
Vietnamese consumers favor sweet milk, fruit and salty flavors in ice cream as well as cheese
foam, pudding and fruit jelly in bubble tea (Duc, 2023; Tran, 2022).
 Market Access and Infrastructure
In China, Mixue benefits from advanced transport links and cold chain facilities to
efficiently distribute products nationwide, although last-mile delivery remains challenging
(Liu et al., 2023). Vietnam still requires supply chain infrastructure upgrades especially in
rural zones, but proximity to SE Asian markets aids regional expansion (Chu, 2019).

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  Regulatory Environment
Stringent food safety rules in China mandate detailed product testing and factory
audits, aligning with Mixue’s own quality controls (Chen, 2023). Vietnam’s regulations are
still evolving with plans to heighten inspections and adopt international standards, posing
initial compliance hurdles for foreign brands like Mixue (Tran, 2022; USDA, 2021).
2.4. Evaluation of reasons why Mixue chooses these 2 markets
Market Size and Urbanization
A key driver of Mixue’s expansion into China and Vietnam is the enormous consumer
base concentrated in major metros (Zhao, 2022; Chen et al., 2023). In China, over 60% of the
population now resides in urban areas, primarily in Tier 1 cities like Beijing, Shanghai,
Guangzhou and Shenzhen which boast average incomes over $20,000 (Statista, 2023). These
prosperous urban hubs with over 300 million consumers represent the primary target for
Mixue’s outlets (Zhao, 2022). Likewise in Vietnam, Ho Chi Minh City and Hanoi account for
10% of the population but drive nearly half of national food service revenues (Kantar, 2021).
Their combined 16 million residents and fast pace of urbanization make them ripe for growth.
Burgeoning Middle Class with Appetite for F&B
Rapid economic development in China and Vietnam has fostered a ballooning middle
class and growing appetites for food and beverage spending (Affine, 2023; Kantar, 2021).
China's middle class already exceeds 400 million people with considerable discretionary
expenditure. Research shows Chinese consumers regard desserts like ice cream as affordable
indulgences, reflected in compound annual ice cream market growth of 5% from 2013-2021
(Affine, 2023; Zhao, 2022). Similarly in Vietnam, per capita expenditure on ice cream, cakes
and cafes/teahouses rose over 7% annually from 2016-2021, pointing to the middle class’s
embrace of such discretionary F&B items (Kantar, 2021).
Youthful Populations Receptive to New Offerings
Both countries feature relatively young demographics, with around one-fifth of
China’s population and over 40% of Vietnam’s under 24 years old as of 2020 (Banerjee et al.,
2020; UNDESA, 2022). These massive Gen Z and millennial cohorts are highly receptive to
creative desserts and beverages like Mixue’s as well as emerging F&B trends, making them
key targets (Basu, 2022; Chen et al., 2023). Their outsized presence through 2050 due to
population momentum spotlights immense long-term opportunities.
Urbanites Increasingly Seek Novel F&B Experiences
Cosmopolitan consumers in China and Vietnam’s big cities are shifting from
traditional staples towards more varied, protein-rich diets and demand novelty in dining
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options (Banerjee et al., 2020; Kantar, 2021). Research by Kantar (2021) shows such
urbanites visit cafes/teahouses and dessert outlets in Vietnam more often than other venues,
underscoring the promise of Mixue’s product range. Ice cream in particular is transforming
from a seasonal treat into an everyday snack for young Chinese professionals (Zhao, 2022).
Customization also growing in popularity as urban Chinese and Vietnamese consumers,
especially youths, seek personalized F&B encounters (Banerjee et al., 2020).
III. Analysis of Market Entry Modes Used in One of the Two Markets
3.1. Description of entry modes Mixue has used to enter Chinese/Vietnamese market
Mixue heavily utilizes franchising to rapidly expand in overseas markets like China
and Vietnam (Zhao, 2022; Chen et al., 2023). Franchising provides a profitable business
model that aligns with founder Zhang Hongchao’s goal of building a branded retail empire
(Bloomberg, 2023). In its home country, 99.8% of Mixue's over 21,500 stores operate via
franchising which accounts for 96% of total systemwide sales (Zhao, 2022).
In Vietnam, Mixue exclusively employs franchising for market entry and currently
has over 1,000 franchise locations as of early 2023 (Duc, 2023; Duc, 2023). The company
directly controls variables like site selection and provides franchisees with supply chain
advantages in ingredients, packaging, equipment and marketing to ensure brand consistency
(Chen et al., 2023; Duc, 2023). Reportedly, establishing a small 50 square meter Mixue
franchise in Vietnam costs around $30,000 - $35,000 excluding real estate fees, enabling
rapid localized scaling (Duc, 2023).
This franchising focus allows Mixue to expand quickly in foreign markets while
benefiting from locals’ on-the-ground expertise regarding consumer preferences, regulations
and real estate.
3.2. Assessment of suitability of these entry modes
Mixue’s franchising model has proven an appropriate market entry choice given the
brand’s exponential growth to over 1,000 Vietnam locations in just 5 years (Duc, 2023).
Franchising provides faster speed to scale across regions rather than establishing owned
stores, especially when expanding abroad (Chen et al., 2023). Local franchisees leverage
familiarity with Vietnamese consumer behaviors, tastes, regulations and real estate dynamics
to optimize locations, marketing and offerings while Mixue maintains brand control (Chen et
al., 2023; Zhao, 2022). This facilitates localization and relevance.
Additionally, franchising requires less capital investment than direct ownership,
enabling rapid national rollout despite Vietnam's developing infrastructure (Chu, 2019;
USDA, 2021). Mixue's franchising also grants access to its formidable China supply chain for
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ingredients and equipment, sidestepping import/sourcing hurdles most foreign brands face
(Zhao, 2022; Yingxue, 2022).
With franchising powering 90% of domestic systemwide sales, Mixue smartly
replicated this asset-light model for Vietnam (Zhao, 2022). Local partners provide
infrastructure and expertise so Mixue can remain focused on brand stewardship amid
ambitious Asian expansion goals.
3.3. Recommendations for alternative options
While franchising has successfully enabled Mixue’s Vietnamese expansion so far, the
company could consider complementing it with alternative modes as the market matures
(Chen et al., 2023). For example, establishing joint ventures with local firms would provide
deeper insights into Vietnamese tastes and F&B regulations to guide product development
and positioning (EqualOcean News, 2023). Partners’ local expertise and relationships may
also facilitate supply chain buildout and retail site procurement.
Additionally, Mixue can explore company-owned stores in Ho Chi Minh City or
Hanoi to trial new offerings, service styles and technologies before franchising nationwide
(Chen et al., 2023). Direct control would allow greater innovation, branding refinement and
understanding of Vietnamese operations. Company ownership in tier 1 cities may also boost
investor confidence before any potential Vietnam stock exchange listing (EqualOcean News,
2023).
That said, franchising should remain Mixue’s priority entry mode given already-
strong momentum and unit economics. As the number of franchisees multiply, Mixue must
ensure franchisee alignment through training, technology integration and consistent brand
experiences (Chen et al., 2023).
IV. Proposed Suitable Marketing Strategies for One of the Two Markets
4.1. Product Strategies
While Mixue’s existing soft serve ice cream and bubble tea menu resonates in
Vietnam, the company should introduce additional products tailored to local tastes as
disposable incomes rise (Kantar, 2021). For example, cheese or durian-flavored ice creams,
avocado or coconut bubble teas, and trendy cheese foam toppings would differentiate
Mixue’s offerings (Tran, 2022; Duc, 2023). Adaptations leveraging local fruits like lychee,
jackfruit or sapodilla could also attract Millennial and Gen Z consumers seeking adventure
(Banerjee et al., 2020). Mixue should source high-quality, responsibly-grown Vietnamese
agricultural inputs to reinforce brand purpose. Personalization enabling customers to
customize ice cream flavors and toppings presents another opportunity to stand out.
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4.2. Pricing Strategies
Mixue should retain its strong value positioning with most items priced under 30,000
VND given Vietnam’s price-sensitive consumers (Tran, 2022). However, premium selections
showcasing decadent ingredients can be priced higher to denote quality, exclusivity and
status. Dynamic pricing tactics adjusting costs by time of day, local foot traffic and weather
can optimize customer conversion and transaction values. Mobile app promotions with free
delivery, member discounts and incentivized referrals will also resonate with digital-savvy
Vietnamese youths.
4.3. Place Strategies
While Mixue’s outlets already dot Vietnamese cities, further expansion into suburban
residential areas, office parks and tourist zones via franchising will enlarge reach (Chen et al.,
2023). Optimizing locations for convenient takeaway given Vietnam’s on-the-go dining
culture is vital (Kantar, 2021). Home and office delivery services address at-home occasions
while self-ordering kiosks improve convenience. To manage swollen summer demand,
mobile carts could serve high-traffic zones lacking retail footprints.
4.4. Promotion Strategies
Leveraging social media influencers and viral music/dance challenges on TikTok and
Instagram spotlights Mixue’s playfulness to tech-adept Gen Z (Chen et al., 2023). Sponsoring
esports tournaments and college campus events strengthens youth connections. Experiential
marketing via pop-up stores, ice cream workshops and mascot appearances creates
shareworthy buzz. Mass advertising should broadcast the brand’s affordability and
accessibility for diverse consumers through moments of delight.
V. References

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