FIGHTING FOR THE SAME CUSTOMERS
But online complaints are growing louder, with many claiming that Mixue is making money at the expense of franchisees, that the company is shifting operational risks to small business owners.
By now, Mixue’s stores are peppered across China. Even in small towns, one street can have multiple outlets – some only 200m away from each other – competing for the same customers. There’s already a hint of cannibalisation in the company’s financials: In the first nine months of 2024, the latest data available, the average daily gross merchandise value per store fell by 5 per cent to 4,184 yuan.
In its franchise agreements, Mixue doesn’t require newly opened stores to keep a minimum distance from existing ones. Increasingly, for franchisees, it is hard work mixed with financial anxiety.
On average, each store can expect to make 367 orders a day, or every 2 minutes for 12-hour days. But operators dare not slack off. It would take some shops two to three years to break even, much higher than what some company employees suggested, according to local media.
So far, Mixue is opening outlets a lot faster than it closes them, and people are only disgruntled online.
Unfortunately, in a weak economy, small businesses have no power and the platform holds all the cards. But Mixue’s capital market success is exacerbating an economy driven by hyper competition, and portends the burnout that will eventually follow.
https://www.channelnewsasia.com/commentary/mixue-china-ipo-mcdonalds-starbucks-zhang-5007776
