By Stu Woo

SINGAPORE -- It sells ice cream and sugary drinks for under $1. Its mascot looks like the love child of Frosty the Snowman and the Michelin Man. And its stores relentlessly blare a jingle set to the tune of "Oh! Susanna."

This recipe helped Mixue Ice Cream and Tea become the world's biggest food-and-beverage chain by number of locations, topping McDonald's and Starbucks.

Pronounced ME-schway, the Chinese company is found across Asia and Australia. It ended last year with 45,000 stores, according to research firm Technomic, after more than doubling its locations in three years.

The company raised more than $400 million in an initial public offering of its shares in Hong Kong on Monday. The shares rose nearly 30% in early trading, giving Mixue a valuation of more than $10 billion.

It isn't done expanding. Mixue said in its IPO filing that it planned to keep growing -- while acknowledging the risk that its existing stores could be cannibalized by new ones.

Mixue features ice cream and drinks priced at 6 Chinese yuan, about 83 cents. That resonates in China, which is grappling with an economic slump. Spending is down because of a broken housing market and other issues.

"People are chasing more cost-efficient products," said Ernan Cui, a Beijing-based analyst for research firm Gavekal Dragonomics. She said Mixue is popular in smaller cities, where the company has focused its expansion.

Mixue was founded in 1997 by Zhang Hongchao, who opened a store selling shaved ice in Henan, a Chinese heartland province.

Its blistering expansion can be explained by the simplicity of its bright red stores, often stalls wedged next to phone-repair kiosks or dumpling shops.

The menu is short and very sweet. It includes the signature ice-cream cone, variations on bubble tea and a lemonade that made Mixue China's biggest purchaser of lemons.

It helps that Mixue charges below-average franchising fees. It generates most of its revenue by selling supplies to franchisees.

Low prices alone don't explain how Mixue embedded itself in Chinese pop culture. Credit the Snow King -- and the jingle.

A roly-poly mascot, Snow King has become a national icon on par with Ronald McDonald and Colonel Sanders. Just as ubiquitous is Mixue's theme song, which plays in stores. The lyrics to the English version: "I love you. You love me. Mixue Ice Cream and Tea."

Mixue said in its IPO filing that it intended to become more global, but didn't mention plans to enter the U.S. Roughly 90% of its stores are in China, with the rest in 10 other Asian countries and Australia.

On a recent afternoon in Singapore, a Mixue store drew in Julian Eymann, an American who visits the country often.

He skipped the rival shop across the street. "This ice cream is better than McDonald's," Eymann said. But he had one complaint: "The song's gotta go. It's got to torture the employees."

Write to Stu Woo at Stu.Woo@wsj.com

(END) Dow Jones Newswires

March 02, 2025 21:34 ET (02:34 GMT)

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