Tuesday, May 28, 2024

Is Mixue’s rapid expansion a threat to local F&B players?

Reading Time: 3 minutes
Hanif Muhammad

Journalist

yan

Editor

Interview

The Mixue ice cream and tea outlets have been mushrooming in Indonesia and it has gone viral in the past few months. Pandaily reported that the number of Mixue outlets in Indonesia reached 317 at the end of March 2022 and it has kept growing. With this figure, Mixue’s operating income reached 25,410,800 yuan or IDR 57.2 billion with a net profit of 2,235,500 yuan or around IDR 5.04 billion.

In 1997, Zhang Hongchao started his business in Henan, China. Meanwhile, PT Zhisheng Pacific Trading is the holder of the Mixue franchise rights in Indonesia. Mixue offers a variety of bubble tea flavors and ice cream options. Its unique flavors and creative menu items, along with its trendy and modern atmosphere, have made it a favorite among Indonesian consumers.

Business expansion

According to the 2023 data as reported by swa.co.id, Mixue has opened over 1,000 shops in Indonesia after only being in the market for 2 years. This rapid expansion can be attributed to several factors, mostly on its popularity on social media. The brand was even featured in President Joko “Jokowi” Widodo’s yearend Instagram post in 2022.

By leveraging the power of online platforms, Mixue has been able to reach a wide audience and establish itself as a top player in the Indonesian bubble tea and ice cream market.

Data from Momentum Works in 2021 revealed that Mixue ranked fifth in the world for franchises with the most shops open with 21,582.

Global largest F&B outlets:

  • McDonalds : 40,030
  • Subway : 37,000
  • Starbucks : 33,833
  • KFC : 26,934
  • Mixue : 21,582
  • Burger King : 19,247
  • Domino’s Pizza : 18,848

“This trend is like FOMO [fear of missing out]. People eat and buy Mixue not because they want it but for it’s social approval and bandwagoning. And why can FOMO be so massive now? It’s because someone’s idea is so easily spread through their social media account,” Marketing Inventure Consulting Expert Yuswohady explained on January 11, 2023, as quoted by swa.co.id.

Mixue’s competitors

Kopi Kenangan

Kopi Kenangan is a successful franchise in the Indonesian beverage market. James Prananto and Cynthia Chaerunissa founded the startup in 2017. Despite being relatively young in the market, the franchise has experienced impressive growth and now owns 850 outlets in 64 cities in Indonesia. This expansion demonstrates the popularity of Kopi Kenangan’s offerings among consumers and its ability to succeed in a highly competitive market.

The franchise’s success at home has led to its expansion into Malaysia, demonstrating its ability to adapt to new markets and appeal to a wider audience. This expansion is a testament to the strength of Kopi Kenangan’s business model and its commitment to delivering high-quality products and services to its customers.

Haus

Gurfon Syarif founded Haus in 2018. The franchise operates under the umbrella of PT Inspirasi Bisnis Nusantara, which specializes in the food and beverage industry. Since its inception, Haus has experienced a significant growth and now owns 197 outlets in 18 cities on Java Island. Despite its relatively young age, Haus is well positioned for continued growth in the future.

Fore

Fore is a successful beverage franchise in Indonesia, founded in 2018 by Robin Boe, Jhoni Kusno and Elisa Suteja. The franchise has experienced a significant growth since its establishment, with a total of 110 outlets in Indonesia as of February 2022. This growth is demonstrated by the opening of 42 new outlets in 2021 and early 2022, which showcases Fore’s ability to succeed in a highly competitive market.

Goola

Goola is an Indonesian specialty beverage franchise, established in 2018 by Jokowi’s eldest son and now Surakarta Mayor Gibran Rakabuming Raka, Benz Budiman and Kevin Susanto. In a short time, the franchise was able to open 5 outlets in Jakarta, showcasing its potential for success in the Indonesian beverage market. Goola founders recognized the potential for growth in this market and were able to secure significant investment from Alpha JWC, which provided IDR 71 billion in capital to support its expansion. This investment allowed Goola to rapidly expand its operations and open 100 additional outlets in the next few years.

Is Mixue threatening?

Mixue’s rapid expansion in Indonesia’s beverage market is posing a potential threat to local brands that have been established for several years. Brands such as Kopi Kenangan, Fore, Goola and Haus have struggled to compete with Mixue’s rapid rate of expansion, despite having a head start in the market.

Kopi Kenangan’s 850 outlets since its opening in 2017 is still lower than Mixue’s over 1,000 outlets. Additionally, Mixue’s cheap prices compared to other brands have raised concerns about the potential for predatory pricing practices, which could further harm local businesses.

In conclusion, Mixue’s rapid expansion in Indonesia’s beverage market is putting pressure on local brands and causing concern about the potential for harmful business practices. While Mixue’s popularity and success are impressive, it is important to consider the impact on the local economy and existing businesses.

Hanif Muhammad

Journalist

yan

Editor

 

Interview

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