China's Leading Bubble Tea Giants Prepare for Highly Anticipated IPOs
China's leading bubble tea giants are set to make waves in the stock market with upcoming IPOs, solidifying their positions as the nation's go-to brands for this beloved beverage
Don't miss out on CNN's Meanwhile in China newsletter, covering the country's rise and its global impact. Two of China's top bubble tea brands are getting ready to make their stock market debut.
Mixue Group and Guming Holdings, famous for their distinctive drinks like passionfruit pulp and grape and cheese-flavored tea, have submitted applications for initial public offerings in Hong Kong, as revealed in stock exchange filings on Tuesday.
The exact size of the offerings was not disclosed in the companies' filings. However, Reuters reported on Wednesday that Mixue, claiming to be China's largest bubble tea chain, is seeking to raise $500 million to $1 billion, while Guming aims to raise $300 million to $500 million, according to an unnamed source.
Mixue refused to provide a comment, and Guming did not respond to a request for comment.
Despite facing high economic uncertainty and low consumer confidence, China still sees affordable indulgences like going to the movies or enjoying cheap food and drinks as positive aspects.
A barista pours coffee into a cup at the Starbucks Reserve Roastery in Shanghai on June 3, 2022.
Luckin Coffee outlet/Getty Images
China, a nation of tea-drinkers, now has more branded coffee shops than the US
The country's bubble tea market is substantial, estimated to be worth 145 billion yuan ($20.4 billion) in 2023, according to a report by the China Chain Store & Franchise Association. Mixue, which translates to "sweet snow like honey" in English, boasts over 36,000 stores in mainland China and 11 in overseas markets like Vietnam and Malaysia, as stated in its prospectus.
The company originally launched as "Coldsnap" in 1997, peddling shaved ice from a small shop in Zhengzhou, central China. Just two years later, the brand was rebranded as Mixue. In 2005, the company made a splash with the introduction of soft serve ice cream for as little as 1 yuan (roughly 15 US cents), which became a bestseller and its inaugural signature offering.
Mixue has extended low prices across its entire menu, offering many items for as little as $1. Best-sellers such as ice cream cones, lemonade, and bubble tea (also known as boba) have contributed to Mixue's market leadership in China. According to its latest filing, Mixue held the leading position in the country's fresh drinks sector, with 11.2% of the market and generating 34.6 billion yuan ($4.9 billion) in sales during the nine months ended September 2023. The chain is recognized across China for its cheerful snowman logo.
On August 13, 2023, moviegoers in Shanghai, China, walk past colorful posters at a local theater. One poster features Creation of the Gods I: Kingdom of Storms on the left, while the other showcases No More Bets on the right.
CFOTO/Future Publishing/Getty Images
Chinas movie theaters thrive as economic gloom descends. Hollywood is missing out
Customers at a company outlet in the Mongkok district of Hong Kong on Thursday confidently expressed their enthusiasm for Mixues' unbelievably low prices. Despite previous reservations about the sweetness of their drinks, 30-year-old administrative worker Emma So couldn't resist the enticing offer, opting for a regular bubble tea with extra tapioca pearls.
Guming is positioned as the second largest bubble tea chain in China, boasting 9,000 stores spread across 200 cities in mainland China. The company, which translates to "ancient tea" in English, was established in 2010 in Zhejiang, an eastern province of China.
Guming's primary strategy targets consumers in non-metropolitan areas of China, with 79% of its stores located in cities categorized as tier two or below, as stated in its prospectus.
