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Hong Kong
CNN
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Two of China’s most popular tapioca brands are preparing to go public.
Mixue Group and Guming Holdings, known for drawing crowds with unique beverages such as passion fruit pulp and grape and cheese flavored teas, have filed for an initial public offering in Hong Kong, according to a stock exchange filing on Tuesday. .
The scale of the offer is compiled in each company’s filings. But on Wednesday, Reuters reported, citing anonymous sources, that Mixue, which bills itself as China’s largest tapioca chain, is aiming to raise between $500 million and $1 billion, while Guming is aiming to raise between $300 million and $500 million. It was reported that the company is aiming to procure
Mr. Mixue declined to comment, while Mr. Gumming did not immediately respond to a request for comment.
As China faces high economic uncertainty and low consumer confidence, affordable indulgences like movie nights and cheap food and drink are seen as a bright spot.
country’s The bubble tea market is huge. The industry is estimated to be worth 145 billion yuan ($20.4 billion) in 2023, according to a report by the China Chain Store and Franchise Association, an industry group.
Mixue, which means “honey-sweet snow” in English, has more than 36,000 stores in mainland China and 11 overseas markets, including Vietnam and Malaysia, according to its prospectus.
The company was founded in 1997 under the alias Cold Snap, selling shaved ice from a small store in the central Chinese city of Zhengzhou. Two years later, the founder announced his Mixue brand name.
The company began selling soft serve ice cream for just 1 yuan (about 15 cents) in 2005, and it quickly became a hit, becoming the company’s first signature product.
The chain is now offering low prices across its menu, selling many items for just $1. Best sellers include ice cream cones, lemonade, and tapioca tea, also known as boba.
That has helped Mixue, whose cheerful snowman logo is associated throughout China, become the market leader. According to the filing, as of the nine months ending September 2023, the company accounted for 11.2% of the market and held a leading position in the domestic fresh beverage sector, with sales of 34.6 billion yuan ( 4.9 billion).
The promise of low prices served as a persuasive sales hook.at work Several customers waiting in a long line at an outlet in Hong Kong’s Mong Kok district on Thursday told CNN that Mixue’s price was too good to pass up.
Emma Soh, a 30-year-old government worker, said she previously thought the drinks were a little too sweet. “But it’s really cheap,” she said, picking up a regular bubble tea filled with tapioca.
Guming bills itself as China’s second-largest bubble tea chain, with 9,000 stores in 200 cities in mainland China. The company’s name means “ancient tea” in English, and it was launched in Zhejiang province in eastern China in 2010.
Guming’s strategy is primarily focused on catering to consumers outside China’s big cities, with 79% of its urban stores considered Tier 2 or lower, according to the prospectus.