Mixue: Bubble tea chain that's bigger than Starbucks sees shares jump on debut

Mi Xue Bing Cheng may not be familiar to many, but this Chinese company already has more stores than McDonald's and Starbucks. This company, which focuses on affordable ice cream and tea drinks, is becoming increasingly popular among consumers.

This Monday, Mi Xue Bing Cheng began trading on the Hong Kong Stock Exchange, with its share price rising nearly 30%. The company raised $444 million (£352 million) through this year's largest initial public offering (IPO) in Hong Kong. Mi Xue Bing Cheng's successful listing also reflects investors' confidence in the Chinese consumer market.

Mi Xue Bing Cheng's popularity contrasts with the economic challenges many people in China are facing, including a real estate crisis and a lack of consumer and business confidence. The company sells ice cream and drinks at an average price of 6 yuan ($0.82; £0.65). The low prices have given it a broad consumer base in lower-tier cities.

The company was founded in 1997 by Zhang Hongchao, a student at Henan University of Economics and Law, initially as a part-time job to help his family's finances. Its full name, "Mi Xue Bing Cheng," means "City of Sweet Snow Ice," and its stores are decorated with the Snow King mascot and play the company's official theme song on repeat. Mi Xue Bing Cheng has rapidly expanded through a franchise model and achieved great success.

According to Mi Xue Bing Cheng, it has more than 45,000 stores in China and 11 other countries, including Singapore and Thailand. The company also stated that it plans to continue expanding. In comparison, McDonald's has "more than 43,000 locations," and Starbucks has 40,576 stores. While Mi Xue Bing Cheng is often seen as China's largest chain of milk tea, iced drinks, and ice cream, it operates more like a raw material supplier than a traditional brand.

Unlike Starbucks, which directly operates more than half of its stores, almost all of Mi Xue Bing Cheng's stores are operated by franchisees. Mi Xue Bing Cheng's strong market debut contrasts with that of its smaller competitor, Guming, whose shares fell on its first day of trading in February. Last year, the shares of the owner of the Cha Bai Dao milk tea chain also fell during its market debut. This shows the market's differentiated reaction to different brands and operating models.