Source: Interface News Article | Debut in Finance
In August 2026, Meixue Group released its interim financial report, which showed that revenue was still slowly growing, but profits had quietly fallen. The pain of supply chain upgrading and the external impact of the food delivery battle also affected this report.
Although the brand map of Meixue Ice City is expanding, its growth is almost entirely supported by the domestic sinking market. It has not only failed to make breakthroughs overseas, but has also significantly shrunk.
The story of the main business of Meixue Ice City tea drinks has reached its ceiling.
So Miyuki Group turned to the coffee business. The number of "Lucky Coffee" stores under Meixue is growing at a visible rate and has expanded overseas, attempting to tell a new story beyond tea drinks.
But in the coffee track, Luckin Coffee and Kudi have already built a solid barrier.
In the tea beverage industry, Meixue has achieved success with extremely low prices, but in the coffee industry, this old business logic may be difficult to reuse.
01 The snow has stopped
Taking a walk on the streets of various cities across the country, you can see Meixue Ice City stores everywhere. However, according to the mid-term financial report of Meixue Group, its revenue in the first half of the year was 15.216 billion yuan, with a net profit of 2.319 billion yuan, a year-on-year decrease of 14.68%. The gross profit margin fell back to 30.4%, a year-on-year decrease of 1.2 percentage points.
Both profit margins have declined, where has the group's profit gone? Meixue Group provided two explanations.
Firstly, it comes from proactive changes, that is, upgrading the supply chain of Zhenxian Pure. Whether it's fresh fruit, fresh milk, or real tea, to be fresh, there must be a production warehouse, a cold chain, and a branch warehouse closer to the store. Behind these words are production bases and warehousing distribution networks built with real money and silver. Things have improved, accounts have increased, and the gross profit margin has been eaten up in the process of actively upgrading.
Another is the passive influence. Last year, the "take out war" was too fierce. Shangguan News reported the situation in July 2025. A clerk said about that weekend: "Meituan group purchase was cheaper than the store. Tiktok had a one cent activity, and Jingdong paid 5 yuan and 2 cups for delivery." The platform threw money at each other, the ticket machine in the store kept running, and small tickets piled on the ground.
The rider has a deeper understanding of this experience. Delivery driver Liu Hui remembers that out of the more than 40 orders he delivered, over a quarter were paid for just over 1 yuan. Normally, the station receives around 200 to 300 orders of honey snow per day, but over the weekend, the number skyrocketed to over 600 orders.
In this' food delivery war ', the platform's subsidies and discounts have raised the base high, but this year the tide has receded, and compared to brand financial report data, it is naturally ugly.
We need to zoom in a little further. Honey Snow's main business is essentially a B2B business, as over 90% of its revenue comes from selling ingredients, equipment, and services to franchisees. For every additional store opened, there is an additional stable source of inventory. The growth of Mixue ultimately comes from the increase in the number of franchisees, but in recent years, the lives of franchisees have also become tighter.
On March 3, 2025, Honey Snow Ice City officially landed on the Hong Kong Stock Exchange, embarking on a new journey in the capital market with the identity of "the world's leading freshly made beverage industry".
But a report from Yingshang.com at that time showed the real situation of Mixue franchisees. Wang Wenjie, a franchisee who opened a store in a third tier city, talked about the operation of the store. He said, "Nowadays, opening Mixue depends very much on the location. In the situation where the store becomes denser and denser, opening a new store basically earns very little, and with the rise of materials such as fruits and tea, profits are constantly being compressed
The more milk tea shops open on the same street, the more frequent they are, and the single store turnover is decreasing, resulting in a longer payback period. When the revenue from opening a store decreases, franchisees will vote with their feet, which is more alarming than the numbers on financial reports.
The overall market situation of Meixue is also not optimistic. Meixue has grown by opening more stores, such as commercial streets, intersections, night markets next to schools, and industrial areas. As soon as the red signs appear, the revenue comes. However, even if the domestic sinking market is large, it is limited. The places that can be penetrated are basically penetrated by Xuewang.
However, the number of overseas stores has decreased, and the pace of going global has also slowed down.
A few years ago, Meixue Ice City was popular in Southeast Asia, with red street signs connecting Vietnam and Indonesia. However, now facing competition from other local brands and considering the cost of international operations, the challenge has truly arrived.
02 Change cup of coffee
How does Meixue Group face challenges? They confidently chose their direction, and the answer was written in the brightest line of the financial report – coffee.
Why is it coffee? Firstly, Meixue's strengths lie in a mature supply chain and low prices. The group believes that this can be seamlessly reused in coffee, with both cold chain and warehousing readily available. So most of the 4 billion yuan purchase order they signed with Brazil is coffee beans. The newly put into operation baking base in Hainan has a production capacity of 20000 tons from the beginning.
Ready made coffee is one of the few tracks that is still expanding, with a market size approaching 250 billion and an annual growth rate of nearly 20%.
Many people are not familiar with Meixue's coffee brand, but "Lucky Coffee" has actually grown for many years. According to media reports such as Xinhua News Agency and The Paper, "Lucky Coffee" began incubating in 2017, following the same "rural encirclement of the city" route as Honey Snow Ice City. 70% of its stores are located in third tier or lower tier cities, priced at 6-8 yuan. By November 2025, the number of stores will exceed 10000, followed by opening stores in Malaysia and Thailand.
Although coffee is the rapidly growing territory of Meixue at this stage, the growth in this area may not be able to reverse the overall decline. A Henan franchisee who has opened 8 lucky cafes said that the single cup profit of lucky cafes is around 1 yuan. According to his understanding, Luckin and Kudi both have higher profits than lucky cafes.
The number of Lucky Coffee stores is growing rapidly, and the overseas plan has been launched. Coffee has become the core incremental business of Meixue Group. The strategic logic is simple, which is to seek growth in other categories that the tea beverage industry cannot provide. Instead of continuing to compete on a peak track, it is better to invest in the second growth curve for a new round of investment.
The supporting actions are all being followed up. Mixue's coffee supply chain is upgrading and its warehousing network is expanding. In the group's view, this is a typical case of losing first and then making profits, sacrificing current profits for future growth.
But both capital and the market are very pragmatic, and after the release of the financial report, the stock price of Meixue Group fell sharply.
The reason is not complicated. The story told by Meixue Group has been told by almost all kinds of consumer companies – spending money now is to make big money in the future. As for how long it will take and how much can be earned, the financial report cannot provide an answer.
03 Long bitter taste
Coffee is no longer a blank market in China. The stores that should have been opened and the coupons that should have been issued have been distributed, and the dividends have been almost digested.
Starbucks educated the first group of coffee drinkers, Luckin Coffee popularized coffee in office buildings and county towns, Kudi thoroughly penetrated the system with prices, and three groups of people each occupied one floor. At this time, Miyuki entered the market, leaving only a gap to accommodate herself.
Beyond the race track, cultivating user mindset is also a hurdle. Luckin Coffee and Kudi Coffee have welded the labels of professional coffee brands to death in recent years. When it comes to coffee, users think of coconut latte and Luckin Coffee coupons, while in the hearts of hundreds of millions of consumers, Milkshire is like a few yuan glass of lemonade.
Mixue's brand recognition comes from affordable milk tea, and even if consumers buy a cup of his coffee by the way, it is still quite difficult to cultivate loyal users. Honey Snow's coffee brand Lucky Coffee is even cheaper than Luckin Coffee's products, but just being cheap is not enough to attract enough users.
When it comes to products, the gap becomes more apparent. Luckin is like a hot selling machine, with astonishing results. In April 2021, it poured coconut milk into coffee to make a raw coconut latte, which few people paid attention to at the time. Five years later, this cup of coffee has sold over 2 billion cups in stores worldwide.
For this cup of coffee, Luckin Coffee has set up an entire archipelago in Indonesia as its exclusive coconut grove, and has set up four roasting bases in Qingdao, Kunshan, Pingnan, Fujian, and Xiamen. Even the coconut milk requires one hour of cold pressing to preserve its freshness.
This is not just marketing rhetoric, but also reflects the strength of the supply chain. By contrast, Lucky Coffee was established in 2017, even earlier than Luckin Coffee's coconut latte, but its own coconut latte was not launched until 2022.
Luckin's products are like an assembly line popping out, with hundreds of new products being tested and tested every year. Sales data will tell it which one is worth scaling up; Honey Snow's tea drink genes are focused on producing large orders and long-term operations. They are accustomed to holding back a few popular products a year. In the fast-paced arena of coffee, the pace is already slow.
With a product, marketing is essential, and in this regard, the two sides are not at the same level. Luckin's collaboration is a model of endowing products with social attributes.
In 2023, it collaborated with Maotai to launch a sauce flavored latte, selling 5.42 million cups on the first day and exceeding 100 million yuan in daily sales. The "first cup of Maotai in life" priced at 19 yuan per cup went viral on social media, and whether one can drive after drinking it directly became a hot topic.
It also collaborates with Coconut Tree to make Coconut Cloud Latte, and collaborates with Line Dog to create cup sleeves around it. Every time, it is discussed online. Miyue also collaborated with China Post to open a joint store. Netizens joked that it had been included in the code, which was very lively at the time, but no one remembered the name of that cup of coffee. Honey Snow can make users remember Snow King who knows how to play jokes, but few people think his coffee is good.
As for the price, it was originally Meixue's expertise, but Kudi and Luckin Coffee have made affordable coffee the norm. More importantly, behind their competitors' low prices are digitalization and supply chain support.
Luckin Coffee has over 35000 global stores and millions of users in its app. The cost of raw materials for each cup has also been minimized. However, Lucky Coffee's store count only surpassed 10000 by the end of 2025, which is more than one position behind its competitors.
When everyone adopts a low price strategy, low price is no longer a barrier, but just a ticket to entry.
I have already finished drinking this cup of tea; The first sip of this cup of coffee is bitter. It is the only self rescue path that Honey Snow Group has found now, but it may not necessarily be the trump card to turn the tables.
Short term investments are difficult to turn into profits, and in the long run, it is necessary to catch up with the first mover in terms of user mindset, product quality, and operational system. Every level is not easy.
The red signs of more than 60000 stores are still spreading in the sinking market, and Snow King's dolls are waving at the store entrance, only to be handed over later, no longer just the familiar lemonade.
As for the taste of the coffee served by Meixue Ice City, it will take time to give an answer.
(Editor in charge: Li Rong)