The growth narrative of Snow King is turning a new page.
Recently, the fresh beer brand Fulu Family announced it has surpassed 3,000 stores. Compared to when it was acquired into the MIXUE GROUP system late last year, its store count has doubled. In March this year, Fulu Family further announced the endorsement by celebrity Lu Han. Within the Mixue ecosystem, endorsement deals often signal an acceleration in brand expansion. Previously, Luckin Coffee announced its endorsement by Wang Junkai after surpassing 4,000 stores, subsequently entering its ten-thousand-store phase. This makes Fulu Family appear to be another familiar Mixue story: leveraging a franchise network, supply chain capabilities, and a low-price strategy to penetrate the market through a small-store model in lower-tier cities, scaling up a previously fragmented beverage category.
However, fresh beer is neither coffee nor milk tea, and even Luckin Coffee, the "eldest son" within Mixue, is finding it difficult to replicate Mixue's past glory. Since announcing its breakthrough past ten thousand stores last November, Luckin Coffee has not publicly disclosed any further store opening progress.
The franchise system, supply chain, and low-price strategy are easy to replicate, but the competitive window is much harder to recreate.
As the freshly-made beverage, coffee, and fresh beer sectors successively enter a phase of competition for existing market share, the upper limits of Mixue's model are being tested and constrained with each new attempt.
The Challenge of Fresh Beer's Model
Why is fresh beer not as straightforward as coffee within the Mixue system? For Fulu Family, fresh beer represents a relatively low-overhead business. According to its franchise manual, the brand does not charge an initial franchise fee. The main upfront costs for franchisees include a deposit, management fees, design and training fees, equipment, and the first batch of inventory, totaling approximately 60,000 RMB. Adding store rent and renovation, the initial investment for a single store is generally around 150,000 RMB.
This low entry barrier is a key reason for Fulu Family's rapid store rollout. As the single-store threshold lowers, the pool of potential franchisees expands. For franchisees, Fulu Family's advantages lie in its "low barrier to entry, simple supply chain, and easy operation." A small shop of around 15 square meters can operate, with beer dispensed directly from the tap. It requires no complex preparation, and management difficulty is relatively low. For family-run shops, small-scale entrepreneurs, and businesses with existing community storefronts, the entry barrier for a fresh beer store is indeed much lower than for a coffee shop.
However, a low-overhead store does not equate to high turnover. While Fulu Family has lowered the entry barrier, it's difficult to change the inherent consumption frequency of the fresh beer category itself. Fulu Family's main products are mostly priced between 5.9 RMB to 9.9 RMB per 500ml, lower than most craft beer bars and similar establishments. With thin margins per cup of low-priced fresh beer, it's hard to cover fixed costs like rent, labor, and ingredient wastage unless sales volume is consistently high.
Compared to milk tea and coffee, fresh beer also finds it harder to distribute orders evenly across multiple time slots throughout the day. Sun Ming (a pseudonym), who became a Fulu Family franchisee early this year, opened his store near a mass-market shopping mall in a second-tier city in Anhui province. He notes that fresh beer consumption is more concentrated in the evenings, and more reliant on summer seasons, group dining, community regulars, and night-time scenarios. Peak seasons and evening rushes bring some traffic, but insufficient orders during off-peak hours drags down overall store turnover efficiency.
"Business was good for three days after Lu Han's endorsement, but we still have some unsold merchandise in the warehouse," Sun Ming said, suggesting there might be a gap between the marketing audience and the brand's actual customer base. "The current operational situation is okay, but it's not profitable."
This highlights the difference between the fresh beer business and the familiar Mixue model. Mixue's core competency isn't simply making products cheap, but rather, through an extreme supply chain, transforming freshly-made beverages that originally had certain production and cost barriers into affordable, mass-market products. Whether it's lemon water or ice cream, the essence is using standardized ingredients and bulk purchasing to bring the price of freshly-made drinks close to that of convenience store beverages, while establishing a sufficiently high-frequency consumption scenario.
Ultimately, Fulu Family has made the storefront model lighter, but the fresh beer category itself has not become higher-frequency. Whether the "small profits, quick returns" model works often hinges on location selection. Prime spots in food streets, night markets, and community commercial spaces are not cheap. If one opts for a more ordinary community location, it then relies on repeat purchases from regulars and online orders. Cultivating the latter not only takes time, but platform commissions and delivery costs further squeeze profits.
In scenarios like home evening drinks, late-night snack deliveries, or impromptu gatherings, another alcohol solution is rapidly gaining traction. For instance, the alcohol delivery service Waima Songjiu has surpassed 2,000 stores covering over 200 cities, with transaction volume doubling year-on-year to 60 billion RMB in 2025.
Whether a freshly poured cup of beer is more attractive than a canned beer, an alcohol delivery order, or a draft beer with supper is not a question that can be answered by store opening speed alone.
Luckin Coffee's Post-10,000-Store Adjustments
Compared to Fulu Family, Luckin Coffee has already achieved a larger scale by capitalizing on the tailwinds of low-priced coffee and delivery subsidies. When Snow King expanded from 5,000 to 10,000 stores, it took a year and a half. Luckin Coffee completed the same journey in just 10 months.
Within the context of the overall store growth of MIXUE GROUP, Luckin Coffee's contribution is also quite significant. In 2025, the Group's domestic stores increased from approximately 41,600 to about 55,400, a net increase of over 13,000 for the year. Based on estimates, Luckin Coffee may have contributed around 40% of the Group's domestic store growth last year.
However, there is a discrepancy between the officially disclosed "ten thousand stores" for Luckin Coffee and third-party statistics on operating stores. GeoQ data shows that as of May 2026, Luckin Coffee had over 8,100 operating domestic stores, covering 30 provinces and 336 cities across China. Its home province of Henan accounts for over one-fifth, with neighboring provinces like Shandong and Hebei following. Looking at city distribution, the combined share of first-tier and new first-tier cities is only 17.3%. This means that even if Luckin Coffee has entered the ten-thousand-store club, its distribution structure is imbalanced.
Compared to competitors like Luckin (the original, not the Mixue brand) and Cotti Coffee, which densely deploy stores in higher-tier cities nationwide, the Mixue-owned Luckin Coffee appears more like a regional low-price coffee brand expanding outward from Henan and surrounding markets. Its competitive relationship with the other major chains is not as direct as outsiders might imagine. At least at this stage, regional misalignment outweighs direct confrontation.
The low-price perception behind a 5.9 RMB Americano does not fully align with the white-collar customer base targeted by the other major chains. However, over the past year, the price anchor for the entire coffee track has been lowered. Substantial subsidies on delivery platforms have allowed brands to participate in low-price competition and acquire new orders at a relatively limited cost, further amplifying a portion of price-sensitive coffee demand.
Amidst this wave of traffic红利, the other major chains continued to increase store density, and Luckin Coffee also chose to seize the window by expanding its store count to capture the customer flow brought by subsidies. Data obtained shows that, based on online operating store counts, Luckin Coffee opened over 2,700 stores in the fourth quarter of 2025, accounting for half of its annual new store additions.
By this time, the industry was already beginning to feel the strain following the retreat of delivery subsidies. Zhou Lin (a pseudonym), a professional franchisee with experience in multiple mature coffee brands, stated that starting in the fourth quarter, his Cotti Coffee store began to feel the pressure of the receding tide. Store densification led to order分流, and delivery fees increased. With lower order volumes, ingredient wastage also rose, making it harder to cover fixed costs.
Data from the original Luckin chain reflects similar pressure, with same-store sales growth for self-operated stores in the fourth quarter at only 1.2%, significantly lower than the previous three quarters. The operating profit margin for self-operated stores fell by nearly 5 percentage points year-on-year.
This is not a problem for a single brand, but a signal that the coffee sector is entering a new phase: store opening speed cannot indefinitely solve growth problems, and low prices cannot long-term substitute for single-store efficiency.
Since 2026, the freshly-made coffee sector has begun shifting from extreme low prices towards price stabilization, quality improvement, and profit protection. Cotti Coffee halted its "all items 9.9 RMB unlimited" promotion at the end of January, while the original Luckin chain scaled back its subsidy scope to maintain per-cup profitability.
After reaching ten thousand stores, the Mixue-owned Luckin Coffee began promoting "upgraded coffee." In 2026, MIXUE GROUP clearly signaled a shift towards "slowing pace and improving quality," planning capital investments of approximately 18 to 20 billion RMB, of which 14 billion will be used for domestic supply chain upgrades. For Luckin Coffee, this translates to "three fresh and one present": fresh beans, fresh milk, fresh fruit, and on-site preparation.
From a supply chain perspective, regions like Shandong, where Luckin Coffee is率先推进升级, already have high store density, making the distribution efficiency of cold-chain ingredients like fresh milk and short-shelf-life beans easier to amortize. However, the upgrade will test consumer price sensitivity anew. Based on its mini-program, the classic latte at some Luckin Coffee stores in Shandong is priced at 13 RMB per cup, 3 RMB higher than in Beijing. Even after applying mini-program subsidies, the final price remains about 1 RMB higher.
Ingredients like "Yue Xian Huo" fresh milk and "short-shelf-life beans" are prominently featured on product pages as new selling points for Luckin Coffee's quality upgrade narrative. If consumers are willing to pay for this "upgraded coffee," Luckin Coffee has the opportunity to shift from low-price expansion to quality-driven growth. However, in the context of receding delivery subsidies and rising final prices, the price changes brought by ingredient upgrades might push away some consumers originally attracted by low prices.
The Pressure Boundary for Franchisees
Luckin Coffee's "upgrade" is not just a product enhancement; it is also an attempt to address the increasingly blurred brand boundaries within the Mixue system. By the end of 2025, MIXUE GROUP had approximately 59,800 total stores, with Luckin Coffee accounting for over 9,800 stores, about 16% of the Group's total. It is no longer just a small sub-brand within the Mixue system but a significant component of the Group's store growth.
GeoQ's analysis found that in Zhengzhou, nearly 90% of Luckin Coffee stores are located within the same grid cells as Mixue Ice City stores. This overlap might not have been a problem initially. Luckin Coffee's rapid scaling itself benefited from the brand trust, supply chain capabilities, and franchisee resources within the Mixue system. For many franchisees, Luckin Coffee represented a second growth curve within the Mixue ecosystem.
However, when the main Mixue Ice City brand began gradually installing fresh coffee grinders in its stores starting in March this year, the category boundary between the two was further blurred. Internal competition within a group is not common in the tea beverage industry. In recent years, most brands facing single-store pressure have preferred to expand categories within the same store, using coffee, ice desserts, light meals, or snacks to increase average transaction value and extend consumption hours.
What makes Mixue特殊 is that it uses a multi-brand matrix to undertake category expansion, externalizing category competition to different brands and different franchisees. There are historical reasons behind this. As early as 2022, Luckin Coffee had already reached about 2,000 stores. At that time, the low-price coffee market still had significant空白, and store expansion was not as difficult as it is today. The franchisees attracted by the main Mixue brand were sufficient to support the sub-brand's continued expansion.
Simultaneously, the single-store pressure on the main Mixue brand arrived later than in the broader industry. Relying on sufficiently low prices, strong supply chain efficiency, and high store density, Mixue could long use "density for volume" to消化 competitive pressure. Multiple stores within the same commercial area could both increase consumer reach and compress the生存空间 of external competing brands.
However, after the entire freshly-made coffee sector underwent a wave of concentrated store expansion, today's competitive pressure is incomparable to the past. Zhou Lin坦言, "We can no longer increase our stakes in the coffee market. Even opening a new store by加盟 the original Luckin chain might have a relatively long payback period and higher risks." He also mentioned that some franchisees in the圈子 are opportunistically selling部分 stores to回流 cash and压降 risk exposure.
From 2024 to 2025, the number of MIXUE GROUP franchisees increased from 20,976 to 27,450, with the total number of franchised stores reaching 59,785. The average number of stores per franchisee decreased from 2.22 to 2.18. New store additions may come more from new entrants rather than existing franchisees持续加仓.
Yang Shun, General Manager of Gaoyan Technology, noted that two years is a critical window for observing the operational stability of franchised stores. Franchise contracts commonly have cycles around two years, and rent is typically signed for two to three years, roughly corresponding to the single-store现金流 payback period. "What needs observation now is not the短期 fluctuation in Luckin Coffee's store count, but how many of the stores opened in the fourth quarter of 2025 can pass the 18-month and 36-month milestones," Yang said.
A Luckin Coffee franchisee stated that in the winter of 2025, the分流 was mainly noticeable among Luckin Coffee stores themselves. After Mixue installed coffee machines this year, it also started to分流 Luckin Coffee. This franchisee opened a store in Beijing in the summer of 2025. Several months later, after a new Luckin Coffee opened within one kilometer, the store "went from making a profit to breaking even." Later, when another store加密 nearby, it turned into a loss.
For the nearly 60,000-store Mixue empire, as the main brand, Luckin Coffee, and Fulu Family all gradually enter more密集 competitive zones, growth pressure will ultimately return to the single-store回报 of franchisees. The boundaries of the Mixue model will be truly tested based on whether franchisees continue to加仓 or陆续 exit.
Comments