Neither McDonald's nor Burger King: Chinese Blow to American Fast Food

McDonald's is no longer the largest fast-food chain in the world. In a surprising turn, Mixue Bingcheng, a Chinese company, has surpassed the American giant in the number of establishments. According to the latest data from Statista, Mixue Bingcheng has over 45,000 locations worldwide, while McDonald's lags behind with 41,800.

Mixue Bingcheng: The Company That Started from a Small Business

Founded in 1997 by Zhang Hongchao, Mixue Bingcheng began as an ice cream and cold drinks business, with the idea of offering its products at extremely low prices. Although its presence is mainly limited to China, the chain has also managed to expand to other Asian countries, such as Indonesia, Vietnam, and Malaysia.

Its affordable pricing strategy, with products like ice cream and tea for less than a dollar, has been key to its rapid expansion. Despite not having a presence in Europe or the United States, Mixue Bingcheng has managed to position itself as the fast-food company with the most locations in the world. Its business model, based on the franchise system, has allowed for unprecedented growth.

The Secret of Its Success

99% of Mixue Bingcheng's establishments are operated by franchisees. This has allowed the chain to expand rapidly without having to bear all the direct costs of each new location. Additionally, the main source of income for Mixue Bingcheng comes from the sale of products, equipment, and packaging to its franchisees.

Despite being the chain with the most restaurants in the world, the company still doesn't surpass other major beverage brands like Starbucks or Tim Hortons in terms of revenue. However, its growth has been remarkable. In the first nine months of 2024, Mixue Bingcheng reported a 42% increase in net profits, reaching 460M euros.

The Challenge for McDonald's and Its Decline in Sales

McDonald's has gone from having a net profit of 2.04 billion dollars in the fourth quarter of 2023 to 2.02 billion in the same period of 2024. Additionally, the chain has faced problems after the Centers for Disease Control and Prevention (CDC) linked an E. coli outbreak to its Quarter Pounder burgers.

Meanwhile, Mixue Bingcheng continues its global expansion. Without having a significant presence in markets like Europe or the United States, it seems to have a promising future thanks to its business model and affordable prices.