Fellow Southeast Asians would have been familiar with the Mixue jingle and have probably seen the jolly Snow King. Maybe you’ve even tried their incredibly cheap yet satisfying soft-serve ice cream or refreshing teas. It’s no accident that Mixue has captured the attention (and wallets) of so many of us. Behind those RM2 ice creams lies a brilliant strategy that’s driving the brand’s rapid growth in the market.

For one, Mixue thrives on a clever concept called the “loss leader” strategy. Simply put, they deliberately sell some items, like their affordably priced ice cream, at such low costs that it barely makes them a profit, or they even lose money on it. But why would a business willingly take a hit? The answer is simple and smart: these low prices get you to walk in their doors. The strategy works wonders because once you’re tempted by the RM2 cone, you’ll likely stay, and maybe even spot another menu item that catches your eye.

The Art of Attracting and Upselling

The secret to Mixue’s success doesn’t just lie in the cheap treats they’re known for, but what they cleverly do after. While the ice cream and basic drinks may come cheap, Mixue also offers a range of other beverages and snacks that aren’t as barebones in pricing. These higher-margin items are where the real profit comes in. Milkshakes (or Mi-Shake), fancy bubble teas, and fruity drinks are examples of items you’re far more likely to try once you’re already in the mood for a drink. And just like that, they’ve turned that RM2 ice cream into a potential RM10 sale.

Their strategy not only drives sales, but it also creates an opportunity for discovery. By getting customers through their doors with affordable pricing, they’re introducing their wider menu – not just once, but multiple times over repeat visits.

Data That Fuels Growth

Here’s where Mixue steps up the game. They use all that customer traffic to gather valuable data on what sells and what doesn’t. This data forms the backbone of their growth strategy. Once they’ve identified popular trends and customer preferences, they roll out new products such as seasonal drinks and promotions that are tailored to their audience. These new offerings are often priced higher (although still considered much cheaper than their competitors) but are designed to be irresistible. It’s a strategic way of growing their menu and steadily increasing profitability.

This approach allows them to stay dynamic and responsive to market demands while still maintaining their core attraction of affordability. It’s a delicate balance that Mixue has mastered.

The Mixue Model

What can we learn from Mixue’s success? It’s a reminder that pricing isn’t just about cutting costs; it’s about creating opportunity. By smartly using loss leader products to draw customers in, upselling higher-margin items, and refining their future offerings through customer insights, Mixue has built a sustainable and scalable model.

For businesses looking to learn from their success, the key takeaway is this: profitability can be achieved through affordability, if approached with a strategic and creative mindset. Mixue’s model might have started with RM2 ice creams, but their plans are as sweet as their cones. It’s a formula built for longevity, and one that’s keeping customers coming back again and again.