When shares of Mixue Bingcheng soared past HKD 500 (USD 64) less than two months after its IPO—lifting its market cap to nearly HKD 200 billion (USD 25.6 billion)—a different kind of contender made its move. On April 28, Mingming Henmang, a rapidly growing snack chain, quietly filed for a listing on the Hong Kong Stock Exchange.
Whispers of an IPO had been circulating since 2023, when the company was still known as Lingshi Henmang. That August, it brought on Wang Yutong, co-founder of Maxceed Capital Group, as CFO—a typical prelude to going public.
By now, the company’s brands—Lingshi Henmang and Zhao Yiming Snacks—are familiar across China, their yellow and red storefronts dotting county towns and rural streets. Lingshi Henmang was founded by Yan Zhou in 2017 in Changsha, Hunan. Zhao Yiming Snacks followed in 2019, launched by Zhao Ding in Yichun, Jiangxi. The two brands merged in 2023 and have since grown to 14,394 stores across all 28 provinces and every county-level city in China.
Crossing the 10,000-store threshold is a milestone few chains have achieved. In the tea and coffee space, only Mixue, Luckin Coffee, and GoodMe have reached that scale.
According to its prospectus, Mingming Henmang generated RMB 555 billion (USD 77.7 billion) in store sales in 2024, with revenue hitting RMB 393 billion (USD 55 billion). Gross profit stood at RMB 30 billion (USD 4.2 billion), and net profit totaled RMB 9 billion (USD 1.3 billion). But margins were just 7.6%—a clear signal this is a volume-driven game.
Mingming Henmang’s business model closely mirrors Mixue’s, even if the product categories differ. In 2024, 99.5% of its revenue came from product sales to franchised and self-operated stores; franchise fees and services contributed less than 0.5%.
Unlike Mixue, which vertically integrates much of its supply chain, Mingming Henmang buys directly from upstream suppliers. Scale and logistics efficiency let it price goods roughly 25% lower than comparable items at offline supermarkets.
From the beginning, co-founder Yan built for affordability. He once remarked that high-spending customers represent only 20–30% of the market. The real prize lies in the majority—everyday consumers seeking maximum value.
Back when it lacked pricing power, the company won supplier trust with a strict no-credit payment policy. That remains the case today.
Zhao, the founder of Zhao Yiming Snacks, has also been open about studying Mixue’s cost-cutting methods. Mixue famously makes its own straws and bottles. Zhao’s version: ditch colorful packaging, use square boxes instead of angled ones, and swap decorative cartons for plain kraft paper—saving RMB 2–3 (USD 0.28–0.42) per unit.
As of December 31, 2024, 9,921 of Mingming Henmang’s stores were located in third-tier or lower cities. About 58% were in counties or townships. Its network spans 1,224 counties—covering roughly 66% of China’s county-level jurisdictions.
That strategy mirrors peers like Mixue and GoodMe. Mixue operates 41,584 stores in China, 57.4% in third-tier cities and below. GoodMe has 9,914 outlets, with 51% in the same tier.
Lower-tier cities are not short on spending power. They have long been underserved by national chains. “They just needed someone to bring made-to-order drinks to them,” GoodMe founder Wang Yunan told LatePost. The same applies to snacks.
Mingming Henmang’s prospectus cites a 2024 offline snack and beverage market worth RMB 2.3 trillion (USD 322 billion) in lower-tier cities—compared to RMB 1.4 trillion (USD 196 billion) in higher-tier markets. Over the past five years, the compound annual growth rate of lower-tier markets outpaced that of higher-tier cities by 2.5 percentage points.
Zhao, who grew up in rural China and once ran a roasted seeds and nuts business, said that local tastes and shopping habits—like broad snack selection and bulk buying—shaped the brand’s approach.
By the end of 2024, the company carried 3,380 SKUs, around 25% of which were custom products. Over 40% were sold in bulk. Each store stocked more than 1,800 SKUs—about double that of a similarly sized supermarket. New products were introduced monthly, often more than 100 per cycle.
In February, the company launched mascots—Xiaomang (a cowboy) and Xiaoming (a superhero)—complete with a theme song, following Mixue’s example of using cartoon branding and music to drive virality.
Even among budget giants, Mingming Henmang’s margins are slim. Mixue’s are roughly 32.5%. Bestore, a more premium snack company, reports 27.8%. At 7.6%, Mingming Henmang is clearly trading margin for scale.
Tea chains benefit from generous markups, which allow them to stretch into mid-tier pricing. Snack retailers don’t have that luxury, making scale and cost control even more critical.
The merger between Lingshi Henmang and Zhao Yiming Snacks positioned the group as China’s largest budget snack chain, giving it national scale and helping it break out of regional confines.
To raise visibility and support franchisee confidence, the company enlisted Jay Chou as a brand ambassador and ramped up marketing, though promotional spend as a percentage of revenue stayed stable.
Operationally, it built 36 warehouses, each within 300 kilometers of its stores. Most orders are fulfilled within 24 hours. Inventory turnover stands at just 11.6 days, compared to 48 days for Bestore.
By the end of 2024, the company had 7,241 franchisees, each running an average of 1.99 stores. Its largest franchisee accounted for just 1% of sales, down from 2.6% in 2022—seemingly a deliberate move to avoid overconsolidation.
Still, competition looms. Haoxianglai, a Wancheng Group subsidiary, reported RMB 318 billion (USD 44.5 billion) in snack revenue last year across 14,196 stores under brands like Luxiaochan and Yadi Yadi.
Zhao compared today’s snack retail scene to the early tea wars: “Soon, we’ll see streets with two, three, even five snack shops—and that’ll be totally normal,” he said in September 2023. “More people eat snacks than drink milk tea. This market isn’t a winner-takes-all.”
That forecast appears to be playing out. But the next phase is about more than just scale, with sustaining profits and supporting franchisee success being just as critical.
In February, Mingming Henmang began testing a “savings supermarket” format that adds daily goods, stationery, toys, eggs, baked items, and refrigerated products. It also rolled out private-label offerings.
As legacy supermarkets reinvent themselves, Mingming Henmang may be writing a broader playbook—one that starts with snacks but ends somewhere much bigger.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Li Xiaoxia for 36Kr.