Over the past five years, Mixue has dominated the ice cream and tea market in the Southeast Asian region after opening its first store in Vietnam in 2018. Based in China, the company now has 22,500 outlets in the country.
There are about 1,000 Mixue stores in the Southeast Asian region, including the Philippines, Thailand, and Indonesia. Interestingly, despite being in operation longer, there are still fewer Starbucks stores and McDonald's restaurants in the region, with 10,000 Starbucks stores and about 9,100 McDonald's restaurants.
In Indonesia, Mixue's presence has been trending on various social media platforms. Many people share their desire to enjoy Mixue products every day, and jokes and memes about the brand often appear, even becoming a popular topic on Twitter.
Mixue has managed to attract attention with its effective business strategy. They run smart promotions on popular social media such as Instagram and TikTok, posting consumer reviews and purchases, and getting endorsements from celebrities. Direct interaction with consumers on social media has also strengthened the loyalty of Mixue fans.
Positive reviews of Mixue in Indonesia have sparked the creativity of young people, who have created memes and videos about the brand's rapid expansion. Some jokes even suggest that every empty space in the neighborhood will soon become a new Mixue outlet.
Mixue's affordable product prices are an attraction for consumers, especially in Indonesia's youth-dominated middle class market. Low operating costs are also attractive to business owners who want to own a Mixue license. The relatively low license fee and support from PT Zisheng Pacific Trading make this business very lucrative.
Working with China's centralized supply chain ecosystem, including Henan Daka Food Co. and Shangdao Intelligent Supply Chain Co., Ltd. gives Mixue advantages in product development, storage and logistics. The stable supply chain from China keeps Mixue's product prices consistent in the Indonesian market.
In addition, China has been Indonesia's largest trading partner for nine consecutive years, with significant trade value. Direct investment from China has also reached a high level. This phenomenon has led to the proliferation of Mixue outlets in Indonesia, with potentially interesting socio-economic implications to follow.
In addition to being a business success story, Mixue - along with other international retail brands based in China, such as Miniso - has the potential to help promote a positive national image of China in Indonesia.
In 2012, a study showed that public knowledge of a brand's origin can positively influence a country's image. The study included nearly 500 respondents in the United States to investigate this phenomenon. The results support the claim by Olle Wästberg, former director of the Swedish Institute, that the furniture brand IKEA has contributed significantly to Sweden's positive image, even more than its government. The study also found that the popular energy drink Red Bull had a positive impact on Austria's image.
The popularity of Mixue can be interpreted as part of China's soft power strategy. The presence of the sweet Chinese-style drink has managed to dampen some of the negative perceptions of China and ethnic Chinese in Indonesia, thereby increasing the acceptance of Chinese products. Despite initial calls to boycott Mixue over its halal certification, the company continues to grow in popularity in Indonesia.
The Chinese government encourages companies to expand overseas, not only to reap economic benefits but also to enhance the country's positive image. As explained earlier, introducing a country's products, in this case China's, into the daily lives of Indonesians can help improve China's positive image. Knowledge of a brand's origin has been shown to be influential in improving a country's image.
It should be noted, however, that negative sentiment toward China remains high among Indonesians, as shown in the 2022 ISEAS-Yushof Ishak survey. The majority of respondents, 65.9%, expressed concern about China's growing economic influence in Indonesia. In addition, 25.4% of respondents felt that China's rise was having a negative impact on Indonesia.
On the other hand, Mixue may face challenges in culinary diplomacy in Indonesia due to the country's efforts to reduce sugar consumption to combat the spread of diabetes. Indonesia is one of the countries in Southeast Asia with the highest per capita consumption of sugar-sweetened beverages.
The Indonesian government recognizes the negative impact of excessive consumption of sugary drinks and is considering plans to impose excise taxes on these products. The number of people with diabetes in Indonesia is also increasing, resulting in significant medical costs.
In the face of the proposed excise tax and criticism of sugary drinks, private companies like Mixue will be challenged to balance business profitability with social responsibility. They will need to find ways to remain relevant and popular in the Indonesian market while addressing the health and social responsibility issues associated with excessive sugar consumption.
Reference: theconversation.com | stratsea.com
