This Chinese Chain Has More Locations Than McDonald’s. They Did It By Copying This U.S. Discount Chain’s Playbook.

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Mixue sells soft-serve cones for as little as 45 cents. It also has more locations than McDonald's . The Chinese chain now runs more than 47,000 stores worldwide, according to the Wall Street Journal . Brothers Zhang Hongchao and Zhang Hongfu built it using the same playbook Dollar General used to outmaneuver Walmart: go where the big guys won't, keep everything bare-bones and sell cheap.

Zhang Hongchao opened his first shaved-ice stall in 1997 in Henan, a Chinese province he compares to Ohio, for just $950. Instead of chasing middle-class shoppers in Shanghai, the brothers planted stands in workers' dorms, village markets and university towns. Today, three-quarters of Mixue's China locations sit in second- and third-tier cities where there's less competition.

The brothers learned the hard way what happens when you stray from the formula. In 2009, envious of a nearby Dairy Queen's upscale customers, Zhang Hongfu opened a premium version of the store with better decor and fresh ingredients. It generated just $900 in profit over two and a half years before he shut it down.

Mixue's stock has gone public in Hong Kong and, despite fierce price competition at home, the company is worth about $10 billion, far behind both McDonald's $180 billion valuation and Dollar General's roughly $26 billion. But in sheer store count, it's already ahead of both.

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