“Involution” has become the buzzword of the moment in China, as the term for price wars characterized by cutthroat and irrational competition hits one sector after another. The latest case of the phenomenon, also often called a “race to the bottom,” began in February when internet giant JD.com announced it would enter the food delivery market, immediately threatening the duopoly of Meituan and Ele.me.
Mixue Group (2097.HK) has been among the winners in the resulting food delivery price war, with its low-cost, high transaction volume ice cream, bubble tea and coffee products flying out of stores and into consumers hands via takeout dining couriers. That boost shows up in Mixue’s midyear financial report, released last week, showing its revenue rose 39.3% year-over-year to 14.9 billion yuan ($2.1 billion) in the first half of 2025, while its profit jumped by 44.1% to 2.72 billion yuan.
But its shares have fallen by more than 15% in the week since the announcement and seem set to languish further on concerns about the sustainability of the company’s banner first-half.