Mixuebingcheng hits the sweet spot for growth by digitising collections

Client Background

Established in 1997, Mixuebingcheng (MXBC) has grown from a single ice cream shop in Zhengzhou, China, to become the largest and most popular ice cream and bubble tea maker in the market, and are present in 11 markets in Asia.

MXBC’s overseas expansion in ASEAN has been especially rapid. Since opening its first store in Hanoi, Vietnam, in 2018, they have grown its presence to more than 4,000 stores across Indonesia, Vietnam, the Philippines, Singapore and Thailand.

Challenges

As MXBC’s business grew, it sold more franchises, resulting in new accounts and banking relationships being opened locally. Disparate ERP systems were also setup in each market, giving rise to an increasingly fragmented treasury infrastructure.

At the Group treasury level, MXBC had selected a new global ERP vendor, Yonyou, and also developed its own online franchisee purchasing system (TMS) to streamline the procurement process for its buyers (franchisees). These were to be implemented across all 11 markets as part of their digital transformation.

However, the transformation in ASEAN posed challenges, given the diversity in language, cultures, currencies and regulatory regimes of each individual market. With the popularity of digital payments in the region, MXBC had also relied on multiple local third-party payment service providers (PSP) for collections in each market. This made manual reconciliation efforts necessary, and increased overall costs for the firm.

MXBC sought a banking partner with an extensive footprint in ASEAN to streamline its collections approach in the region. It was also critical that any new banking solution be integrated with MXBC’s new ERP and TMS systems.

Solution

MXBC mandated HSBC as its main collection bank in ASEAN and opted to pilot the transformation project in Vietnam – one of their largest markets, with over 1,000 franchise stores in operation. Running in parallel with the setup of its new ERP and TMS system, MXBC adopted HSBC’s Dynamic QR code solution via API connectivity – a key component to digitising collections.

This allows MXBC’s franchisees in Vietnam to order raw materials via MXBC’s TMS platform, and simply scan a dynamic QR code on the portal to pay for them. Generated by HSBC, the dynamic QR code enables franchisees to make payments via NAPAS, Vietnam’s 24/7 real-time payment rail. Franchisees can pay from bank accounts from other NAPAS member banks, or e-wallet providers that support VietQR. The dynamic nature of the QR code means payment details (i.e. amount and reference info) are pre-filled, so buyers can simply review and confirm the payment.

For MXBC, this has enabled sales proceeds to be credited instantly 24/7 without involving third-party PSPs, enhancing working capital, and reducing risks associated with manual cash handling.

Daily collection reports embedding order reference numbers are further integrated into MXBC’s new ERP and TMS systems via HSBC’s Automated File Delivery solution, automating collections reconciliation. This has been a game-changer for group treasurers, as overseas cash is now visible within the same system.

With the successful pilot in Vietnam, MXBC is in the process of expanding the solution to Indonesia, Thailand, the Philippines, and Malaysia by end of 2024.

Benefits

• USD 10K in savings per year by eliminating third party PSPs, driving greater cost efficiency
• 24/7 settlement of cash, alleviating concerns around meeting cut-off times or bank holidays
• Improved visibility and control on cash flows at the Group level
• Enhanced transparency into transactions through instant notification of collections
• Streamlined receivables reconciliation
• Seamless integration with MXBC’s new ERP and TMS systems