To understand how a Chinese ice-cream shop surpassed McDonald's in-store locations, skip Beijing or Shanghai.

Instead, look at a Dollar General in Dayton, Ohio, or Lubbock, Texas.

Over seven decades, the American discount chain built a 21,000-store juggernaut on a simple formula: Go where Walmart won't, keep stores bare-bones and sell cheap staples to people stretching their paychecks.

Halfway across the world, the Zhang brothers independently saw the same opportunity in China's unglamorous interior. Instead of $1 paper towels, they sold 45-cent soft-serve cones and cheap drinks.

Today, Mixue is the world's biggest food-and-beverage chain, with more than 47,000 locations last year, according to research firm Technomic, and the company has added thousands more this year.

There have been hurdles along the way. Both Mixue and Dollar General learned that chasing upper-crust customers was a dangerous and often doomed temptation. And competitors are always nipping at their heels-particularly for Mixue, where a sluggish Chinese economy has led to cutthroat price wars.

Last year, Mixue-pronounced ME-schway-assembled managers and franchisees in Singapore, said people familiar with the gathering. Having expanded across Asia and Australia, its next target was America.

Co-chairman Zhang Hongfu told the crowd in Chinese that Mixue was going global. Then for emphasis, he switched to English.

"The world is big," he said, "so we have to give a f-."

Here's how Dollar General and Mixue conquered the discount world.

'Where they ain't'

When Walmart grew past 3,000 stores in the 2000s, Dollar General's then-chief executive, David Perdue, latched onto a counter-strategy: "We went where they ain't."

Perdue, now the U.S. ambassador to China, saw the opportunity in rural areas 40 miles from the nearest Walmart. The company also flooded cities like Dayton, where drivers can pass three Dollar Generals before reaching a Walmart superstore.

Today, the company says about 75% of Americans live within 5 miles of a Dollar General.

Across the Pacific, Zhang Hongchao ran a similar play. In 1997, he opened a shaved-ice stall in Henan, a Chinese province that might be compared with Ohio. A decade later, his younger brother, Zhang Hongfu, joined the business and eventually became its chief executive.

Inheriting a "low-price gene" from poverty, as Hongfu said in a document that detailed the company's history, they ignored the middle-class customers whom Starbucks and Chinese brands chased in Shanghai. They opened stands in workers' dormitories, village markets and universities, chasing cheap rent and foot traffic.

Today, three-quarters of Mixue's shops in China are in second- and third-tier cities, where the company says it has fewer competitors.

No frills

Instead of buying real estate, Dollar General mostly leases bare-bones, company-operated stores. The company said last year that opening one costs about $500,000, a fraction of a big-box store's price tag.

Inside is minimalism: plain concrete floors, exposed LEDs and little backroom storage. Deliveries go from trucks to shelves, often still in shipping boxes.

Mixue squeezed this blueprint into franchised stalls as small as 45 square feet, the size of a walk-in closet.

An early store cost $950 to open: $740 for a secondhand ice-cream machine, $120 for rent and $90 for electrical wiring and decor, Zhang Hongfu wrote. It shared space with a steamed-bun seller jealous of the simplicity. "No need to prepare fillings, no need to knead dough," Hongfu recalled her saying.

Hongfu kept the menu equally spartan. Every drink, he wrote, relies on five basics: water, sugar, tea, milk and toppings. This streamlines supply chains and simplifies training.

In a Mixue in suburban Hanoi, employee Quan Thuy Hien arrived 15 minutes before opening to mix drink bases with water. Every few months, staffers would learn new recipes in a couple of days. "There wouldn't be any skills involved," she said.

Beware the upmarket trap

In 2020, Dollar General chased higher-income suburbanites by launching Popshelf, a brand selling discretionary items like party supplies and cosmetics under $5.

The goal was 1,000 stores. But by 2025, citing weakening discretionary spending, it dialed back the plan and closed 45 locations. Today, it operates 180.

In China, Hongfu ran a similar experiment. Envious of the stylish customers at a local Dairy Queen, he lamented his chain's shabby student clientele.

In 2009, he opened an upmarket rival with fresh ingredients and premium decor. Sales dropped as competition arrived. After 21/2 years, he closed the store after generating just $900 in profit.

Selling pricier products, he reflected, meant higher-maintenance customers expected better decor and staff. "I should have just stuck to selling at the prices I'm best at," he said. "Do not put on airs."

Recently, competition has pressured Mixue's profits, said analysts at Macquarie, an Australian bank. Since its Hong Kong stock-market debut last year, the company's stock has halved, yielding a $10 billion valuation-far below McDonald's $180 billion.

Expanding in the U.S., Mixue has strayed from its playbook by opening in expensive Manhattan and Hollywood ZIP Codes. Yet one thing remains constant: low prices. A soft-serve cone costs $1.19.