The "ice cream assassin" who once left the industry because the price of his products was too high is now starting to worry about money. Recently on major social media platforms, many netizens claiming to be former employees of Zhong Xuegao have posted messages asking for salary. According to these people’s descriptions, Zhong Xuegao’s salary has been delayed since August. The reason is:"Company funding is very difficult right now."

Although Zhong Xuegao responded to the outside world that the company is actively resolving relevant disputes and everything is currently operating normally. But according to a report in the "Daily Economic News",The people who were owed wages by Zhong Xuegao were not only the resigned employees, but also the current employees at the headquarters were owed wages for two to three months.

Judging from Zhong Xuegao’s recent news, this new domestic brand that insists on taking the high-end route does seem to have encountered some troubles. Its official social platforms such as Weibo and official accounts have stopped updating for more than two months. Some suppliers even chased after Zhong Xuegao in the official blog comment area to demand accounts. Offline channels also often see Zhong Xuegao products being sold at low prices.

According to public information, Zhong Xuegao has been unable to obtain external financing since May 2021.From May to June this year, 21 branches of Zhong Xuegao Food (Shanghai) Co., Ltd. were also canceled one after another.

As a fast-moving consumer brand, weak market performance is the main reason why Zhong Xuegao is in a worrying situation today. Although Zhong Xuegao was once known as the "Hermès of the ice cream industry," Zhong Xuegao still cannot escape the fate of being abandoned by the market after being unable to continue to create a sense of freshness for consumers.

Poor online and offline sales

This past summer, Zhong Xuegao, who specializes in ice cream and other products, did not experience the expected sales peak.

In the past, Zhong Xuegao, even if the ice cream he launched was priced as high as 100 yuan, it was still popular among consumers. For example, the seasonal limited-edition "Xing Yu Nian" box cake launched in 2021 was priced at 68 yuan. It was once sold to 200 yuan by scalpers, and it needed to be bundled with other products to buy it.

In this year's ice cream market, Zhong Xuegao had to lower his arrogant head. According to Chao News, Zhong Xuegao's full range of ice cream, originally priced at 13 yuan to 18 yuan, has been sold at a promotional price of 4.99 yuan in many offline stores.

However, it is worth mentioning that the price cooling of ice cream products is an obvious trend in the market this year. According to the ice cream/ice cream best-selling list in Central China for the second quarter of 2023 released by FoodTalks and Immediate Win, the products with better sales this year are concentrated in the price range of 3-5 yuan. Zhong Xuegao’s light milk ice cream priced at 13 yuan only ranked at the bottom of the list.


In addition, due to the heavy rains this summer, the sales of ice cream nationwide this year are indeed not as good as in previous years, and the frequency of replenishment of some categories of ice cream has even been significantly reduced.

Zhong Xuegao is not unprepared for this summer’s market conditions. In March this year, Zhong Xuegao changed his previous high-end route and launched Sa’Saa ice cream priced at 3.5 yuan. This product is only available for offline sales, and has the gimmick that AI participates in the design and development.

According to Lin Sheng, founder of Zhong Xuegao, internally,Sa’Saa’s product is called “Zhong Xue Bu Gao”.It is hoped that on the basis of maintaining high quality, we can expand the product line and bring more choices to consumers in the hot summer.

However, judging from the subsequent market terminal performance, this product did not win much recognition from consumers.

Offline terminal sales are poor, and the online channels that Zhong Xuegao relied on have failed to maintain their advantage this year. According to Douyin's best-selling brand list for the second quarter of 2023 (ice cream TOP10), Zhong Xuegao's market share is only 3.99%, lagging far behind brands such as Kaidoo, Yili, Qiaolezi and other brands. During last year's 6.18 promotion, Zhong Xuegao was also the No. 1 Douyin ice cream brand in self-broadcast sales, Douyin e-commerce rankings, the ice cream industry's most popular list and recommendation list.

In traditional e-commerce channels, Zhong Xuegao is also in decline. During Tmall 6.18 this year, Zhong Xuegao failed to make the Top 10 list of fresh food store sales and popularity. Before that,Zhong Xuegao has ranked first in the 6.18 Tmall ice category for three consecutive years, and also won the top sales in Tmall’s fresh food category in 2022.

The high-end image cannot be maintained

What needs to be objectively acknowledged is that Zhong Xuegao’s defeat was due to changes in the consumption environment. Young people who were willing to buy ice cream at high prices in the past few years now have to face the fact that consumption has been downgraded. Even some middle-class consumers have begun to drink coffee worth 9.9 yuan.

This year, on major social platforms, a new word was born in discussions about ice cream products - Ice Cream Bodhisattva, which refers to some affordable ice cream that is both convenient and delicious, such as Little Pudding, Want Want Crushed Ice, etc. In some offline scenarios, the low-price sales model of "cold drink wholesale" has also won the favor of more ice cream consumers.


But returning to Zhong Xuegao himself, last year’s wave of “ice cream assassins” was so powerful that its impact on the market exceeded many people’s expectations. Even Lin Sheng, the founder of the advertising and marketing industry, may have underestimated the impact of that wave of public opinion storm.

On the one hand, from the product point of view, although Zhong Xuegao insists on taking the high-end route, the early good market feedback is based on excellent online marketing and novel product positioning, such as "Ecuador Pink Diamond" ice cream, "Xing Yu Nian" box cake co-branded with "Qing Yu Nian" and other products.

However, after entering the offline channel, Zhong Xuegao caused complaints from consumers due to the excessively high selling price. The practice of not clearly indicating the price also lost a lot of popularity among passers-by. In addition, the evaluation video of Zhong Xuegao's ice cream "does not melt at high temperatures" continued to spread on the Internet. Zhong Xuegao quickly lost its high-end image, leaving only the distinctive feature of "expensive".

In addition, after Zhong Xuegao experienced the "Ice Cream Assassin", he once stated that he would promote the formation of separate freezers offline. Although this approach was based on the model of high-end products such as Haagen-Dazs and DQ, due to the collapse of his reputation, Zhong Xuegao, who originally had a chance to be mixed in ordinary ice cream and selected by consumers, became even more uninterested after being displayed alone.

This also explains why even though Zhong Xuegao sold products at significant discounts at offline terminals this year and also launched a series of affordable products, he was unable to regain the trust of consumers in the short term.

Moreover, in offline channels, products such as ice cream have obvious seasonality, and there may be only one opportunity a year to capture the minds of users. From a business perspective, this kind of trial and error cost is too expensive. If you don’t seize the opportunity once, you have to wait another year. If it comes to the financial level specifically, if sales in one summer fail to meet expectations, then Zhong Xuegao's cash flow may be under pressure throughout the year.

Is it difficult to sell new domestic products at high prices?

From last year's "Ice Cream Assassin" to this year's "79 Yuan Eyebrow Pencil," it seems that new domestic brands are expensive and have become the original sin. Especially in the context of consumption downgrade, consumers have become increasingly intolerant of the condescending attitude of brands.

Especially for brands like Zhong Xuegao and Hua Xizi that relied on online marketing to quickly become popular, the past strategies no longer seem to work. Although there are still successful co-branded cases such as "Latte Coffee" this summer, without stronger brand power and offline channels as support, new consumer brands are no longer able to capture the hearts of consumers, and even have negative effects.

At this point, there is still a clear gap between new consumer brands and traditional FMCG giants.

In contrast, some high-quality and low-priced old domestic brands have ushered in a second spring in recent years. Under the blessing of traffic, they have frequently ushered in "wild consumption" and even have the potential to counterattack Internet celebrity brands.

In the final analysis, product strength is still an important factor in determining whether consumers will pay.

After the rise of the mobile Internet, many out-of-market consumer brands are often endowed with more value factors, such as emotional value, social value, etc. New and unique product positioning, attractive appearance packaging, or marketing methods such as co-branding and Internet celebrity recommendations can often build market visibility in the short term.

This also has a certain relationship with the founding team of the company. The experience and philosophy of the founder may often determine the brand temperament and product focus. For example, the founder of Zhong Xuegao is a senior advertising person, and the founder of Huaxizi, Wu Chenglong, was previously a marketing expert in the beauty industry.

However, when the novelty of consumers wears off, FMCG will still return to its practical value, and the brand premium established before can easily be exposed. Moreover, products that rely solely on "storytelling" themselves lack a moat. For those industry giants with supply chain and channel advantages, it is not difficult to quickly learn from and copy them.

Lin Sheng, founder of Zhong Xuegao, once said:“To build a brand, you must first become an Internet celebrity and get out of the industry, then work hard to become a long-term celebrity from an Internet celebrity, and finally become a brand.”However, it can be seen from Zhong Xuegao's disastrous defeat this summer that Lin Sheng and his Zhong Xuegao have obviously not found a suitable path on the road from Internet celebrity to long-term popularity.

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