Internet celebrity ice cream brand Zhong Xuegao is once again at the forefront of public opinion. According to comprehensive reports from multiple Sina Technology media, recently, a number of netizens claiming to be employees of Zhong Xuegao broke the news on social media that they were owed wages.



▲Picture: Sina Technology

According to Sina Technology, recently, many netizens claiming to be employees of Zhong Xuegao broke the news on social media that they were owed wages. According to relevant netizens, Zhong Xuegao optimized some employees due to poor performance, but the employees have not received relevant payments after signing the compensation agreement, and there is no clear timetable. Another netizen said the delay in salary and compensation payments has exceeded two months. This caused many people to exclaim: The ice cream is so expensive, how can you still not make money?

Relevant media asked Zhong Xuegao to confirm the authenticity of the news. As of press time, Zhong Xuegao responded to the matter, saying that relevant disputes were being actively resolved and operations were operating normally.


▲Picture: Screenshot taken by netizens

This not only caused the outside world to sigh, after all, in this season, ice cream has long passed its best-selling period, and now it has returned to the public eye in this manner. Going back to this summer, in order to cope with the summer heat, ice cream has become a product that people consume very frequently. In this year's "hottest summer in history", major brands have launched a fierce battle for users around ice cream.

Internet celebrity brands are gaining momentum. As a synonym for sky-high-priced ice cream, "Ice Cream Assassin" represented by Zhong Xuegao has become a major Internet buzzword; in 2023, the situation has changed, with more and more users choosing to reject "Ice Cream Assassin" and return to rationality.

01

Consumers are rational

Channel dealers are in pain

In the past, the general environment has greatly increased the market capacity of home consumption scenarios. Seeing this situation, many leading brands are investing in building factories. However, overly optimistic estimates for the future, combined with other factors, have caused oversupply in the ice cream field this summer, leading to an extremely fierce price war.

According to an interview with FMCG, a vertical self-media in the food and beverage field, some ice cream wholesalers said that the price of ice cream this year is basically between 1 and 5 yuan. The market feedback is that high-priced ice cream cannot be sold, so they are clearing out goods through discounts, promotions, etc. Some dealers said that high-priced ice cream is difficult to sell. In order to stimulate sales, manufacturers that insisted on selling at the original price last year have also relaxed this year.

Also on a certain social platform, some netizens posted that Zhong Xuegao was being sold in supermarket freezers at a special price of 5 yuan each. Zhong Xuegao has always been positioned as a mid-to-high-end ice cream brand. Compared with its original high price of tens of dollars, the price of 5 yuan a piece is really a special price.


▲Picture: Screenshot taken by netizens

This summer, an article titled "Ice Cream Wholesale—The Tragedy of Ice Cream Shops This Year" was circulated on social networks. The author of ice cream wholesale admitted in the article that in August, summer is coming to an end, and the average daily sales are only 800 yuan, and sometimes even only 300 yuan a day.

In the comment area of ​​the above-mentioned article, many netizens who are suspected to be practitioners also expressed similar emotions: "This year is generally difficult. I haven't made any money yet. Summer is over."

There is another important factor behind the pain channel operators are experiencing, that is, consumers are becoming more and more rational. According to data from Toubao Research Institute, in terms of purchasing factors, taste and price are the primary considerations for consumers. The proportion of consumers who consider taste and price when purchasing ice cream accounts for as high as 95% and 48% respectively. In addition, nearly 70% of consumers believe that the price of ice cream is too high, while only 10% think that the price is reasonable, acceptable and affordable.

The main consumers of ice cream tend to be rational in their consumption behavior of ice cream, coupled with the influence of the macroeconomic environment, which determines that high-priced ice cream cannot rise. The temporarily hyped "ice cream assassin" will easily suffer backlash from public opinion, which will further affect its own sales. In this case, some channel operators will inevitably suffer losses.

02

"Ice Cream Assassin" exits

"Ice Cream Bodhisattva" takes the top spot

As the "Ice Cream Assassin" gradually disappeared, the "Ice Cream Bodhisattva" stood in the C position.

The so-called "Ice Cream Bodhisattva" refers to affordable ice cream. Because of its affordable price, it is affectionately called "Ice Cream Bodhisattva" by netizens. For example, the classic little pudding ice cream launched by Yili has only 85 calories per ice cream, does not add trans fatty acids, has a milky appearance and a soft and glutinous texture. The most important thing is that the price is affordable, with the retail price of a single ice cream not exceeding 5 yuan.

According to the FoodTalks TOP50 best-selling ice cream/ice cream products list in East China, South China, Central China, and North China in July 2023, among the top ten ice creams, only two 10 yuan ice creams in East China are on the list, and the rest are 5 yuan and below. Among the ice cream brands on the list, Yili can be said to be "far ahead", with many products including Yili Chocolate Classic Ice Cream (75g package), Yili Chocolate Classic Ice Cream (75g package) and Yili Chocolate Ice Cream Four Circles Egg Milk Chocolate Flavor (70g package), etc., being relatively popular.


▲Picture: Yili Qiaolezi

The above list is compared with the data behavior of Toubao Research Institute and iiMedia Consulting. According to the latter report, the overall consumption frequency of the domestic ice cream market is not high, with 55% of consumers consuming no more than 3 sticks a month. The price of ice cream acceptable to consumers is mainly concentrated in the 3-10 yuan range, accounting for 70.9%.

Yili, which dominates the list with a variety of products, has a complete product line covering the range of 3-10 yuan, such as the current flagship series of products: Ice Factory, Miaoqu, Qiaolezi and Zhenxi. Among them, Ice Factory does not contain milk ingredients and sells for the lowest price, about 3.5 yuan/box; Zhenxi uses raw milk and micron-level technology to make it, and is positioned as a relatively high-end product, priced at about 10.2 yuan/box.

Although new Internet celebrity brands briefly occupied more public discussion last year, when the market returned to rationality, established ice cream companies still showed stronger market competitiveness.

In terms of product structure, leading companies like Yili undoubtedly have richer and more diverse ice cream products, which makes them more confident and comfortable in the face of the changing market environment.

In the supply chain, domestic dairy giants have huge raw material advantages in milk sources, sugar, etc. In recent years, they have been deeply involved in the field of ice cream raw materials. For example, in 2021, Yili invested 860 million yuan in an Indonesian dairy base with a daily production capacity of 4 million pieces of ice cream; in 2022, Mengniu also invested 1.5 billion yuan to build 8 ice cream production lines, with a daily production capacity of nearly 300 tons.

In terms of sales channels, Internet celebrity brands do not dominate. In 2020, Zhong Xuegao began to enter offline. With higher channel fees than traditional ice cream brands, it entered nearly 400,000 freezers in more than 200 cities across the country. However, at that time, Yili had more than 6 million terminal outlets nationwide.

Therefore, to a certain extent, it can be said that on the surface, the "Ice Cream Assassin" is on the way out and the "Ice Cream Bodhisattva" is on the rise. The essence is that more brands that have become popular through marketing and topical marketing are inherently weak and have weak foundations. When faced with the drastically changing consumer environment, they can easily show their timidity and reveal their true colors.

03

Where will the ice cream market go in the future?

Where the ice cream market will go in the future, from the current perspective, there are at least two changes that cannot be ignored.

First, offline channels have become more diverse. Among them, ice cream offline channels represented by snack discount stores and cold drink wholesale stores are particularly popular. In these stores, a large number of affordable ice cream is displayed. Because they are offline, consumers can conveniently choose ice cream on the spot; because the price is cheap, the weight of cost-effectiveness will continue to increase in consumers' purchasing decisions.

Secondly, ice cream brands that position themselves as mid- to high-end brands have begun to “put down their stature.” For example, on July 29 this year, Moutai cooperated with the ice cream brand Zhongjie 1946 to launch a "small stick" priced at 29 yuan.

Strictly speaking, Moutai cannot be regarded as a mid-to-high-end ice cream brand. Making ice cream can be more regarded as Moutai's move to promote brand rejuvenation. It attempts to convert young people who consume ice cream into potential consumers of Moutai liquor in the future. However, in terms of price alone, Moutai ice cream can indeed be regarded as mid-to-high-end. Moutai has previously launched a series of products priced at around 66 yuan. The 29 yuan "small stick" launched this time is the first time it has launched ice cream priced under 30 yuan.


▲Picture: Moutai ice cream

In addition to incubating the "Li Daju" brand in 2019 with a price between 6 and 12 yuan, this year Zhong Xuegao, who is well versed in marketing, took advantage of the global AI craze triggered by ChatGPT and launched a new series of products called Sa'Saa created by AI. What is more concerning to the outside world is that for Zhong Xuegao, this is also a low-priced product, with a Sa'Saa priced at 3.5 yuan.

This leads to a major development trend in the ice cream market in the future, that is, from the price range of ice cream, the price range of 3-10 yuan will increasingly replace the price range of 1-3 yuan. According to data from O2OMind and the New National Products Research Institute, in May 2021, the ice cream product price range of 1-3 yuan on the O2O platform accounted for the highest proportion at 34%; by May 2022, the proportion of 3-5 yuan rose to the first place, expanding from 26% to 30%.

In other words, with the improvement of per capita living standards, consumers are indeed paying for ice cream with better overall product quality and higher prices, but the acceptable price increase is not large.

In such a context, it seems a bit blind and arrogant for some Internet celebrity brands to suddenly raise the price to dozens of yuan per unit. They overestimated or misestimated the durability and reliability of the so-called consumption upgrade, and took advantage of the psychological and behavioral characteristics of contemporary young people, especially Generation Z, who pursue novelty, express their individuality, focus on social interaction, and are willing to share, and want to maximize their own interests through the online DTC (Direct to Consumer, direct sales to customers) model.

However, it needs to be questioned whether many brands really understand the consumer behavior characteristics of Generation Z. According to the "How to Innovate for the Tangled Generation Z - China Snacks and Beverages Category Research Report" released in June this year by Reese Consulting after surveying about 2,000 Generation Z subjects, it can be seen that when it comes to food and beverage consumption, Generation Z shows a relatively obvious "want and want" characteristics: both good products and cost-effective prices; healthy and life-saving, but also living in the present and pursuing taste stimulation.

For some Internet celebrity brands in the ice cream field, it is easy to blindly raise the price of their products, but it is obviously much more difficult to get young consumers to continue to pay for them.

Rees Consulting gave another major conclusion in this report, that is, 77.5% of Generation Z respondents believe that the health of ingredients is an important consideration, which in turn leads to another major development trend in the ice cream market: more and more healthy and functional ice cream products are expected to emerge. Through research, Toubao Research Institute found that among consumers’ expectations for future ice cream products, low-fat and low-sugar, more diverse flavors and no chemical additives are the top three.

In short, under the wave of new consumption, although some Internet celebrity brands seem to have brought new concepts and definitions to ice cream, the popularity is always blown away by the rain and wind. Gorgeous copywriting, exquisite advertisements, and seemingly scarce and unfamiliar conceptual raw materials are not sufficient conditions for mainstream consumers to continue to pay.

Philip Kotler, known as the "Father of Modern Marketing," once proposed the value exchange theory, that is, marketing is an exchange process in which both parties can obtain benefits. Enterprises exchange with consumers by providing valuable products and services, thereby maximizing the interests of both parties.

In just a few years, Zhong Xuegao has gone from being a popular internet ice cream celebrity to being a controversial "ice cream assassin". Recently, he has been involved in a negative scandal over wage arrears. The bottom line is that Zhong Xuegao did not provide products and services commensurate with his positioning and price, and was not worthy of his name. This situation harms the interests of consumers and is obviously inconsistent with the value exchange theory proposed by Philip Kotler. Therefore, the rational Generation Z who “want both” chose to vote with their feet.

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