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Zebra Consumption Chen Biting

When the price reduction of ice cream coincides with this hot summer, ice cream consumption has unsurprisingly increased.

The more lively the market is, the lonelier Zhong Xue Gao is. Since a series of crises broke out at the end of last year, this once popular ice cream brand has gradually moved away from the mainstream market and public attention.

However, the market should not ignore that it was Zhong Xue Gao that opened a crack in the high-end development of China's ice cream industry; it also taught the traditional local ice cream industry a good lesson through its product power and social marketing.

In the long history of China's ice cream industry, Zhong Xue Gao is unlikely to become a "star", but a "meteor" also has its value.

Ice cream price reduction

How to relieve stress in the hot summer? Have some ice cream.

This year, not only can we not see the so-called "ice cream assassins", but they are generally much cheaper, especially in the e-commerce channels where major manufacturers are competing fiercely.

Clicking on the Douyin group buying, 4 sticks of Yili Chocolats and 4 boxes of Mengniu tri-color ice cream are both discounted by 32%, priced at 9.9 yuan.

The price of ice cream is becoming more affordable not only online but also offline. For example, Magnum, which usually costs 15 yuan per stick in convenience stores, can now be bought for 5.9 yuan; Nestle 8th Power, which used to cost around 10 yuan per box, is also on sale for 5.9 yuan; Moutai ice cream, which was once out of reach, has also pressed the "price reduction" button, with the unit price dropping from 66 yuan to 10 yuan.

Needless to say, Zhong Xue Gao's price dropped from a few dozen yuan at the beginning to more than ten yuan, and even launched a special offer before expiration, with the price once dropping to 2.5 yuan per stick.

If the price reduction of high-end ice cream is to clear inventory, then the downward price of new ice cream products this year can further illustrate the trend of "low price is king".

The terminal prices of Magnum's new products "Little Golden Dragon" and "Blue Dragon" are between 8 and 9 yuan; the Oreo cones launched by Nestlé and Oreo are also priced below 10 yuan; Bright Dairy's new crispy ice cream, launched in May, costs 85 yuan for 15 pieces, with a unit price of 5.7 yuan; the new product "One Acre of Melon Field" launched by Ruby is priced at 3.45 yuan per piece.

The new players will implement affordable prices to the end: Wumart’s Liangshiji Raw Chocolate ice cream launched this year is priced at 2.29 yuan per stick; Hema’s own-brand raw milk ice cream, mung bean popsicles, etc. are priced at 1.5-3.5 yuan per stick.

The industry-wide price reduction trend, coupled with the high temperatures this summer, has significantly increased the sales of ice cream. For example, the Douyin channel, which has risen rapidly in recent years, saw its ice cream sales increase by 97.8% in the first half of the year compared to the same period last year.

The busier the market, the lonelier Zhong Xuegao, which has been forced into a corner, appears. Since the fourth quarter of 2023, after a series of negative events such as wage arrears, equity freeze, and height restrictions imposed on founder Lin Sheng, the ice cream internet celebrity Zhong Xuegao has gradually withdrawn from the mainstream market.

The last few times that the market paid attention to Lin Sheng were because he sold sweet potatoes to pay off his debts. When the live broadcast room was opened, it was embroiled in public opinion controversy because of issues such as "sky-high prices".

Stirring up the high-end market

While saying goodbye to Zhong Xue Gao, we must admit that Zhong Xue Gao has injected a breath of fresh air into the high-end development of China's ice cream market.

Previously, the high-end ice cream market has been dominated by international giants such as Unilever and Nestle. Yili and Mengniu have tried to focus on developing mid-to-high-end products, but the effect was not obvious.

Zhong Xue Gao emerged out of nowhere and, with real money investment, raised consumers' perceived ceiling of ice cream prices, creating a better opportunity for other brands to move upscale, and domestic veteran players have launched new high-end products one after another.

At that time, new players such as Zhong Xue Gao and Zhongjie 1946 emerged in front, and old brands such as Yili, Mengniu, and Guangming (600597.SH) attacked from behind, which brought a great impact to international high-end ice cream brands.

When Zhong Xue Gao was frequently on the hot search list because of "expensive", "false advertising", "want it or not", and "IQ tax", after the meticulous analysis by major media and KOCs, the super high-end ice creams were disassembled clearly, inadvertently accelerating the collapse of the myths of other super high-end ice creams.

In July 2021, netizens questioned Magnum for the different ingredients used in China and abroad, and the mismatch between high-end positioning and cheap ingredients. After the hot topic broke out, negative words such as "Magnum", "low-end" and "inconsistent" continued to emerge in searches across the Internet.

Unilever, which was caught in a storm of public opinion, did not take effective measures but continued to raise prices. Consumers chose to vote with their feet, and the market share of its Magnum brand was further eroded.

Relevant data shows that in 2023, Unilever's market share fell by 0.62%; in contrast, Yili (600887.SH)'s market share increased by 1.74%. In March this year, Unilever announced that it would completely divest its ice cream business by the end of 2025.

Leading a new way to play ice cream

In addition to tearing open a crack in the high-end ice cream market, Zhong Xuegao has also increased the chances of value enhancement for domestic ice cream in terms of products and marketing.

In an era of rational consumption, the brand premium of high-end ice cream needs strong product support. Previously, domestic ice cream has been stuck in the low-end and mid-end markets. Zhong Xue Gao became popular with high-end raw materials to support high prices, and other domestic players followed suit.

Today, although Zhong Xue Gao has declined, the product power thinking it explored is influencing more and more local ice cream brands.

For example, Feihe Dairy’s new product, Classic 1962 milk ice cream, uses raw milk, cream and milk powder instead of margarine which may contain trans fats, making the ingredients more streamlined and healthier.

Xinruye’s new ice cream “Cocoa Crumbles” also puts a lot of effort into the raw materials: the cappuccino-flavored ice cream is added with 20% raw milk, and the rich chocolate crust is made of imported chocolate, with the main focus on health.

Lin Sheng, who was an advertiser, also gave domestic ice cream brands a vivid marketing lesson through Zhong Xue Gao.

Previously, domestic ice cream giants mainly promoted their products by signing spokespersons and sponsoring variety shows; Zhong Xuegao is better at social marketing, focusing on impressing young people and embracing the main consumer force of the future, opening the door to a new world for the brand.

Since then, joint marketing by domestic ice cream brands has been very popular. The most outstanding one is the joint marketing by Mengniu and Moutai, which has a significant effect of breaking the circle.

On this basis, the old ice cream brands are becoming more and more courageous in their pursuit of younger customers, focusing on joint marketing while pursuing experiential marketing ideas that focus more on the emotional value of products and consumption scenarios.

The co-branded ice cream of Mengniu Dairy (02319.HK) and Snow Beer focuses on consumer scenarios such as friends’ gatherings, leisure and entertainment, and barbecue season, with the main theme of accessibility; Yili ice cream is linked with the New Youth Music Festival in Texas, allowing young people to feel the coolness of ice cream while enjoying their passion.

Perhaps, it will be difficult for Zhong Xuegao to continue its journey, but in the history of the development of China's ice cream industry, it has left a mark like a "meteor", with a strong imprint.