During the Double Eleven period in 2018, the Erdogua Pink Diamond ice cream at 66 yuan/box became popular, which also made the Zhong Xuegao brand known to more consumers.
In 2021, Zhong Xuegao launched two more ice creams, "Xing Yu Nian" and "Zhi Mei Long Li". Due to the limited release, scalpers once sold them to 200 yuan a box; consumers even had to "match them" just like buying Hermès. "Goods" purchase.
However, looking back now, Zhong Xuegao's situation seems to have taken a 180-degree turn.
Red Star Capital Bureau noticed that recently, a topic #Zhong Xuegao's price dropped from 60 yuan to 2.5 yuan# was on the hot search on Weibo. In addition to the sharp price drop, Zhong Xuegao also reported that he owed employees wages, The founder restricted high consumption and other negative news.
From the peak to the bottom, what has Zhong Xuegao experienced?
Information and pictures Pictures from Visual China
(1)
made a high-profile debut
Lin Sheng, the founder of Zhong Xuegao, is a senior advertiser and has a close relationship with ice cream.
Around 2015, Lin Sheng successively took charge of the ice cream brands Madier and Zhongjie, making these two old ice cream brands popular again. After
had successful experience, Lin Sheng also thought of making a new brand of his own. So in 2018, Zhong Xuegao was born.
As soon as Zhong Xuegao debuted, he received strong support from capital, including angel round investment from ZhenFund and Matrix Partners China, as well as pre-A round financing with participation from Tiantu Capital and Toudou Shidao. It can be said that Zhong Xuegao, which was only 9 months old at the time, was already surrounded by new consumer investment institutions. Why is
Capital optimistic about Zhong Xuegao?
On the one hand, it is because Lin Sheng himself has already shown his performance when he was trading Madier and Zhongjie. Yao Zhen, a partner of Toudou Shidao Fund, said: One of the most critical factors in investing in Zhong Xuegao is founder Lin Sheng.
On the other hand, the ice cream market really needs a new story. According to data from the Qianzhan Industry Research Institute, the market size of my country's ice cream industry has reached 124.1 billion yuan in 2018. Faced with the huge market size, capital has also seen opportunities in it.
As for Zhong Xuegao, compared with many ice cream brands, it focuses on differentiation.
Source: Zhong Xuegao official website
First of all, at the product level, there are stories to tell in terms of product appearance design, raw material selection, etc.
For example, on Double Eleven in 2018, a 66-yuan Erdo melon pink diamond ice cream, a lemon pomelo that is said to take 20 years to bear fruit, and only 3 tons of natural pink cocoa in the country. It was full of gimmicks, and 20,000 pieces were sold out in 15 hours.
Next is the channel. Zhong Xuegao initially focused on online channels, and there was relatively less competition. As for competitors who dare not vigorously expand their online presence, the main reason is that cold chain costs are too high.
For example, the Beijing News once conducted a survey. When merchants in Zhejiang and Shanghai send ice cream worth 150 yuan to the free shipping area, it costs 40 yuan just to buy dry ice + shipping. If it is sent to Beijing, the actual transportation cost is at least 60 yuan. .
However, this is not a big problem for Zhong Xuegao. Because Zhong Xuegao originally sells high-end products, to put it bluntly, companies can transfer these costs directly to consumers.
As founder Lin Sheng said: "To build a brand, you must first make yourself an Internet celebrity."
Zhong Xuegao reached his peak when he debuted and began to make rapid progress.
public information shows that in 2019, Zhong Xuegao’s omni-channel sales GMV (gross merchandise transactions) exceeded 100 million yuan; in the first half of 2020, Zhong Xuegao’s sales on Taobao and Tmall totaled 128 million yuan, with sales of 905,000 units and an average price of 128 million yuan. As high as 141.82 yuan; during Double 11 in 2020, Zhong Xuegao climbed to the top of Tmall's ice category sales, with 34 million ice creams shipped out of the warehouse in 2020.
(2)
Controversies and Questions
However, since its establishment, there have been many controversies and questions surrounding Zhong Xue’s high price. Multiple marketing accidents also caused Zhong Xuegao's reputation to plummet at the consumer level.
In 2021, founder Lin Sheng said in an interview that Zhong Xuegao’s gross profit was slightly higher than that of traditional cold drink companies. When the most expensive one sold for over 66 yuan, he said that the product cost was almost 40 yuan, and bluntly said, “It’s that price. , do you like it or not?"
Since then, Zhong Xuegao has been on the hot search 6 times in 4 days. Most netizens are questioning Zhong Xuegao’s remarks about whether he wants to buy or not and whether Zhong Xuegao’s cost is really that high.
In addition, Zhong Xuegao has had many marketing accidents in order to promote the high-end of his own products.
For example, in 2019, Zhong Xuegao’s grape-stuffed grape ice cream advertised that it “does not contain a grain of sucrose or sugar substitute. Fructose brings a more fragrant aroma. It only uses special-grade grape grapes from the core grape growing area of the Turpan Basin. Zero Added, sweet and not greasy." However, later, according to the administrative penalty decision issued by the Shanghai Huangpu District Market Supervision and Administration Bureau, the inspection report of the red raisins, the raw material of grape wine and ice cream provided by Zhong Xuegao, showed that the specification level of the red raisins was bulk/first grade, and the publicity Special bonus amounts constitute false advertising.
In the same year, when Zhong Xuegao was promoting a light milk ice cream product, he mentioned "without adding a drop of water, pure milk frankincense" and other promotional content. However, subsequent official verification revealed that the ingredient list of the ice cream product clearly contained drinking water ingredients, and its promotional content was inconsistent with the actual situation. In the end, Zhong Xuegao was administratively punished for publishing false advertising.
In 2022, the two public opinion crises of "Ice Cream Assassin" and "Burning" will bring a "fatal blow" to Zhong Xuegao.
First of all, the cause of the "Ice Cream Assassin" incident was that after Zhong Xuegao entered offline stores, some supermarkets did not clearly mark the product prices, resulting in consumers buying the higher-priced Zhong Xuegao without their knowledge. products, thus triggering widespread dissatisfaction and doubts among consumers.
Immediately afterwards, the "burning" incident intensified the crisis of public opinion. The phenomenon shown in the short video that Zhong Xuegao's ice cream does not melt at high temperatures or even when burned with fire has aroused consumers' concerns about the ingredients and quality of the ice cream. Although Zhong Xuegao responded to this and explained the role of ingredients such as carrageenan added to the product, many consumers did not buy it and believed that his explanation could not completely eliminate doubts.
A series of incidents not only caused serious damage to Zhong Xuegao's brand image, but also affected consumers' purchasing intentions and trust.
Since then, Zhong Xuegao’s sales have also begun to decline. According to media reports, in the summer of 2023, some dealers said that Zhong Xuegao’s wholesale purchase price had been as low as 3.5 yuan per stick, and the promotional price was almost halved.
(3)
Changes in the consumer market
Why did Zhong Xuegao, who was at the top of his game when he debuted, decline within 6 years of its establishment?
First of all, it is the change in consumer consumption concepts.
Back a few years ago, the consumption concept of middle-class families and young consumer groups in first- and second-tier cities was still "not seeking the best, but the most expensive and hardest to buy." They wanted all kinds of new models, limited editions, and co-branded models. Gotta try.
But now, many people’s consumption concepts have changed, and these consumer groups have begun to pursue more cost-effectiveness. For example, Pinduoduo, 9.9 yuan Luckin, etc. have begun to become high-frequency words among young groups.
Slowly, affordable alternatives have repeatedly defeated high-end products and become consumers' first choice; even "It's not that xx can't afford it, but that xx is more cost-effective" once became an Internet buzzword.
At the same time, according to the "Double Eleven" consumer behavior research report by 21st Century Business Herald in November 2023: Who won the comprehensive cost-effectiveness battle? " shows that it has collected 1,300 valid questionnaires, mainly in the age group of 25-45. These valid questionnaires show that consumers are more rational in their consumption attitudes and pay more attention to consumption quality.
Generally speaking, with the arrival of the economic cycle, "cost-effectiveness" has become the first choice for many consumers today.
Against this background, Zhong Xuegao began to be considered by consumers as a product with a serious deviation between brand premium and cost.
Although the brand emphasizes the use of the best materials, users do not agree and believe that it lacks cost-effectiveness, resulting in consumers being unwilling to pay for it.
In addition, according to iiMedia Consulting data, in 2022, the accepted price of a single ice cream by netizens is mostly 3-5 yuan, accounting for 37%; the accepted price of 10-20 yuan accounted for 16.3%; the acceptance rate of more than 20 yuan Only 1.8%.
Zhong Xuegao may also be aware of the fact that high-end products are becoming increasingly difficult to sell, and then launched affordable ice cream in an attempt to save himself.
In March 2023, Zhong Xuegao launched an ice cream called sa'saa. Compared with Zhong Xuegao's products, which generally sell for 13 to 18 yuan per stick, sa'saa is priced at only 3.5 yuan. It is just a brand new low-priced ice cream. The product failed to create much excitement in the market.
Secondly, Zhong Xuegao’s marketing strategy relies on short-term traffic and popularity, which is not what the brand needs for long-term development. As an Internet celebrity brand, Zhong Xuegao quickly gained popularity through unique marketing strategies and promotion on social media platforms in the early days. However, this short-term traffic and popularity cannot sustain the development of the brand. In the face of negative public opinion and market competition, Zhong Xuegao failed to adjust his strategy in a timely manner, resulting in serious damage to the brand image.
Finally, Zhong Xuegao’s own channel construction is not comprehensive, which is not conducive to long-term market competition.
In fact, the consumption scene of ice cream has always relied heavily on offline, because the product has strong immediacy characteristics. The real market is still the convenience stores that dot the streets and alleys across the country.
According to data from the Qianzhan Industry Research Institute, the proportion of online ice cream sales in 2021 will only be 20%. In the larger offline market, Zhong Xuegao has to face many large companies such as Yili, Mengniu, Heluxue, Nestlé and so on. According to Euromonitor data, as of 2022, Yili ranks first with a share of 27.7%, followed by Unilever (and Luxue) and Nestle, with 11.6% and 11.1% respectively. What the giants have achieved has not been easy. For example, when Heluxue entered the Chinese market, they began to put freezers in major cities regardless of cost, including 13,000 freezers in Shanghai alone.
However, Zhong Xuegao, who finally squeezed into the offline market, was ruthlessly complained by consumers because the price was too high.
Summary:
In fact, in recent years, there have been many Internet celebrity brands that were once very popular but are now in trouble or even bankrupt.
For example, Hutouju, a new Chinese baking brand founded in 2019, also reported a series of negative news in March 2023, including bankruptcy, layoffs, debt problems, etc. In addition, a number of Internet celebrity noodles selling for 30 yuan have also been exposed to poor management and other related news.
Behind this, we have to deal with complex economic cycles. On the one hand, brand building cannot be fully supported by traffic; on the other hand, the value and price of products have begun to be re-examined by consumers; in addition, the company itself needs to be in the supply chain. Capacities in aspects such as talent cultivation, financial strength, etc. are also crucial.
Red Star News reporter Liu Mi
editor Yang Cheng
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