The “Ice Cream Assassin” Zhong Xuegao is “Back”? Don’t Celebrate Too Soon—There’s a Clever Business Strategy Behind It
Hello everyone, I’m your financial observer. Recently, Luo Yonghao mentioned on Weibo that airport ice cream was unpleasant to eat and casually reminisced about Zhong Xuegao, which made many old fans feel a stir of excitement. Then, even more surprising news came: Zhong Xuegao’s core assets, such as its trademarks and patents, have officially changed hands, and the new owner is likely to be Royal Tiger, a company known for selling sausages and hand-held pancakes in supermarkets.
It’s like a once-loved and hated “noble” family member suddenly being bought by a chef who specializes in making “home-cooked” food. What does this really mean? Is Zhong Xuegao making a comeback as the former brand, or is it just changing its identity to continue making a profit? Today, we’ll break down this situation in simple terms and make it clear for everyone.
1. Zhong Xuegao isn’t “dead” – it’s just changing “bodies”
First, let’s clarify a misconception: The Zhong Xuegao brand hasn’t disappeared completely; it’s just undergone a kind of “organ transplant.” People thought Zhong Xuegao had gone bankrupt, but in reality, the original operating company (Zhong Xuegao Food Shanghai) was forced to auction off its assets due to heavy debts. These assets included the most valuable parts of the brand: the name (trademark), the recipe (patents), and the design (copyright).
In May of this year, someone bought these 508 intangible assets for 21.1 million yuan. Now that the transfer of rights is complete, the original social media accounts will be deleted because the name “Zhong Xuegao” and its logo no longer legally belong to the former owner.
Who is the buyer? Business records show that the newly established “Changsha Zhong Xuegao Food” is backed by two key individuals: the mysterious Wang Yaqing (the buyer at the auction) and the parent company of Royal Tiger. Although it hasn’t been officially announced, this relationship is now public.
In simple terms: The original Zhong Xuegao company was a “shell,” but the brand name “Zhong Xuegao” remains. Now, Royal Tiger is using this name to open a new business. It’s like you buying the sign of a failed online restaurant and re-opening it with a new team and supply chain.
2. Why Royal Tiger? Because they have what Zhong Xuegao lacks
Many might wonder: Royal Tiger sells sausages and hand-held pancakes; do they know how to make ice cream? The answer lies in business logic and complementarity:
Zhong Xuegao’s problems: The ice cream was too expensive, and logistics costs were high. To maintain its premium price, Zhong Xuegao relied on expensive cold-chain shipping, mainly through online sales, which drove up costs. When sales declined, profits were affected. Moreover, when consumers stopped willing to pay for the premium price, the high price became a liability.
Royal Tiger’s strengths: Royal Tiger started in the frozen food business (sausages, pizza, etc.) and focuses on supply chain efficiency:
- Wide distribution: They sell not only online but also in 100,000 physical stores nationwide, including snack shops and Yonghui supermarkets.
- Strong logistics: They have factories in North China, Central China, and Southwest China, with 49 self-operated warehouses, making their products cheaper to transport by 50%.
- Low prices: Their sausages cost 18.5 yuan for 10 pieces, and hand-held pancakes cost 16.3 yuan for 10 slices. This price competitiveness was something Zhong Xuegao, which relied solely on online sales, lacked.
Conclusion: Royal Tiger bought Zhong Xuegao not to make luxury products but to use its lower-cost supply chain to produce ice cream. If Zhong Xuegao used to sell ice cream for 15 yuan at a cost of 10 yuan, Royal Tiger could reduce the cost to 5 yuan and still make a profit, selling it for 8 or 9 yuan while still being appealing to consumers.
3. The market has changed: from “experiencing the new” to “being rational” – the bubble of premium ice cream has burst
Why was Zhong Xuegao popular? It was a product of the “new consumption” era when people were willing to pay for “internet-famous,” “premium,” and “design-driven” products. However, the trend has changed:
- Consumers have become more discerning: Prices of ice cream have been dropping from 3.58 yuan to 3.28 yuan per 100 grams between 2023 and 2026, with the mainstream price range now below 6 yuan. Consumers no longer want to pay a high premium for a brand story; they prefer quality and affordability.
- Competitors have changed: Zhong Xuegao’s competitors used to be brands like Häagen-Dazs and Menglong. Now, its competitors include:
- Freshly made ice cream shops: Such as Ye Ren Shen and Nai Xue, which offer freshly made, innovative flavors like pistachio and rice.
- Affordable brands: Zhong Xuegao’s own lower-priced products and other cost-effective brands.
In simple terms: People used to think “expensive = good,” but now they think “expensive = a waste of money.” If Zhong Xuegao continues with its high-price strategy, it’s doomed. Therefore, a price cut is almost inevitable after the new owner takes over.
4. The future of Zhong Xuegao might look like this: cheaper and more accessible
If Royal Tiger really brings Zhong Xuegao back, what changes might we expect?
- Price drops: The previously expensive ice cream (15–30 yuan per piece) could become more affordable (6–10 yuan per piece) thanks to Royal Tiger’s supply chain.
- Expanded distribution: Zhong Xuegao could be found in convenience stores, snack discount stores, and community groups, not just on Tmall’s official store.
- More practical products: Future Zhong Xuegao products might focus on value, such as larger portions or more family-friendly sizes.
- Brand rebranding: The name “Zhong Xuegao” carries negative connotations (expensive, unpleasant, controversial). The new owner needs to redefine the brand, possibly shifting from a premium image to one that emphasizes quality and value for money.
5. Risks and challenges: Rebuilding trust is harder than selling products
Although the business logic makes sense, Zhong Xuegao’s “resurrection” faces significant challenges:
- Trust crisis: The 2022 incident where the ice cream didn’t melt at 31°C severely damaged the brand’s reputation. Consumers may wonder if the recipe has changed or if it’s just a new packaging. Rebuilding trust takes time and solid product quality.
- Fierce market competition: The ice cream market is highly competitive, with giants like Yili, Mengniu, and Heluxue, as well as new brands like Zhong Xuegao and Ye Ren Shen. Royal Tiger’s brand recognition in the ice cream sector still needs time to build.
- Dilution of the Zhong Xuegao IP: If Zhong Xegao becomes too affordable and mainstream, its premium image could be lost, potentially leading to fan loss. The new owner needs to balance cost-effectiveness and brand identity.
Conclusion
Zhong Xuegao’s “resurrection” is not just a simple comeback but a complete transformation of its business model:
- Past: Zhong Xuegao = Premium + High price + Online focus + Brand marketing.
- Future: Zhong Xuegao = Value for money + Lower margins + Offline presence + Supply chain-driven.
For consumers, this could be good news as they might be able to buy Zhong Xuegao for less money. However, for the brand itself, it’s a big gamble. It must lower its stance, return to a more accessible position, and win back consumer trust with genuine quality and reasonable prices.
Whether it will succeed remains to be seen. After all, in this era of rational consumption, only those who can reduce costs and maintain quality will succeed in the long run.