In-Depth Analysis of Zhong Xuegao’s “Rebirth”: From the “Ice Cream Killer” to an “Affordable Brand” – What Exactly Has Changed?
Hello everyone, I’m your financial journalist.
There’s been some big news recently: Zhong Xuegao, the brand once criticized harshly and declared bankrupt by the court, has made a comeback.
Many people’s first reaction was, “How come it didn’t completely fail?” or “Is it just under a new name, continuing to exploit consumers?”
In fact, Zhong Xuegao’s return is more like a “learning to walk again” after losing an arm, rather than a dramatic “return of a king.” It has shed its once-prideful “luxury” image and adopted a more modest, “affordable” approach.
To help you understand the behind-the-scenes story, I’ve broken down the key points of this article into five aspects, explained in simple language: How did it survive? What changes has it made? And does it still have a chance?
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1. The “Light Assets” Advantage Behind the Speed: Why Did It Recover in Just Five Months?
Normally, the process of a brand going bankrupt, having its assets liquidated, a new team taking over, renegotiating production contracts, and restarting production would take at least one to two years. But Zhong Xuegao managed to do it in just five months, from the court’s bankruptcy declaration to the launch of new products, which is indeed incredibly fast in the fast-moving consumer goods industry.
The reason for this speed? Two words: Light Assets.
1. No Burdens: One of Zhong Xuegao’s biggest criticisms was the lack of its own factory. However, in the context of bankruptcy restructuring, this became an advantage. It didn’t have to deal with heavy assets like land, buildings, or equipment.
2. Production Partners Still Available: The factory that produced Zhong Xuegao’s products didn’t close down; the production lines, formulas, and ingredient lists remained intact. The new team could just start production immediately, saving time on research and development, trial and error, and equipment adjustment.
In simple terms:
It’s like a restaurant that closes, but the chef (the production partner) is still there, and the recipe is unchanged. The new owner just needs to change the sign and reopen.
But note: This “lightness” is a double-edged sword. It speeded up the recovery, but it also means the brand’s control over its supply chain remains dependent on others. If the production partner decides to stop working or raises prices, Zhong Xuegao could be at a disadvantage again.
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2. The Price Drop: From the “20-Yuan Killer” to the “7-Yuan Affordable Brand” – What’s the Calculation?
This is the most significant change in its comeback.
Previously:
Zhong Xuegao’s products cost around 6-7 yuan to produce, but they were sold for 14-16 yuan, or even 20 yuan at convenience stores. The difference was all taken by distributors and stores. This was the so-called “high margin.”
Now:
The new Zhong Xuegao products (Light Milk, Velvet Chocolate, and Half-Half Chocolate) are priced between 6.9 and 7.9 yuan.
Why the price cut?
1. Removing Excess Costs: The high price included a lot of “buzz factor” and excessive profits for distributors. Consumers felt they were paying for the brand’s “internet celebrity status.” By lowering prices, the brand is telling consumers, “Don’t pay for the hype; pay for the product.”
2. Stabilizing Prices: This is crucial in the fast-moving consumer goods industry. Excessive profit margins led to inconsistent prices across stores, damaging the brand’s reputation. The new strategy aims to set fair prices.
3. Returning to the Essence: Data shows that 80% of consumers are willing to pay for ice cream priced between 3-6 yuan, while the 6-10 yuan range only accounts for 10%. Zhong Xuegao was trying to compete in the higher-end market, which was unsustainable. Now, with prices around 7 yuan, it’s positioned between the mid-range local brands and the more expensive foreign brands, offering a competitive price.
In one sentence:
It no longer relies on high prices to make money; it focuses on stability and sales volume.
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3. Who Took Over? Is “Royal Tiger” the Owner or Investor?
Many people thought “Royal Tiger” had bought Zhong Xuegao, but that’s a misunderstanding.
The truth is:
The new company is called “Zhong Xuegao Brand Management (Shanghai) Co., Ltd.”
- Major Shareholder: Wang Yaqing (60% of the shares).
- Second Largest Shareholder: Changsha Hujia Food Technology (40%), the parent company of “Royal Tiger.”
The Relationship:
The new team denies complete control by “Royal Tiger,” emphasizing a financial investment relationship. The new company is independently operated by CEO Chen Dacheng’s team with no business overlap with Royal Tiger.
What does this mean?
1. Legal Separation: The debts, disputes, and supplier payments from the old Zhong Xuegao have no impact on the new company, which acquired the trademark for 21.1 million yuan.
2. Independent Operation: Although Royal Tiger is a major shareholder, it focuses on frozen desserts, which are different from ice cream. The new team is more like an independent startup with a wealthy investor’s support.
In simple terms:
It’s like a company going bankrupt, and someone buys the trademark, then hires a new team to run it. The old creditors can’t pursue the new company, and the new company doesn’t inherit the old debts.
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4. The Real Challenge: Products Are Back, but How to Rebuild Trust with Channels?
Many think that as long as Zhong Xuegao lowers prices and keeps the same taste, it will sell well. But this underestimate the problem.
Why Did Zhong Xuegao Fail?
It wasn’t because of poor quality; it was due to a loss of trust with its channels.
1. Excessive Pressure on Distributors: To meet sales targets, Zhong Xuegao forced distributors to stock up on products, leading to unsold inventory and losses.
2. Chaos in Prices: With too much inventory, distributors offered discounts, which made consumers doubt the quality of the brand.
3. Broken Trust: When stores saw losses from buying Zhong Xuegao’s products, they were reluctant to reorder.
How Does the New Team Solve This?
1. No More Excessive Pressure: The new team promises to pilot sales online and through selected channels this winter without forcing distributors to stock up.
2. Small, Agile Operations: The team is kept small (under 100 people) to avoid large-scale operations.
3. Rebuilding Trust: This is the hardest part. The factory and formulas are back, but trust with distributors and stores must be rebuilt step by step.
In simple terms:
It’s like a former scammer who has changed his ways. Even if he now tells the truth, people may still distrust him. The new team needs to prove itself over time with consistent, trustworthy behavior.
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5. Future Prospects: Does It Still Have a Chance in a Shrinking Market?
Let’s look at the broader market situation.
Bad News: The ice cream market is declining. Sales from May to August 2026 fell 12.93%, the fourth consecutive year of decline. Consumers no longer pay for the “story” behind a brand; they value cost-effectiveness more.
Good News: The market is becoming more fragmented, with two segments performing well:
1. Ultra-Inexpensive: Brands like Yili and Mengniu’s products under 5 yuan sell well.
2. Ultra-Fresh: Brands like “Wild Man Mr.” with unique flavors like rice and pistachio are popular on social media.
Zhong Xuegao’s Position:
It’s stuck in the middle, with prices around 7-8 yuan. This position is challenging:
- It’s more expensive than 5-yuan products, so consumers hesitate.
- It’s cheaper than the more expensive, unique products, but lacks appeal.
Its Opportunities:
1. Quality and Price: It needs to offer good quality at a reasonable price in the 6-10 yuan range.
2. Fragmented Channels: It needs to expand into new channels like snack stores and membership-based stores.
3. Healthy, Compact Packaging: Trends are towards lower-sugar, low-fat, and smaller portions (20-30 grams). If Zhong Xuegao can innovate in these areas, it still has a chance.
Conclusion:
Zhong Xuegao’s “rebirth” is more like learning to walk again. It has learned to be less aggressive, more honest, and more customer-friendly. However, it still needs to find a niche in a shrinking market.
This winter is a testing period; next summer will be the real test.
Next time you see Zhong Xuegao’s products in the supermarket, I hope your first thought isn’t, “Will this brand disappoint me again?” but, “Hmm, for this price, let’s give it a try.”
That’s the true sign of Zhong Xuegao’s real revival.