The “Resurrection” of Zhong Xuegao: Don’t Be Fooled by the Trendy Searches – It’s Just a Brand Rebirth
Hello everyone, I’m your financial observer. These past two days, Zhong Xuegao has made it onto the trending search lists again. It all started with Luo Yonghao casually mentioning his nostalgia for the brand, followed by an official announcement stating that the brand assets had been transferred, and the new owners appeared at an exhibition in Tianjin with the brand.
Many netizens saw this as a “return of a king,” and some even speculated that Luo Yonghao was behind the whole thing. However, as someone who frequently analyzes financial news, I need to bring you down from the hype and clarify the situation: This is not the original Zhong Xuegao “resurrecting” – it’s a complete brand rebirth under a new name. The old Zhong Xuegao, which was in debt and became a topic of public criticism, no longer exists. What’s alive now is a new company that uses the “Zhong Xuegao” name, but with a new owner, a new supply chain, and possibly even a new product philosophy.
Let me break down this situation into five key points for you in plain language.
1. The Legal Separation: You’re Buying a Name, Not Debt
First and foremost, we need to understand a crucial legal fact: The new Zhong Xuegao and the old Zhong Xuegao are two completely separate legal entities. The old Zhong Xuegao (the original company) incurred a debt of 782 million yuan due to poor management. This debt is still the responsibility of the bankrupt entity, not the new company.
The new owners paid 21.1 million yuan to purchase 508 intangible assets from the court auction. In simple terms, they bought the trademark, related patents, and copyrights associated with the “Zhong Xuegao” brand. It’s like a restaurant that goes out of business and owes a lot of money; a new owner buys the name and the recipe, rents a new location, buys new ingredients, and hires new staff to reopen. When you eat at the new restaurant, you’re enjoying the food made by the new owner, not the mess left by the old one.
Therefore, the new owners have not inherited the old Zhong Xuegao’s debts or its reputation (good or bad). What they bought is just a well-known brand IP (intellectual property). The assessed value of this IP was only 2.07 million yuan, but the final transaction price was 21.1 million yuan, a tenfold increase. This indicates that the new owners are interested in the brand’s remaining recognition among consumers, not its past glory.
2. Revisiting the Peak: How Zhong Xuegao Became a “Luxury” Ice Cream Brand
To understand the current situation, we need to look at how Zhong Xuegao became so popular. In 2018, Lin Sheng founded the brand. As a marketing expert, he did several things right:
- Brand Positioning: The name was a play on words referring to “Chinese ice cream,” and the product was designed in a tile shape, positioning it as a high-end domestic brand.
- Pricing Strategy: They launched the “Ecuadorian Pink Diamond” ice cream for 66 yuan each, sold in limited quantities, instantly raising the price of ice cream to a luxury level. Ice cream, which used to be a cheap snack, became a “luxury” product.
- Traffic Generation: Zhong Xuegao was very good at leveraging internet traffic. It appeared frequently in live streams by influencers like Viya and Li Jiaqi, and Luo Yonghao’s first live sale sold 200,000 units. The brand even adopted luxury product distribution strategies, bundling new products with other items.
The secret to its success at that time was simple: Emphasize marketing over product quality. They were selling more of a “social currency” than just ice cream. Buying Zhong Xuegao was about showing off your taste and sophistication. This strategy, combined with the trend of rising consumer spending, helped the brand raise 1.3 billion yuan in funding and reach a valuation of nearly 4 billion yuan.
However, this model had a major flaw: It relied on continuous online exposure to maintain its high price. Once the traffic faded or consumers started to question the value, the brand’s reputation collapsed quickly.
3. The Collapse: When the “Brand Image” Met Common Sense
Zhong Xuegao’s downfall began in the summer of 2022. Rumors spread that the ice cream didn’t melt at 31°C or even when burned. Although the company explained this with the addition of dairy solids and stabilizers, this directly shattered consumer trust. It turned out that the expensive ice cream was actually just high-quality but with questionable ingredients.
Old issues were also brought to light: The brand had been penalized in 2019 for false advertising, claiming it contained no water when it actually did, and the “special grade” raisins were just regular raisins. Public opinion turned against the brand, which was no longer seen as high-end but rather as a cheap and deceptive product.
Once trust was lost, the chain of funding broke. Sales plummeted, and the company faced unpaid salaries, lawsuits, and bankruptcy proceedings.
The lesson from Zhong Xuegao is clear: A strong narrative can create a high price, but it can’t sustain trust. You can use stories to drive prices, but if the product doesn’t stand up to scrutiny, the more exposure you have, the greater the backlash.
4. The New Owners’ Strength: The Supply Chain is the Key to Success
Now the new owners have taken over, relying on the supply chain of Royal Xiao Hu. Royal Xiao Hu is a company with strong capabilities in supply chains and offline channels, owning tens of thousands of physical stores. This means Zhong Xuegao is no longer just a internet-famous brand but a fast-moving consumer goods brand with a solid foundation.
The new owners have several advantages:
- Cost Efficiency: Their mature cold chain supply chain reduces fulfillment costs.
- Wide Distribution: With thousands of stores, they can distribute products quickly and widely.
- Changing Consumer Trends: Consumers are now more rational, seeking value for money (high quality at reasonable prices).
If the new owners can leverage these advantages to transform Zhong Xuegao from a luxury brand to a high-quality, affordable one (e.g., products priced between 10-20 yuan with genuine ingredients), they have a chance to regain its footing. The key here is product quality and supply chain efficiency, not just nostalgia.
5. A Warning: Don’t Rely on Nostalgia as a Lifeline
Finally, I want to share some honest advice for all brands trying to make a comeback. Luo Yonghao’s mention of nostalgia did bring a lot of attention to Zhong Xuegao, but it’s just a form of “preheating,” not a real resurrection.
If the new owners misunderstand the significance of this trend and think they can simply rely on emotional marketing, traffic, and partnerships to return to their peak, they’re mistaken. Nostalgia can get a brand back on the market, but it’s repeat sales that will ensure its long-term success.
Consumers might buy the “reborn” Zhong Xuegao out of curiosity to see what’s changed. But if the products remain the same, overly expensive, and marketing outweighs quality, the 21.1 million yuan spent on the brand will only depreciate further.
In summary, the “resurrection” of Zhong Xuegao is not a return to the past; it’s a complete rebranding. The brand must abandon its past reliance on internet fame and focus on product quality, supply chain efficiency, and customer service. For consumers, it’s best to wait for new products to be released and judge for themselves. After all, taste is the ultimate judge.