Zhong Xuegao’s “Rebirth”? Don’t Be Too Quick to Feel Moved—There’s a Clever Business Strategy Behind It
Hello everyone, I’m your financial journalist. The biggest buzz in the ice cream industry lately is the return of “Zhong Xuegao.”
Let me highlight the key points: This is not the Zhong Xuegao you might have thought of as being ridiculously expensive, nor is it the Zhong Xuegao that Luo Yonghao misses. The current Zhong Xuegao has a new owner, new prices, and even a new approach to business.
In simple terms, the original Zhong Xuegao went bankrupt and was bought by a supply chain giant named “Royal Tiger” in collaboration with a food safety blogger. Their plan is to re-enter the market with lower prices and a more approachable image.
But it’s not that simple. Today, I’ll break down this situation into five aspects to help you understand what’s really going on and whether we consumers should support it.
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1. Who’s in Charge? It’s Not a “Rebirth,” but a “Resurrection” Using an Existing Brand
First of all, it’s important to understand that the Zhong Xuegao being sold now is legally a different entity from the one in the past.
The original Zhong Xuegao, due to poor management, put its trademarks and recipes (its intangible assets) up for auction on JD.com. Wang Yaqing bought these assets for 21.1 million yuan, which represents a 9-fold premium, indicating that people still saw some value in the brand.
But who paid for this? There are two key players behind this:
- The Financier: Royal Tiger. A large frozen food company with significant supply chain capabilities (we’ll discuss this in more detail later). They invested 40% of the money and hold 40% of the shares.
- The Public Face: Chen Dacheng. He’s not a traditional professional manager; instead, he’s a food safety blogger with millions of followers on Douyin, where he shares tips on how to choose good products and identify fake rice.
Here’s the Catch: The new team insists that Royal Tiger’s investment is purely financial and has no business relationship with the new Zhong Xuegao, claiming it operates independently. However, with 40% of the shares, Royal Tiger has considerable influence. It’s like Xiaomi investing in a startup—although they say they won’t interfere, they still have control and likely have their own plans.
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2. The Price Drop: From an “Ice Cream Assassin” to an “Affordable Option”?
What used to be Zhong Xuegao’s biggest flaw was its high price. An ice cream could cost twenty to thirty yuan, or even sixty-six yuan, earning it the nickname “Ice Cream Assassin.”
Now, the three classic flavors—Light Milk, Velvet Cocoa, and Half and Half Qiaqiao—are priced between 6.9 and 7.9 yuan per piece.
- Previously: 66 yuan per piece (high-end luxury)
- Now: 6.9–7.9 yuan per piece (mid-to-high-end consumer product)
This price change is crucial. For example, Menglong is also targeting a more affordable market, with its mini packs costing around 5–7 yuan. Similarly, 80% of the ice creams on the market currently cost less than 6 yuan.
What does this mean? Zhong Xuegao is abandoning its “luxury” image and focusing on value for money. It no longer aims to prove that domestic products can be top-quality; instead, it wants to show that its products are reasonably priced while still maintaining their quality.
However, there’s a contradiction: At 6.9–7.9 yuan, the price is still not considered extremely cheap. In an era where consumers are seeking the best value for money and even turning to plain water instead of milk tea, this price falls in an awkward middle ground—higher than the cheapest ice creams but not low enough to attract frequent purchases.
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3. Changing Distribution Channels: Moving Away from Convenience Stores to Snack Vending Machines
Previously, Zhong Xuegao was mainly sold in convenience store freezers. The experience was often unpleasant: you’d pick up an ice cream, see the price, and feel disappointed.
The new Zhong Xuegao is smart enough to target snack vending machines (like Snack Hunbang and Good Special Sale) and supermarkets instead.
- Reasons for the Change: Young people nowadays shop for snacks in a more strategic way, looking for deals and bulk purchases. They are more rational about prices and less likely to feel ripped off.
- Cost Advantages: Royal Tiger has a strong supply chain and logistics network (49 own warehouses + 56 cloud warehouses). If Zhong Xuegao can integrate into this system, its profit margins could increase, potentially allowing for further price reductions.
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4. A Complete Change in Image: From Arrogant to a Food Safety Advocate
One of the most disliked aspects of the old Zhong Xuegao was its arrogance. The phrase “Buy it or don’t” and its stubborn attitude after the “ice cream doesn’t melt” incident damaged its reputation.
The new CEO, Chen Dacheng, is the perfect solution:
- Who is he? A food safety blogger who shares knowledge about how to choose safe products and debunk myths.
- What does he do? He teaches people these things in videos and speaks at events.
- His Approach: At an exhibition, he admitted he’s a fan of a rival brand and likes their rice-flavored ice cream.
This move is very clever:
- It reduces arrogance: As a blogger, Chen Dacheng represents neutrality, objectivity, and approachability, unlike a traditional CEO.
- It rebuilds trust: By having someone who talks about food safety as CEO, the message is clear: “We value safety and transparency.”
- It buffers public opinion: If negative news emerges, Chen Dacheng can use his expertise to address it effectively, unlike cold PR statements.
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5. Can Sentiment Alone Sustain a Business?
Finally, let’s consider the most critical question: Can the new Zhong Xuegao succeed?
It has several advantages:
- Brand Awareness: Despite negative experiences, the name “Zhong Xuegao” still attracts attention. Luo Yonghao’s social media posts gave it free promotion.
- Supply Chain Support: Royal Tiger’s backing ensures stable costs and distribution channels.
- Affordable Image: Chen Dacheng’s reputation can help improve the brand’s image.
However, it faces significant challenges:
- Changing Consumer Habits: People prefer freshly made ice cream from brands like Ye Ren Sheng and tea shops because of its freshness and social appeal. Prepackaged ice creams like Zhong Xuegao are becoming less popular.
- Product Quality: The new Zhong Xuegao uses the same old recipes and production methods. With lower raw material costs, price cuts may not significantly improve quality. If there’s no noticeable improvement, customers may not continue to buy it.
Conclusion:
The new Zhong Xuegao’s “rebirth” is more of a strategic move to revitalize the brand through a new approach. It’s trying to adapt to a changed market with lower prices, a more practical supply chain, and a more relatable image.
For consumers: If you’re curious, give it a try for 6.9 yuan—it’s not expensive and can support domestic brands trying to innovate. But don’t expect it to return to its former luxury status or solve the “ice cream doesn’t melt” issue.
Ultimately, its success depends on whether it can convince enough people to buy more than just once, even as winter approaches.
This is the real test for Zhong Xuegao.