Summary of Key Points
In June 2026, the local new tea beverage brand Ningji joined an investment consortium to take over Hagen-Dazs stores in mainland China. This marks a significant shift for tea beverage brands entering the ice cream market from merely offering ice cream as a supplementary product in their stores to acquiring entire independent outlets. On one hand, the tea beverage industry is experiencing slow growth (with a year-on-year increase of only 6.45% in 2025 and a net loss of 30,000 stores), urgently seeking new sources of revenue. On the other hand, traditional ice cream brands such as Zhongxuegao have faced decline due to issues like aging products and low cost-effectiveness (with Hagen-Dazs closing over 70% of its stores). There are two main approaches to this cross-industry collaboration: Approach A (adding ice cream items to existing stores, such as Xicha and Mixue Ice City), which is low-cost and quick to implement; and Approach B (operating independent ice cream stores, like Ningji’s acquisition of Hagen-Dazs stores), which is more challenging. The success of these efforts will depend on the ability to address differences in customer preferences and achieve operational synergy.
Why Are Tea Beverage Brands Turning to Ice Cream?
Simply put, there is money to be made—and it’s a necessary move:
- The market is large and attractive: The Chinese ice cream market was worth 183.5 billion yuan in 2024 and is expected to reach 233.4 billion yuan by 2030, with Italian gelato growing at a rate of 17.6%—representing a rapidly expanding opportunity.
- The tea beverage industry is highly competitive: With nearly 40,000 Mixue Ice City stores and 7,000 Wangba Cha Ji stores, price wars have pushed profits down. Entering the ice cream market offers a low-barrier, high-return option.
- The supply chain can be leveraged: The ingredients used for bubble tea (milk, fruit, syrups) are similar to those for ice cream. Adding a few thousand yuan worth of equipment, securing 1 square meter of space, and training staff can get the business up and running with minimal additional costs. Moreover, the gross profit margin on ice cream is as high as 65%, significantly higher than that of bubble tea—making the customer value double by offering an ice cream for an extra 20 yuan on top of a 15-yuan bubble tea drink.
Two Approaches to Cross-Industry Collaboration
There are two different strategies for tea beverage brands to enter the ice cream market:
- Approach A: Adding Ice Cream Items to Existing Stores (Xicha, Mixue Ice City): This is like pursuing a side business. For example, Mixue Ice City uses 2-yuan cones to attract customers, while Xicha’s 19-yuan “Xila Duo” products increase average transaction values, and Wangba Cha Ji’s 18-24-yuan gelatos gain popularity on social media. The advantages are low cost and low risk, as existing stores and supply chains can be utilized; however, ice cream remains a secondary product.
- Approach B: Acquiring Independent Ice Cream Stores (Ningji’s Acquisition of Hagen-Dazs): This is like starting a new company. Ningji will have to manage 171 independent stores with high rent costs and declining customer footfall in key areas, while also establishing its own supply chain and training staff. The advantage is gaining access to a high-end brand’s offline network; the challenge is that it may strain the company’s resources if not managed properly.
Why Are Traditional Ice Cream Brands Failing?
Previously, brands like Hagen-Dazs were associated with luxury, and Zhongxuegao was popular among internet users. Why have they fallen out of favor?
- Changing consumer preferences for cost-effectiveness: Young people now prefer affordable, tasty gelatos (e.g., Yeren Shengshi) or inexpensive cones from Mixue Ice City over expensive options.
- Brand obsolescence and lack of marketing innovation: Tea beverage brands are adept at launching new products quickly, gaining media attention, and engaging with customers through private channels, while traditional brands remain stuck in old ways.
- New local brands are competing fiercely: Brands like Yeren Shengshi have opened over 1,300 stores in two years, and Bobi Ice Cream has expanded to lower-tier markets with a customer value of 12.5 yuan—half the price of Hagen-Dazs—and they better understand the needs of younger consumers.
Challenges of Cross-Industry Collaboration
Regardless of the approach, there are numerous challenges to overcome:
- Approach A’s Challenges:
- Controlling inventory loss: Gelato quality declines after four hours, requiring precise sales forecasting to avoid waste.
- Seasonal variability: Ice cream sales are high in summer; how to sustain operations in winter?
- Blurred brand identity: If ice cream sales surpass those of bubble tea, customers may question the store’s identity as a tea beverage shop.
- Approach B’s Challenges (Ningji’s Situation):
- Revitalizing old stores: Hagen-Dazs stores face declining footfall and high rent; Ningji needs to attract younger customers without compromising its luxury image.
- Integration of Two Systems: Integrating the operations of affordable tea beverage franchises with high-end direct-operated ice cream stores requires aligning customer demographics, pricing, and supply chains.
Financial Pressure: Without recent funding, Ningji’s slow store expansion could lead to cash flow issues when acquiring 171 stores.
The Decisive Factor: Differentiation
The key to success in this cross-industry collaboration lies in creating differentiated products:
- Brands using Approach A should cleverly combine ice cream with tea beverages, such as using popular bubble tea flavors in ice cream to reduce trial and error costs.
- Brands using Approach B should bring new vitality to Hagen-Dazs products, such as incorporating lemon tea elements or using tea beverage marketing strategies to attract younger customers.
- Ultimately, consumers will only continue to buy from brands that offer delicious and innovative ice cream offerings.
This battle between the “solid” (ice cream) and “liquid” (tea beverages) industries is just beginning. Some brands may find growth opportunities, while others may face setbacks. However, for consumers, it means more affordable and innovative ice cream options to enjoy in the future.