Intern Reporter | Xue Yuting
Editor|Wang Shanshan
Cartography |
After the news of "the price dropped from 60 yuan to 2.5 yuan" made "Zhong Xuegao" rush to the hot search on Weibo again in the spring of this year, soon the Internet celebrity brand in the ice cream industry was exposed to the founder Lin Sheng was restricted from high consumption. As of now, Zhongxuegao's Tmall flagship store is still open, but a large number of products are shown to be out of stock, and some buyers wrote reviews in mid-March, complaining that the ice cream production date was August last year. This ice cream brand, which has been a smash hit in the past few years, seems to be melting on its own before this summer arrives.
In the same month, the founder of another online celebrity cake brand, Panda Don't Go, announced internally that the company had gone bankrupt due to a broken capital chain, and some employees posted an open letter asking for wages directly on the brand's official Weibo.
These two brands were established in 2017 and 2018 respectively, when China was at the climax of new consumer brand entrepreneurship. Panda did not use the label of "Haidilao in the baking industry", and Xue Zhonggao was once regarded as "Hermes in the ice cream industry". These two brands, which are very good at storytelling, use e-commerce channels to cut into two sub-food categories that have long been dominated by traditional channels in the past as "new species", and have quickly become highly talked about Internet celebrity brands on social networks and grass planting communities.
Since then, the path and speed of their business decline have been surprisingly consistent: the rapid ebb and flow of venture capital, the lack of experience in switching from online channels to offline platforms, the breakdown of capital chains due to the uncontrolled pace of market expansion, and the collapse of supply chain cooperation...... All this shows the fragile commonality of Internet celebrity consumer brands.
01
Is the story of an influencer brand true?
Zhong Xue was born with advertising genes. The founder, Lin Sheng, was born as an advertising person and made extraordinary achievements in the marketing war of the ice industry: he once packaged Modern as "the cold drink of celebrities and aristocrats a hundred years ago", making its sales exceed 10 million yuan a year; participated in moving the old brand "Zhongjie Ice Food" in Shenyang to Shanghai and incubating it into a high-end sub-brand "Zhongjie 1946", exploring its historical relationship with Zhang Zuolin, a figure in Northeast China, and using e-commerce channels to quickly become popular.
Being a brand is inseparable from storytelling, and the stories of Lin Sheng for Modern and Zhongjie 1946 are all based on new domestic products, and have been tested and recognized by the market. Subsequently, he himself stepped on the new consumption boom to found Zhongxuegao, which naturally continued this experience, and quickly ushered in star institutions such as Jingwei Venture Capital and Zhen Fund to bet, and was pinned on the high hope of "becoming the next Hey Tea". Yao Zhen, a partner of Toutou Yes Dao Fund, once said that one of the most critical factors in investing in Zhong Xuegao is Lin Sheng.
Lin Sheng once bluntly said that ice products are not high-tech products, "What you can do can be done by other brands, and everyone compares the problem of communication ability." Therefore, Zhong Xuegao must first be an Internet celebrity, and then a brand.
"Zhong Xuegao wants to be an Internet celebrity first, and then a brand. ”
Zhong Xuegao's Internet celebrity story revolves around the word "expensive", and in 2018, Double 11 launched the "Ecuadorian Pink Diamond" priced at 66 yuan, which was called "Hermes in the ice cream industry" by netizens. In order to make consumers accept the new price band, Lin Sheng tailored an advanced version of the story of Chinese ice cream for Zhong Xuegao, using tile shapes to reflect traditional Chinese culture, and inventing the measure word "piece" to count ice cream sales. Zhong Xuegao proves the truth of "you get what you pay for" in terms of materials, such as "only 3 tons of natural pink cocoa from Ecuador in China, and this lemon pomelo that only bears fruit once in 20 years". At the same time, Zhong Xuegao continued to throw out various cross-border co-branding activities to maintain the popularity of brand marketing.
Zhong Xuegao was the first to sell ice products based on e-commerce channels, and from the perspective of the cost of cold chain distribution, it is obviously more suitable for "boxed mass sales" orders, but Lin Sheng was able to successfully market a "home storage scene", telling users to consume ice cream as an after-dinner dessert.
From 2018 to 2021, dominated by the trend of consumption upgrading, Zhong Xuegao created an Internet celebrity effect with Guigui, and this methodology did work, occupying the top position in the sales category of Tmall Double 11 ice category for several consecutive years.
However, it is easy for the outside world to question the Internet celebrity brands positioned in the high-end market, especially from the perspective of ingredients and craftsmanship, it is difficult for an ice cream to constitute a high enough quality threshold.
In 2019, Zhong Xuegao's sales exceeded 100 million yuan, but in the same year, the regulatory authorities judged that they were false propaganda because the advertisements of "no drop of water, pure and pure bovine frankincense" and "special red grapes" did not match the actual ingredients list.
In 2022, Zhong Xuegao's outbreak of negative public opinion of "high temperature does not melt" has become a turning point for this Internet celebrity brand.
02
Channel "slap in the face"
Following Zhong Xuegao, from 2019 to 2020, a large number of online celebrity ice cream brands surfaced, and more than half of the new products priced at more than 10 yuan were also e-commerce as the main channel. Driven by these new products, data released by the China Green Food Association in 2020 showed that the online channel of ice cream in China accounted for only 5% of sales that year, and by 2021, the figure had grown rapidly to 20%.
Peers quickly noticed that Zhong Xuegao opened its first offline experience store in Shanghai in 2019 and announced that it would accelerate its entry into offline channels. The reason is simple, offline instant retail channels are still the main battlefield for ice product consumption. However, what really bursts the bubble of influencer brands is their journey from online to offline.
In 2022, the term "ice cream assassin" became an internet buzzword: among the dozens of ice creams randomly stacked in the freezers of convenience stores, consumers thought they had picked an ordinary-looking ice cream, but were unexpectedly stimulated by the high price at checkout. This kind of stabbing experience mainly occurs on a number of Internet celebrity brands, and Zhong Xuegao is particularly prominent in this controversy.
In the summer of 2022, the price list of ice cream posted on the freezer of a convenience store is almost all above 10 yuan.
Ice products are a kind of instant consumption in the offline retail market, while the mass sales on e-commerce platforms are mostly purposeful purchases for family scenes. The consumers and brand perceptions corresponding to these two types of channels do not completely coincide. Once the "Hermes of ice cream" in the e-commerce channel enters the convenience store and squeezes into the same freezer with dozens of other brands, it has to face the most naked price competition in the ice market.
New brands often have insufficient control over channel agents, and once the products are unsalable, it will lead to a situation of chaotic prices in the market. Brands can't stop retailers from selling their products, and they can only watch the brand reputation they have easily accumulated suffer a serious impact but can't do anything about it—exactly what Zhong Xuegao has experienced since 2023. The direct impact of the market price fluctuation is that consumers are shocked by the high price spread of Zhongxue, and then question the cost of the product and the brand value.
Panda does not follow the earliest business model, which is that after the user places an order online, the "cake + celebration service" is delivered to the home. It has successfully sold 6 million cakes in three years, covering 23 cities across the country, with an annual income of up to 800 million yuan. However, it is the process of quickly replicating the above model to more cities that has accelerated the business crisis of Panda not leaving—the young entrepreneurial team has burned money all the way to enclose land, and has not paid enough attention to the capital chain risks brought about by the heavy model at the logistics and service levels.
03
Is it wrong to become popular through "high-end"?
Is Zhongxuegao's abandonment by the market because of the price backstab? In fact, marching towards high-end is the common choice of many ice cream brands. Häagen-Dazs, which entered the Chinese market in 1996, currently has 390 stores across the country, with an average customer unit price of more than 70 yuan. General Mills, the food company that owns the brand, has revealed that half of the company's revenue in the Chinese market in 2022 came from Häagen-Dazs. At the same time, the Chinese market also accounts for 30% of the total Häagen-Dazs international market revenue. Sam's Club, which has a demanding selection of products, ranks in terms of ice cream sales, and in addition to its own brand MM ice cream products, the best-selling social brand (also known as NB brand) is the Häagen-Dazs 8-cup sharing pack with a price tag of 159.9 yuan.
In addition, traditional low-cost ice cream brands such as Mengniu and Yili have also continued to explore upwards and have achieved outstanding results. Moutai Group disclosed data in May last year that the 66-yuan Moutai ice cream produced by Mengniu sold more than 10 million cups in the first year of listing. It can be seen that the road to high-end ice cream industry is far from the end.
In the second year of the brand's establishment, Zhong Xuegao launched a sub-brand ice cream "Li Da Tangerine" with a unit price of about 10 yuan, and opened a Tmall flagship store. In 2023, the AI element ice cream "Sa'Saa" priced at 3.5 yuan will be launched, with the internal code name "Zhongxue is not high". It can be seen that Zhong Xuegao also wants to use the brand matrix to make the product cover multiple price bands, after all, relying on a high-end Internet celebrity product to hit the market, once the popularity of its story declines and the bubble is punctured, it may face the crisis of the overall collapse of the brand. However, Zhong Xuegao's Internet celebrity story of working on high-priced ice cream is difficult to help it develop the affordable product market.
From "Burning Ice" to "Ice Cream Assassin", Zhong Xuegao's predicament essentially reflects the dual lack of product power and channel power of a rapidly rising Internet celebrity brand.
Learning to play cross-border co-branding is the simplest marketing strategy, but it is the hard work of consumer brands to continue to cultivate channel power based on product power. Zhongxuegao's model is that the products are produced by the foundry, sold through the e-commerce platform and directly distributed to the C-end. Zhong Xuegao's offline channels for breakthroughs are mainly concentrated in the freezers of convenience stores, and they are in close combat with giants such as Mengniu and Yili.
On the other hand, Häagen-Dazs's operation in China, its production side, General Mills, currently has four production bases and three central kitchens in China, and on the retail channel, according to data released by Narrow Door Restaurant, Häagen-Dazs's self-operated stores have shrunk from more than 460 to 390 in the past six months, and more than 70 stores have been closed. However, the brand's Chinese market managers mentioned in media interviews last summer that Häagen-Dazs's performance in the B-end market is larger and faster, such as high-end restaurants, high-speed rail or airline business class, high-end hotels and movie theaters.
After the "Ice Cream Assassin" scandal, Zhong Xuegao also tried to imitate Häagen-Dazs and other high-end ice cream with clear prices to lay its own freezers, but this hardware investment needs to be put in a longer period of time to evaluate its effect, which will increase the pressure on sales costs in the short term. Lin Sheng said at the dealer conference in April 2023 that in 2022, Zhongxuegao's offline channel sales surpassed online for the first time. But in order to achieve this structural transformation, Zhongxuegao has aggressively expanded its staff and department from 2021 to 2022, more than doubling the number of employees, and the company has become increasingly clunky, further challenging the online celebrity brand's organizational management capabilities.
In the face of the highly involuted ice market, although Zhong Xuegao is good at popular models, it is difficult to continuously create popular models. Co-branding used to be the most common trick used by Zhongxuegao, but in the past few years, Zhongxuegao has cooperated with dozens of co-branded brands, and the repetition will only make consumers gradually tired of this marketing method. Therefore, simple cross-border co-branding is not the same as product innovation.
However, it needs to be acknowledged that consumers are becoming more price sensitive, and as Unilever has expressed, "consumers are turning to value-added products". On March 19 this year, Unilever announced that it would separate its ice cream business, which owns two representative brands, "Menglong" and "Lovely Duo". Unilever's financial report shows that in the fourth quarter of 2022, the ice cream business chose to increase prices sharply, by as much as 14.2%, and in 2023, it will further increase by 8.8% year-on-year, but it will lead to a 6.0% year-on-year decline in underlying sales, which is the most serious decline among all business segments of the company.
In the past, how should those consumer goods that chose to be positioned in the high-end market deal with themselves in this environment? It is not necessarily wise to rush to lower the price band of their products. Perhaps the most obvious case here is Hey Tea.
At the beginning of 2022, Heytea reduced the main price of its products from 20 yuan to 30 yuan to 15 yuan to 19 yuan, and even launched a 9 yuan drink. However, this sinking strategy did not please the core consumer groups originally served by Heytea, but they paid more attention to the obvious "degradation" problem of Heytea with the price reduction: the content of the pulp was significantly less, and the mainstream cup type of 650ml was changed to 500ml......
At the beginning, Heytea relied on the product innovation of freshly made tea drinks to obtain ultra-high pricing power, and successfully opened up a high-end price market with few followers behind it. If you only stick to this price band, Heytea can tell the story of its product innovation and marketing power to the extreme relatively easily. However, the allure of the larger market to the brand eventually evolved into a complete change in Heytea's overall strategy and business model: from relying on a single cup of high-margin goods to make money, to a cost-based business of "low-price volume". And the price of this choice is that in the price range of 10 yuan to 20 yuan, Heytea's product innovation space is also highly squeezed, and there is no longer a barrier to innovation, because peers have the opportunity to quickly copy every new tea you invent.
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