Zhong Xuegao has new news, but it is still not good news.
On April 21, a Weibo post by Deng Qingxu, CEO of Sina Finance, sent Lin Sheng, the founder of "good brother" Zhong Xuegao, to the hot search, "Zhong Xuegao's founder said that he would also repay his debts when selling sweet potatoes" once again sparked heated discussions. That night, Lin Sheng, who has rarely spoken out recently, posted on Weibo: "If you don't run, you won't be cowardly." ”
After a series of events such as price reduction and clearance, being blown up and laying off employees, and being riddled with lawsuits, Lin Sheng, the founder of Zhongxuegao, seems to be much more humble. At the 2024 dealer conference, Lin Sheng, who had not appeared for a long time, set the theme as "the darkest hour", and in the face of more than 100 dealers present, he lowered the target for 2024 to less than half of 2023, "only 300 million business this year".
Zhong Xuegao's decline is known to almost everyone. On March 11, the Shanghai Jiading District People's Court issued a consumption restriction order to Zhong Xuegao, and the person who restricted consumption was Lin Sheng, the founder of Zhong Xuegao. Tianyancha shows that in February this year, Zhong Xuegao was forced to pay more than 810,000 yuan, and the equity of 7 of its companies has been frozen.
From "Internet celebrity brand" to "ice cream assassin", Zhong Xuegao has walked for 6 years. In the vast record of the new consumer army, Zhong Xuegao was once an undeniable leader - with a revenue of more than 100 million yuan in 16 months of establishment, and 152 million ice creams sold in 2021, with a revenue of more than 1 billion.
At the beginning of 2022, Lin Sheng said in an exclusive interview with Yabuli Forum that a momentary boom or traffic cannot precipitate the brand, and Zhong Xuegao's original intention is to prove to the world that China has high-quality ice cream.
The aftermath has not yet dissipated, but it has already gone to defeat.
To be a brand, be an Internet celebrity first
In 2014, Modern Martial, a well-known ice cream brand in Northeast China, hoped to enter the national market. In the same year, Modern opened more than 20 stores in Beijing's Qianmen, Xidan Joy City, Nanluoguxiang and other prosperous business districts, with annual sales of more than 20 million yuan.
In 2016, another Shenyang "Middle Street" ice cream from Northeast China became the "first generation of Internet celebrities", and the Middle Street 1946 series stood at a high price of 20 yuan. Also in 2016, Zhongjie Ice Cream entered Tmall and won the ice cream category championship for the first time in the "Double 11".
Behind the two outstanding ice cream brands, stands the same trader Lin Sheng.
Lin Sheng, who was unwilling to work from 9 to 5 at that time, founded his own advertising agency in Shanghai. Coming from a history background, he was able to excel in the marketing strategies of Modern and Midstreet 1946. On the brand packaging of Modern Martial, Lin Sheng grasped the characteristics of "time-honored brand", from the "Little Paris of the East" during the Republic of China to the ancient court recipes of Modern which were exclusively provided by the upper class, highlighting the historical sense and expensive points of the brand as much as possible.
Although Modern stopped cooperating with Lin Sheng in the later period, the successful creation of the two cases allowed Lin Sheng to go deep into the ice cream industry and explore a set of Internet celebrity brand methodology throughout.
Until Lin Sheng personally came down and created his own brand Zhongxuegao.
Lin Sheng once described the overturning and testing over and over again in the early days, saying that he tried ice cream every day to survive, and then asked the R&D personnel to change it when he encountered deficiencies. On May 20, 2018, Zhong Xuegao officially launched the "Ecuador Pink Diamond" ice cream, with a high price of 66 yuan, which made people fall through the glasses, and unexpectedly, 20,000 pieces of ice cream were sold out within 10 hours on Double 11 that year.
The data says it all, Lin Sheng, who has always emphasized that "making yourself an Internet celebrity first to be a brand", has successfully interpreted what it means to be "the peak of debut".
Lin Sheng once said: "Middle Street 1946 caught up with a good era. "Zhong Xuegao's success, in addition to the east wind of the times, also has the Internet celebrity methodology that Lin Sheng believes in - high narrative packaging, high breakthrough promotion, and high price.
In the narrative of Zhongxuegao's "Ecuador Pink Diamond" ice cream: only 3 tons of natural powder cocoa can be found in the country instead of coloring, the semi-wild lemon pomelo used in the ice cream only bears fruit once in 20 years, and the yogurt used adds up to more than 1.2 million tons.
Under the gorgeous formula, Lin Sheng led Zhong Xuegao to sit on the traffic express. At the beginning of the brand's establishment, Lin Sheng directly drove the product cart to the headquarters of Xiaohongshu, and invited the popular bloggers of the platform to try and recommend it; Li Jiaqi, Luo Yonghao, and Wei Ya all had Zhong Xuegao's products in the live broadcast room.
In order to attract young consumers and create a "national trend" attribute, Zhongxuegao has co-branded with a number of brands, including the youth version of ice cream co-branded with Xiaomi, the fragmented ice cream produced with Luzhou Laojiao, and the cherry yogurt-flavored ice cream produced with Hema .
"Influencers are the only way to a brand" "If you can't even be an influencer, then don't be a brand"...... Lin Sheng firmly led Zhong Xuegao on the road of Internet celebrity brand, and it has indeed become a successful target in the new consumption upswing, all of which verifies the "correctness" of this Internet celebrity methodology.
Abandoned "Ice Cream Hermes"
The whole series of Zhongxuegao, which is priced at no less than 15 yuan, has become a symbol of quality and fashion, and is known as "Hermes in ice cream". Under the peace, few people questioned Zhong Xuegao at his peak, but the gift given by fate had already been secretly marked with a price.
In the upward easterly, it is capital that smells the crisis first.
Around 2018, when Zhongxuegao was born, it was in the traffic dividend period of new channels such as Xiaohongshu and Douyin, and as long as new brands make good use of these channels, they can reach users to the greatest extent with very low marketing costs. Perfect Diary, a domestic brand launched in 2017, is regarded as a vane of new consumption, and in 2018, new tea drinks represented by Heytea have been expanding rapidly.
In the investment frenzy of the consumer market, investors are eager to find the next traffic brand. Zhong Xuegao, who is in charge of Lin Sheng, conforms to the logic that investing in a brand is "investing in people". From 2018 to 2021, Zhongxuegao received a total of 4 rounds of financing. At the peak, 200 million yuan was raised in the A round, and investment institutions such as Zhen Fund, Jingwei Venture Capital, and Yuansheng Capital formed a strong capital barrier.
But what is unexpected is that it took less than half a year from the pursuit of 10,000 people to the fading of capital.
In 2021, the growth myth of the e-commerce platform "Double 11" will no longer continue. In the same year, Alibaba Group disclosed that the total transaction volume of Tmall's "Double 11" was 540.3 billion yuan, and the GMV growth rate fell from 26% in 2020 to 8.45%.
With the fading of traffic dividends, some new consumer brands that have taken advantage of the trend have frequently overturned. Xiaoxian stew, which promotes health and nutrition, has been repeatedly questioned, and the light of domestic products "Perfect Diary", the first share of milk tea, Nai Xue's tea, has seen its share price fall and its market value shrink.
Return to calm capital and no longer easily invest in "fragile" new consumer brands. After May 2021, Zhong Xuegao no longer had new financing to enter, and the domestic "Hermes" began to be abandoned by capital.
At the same time as the capital withdrew, Zhong Xuegao's brand trust also began to loosen, and the new consumer brands that have been "slapped in the face" many times have made consumers full of vigilance.
It is a pity that Zhong Xuegao, who is 66 yuan, cannot stand up to scrutiny, and the two administrative penalties imposed on him by the Shanghai Municipal Administration for Market Regulation have shown that Zhong Xuegao claims that the milk ice cream without adding a drop of water actually contains water; the so-called standard ice cream sticks used by babies are only general standards after inspection; and the special red grapes selected in the products are shown to be bulk red grapes after inspection.
In the summer of 2022, the "ice cream can't burn" incident became the first domino for Zhong Xuegao's reputation to collapse. Although Zhong Xuegao responded, "The right amount of carrageenan helps the milk protein in ice cream to maintain a relatively stable state", it is no longer synonymous with high-end, and has been replaced by "ice cream assassin".
Just as the incident was in an uproar, a screenshot of Lin Sheng's circle of friends on the Internet seemed to respond that the product far exceeded the national standard quality, and was taken out of context by pseudoscience, and was suspected to be industry competition, and the traces of the water army were obvious.
In this response, Lin Sheng, who "shouted grievances" for Zhong Xuegao, was not lacking in self-confidence. The results in 2022 may explain Lin Sheng's confidence, and until the first half of 2022, Zhong Xuegao still rose gratifyingly. According to Sina Finance, from May 2021 to May 2022, Zhongxuegao's sales volume increased by 176% year-on-year, with a total revenue of 800 million yuan. However, the compound annual growth rate of total sales in 2022 will be about 50%, far less than the performance of more than 100% in the previous three years.
Beneath the calm waters, the fading capital and the collapse of trust of consumers have come to the verge of giving up. It's just that the founder Lin Sheng is still unaware.
The tide receded
Lin Sheng in 2022 is still in high spirits, but in 2023, the situation will take a sharp turn for the worse.
Zhong Xuegao has to face not only a crisis of public opinion, but also the collapse of the brand building. According to the official account "Food Internal Reference" reported in January this year, a person familiar with the matter said: "After 2023, Zhong Xuegao's team has changed from more than 1,200 people at the peak to more than 100 people at present, and the performance has increased from more than one billion yuan in annual sales at the peak to nearly 700 million yuan last year......
Times have changed, and Zhong Xuegao is no longer the "light of domestic products", but is tied to layoffs, equity freezing, founder restrictions, etc. What's even more powerless is that the once top domestic products have completely lost their supporters, when Lin Sheng, who was limited to height, took the green train to Beijing, saying that "selling sweet potatoes also has to pay off debts", and the high-praise comment under Weibo was, "Do you plan to sell sweet potatoes for 40 yuan a piece?"
No one knows whether Lin Sheng, a marketing genius, can repay his debts, but Zhong Xuegao is indeed in danger.
Looking back on the development of the past six years, Zhong Xuegao has stepped on the pit that Internet celebrity brands will step on.
First of all, Lin Sheng's deepest imprint on Zhong Xuegao is "Internet celebrity", and the mysterious thing is that the falling Zhong Xuegao was also defeated by "Internet celebrity".
In the traffic bonus period when everyone can enter the market, the channel traffic corresponding to new consumer brands can indeed pull the brand to a high level in the short term. In March 2022, data from Yiou Think Tank showed that Alibaba's customer acquisition cost in fiscal year 2021 was 477 yuan, an increase of nearly 2 times compared with fiscal year 2020. The increasingly expensive traffic needs to bear a greater cost for Zhong Xuegao, who started with marketing.
Secondly, Internet celebrity brands are negligent in quality control, and it is difficult to become popular. Lin Sheng has a point of view that "Internet celebrity + time = brand". Zhongxuegao's impression to the outside world may be defeated by the high price, but high-end brands such as Häagen-Dazs and Luxue show that consumers are not unwilling to pay for high prices, but the price and quality should match.
In the early stage of development, Zhongxuegao attracted consumers with gimmicks such as raw materials and co-branding. But as time goes by, people find that Zhong Xuegao has only upgraded marketing methods, and some netizens found their ice cream factory in Zibo, Shandong Province, and found that Zhong Xuegao's 18 yuan velvet cocoa tastes almost the same as the factory's 5 yuan "Si Nong Shengqiao".
"Zhong Xuegao is not only an assassin, but also a deception" - once consumers have a sense of being deceived, Zhong Xuegao's decline is inevitable.
Finally, after getting financing, he was eager to expand and lay out offline, which accelerated Zhongxuegao's downward trend. In this regard, Lin Sheng once reflected in an exclusive interview with "Red Star Capital Bureau", "running too fast and sinking too fast".
In terms of organizational structure, Zhongxuegao in the rising period is eager to expand the team, according to the "Tiger Sniff" report, from 2021 to 2022, Zhongxuegao's employees have more than doubled.
Earlier, Zhong Xuegao, who started online and had a fixed customer base, was eager to go offline. In 2020, they entered the offline channel for the first time, entering nearly 400,000 freezers in more than 200 cities at a higher channel fee than traditional ice cream products. Obviously, as a retail deep-water area, the test of offline supermarkets has not been as smooth as imagined.
On the premise that no new financing has entered, the accelerated expansion of offline channels and teams will inevitably accelerate the tightening of cash flow. This also explains why Zhongxuegao will reduce costs by laying off employees in 2023 and why a large number of suppliers are dunning.
In the past six years, from the rise to the decline, the development of Zhongxuegao and the new consumption movement have almost overlapped. In recent years, there have been many Internet celebrity brands that have fallen, and when consumers return to rationality, the Internet celebrity effect of "Zhong Xue Gao" has failed.