Click to read the original article for details Source: 泡腾VCer (ID: ptvc2020) Author: Claire Recently, a trending topic about Magnum pushed ice cream into the spotlight. Because it uses vegetable oil as a raw material in China, while using milk abroad, netizens questioned the "double standard" of its ingredients. Subsequently, Magnum officially responded that using vegetable oil is for environmental protection, and that the vegetable oil is not a non-dairy creamer and complies with national regulations, but it remained silent on the "double standard" issue. This "evasive" clarification further angered netizens, who called for a boycott of all Wall's ice cream products. It must be said that brands that cannot fool netizens are like the coal ball cake of the past; they become notorious before they even become popular. On one end, there is the still-strong Little Pudding selling for 1 yuan; on the other, Zhong Xue Gao, which is hard to buy even with a 200 yuan surcharge. The ice cream track, with such a wide price range, makes it increasingly difficult for brands to find their positioning. Blindly following trends to create bestsellers inevitably leads to a short-lived fate. In this 100-billion-yuan market, how can brands break the curse and turn from internet celebrities into long-lasting hits? How did the three-year-old Zhong Xue Gao become the "Hermès of ice cream" and frequently appear in top livestream rooms? What are the future trends in China's ice cream track? How can brands seize new opportunities and successfully stand out in the melee? To better understand the ice cream industry and find breakthrough points for brands and capital, the Effervescent Researcher conducted an in-depth analysis of the past and present of the ice cream track. In this article, you will see: - Panorama of the ice cream track - New gameplay in the ice cream track - Deconstructing the old internet celebrity brand Zhong Xue Gao - Future trends and breakthrough points in the ice cream track Panorama of the ice cream track A 100-billion-yuan market with continuously rising average order value The earliest industrially produced frozen products in the Chinese market can be traced back to the "Meinv Pai" (Beauty Brand) ice cream decades ago. In 1932, the American-founded Haining Ocean Company introduced ice cream production equipment and built China's first ice cream factory, giving it a very alluring name—"Meinv Pai." For a long time afterward, Meinv Pai dominated the Chinese ice cream market. It wasn't until 1950, when the domestic brand "Guangming Pai" (Bright Brand) emerged, that this situation was broken. However, at that time, ice cream categories and flavors were relatively simple, and the ingredients were relatively inferior. It wasn't until the 1990s, when foreign brands represented by Wall's and Häagen-Dazs officially entered the Chinese market, that ice cream with delicate texture and rich milk flavor became known to Chinese consumers. According to data from the China Food Industry Association, the scale of China's ice cream market was only 70.8 billion yuan in 2014, and it rapidly grew to 138 billion yuan in 2019. It is estimated that in 2021, the scale of China's ice cream market is expected to exceed 160 billion yuan, ranking first globally. (Data source: Qianzhan Research Institute) The rapidly developing cold-chain logistics industry and e-commerce platforms have brought impressive results to online ice cream sales and also driven the rapid development of the ice cream market. In 2018, there were only about 60 online ice cream brands in China; now the number of online brands is expected to exceed 300, and the proportion of online sales has risen from 5% to 20%. According to the "Online Ice Cream Consumption Trend Report," in 2020, the ice cream category on Tmall achieved growth across all subcategories, with sales nearly doubling compared to 2019, driven mainly by new products. Among online consumers, a large number of Generation Z have flooded into the ice cream consumption market. In the past year, Generation Z's online purchases of ice cream through various e-commerce platforms increased by 175% year-on-year. In 2020, the "delicate moms" group accounted for the highest proportion of online ice cream consumers, higher than new white-collar workers, senior white-collar workers, and urban blue-collar workers. At the same time, as a frozen food, ice cream has higher requirements for cold-chain transportation than fresh food. E-commerce platforms use the slogan "melt and compensate" to increase purchasing power, but this significantly raises logistics costs, causing ice cream prices to continue to rise. In terms of raw materials, merchants' upgrading of material quality is also an important reason for the high price of ice cream. Taking Zhong Xue Gao as an example, during the 2018 Double 11, it launched the 66-yuan "Ecuador Pink Diamond," with raw materials including Ecuadorian natural pink cocoa beans, Japanese lemon oil, and French-processed pure fruit puree, costing nearly 40 yuan. The overall price of the ice cream market has risen with costs, and classic products have also seen significant price increases. According to Qianzhan Research Institute analysis, before 2019, the domestic ice cream industry presented a "tripod" situation. Among them, foreign brands such as Häagen-Dazs, Nestlé, Wall's, and Baixi occupied most of the high-end and part of the mid-range market; domestic brands such as Yili, Mengniu, Guangming, and Deshi occupied 45% of the mid-range market; and regional brands such as Wuyang occupied 30% of the mid-to-low-end market. However, with the addition of internet-famous ice creams like Aoxue Double Egg Yolk and Coconut Ash, this situation was completely broken. Can ice cream replicate the glory of the milk tea market? Who will become the Heytea of the ice cream world? This article will analyze the new gameplay in the current ice cream track and, using the "old internet celebrity" Zhong Xue Gao as an example, conduct an in-depth analysis of the ice cream track. New Gameplay in the Ice Cream Track The rise of the new generation of consumers, such as the post-90s and post-00s, has stirred up the entire ice cream market. They no longer pursue the single function of relieving heat but have made diverse flavors and social attributes their new demands. As consumption upgrades and consumption diversification gradually become new trends, more and more innovative products are emerging in the ice cream track. 1. Niche Flavors—If you can think of it, they can make it Since the salty-sweet Double Egg Yolk ice cream became popular across the internet in 2019, ice cream manufacturers seem to have let themselves go, and ice cream flavors have gradually taken unconventional paths to achieve surprise victories. According to CBNData's "2019 Online Ice Cream Consumption Insights," taste is no longer the only demand of consumers. With the rapid rise of various niche and novelty flavors, their consumption share has increased year by year. Salty flavors such as sea salt and salted egg yolk are becoming increasingly popular, and pearl milk tea flavor became the fastest-growing niche flavor in 2019. In the era of tipsiness, alcoholic ice cream has also become a major consumption trend. Flowing German black beer ice cream, Shaoxing rice wine popsicles, Zhong Xue Gao X Martell cognac degree ice cream, and Suibian X Jiang Xiaobai's white peach wine chocolate ice cream have all been loved by young people. The "Blackout" ice cream launched by Zhong Xue Gao and Luzhou Laojiao sold over 1,600 portions in just four days, receiving enthusiastic pursuit from consumers. In addition, ice cream manufacturers have not forgotten consumers who love sweets, successively launching pineapple cake ice cream, macaron ice cream, brown sugar milk tea ice cream, and pearl milk tea ice cream—truly "I have all the styles you like." There is another type of ice cream that also grabs attention through "flavor" and fun, arousing consumers' curiosity and gaining wave after wave of market popularity, becoming the traffic password for ice cream. Examples include "Northeast Iron Pot Stew flavor," "Changsha Stinky Tofu flavor," "Yangzhou Fried Rice flavor," and "Shanxi Old Vinegar flavor." According to data from Tmall Heihe and Alimama, in 2020, the GMV of "wasabi flavor" and "stinky tofu flavor" ice cream increased by 1368% and 6772% year-on-year, respectively. 2. Co-branded Ice Cream—What you buy is not ice cream but nostalgia According to data from the "2020 Global Fashion IP White Paper" released by Shangsuo in 2021, from 2017 to 2019, there were 1,389,767 cross-industry co-branding releases globally, and 38% of fashion brands believed that releasing brand IP co-branding could better win market opportunities compared to launching pop-up stores, gradually becoming the most important marketing method for brands. By borrowing each other's channel resources, both brands can cover more target consumers, achieving sales breakthroughs while also bringing sufficient topic discussion and traffic to both brands. As consumers, when purchasing cross-industry products, what attracts them is often no longer the product itself but more the emotional resonance. For example, the old internet celebrity in the ice cream world, Zhong Xue Gao, joined forces with AD Calcium Milk to launch the "Underage Ice Cream," with the slogan "Who isn't a baby?" which exploded across the internet. AD Calcium Milk consumers are mostly post-80s and post-90s, and its sweet and sour taste has long been engraved in the hearts of several generations, becoming a classic. The group that loved AD Calcium Milk back then has grown into the backbone of society, and the co-branding of Zhong Xue Gao with the "national internet celebrity" AD Calcium Milk is a reenactment of this group's memories and feelings of youth. It seems that eating this "Underage Ice Cream" can take you on a time machine back to childhood days of playing marbles, catching cicadas, and catching loaches. 3. Cultural and Creative Ice Cream—Everything can be made into ice cream The origin of cultural and creative ice cream can be traced back to the cherry blossom ice cream at Beijing Yuyuantan Park in 2016. In 2015, Zhang Qi, the head of the Yuyuantan Park management team, was inspired by the paper tray of a machine-made ice cream at a tea shop during an inspection of Beijing's Houhai tourist area. Combined with elements from the Qing court drama "Bu Bu Jing Xin" (Startling by Each Step), she began to think about creating an exclusive ice cream that reflected the culture of Yuyuantan Park. In Yuyuantan Park, famous for its cherry blossoms, the cherry blossom shape became Zhang Qi's natural choice. In the spring of 2016, the cherry blossom ice cream was first launched, but because it missed the peak cherry blossom season, the market response was mediocre. Thus, the cherry blossom ice cream went on without much fanfare for two years. Around 2018, Zhang Qi began to notice signs of tourists taking photos and checking in. Subsequently, cultural and creative ice cream gradually appeared in major scenic spots across the country, but none successfully exploded online. It wasn't until the summer of 2019, when the Palace Museum launched its ridge beast ice cream and it hit the trending searches, that cultural and creative ice cream officially entered the public eye. After the pandemic, China's tourism market has begun to rebound significantly. Data from the National Bureau of Statistics shows that from 2011 to 2019, China's domestic tourism market maintained a high growth rate of over 8%, with 6.01 billion domestic tourist trips in 2019, an average of 4.3 trips per person per year. Tourism has gradually become a normalized consumption for citizens. During travel, dining and shopping are the main additional consumption items for tourists in scenic areas. Cultural and creative ice cream uses ice cream as an organic carrier, incorporating scenic elements, and quickly stands out among many ice creams. Cultural and creative ice cream not only has high aesthetic value and cultural characteristics but also brings traffic to consumers themselves when they post photos and check in on platforms, becoming a product that expresses personal attitudes and trendy labels. In Wuhan, on average, one in every three visitors to the Yellow Crane Tower buys a local cultural and creative ice cream. According to data from Guanyan Tianxia, the bronze mask ice cream from the Sanxingdui Cultural and Creative Museum sold over 20,000 units during the May Day holiday; Baotu Spring ice cream sold over 600 boxes (19,000 units) during the May Day holiday; and the cherry blossom-shaped ice cream from Beijing Yuyuantan Park, the originator of cultural and creative ice cream, sold 47,000 units during the Qingming Festival holiday. Deconstructing the "Old" Internet Celebrity Brand—Zhong Xue Gao Founded in March 2018, Zhong Xue Gao is not exactly "old," but it has left a deep impression on Chinese people, frequently appearing at the top of trending searches, and its sales have consistently ranked first in the ice cream category. On May 18, Zhong Xue Gao completed a financing of 200 million yuan, led by Yuansheng Capital, with participation from H Capital, Tian Tu Investment, and Wanshi Capital, with a valuation exceeding 1 billion yuan. As a new domestic ice cream brand, Zhong Xue Gao has firmly grasped the attention of contemporary consumers and created multiple internet-famous bestsellers. Behind Zhong Xue Gao's popularity are its high aesthetic value, good taste, and multi-channel marketing. Information source: Qichacha 1. Innovative R&D Behind the Exquisite Exterior Taking three common Chinese surnames and using the homophone of "Chinese ice cream" as its name, with auspicious cloud tiles and a back-and-forth pattern, Zhong Xue Gao showcases the personality of "Chinese-style ice cream" from the inside out, implanting the brand image of new national trend in consumers' minds. At the same time, the brand actively creates differentiated value, effectively avoiding imitation by peers. Zhong Xue Gao founder Lin Sheng believes that only by breaking through in products can the brand better meet consumer needs. Apart from the basic flavors represented by "Light Milk Ice Cream" and "Velvet Cocoa Ice Cream," Zhong Xue Gao continuously develops seasonal limited products and co-branded products. For example, "Golden Autumn Red Bean Ice Cream," the "Blackout Ice Cream" co-branded with Luzhou Laojiao, and the "Qingzhu Ruoye Ice Cream" co-branded with Wufangzhai have all made a statement in flavor, satisfying consumers' pursuit of different tastes and curiosity. In addition, "user co-creation" is another communication value point of Zhong Xue Gao's innovation. In September 2020, Zhong Xue Gao launched "Preserved Plum Flavor Ice Sorbet," with the slogan "This is a product co-created with you." From R&D and tasting, to outer packaging, to final naming, the entire process of product creation invited fans to participate and observe. The brand also used homophone puns to create a funny video, inviting historical celebrities from different backgrounds to boldly confess to consumers—"I like you" (xue ni), "Mei (no) ni (you) bu xing" (Can't do without you), etc., taking interesting marketing to the end. Through product co-creation, the brand continuously evokes consumers' memory and desire for new products, stimulates their purchasing enthusiasm, and also brings strong emotional resonance. Not limited to traditional tiles, in March 2021, Zhong Xue Gao also launched a product called "Zhong Xue Gao's Cake," with two flavors: "Xing Yu Nian" and "Zhi Mei Long Li." This ice cream dessert, packaged in a lunchbox, has stronger sharing attributes and is suitable for more diverse consumption scenarios. One scoop reveals 4 layers and 6 textures, bringing consumers great freshness and satisfaction, while also blurring the boundary between dessert and ice cream, offering more creative ways to eat. 3. Multi-line Parallel Marketing Mix In the just-passed 618 mid-year promotion, Zhong Xue Gao sold over 2 million ice cream sticks, with sales increasing by 535.02% year-on-year. Now, opening Xiaohongshu, there are more than 20,000 notes about Zhong Xue Gao, and unboxing review videos on Bilibili are also endless. Zhong Xue Gao has staged a "textbook-style" marketing campaign, vividly interpreting the three-step method of creating trends summarized by founder Lin Sheng. (1) Social Media Marketing In its early days, Zhong Xue Gao chose Xiaohongshu as its diffusion channel. In May 2018, when the first batch of Zhong Xue Gao products was launched, the team found a large number of KOLs and ordinary users on Xiaohongshu to experience the products and post planting notes. Data shows that within three months of launch, Xiaohongshu notes about Zhong Xue Gao exceeded 2,000, helping the brand attract its first batch of seed users and quickly forming a closed loop from planting, purchasing, to posting notes again. Subsequently, on platforms such as Weibo, WeChat official accounts, and Bilibili, the brand accumulated a large number of users through advertising, personal sharing, and fan interactions, expanding brand awareness. (2) Celebrity Effect and Livestream Traffic To cover consumers of different ages and genders simultaneously, Zhong Xue Gao fully utilizes the influence of the fan economy, signing celebrities from different dimensions such as Tong Liya, Zhou Yiwei, and Ao Ziyi as spokespersons. The brand also livestreams on multiple platforms. After its Taobao debut in July 2019, the brand entered Douyin in early 2020, selling 198,000 sticks during Luo Yonghao's livestream debut. Investing in the livestream rooms of top anchors Li Jiaqi and Viya also significantly boosted sales. During the 2020 "Double 11" period, Zhong Xue Gao ranked first in Tmall's ice cream category sales, and in 2020, it shipped a total of 34 million ice cream sticks. (3) Fancy Cross-industry Co-branding According to the report "This is the National Trend Territory of the Post-95s" released by CBNData, cross-industry collaboration is a shortcut for young people to accept trend recommendations. Zhong Xue Gao can be said to have a firm grip on young people's minds. Since its establishment, Zhong Xue Gao has co-branded with dozens of brands, continuously innovating product flavors to keep consumers' freshness and expectation for the brand and increase consumption desire. At the same time, through co-branding topic creation and content operation, it maintains the brand's heat and topic discussion, and emotionally resonates with consumers, bringing the brand closer to consumers. From the raw material end to create a high-quality concept, using design and high aesthetics for promotion, and then using bestsellers, seasonal limited products, and co-branded products for marketing, under this set of combined punches, it seems like we can see the Heytea and Naixue of the past. Let's boldly guess: will Zhong Xue Gao become the next Heytea? Future Trends in the 100-billion-yuan Market 1. Do Products, But Also Build Brands 2019 can be called the first year of Chinese ice cream, with major brands competing to seize a piece of this big cake, and various product brands emerging everywhere. However, the homogenization of ice cream has become increasingly serious with the continuous development of this category. After a bestseller appears, various imitations emerge endlessly, and in the end, only product names like Coconut Ash and Salted Egg Yolk remain in consumers' minds, not brands. After the Aoxue Double Egg Yolk ice cream became a hit in 2019, the brand launched "Northeast Iron Pot Stew Ice Cream" and "Crab is Fat Ice Cream" in 2020, but due to the lack of brand value support, consumers' value recognition of the products did not successfully transfer, and these two products did not replicate the popularity of the Double Egg Yolk ice cream. If you only focus on product polishing and neglect the brand, expanding into new categories is like opening a blind box, not knowing whether you'll get a surprise or a shock. At the same time, consumers are more likely to try internet-famous ice creams out of novelty, but for repeat purchases, they still turn to leading brands like Guangming and Mengniu. According to data from the China Enterprise Brand Research Center, in 2021, the top two brands in the ice cream/ice pop brand power index score were Mengniu and Yili, while Zhong Xue Gao, despite its all-around high-intensity marketing, did not even make the top ten, nor did it appear in the customer recommendation index score ranking. To have a place in the ice cream market and remain popular for a long time, brands need to have a clear positioning and understanding of themselves. How to form their own brand tone and create differentiated products is a question brands need to consider. 2. Quality is Ultimately King In 2019, the hit Aoxue Double Egg Yolk ice cream was found to have "total colony count and coliform group exceeding standards," directly ending the product's internet celebrity career. In 2020, Aoxue ice cream was again called out for exceeding total colony count standards, with the plea "hope the company pays more attention." In the same year, Zhong Xue Gao's Light Milk Ice Cream, which claimed to be "formulated without added sucrose or sugar substitutes," was found to contain sucrose, and the brand's ice cream, which boasted "not a drop of water added," was found to "have moisture." Various similar news has triggered consumer doubts about the quality of popular ice creams. In a market of consumption upgrades, consumers have gradually accepted the collective price increase of ice cream and are willing to pay for "healthy and high-quality" ice cream. But when spending the price of a cup of milk tea on an ice cream stick, consumers have stricter requirements for product quality. The premium pricing of ice cream should not blindly pursue profits but should be based on the embodiment of the product's own quality. On the other hand, leading brands without bestseller products have long stood firm in the fierce market competition through their adherence to quality. 3. Healthy Ice Cream May Become a Breakthrough Point With the improvement of social living standards, consumers are becoming more health-conscious in terms of food. According to Mintel's "Healthy Food and Beverage Ingredients Insights," global consumers are increasingly paying attention to the quality and health benefits of food and beverages while enjoying delicious food. Among them, 84% of Chinese consumers said they are willing to spend money on high-end food and beverages that claim to be beneficial to health. Facing this trend, many ice cream brands are launching healthier products to attract consumers. For example, Wall's launched the So Good light ice cream series in 2019, with calories not exceeding 85 kcal. Niche brand Kemiku launched a barley leaf flavored ice cream, sugar-free and worry-free. Yili's high-end brand Xujinhuan focuses on "fresh fruit and live bacteria yogurt ice cream." The popular oat milk brand Oatly has also entered the ice cream market, launching an oat-based vegan ice cream. It is not only friendly to lactose-intolerant people, but the natural and pollution-free production process of oat milk is also a highlight. According to the "Online Ice Cream Consumption Trend Report," last year, sales of low-fat products in the online ice cream market increased by 131% year-on-year, and sugar-free products increased by 128%. With more and more brands launching healthy ice cream and the emergence of various plant-based ice creams, the development potential of the healthy ice cream market is obvious. In the context of national health consciousness, multi-functional and healthier ice cream may become a breakthrough point. In the ice cream track flooded with imitations, being an internet celebrity seems to have become a death label. Once labeled, most products don't last more than one summer. Faced with a dazzling array of novel ice creams, consumers are gradually becoming aesthetically fatigued. After all, no matter how good-looking the ice cream is, it will eventually be eaten or melt. For users, the unchanging law is: it starts with appearance, falls into taste, and is loyal to quality. The ritual of taking photos and checking in seems to have become a standard for eating ice cream, but after the wind blows, only the proof in the photo album and the faintly remembered taste remain. What truly stays in memory is probably the happy summer days of childhood when a 50-cent ice cream brought joy. -END- PS: The 2021 (4th) China FMCG Conference, hosted by "New Distribution," is about to open in Shanghai. Focusing on industry trends + practical cases + growth through connections as the core, 3,000 FMCG practitioners will gather for the event. 10 thematic forums cover new retail O2O, community group buying, short video livestream e-commerce, distributor transformation, rise of new consumer brands, interpretation of new alcoholic beverages, distribution B2B supply chain, omni-channel marketing, B2B2C new technology applications, etc., with operators from various sub-sectors bringing the latest case studies. Some of the confirmed heavyweight guests so far include: 1. Tao Shiquan, founder of Jiang Xiaobai; 2. Yao Xuhong, general manager of Meiyijia Holdings Co., Ltd.; 3. Lu Xiuqiong, global expert partner at Bain & Company and former vice president of marketing for Coca-Cola China; 4. Chen Xiaodong, senior vice president of Nestlé Greater China; 5. Zhang Fujun, president of Lee Kum Kee Sauce Group China; 6. Bi Chaojiao, general manager of China Resources Snow Breweries (China) Marketing Center; 7. Yang Hongbin, vice president of Junlebao Dairy Group; 8. Yang Shun, COO of Lipton Greater China; 9. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; 10. Li De, e-commerce general manager of Gold Hong Ye Paper Group... A grand event for FMCG professionals—you must be there! Are you "watching" me?