Zhong Xuegao, the best teacher is Hey Tea

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Text | Luo Lixuan

Source: 20 Society

Zhong Xuegao, who was scolded for the number one search on Weibo, has become a “public enemy of the whole people”.

Is Zhong Xuegao wronged? Maybe it’s a bit injustice from a pure product point of view.

It does not melt under the sun for 1 hour. According to experts interviewed by The Paper, it is actually because the solid content of Zhong Xuegao ice cream is high, and the melted product is more viscous, so it can maintain a solid state. In addition to the fact that there are more solids, there is a simpler principle for “burning without melting” – when people use fire to bake snow, the outside temperature is higher than its boiling point, and the snow will directly turn into water vapor. This process occurs in It is called “sublimation” in junior high school physics books. The process of these experimental designs, and the conclusions you want to demonstrate, are hardly scientifically literate.

But the core of the contradiction may have been shifted and deviated. Looking back at the process of Zhong Xuegao becoming the public enemy of the whole people, people were most angry about this brand at first. Consumers pick it up and go to checkout, scared by the price, and forced to pay the bill because they are embarrassed to turn back, thus becoming an “ice cream assassin”.

In the final analysis, it is because of the sudden mismatch between Zhong Xuegao’s positioning, pricing and channels, which has caused confusion to consumers. Originally it was a high-end positioning, and maybe the products were fine (meets or even better than the national standards in some indicators). Previously, there was a lack of supporting investment in mass channels such as variety shows or offline, so this positioning was not really familiar and recognized by the public. At this time, rashly joining the masses and mixing in convenience stores will inevitably cause confusion among consumers.

The outrage is understandable considering that some consumers do not know the brand. And the source of social emotions behind this kind of anger is what all business owners cannot ignore.

There are two ways to solve this problem. One is, as netizens said, to put branded small freezers in convenience stores, just like Haagen-Dazs, to draw a clear line with other brands. The other is to simply lower your stature and enter the mass market directly.

This reminds us of another brand that takes the initiative to cut prices even though it is also “aristocratic”: HEYTEA, which launched a product line starting at 10 yuan at the beginning of this year. It can be said that it has gained new customers and maintained its high quality. Quality brand positioning.

When your consumers hold their wallets, you better be a “people’s brand” that is considerate to them. Sometimes reading and following the trend of the times is a threshold that an enterprise must pass, and it is also a minimum awe of the market.

Ice cream also needs to be calm

Many media have pointed out that Zhong Xuegao’s real problem is that he entered the wrong channel.

In a daily consumption scenario like a convenience store, everyone defaults that the price of the product should be relatively close to the people, and it doesn’t hurt to spend it. The ice cream in the refrigerator is not like the clear price on the shelf. It is also because many small stores have limited refrigerated space, and the price of ice cream is not much different, so this habit will be established.

However, since the high-end ice cream represented by Zhong Xuegao entered the convenience store channel, there are still many consumers who are not very price-sensitive. As a result, many ice cream brands have also seen the possibility of “consumption upgrade”. This year, they have launched a batch of products with higher prices, relatively better materials and newer ideas, such as Madiel’s durian ice cream ice cream (14 Yuan), Northeast Daban Heiqiao (19.8 yuan), Yili’s Xujinhuan Ice Cream (18 yuan), etc., and Zhong Xuegao, priced at 15 yuan, is not so prominent.

When the frequency of being “assassinated” by ice cream assassins increases, consumers’ grievances naturally increase. When they are looking for a release point for their emotions, Zhong Xuegao, who first started the upgrade trend, has become the target of public criticism.

In the channel that Zhong Xuegao is good at, they can talk about success. In this year’s 618 ice cream hot list on the e-commerce platform, Zhong Xuegao still ranks first in all sub-categories of ice cream. In the past few years, Zhong Xuegao used social platforms such as Xiaohongshu and Douyin to attract and reach target users, and then sold them in the form of whole boxes on e-commerce platforms such as Taobao.

That is to say, the users who successfully converted Zhong Xuegao before are all users who have recognized their brand positioning and price before making a purchase decision. In the convenience store, for the more general consumers, they do not know Zhong Xuegao.

Therefore, Zhong Xuegao’s problem is not that he entered the wrong channel, but that he did not have the awareness to become a mass brand before entering the mass channel.

Zhong Xuegao’s problem may actually be the result of these new consumer brands that use the traffic dividends of social platforms and sell directly to consumers, such as Sandunban, Wangfusuan, and Ramen Saying. question.

In the early stage of brand growth, they found some relatively niche and emerging demand points, creating products with relatively higher costs (and thus higher prices), but more in line with consumer needs, and directly promoted and sold them on social platforms. For brands, their most important profit margin is not actually raising prices, but cutting out middlemen.

The problem now is that their drainage is quite accurate, even a little too accurate, so that the public does not recognize them. New consumer brands have always lived in the beautiful bubble created by the skyrocketing social platform, but now that dividends are disappearing and consumption is declining, they can only go offline and face the very cruel traditional retail world.

For example, TV commercials, elevator commercials, subway commercials, mom-and-pop shops that count their profits to 1.3 cents, and competitors who precisely grab spots or even sign exclusive contracts, all require a lot of money, time, and energy. to face the test.

Zhong Xuegao is a small company

Some netizens complained on Weibo that since it is an expensive ice cream, why not learn from Haagen-Dazs and set up a special freezer for themselves? Today, Zhong Xuegao responded to “Chinese Entrepreneur” that the company is promoting offline channels to display separate freezers so that consumers can distinguish them.

With such a simple method, why didn’t Zhong Xuegao do it before? The core reason is that compared with his peers, Zhong Xuegao’s ability to negotiate offline may not be so strong.

In May last year, Zhong Xuegao just announced the completion of a 200 million yuan Series A financing. Investors include Yuansheng Capital (lead investment), H Capital, All Things Capital, and Tiantu Investment, with a valuation of 1 billion. Zhou Bing, co-founder of Zhong Xuegao, revealed to the “21st Century Business Herald” that in 2021, Zhong Xuegao’s sales volume will be 152 million, an increase of 176%, and revenue will double compared to the previous year. Currently, Zhong Xuegao has about 2,000 employees. According to the estimates of the financial gossip girl, Zhong Xuegao’s annual revenue is about 800 million.

Looking at it this way, Zhong Xuegao’s scale seems to be not small. But if you compare it with Yili, Mengniu and other companies, it seems a little insignificant. In 2021, Yili, which has a revenue of 110 billion, will have a revenue of 7.16 billion in the cold drink category alone, a year-on-year increase of 16.3%.

More importantly, in addition to selling ice cream, Yili, Mengniu and other companies are also the most important dairy producers in China, with a very rich product line and more than 2 million retail terminals across the country. Faced with retailers, they obviously have strong negotiating power.

Therefore, compared with competitors who can easily spread to the whole country, Zhong Xuegao is still a small company. To add a freezer to a retailer involves additional negotiation costs and requires higher coordination capabilities, not one or two. Something that can be done in a quarter. Even if Zhong Xuegao has already begun to make similar arrangements, it is estimated that the consumer side will have to delay for a while before they can feel it. Moreover, the “ice cream assassins” on the retail side are not limited to Zhong Xuegao’s family.

In addition, the scale is not large enough, which will make the cost of Zhong Xuegao not easy to optimize.

Zhong Xuegao currently does not have his own factory. According to Tech Planet, Zhong Xuegao currently has two suppliers, one in Shandong, which is Zhong Xuegao’s cooperative R&D partner and foundry. Generally speaking, the ex-factory price of 11 yuan ice cream is 5 yuan. And a county dealer told Tech Planet that Zhong Xuegao, who sells for 13 yuan, gave them a purchase price of 7 yuan, and Zhong Xuegao, who was 18 yuan, did not buy more than 8 yuan.

In addition, Zhong Xuegao has delivery costs. Ice cream needs the cooperation of cold chain logistics and distribution storage and transportation system, and online orders must be shipped one by one. According to Zhong Xuegao’s previously published data, its cold chain cost is 46%, which is higher than the industry average of 32%.

From the ex-factory price to the purchase price, Zhong Xuegao’s gross profit is probably between 1-2 yuan per ice cream. If it is conservatively estimated based on the sales volume of 150 million yuan, the gross profit of 150 million yuan requires market launch, maintenance channels, 2,000 employees, and the normal operation of the enterprise. This is a relatively tight figure. Therefore, it is entirely possible that Zhong Xuegao saved some additional costs at the retail end when he did not encounter such a strong brand crisis.

Lowering the price is also an option

What many people don’t realize is that although he has been complaining about being expensive, in fact, Zhong Xuegao has quietly lowered prices while trying to maintain his brand positioning.

According to the on-site visit of the 20 company, in convenience stores such as Lawson and 711, Zhong Xuegao is conducting the second 1 yuan promotion. That is to say, for a piece of Zhong Xue Gao Yangmei Milk Ice, which costs 13 yuan, the average price of two pieces is only 7 yuan, a decrease of 6 yuan. Moreover, on the new flavors such as Haiyan Coconut Coconut and Black Tea Cheese, Zhong Xuegao has indicated that they are exclusively for the channel, and they are only sold in this channel, hoping to be differentiated from products with higher prices online.

It can be seen that Zhong Xuegao wants to maintain the original brand positioning and remains cautious about price cuts, but it also shows that price cuts can be achieved.

After all, from the beginning of his debut, Zhong Xuegao has used various methods to increase his brand potential: for example, a limited edition pink diamond ice cream of 66 yuan, and co-branded cooperation models with multiple brands (at that time It is still a relatively rare thing), and imitating the Japanese food industry, launching new limited-edition flavors every year to keep consumers fresh. Delicious, high-quality, creative, and many factors have brought together Zhong Xuegao’s brand positioning of “high-end” (or expensive) in the hearts of some consumers.

But now, consumers are resisting the recognition Zhong Xuegao has received before and the current brand positioning. To win back their love, it is better to figure out how to make products that meet their needs on the premise of adhering to the essence of the brand.

Zhou Bing also mentioned in an interview with “21st Century Business Herald” that Zhong Xuegao is not a high-end brand, but a high-quality brand. Maintaining quality awareness, abandoning the “advanced” positioning, and developing lower-priced products may be the way out for this PR crisis.

At this point, HEYTEA may have become a success story. Since January this year, many people found that HEYTEA began to reduce the price, and the milk tea above 30 yuan has been adjusted to less than 30 yuan; on February 24, HEYTEA officially announced that it has completed a comprehensive price adjustment, and will no longer launch 29 this year. New beverage products above RMB 100,000, and promise that the price of existing products will not increase within this year.

This caused a lot of doubts at the time, after all, “self-depreciation” is not common in our daily life.

HEYTEA responded to the media’s statement that “the price band of our mainstream products has been maintained at 19-29 yuan for a long time, which is not the so-called high-priced tea drink. This price adjustment is also a normal adjustment action of HEYTEA in its own mainstream price band.” More people believe that this is a strategic adjustment made by HEYTEA in response to the sluggish overall consumption this year. By reducing prices, it can also increase the repurchase rate of original consumers while pulling new ones. It is also a new promotion.

Now open HEYTEA, we can see that in the column of “recommendation at par”, the price of succulent peaches and plums, coconut coconut mango mango, and “Perilla Powder Peach Drink” jointly negotiated with “Menghualu” are all priced at 15 yuan. The evergreen players such as succulent peach and succulent mango are priced at 18 yuan. The pure tea product “Pure Green Tea” is even priced at 9 yuan.

However, this still does not harm consumers’ positioning of HEYTEA, and the existence of high-priced products will not be criticized. HEYTEA still maintains people’s recognition of its high-end positioning.

Therefore, for Zhong Xuegao, going to the freezer can make up for it; but to win the hearts of the public, it may be necessary to make some difficult decisions.

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