An Ice Cream Empire’s Meltdown: Zhong Xue Gao’s Dramatic Fall from Grace

Zhong Xue Gao, a would-be upmarket Chinese ice cream brand often referred to as “the Hermès of Ice Creams,” is currently experiencing a dizzying fall from grace. The brand, also sometimes called “Chicecream” in English, has seen its prices plummet, falling from RMB 60 (around USD 8) to a mere RMB 2.5 on a certain online shopping platform.

Ice cream consumers, taken aback by this drastic price drop, have felt a sense of betrayal, pondering the vast profit margins that the company must have previously enjoyed. The price reduction, however, is just the tip of the iceberg. In recent years, Zhong Xue Gao has been embroiled in controversies ranging from accusations of exploiting customers to facing serious financial and legal trouble.

The company’s woes began to surface publicly around December 2023, when the equity of seven of its subsidiaries was sequentially frozen by courts across various regions, locking up nearly RMB 38.8 million in assets. These subsidiaries were involved in a wide range of activities, from food manufacturing and sales to logistics and wholesale.

Legal challenges soon followed. One subsidiary, Zhong Xue Gao Food (Shanghai) Co., Ltd., was compelled by the Shanghai Jiading District People’s Court court to fulfill overdue legal obligations amounting to RMB 817,000, while another was fined over RMB 1.12 million by the Shanghai Yangpu District People’s Court.

The human cost of these financial troubles has been significant. The company’s workforce has dwindled from over 2,000 employees at its peak to just around 100. Some former employees are owed back pay, and despite negotiations, have yet to receive full wages dating back to last fall, nor the entirety of their severance packages.

Even at the zenith of its popularity, Zhong Xue Gao was beset with controversies. Beyond its “the Hermès of Ice Creams” nickname, the brand was also dubbed the“the Ice Cream Assassin” for its wallet-killing prices.

Back in 2022, the company faced significant public scrutiny when videos surfaced online showing its ice cream not melting when exposed to fire. This bizarre incident led experts and regular consumers alike to question the safety of Zhong Xue Gao’s products.

Now, it seems Zhong Xue Gao is finally melting under the intense pressure of its controversies and financial woes. Though the brand didn’t do itself any favors along the way, its predicament also seems to speak to a number of larger factors and issues: increasingly health conscious consumers, limited budgets, and the failure of new brands which have sought to sell themselves through a “luxury” image and price point, rather than more organically building such a reputation through high-quality products.

Banner image via Sina.