Raising the bar

Zhongxuegao’s ice cream bar

Despite its exotic sounding name, Häagen-Dazs was founded in New York by a Polish immigrant in 1959. He reckoned that ice cream lovers would be more willing to splurge for something with a foreign name so he came up with what he thought sounded Danish and printed a map of Scandinavia on the ice cream’s cartons.

Reuben Mattus also spotted an emerging trend. Consumers were happy to spend money on gourmet foods with ingredients that were of high quality and natural. His ice cream gained a large following, eventually catching the attention of the Pillsbury Company, which acquired Häagen-Dazs in 1983.

In China, an ultra-high-end ice cream brand has garnered national attention. It is so expensive that some say it is the “Hermès of ice cream”. Founded in 2018, Zhongxuegao (the brand name sounds like “Chinese ice cream” in Mandarin) makes ice cream bars shaped like traditional Chinese roof tiles. A bar retails for around Rmb20 ($2.90) when most ice cream in China costs about a tenth of that. It also has plenty of premium options and seasonal flavours. For instance, it launched a flavour – Ecuadorean pink diamond – in 2018 that cost as much as Rmb66 a bar.

“Consumers appreciate product breakthroughs and are willing to pay for innovative products. Zhongxuegao has always been ahead of the trend. Sometimes we get it right, sometimes we don’t, but our products will always impress consumers,” proclaimed Lin Sheng, the company’s founder.

Part of the young brand’s success is its ability to formulate uncommon flavours, season after season, that keep consumers interested. Last winter it released an osmanthus and red bean series. This summer, it sold cartons of frozen custard ice cream bars. A box retails for between Rmb68 to Rmb88 and comes in several different flavours such as the combination of apricot, peach and almond; or lychee with longan and nuts.

Despite the hefty price tag, many consumers scooped up the new line. The company claimed that it sold out of 20,000 boxes almost instantaneously. Scalpers have also been taking heed, snapping up the products and then reselling them at three times the original price, says 36Kr. There are also plenty of knock-offs flooding the market.

Zhongxuegao generates the majority of its sales online, operating virtual storefronts on Tmall and JD.com. In its first 16 months on Tmall, it sold Rmb100 million worth of ice cream. In the first five months of this year, too, it sold 100 million bars. It is also running 20 retail outlets, mainly in Shanghai and Hangzhou, and distributes its products in selected supermarkets and convenience stores in over 100 cities around the country.

So is the ice cream worth the price? Judging from the responses on Tmall, the bulk of reviewers were happy, with many saying that the flavours are interesting and the quality is high. Most say they will happily purchase another bar.

WiC also interviewed a few consumers that have purchased Zhongxuegao ice cream and they gave a similar response, though they acknowledged that the price is exorbitant.

Zhongxuegao is now ready to expand its portfolio to other frozen products. It recently launched a line of high-end frozen dumplings. A box of 16 shrimp and chive dumplings costs Rmb89. The most expensive in the new range – made with chicken and matsutake mushrooms – will set you back Rmb98 a box, which is around Rmb6.1 per dumpling.

Investors are among to those who are impressed by the firm’s growth trajectory.

The company just completed a Rmb200 million financing round, according to 36Kr.

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