From Mengniu and Yili, to heluxue and Haagen Dazs, to Zhong Xuegao and Zhongjie 1946… Ice cream / ice cream seems not to be sold in the streets for a few cents.
Throughout the development history of Chinese ice cream / ice cream, from the “beauty” popsicle produced by Haining foreign exchange in the 1930s, the advent of Guangming ice cream in the 1950s, the arrival of Baxi ice cream in the 1990s, to the rise of online popular brand Zhong Xuegao four years ago, now, China’s ice cream / ice cream market has ushered in another “epic” cross-border chaos.
So, how many “cross-border” fields have ice cream / ice cream brands unlocked in recent years? Why can’t ice cream / ice cream brands stop “crossing the border”? In the future, can ice cream / ice cream always “win” by “cross-border”?
“Epic” cross-border chaos
After consulting the official websites and flagship stores of various ice cream / ice cream brands, titanium media · Ti Du Tuwen found that in the past two years, only 13 mainstream ice cream brands had at least 34 “cross-border” joint names. Among them, Haagen Dazs, Guangming and Deshi are well deserved “cross-border kings”, and there have been at least five “cross-border” cooperation. Followed by Yili, heluxue, Mengniu and Dongbei Daban, three times respectively.
From the perspective of “cross-border” areas, ice cream brands have been developing a “cross-border” pattern from drinks (such as Maotai), games (such as hero alliance), tea (such as Naixue’s tea), coffee (such as Costa), scenic spots (such as Beijing Yuyuantan), retail stores (such as Rosen), universities (such as Renmin University of China) and museums (such as Shenyang Forbidden City).
Why can’t “cross-border” stop?
Challenging the head brand is promising
For the ice cream / ice cream market competition pattern that is “solid as gold”, the most powerful challenge comes from the rise of zhongxuegao, Zhongjie 1946 and other “net red” brands.
From the “beauty” popsicle produced by Haining foreign company in the 1930s, the advent of Guangming ice cream in the 1950s, and the entry of foreign brand Baxi ice cream (Baxy) in the 1990s, to now, China’s ice cream market has gone through rounds of brand iteration.
Over the past few decades, although many people have entered the ice cream circuit, few have “left the circuit”. Up to now, more than half of China’s offline ice cream market share is firmly in the hands of four ice cream brands.
According to the China ice cream / ice cream industry trend report (2022 Edition), the offline ice cream market shares of Yili, heluxue, Mengniu and Nestle ice cream brands reached 19%, 15%, 9% and 8% respectively, with a total of 51%. In comparison, Baxi ice cream, which entered China in the 1990s, ranked fifth with a market share of 6%.
Not to mention a bunch of new brands. Since 2017, the ice cream market has set off a small upsurge of enterprise registration. According to tianyancha data, in 2017, more than 8200 ice cream related enterprises (the name or business scope includes “ice cream, ice cream, ice cream, popsicle, and Popsicle”, and the business status is “in business, surviving, moving in, moving out”) were established, hitting a new high in recent five years. By April 25, 2022, there are nearly 45000 ice cream related enterprises in China. Among them, about 67% of ice cream related enterprises are distributed in the wholesale and retail industries, and more than 9% are self-employed businesses.
Now, after the success of “cross-border” marketing of online brands, the “followers” in the ice cream / ice cream market see hope.
Can set a high price
With the label of “cross-border”, you can “set a high price”. Since Zhong Xuegao’s online red ice cream / ice cream has made its brand advantage by relying on “cross-border” co branding + high pricing, in the ice cream / ice cream industry, “cross-border” co branding + high pricing has become a normal.
After comparing the unit prices of 26 “cross-border” ice cream from 8 ice cream brands, titanium media · Ti Du Tuwen found that the average price of a single “cross-border” ice cream was about 12 yuan. Among them, the most expensive one is priced at 21.6 yuan / piece (Dongbei Daban x daily Heiqiao). The cheapest one, namely, the “cross-border” mini model of heluxue and baokemeng, costs 2.68 yuan per piece.
What does high pricing mean for ice cream brands? According to the public data, Zhong Xuegao, who relies on cross-border co branding and high pricing to become a brand, had a revenue of more than 100million yuan when it was established 16 months ago. Lin Sheng, the founder of Zhong Xuegao, said in an interview that the gross profit margin of Zhong Xuegao is slightly higher than that of traditional cold drink enterprises.
How much is the gross profit margin of traditional cold drink enterprises? Taking Yili dairy and Sanyuan Co., Ltd. (parent company of Baxi) as examples, the company’s financial report data show that from 2016 to 2021, the gross profit margin of Sanyuan ice cream business was basically maintained at the level of more than 30%. In 2020, the first year of COVID-19, the gross profit margin of Sanyuan ice cream business fell to 21.73%, but it rebounded rapidly one year later and returned to the 30% level.
In contrast, the gross profit margin of Yili dairy cold drink business is higher. From 2016 to 2021, the gross profit margin of Yili dairy cold drink business continued to be above 40%. In 2020, when the epidemic occurred, the gross profit margin of Yili dairy cold drink business reached 48.66%, the highest level since 2016.
Consumers eat the “cross-border” set
From the point of view of consumers, we all roast that “we have lost the freedom of ice cream”, but we did not buy less.
For offline stores, take the “crossover” between Mengniu and the little yellow people of Universal Studios in Beijing as an example. According to luminfang, President of Mengniu, during the trial operation of Universal Studios in Beijing, the daily sales of Mengniu ice cream workshop exceeded 120000 yuan, exceeding the maximum daily sales of Haagen Dazs in China.
On the online e-commerce platform, according to tmall’s top selling list of ice cream by May 24, 2022, among the classic ice cream / ice cream brands, the “cross-border” models of Dongbei Daban and dailyheiqiao have ranked among the top 15 in the top selling list of ice cream.
Do you win by relying on “cross-border”?
The so-called fashion will pass sooner or later. After the “cross-border” campaign, more and more rational consumers have found that taste is the king in eating ice cream / ice cream. According to the China ice cream / ice cream industry trend report (2022 Edition), in response to the question “what is the purpose of eating ice cream”, more than 75% of consumers said that when buying ice cream, taste is a very important determinant.
Good taste is not enough, but also healthy. According to the top trends for 2020 data quoted in the China ice cream / ice cream industry trend report (2022 Edition), the expectations and habits of global consumers for snacks are constantly changing. The trend of healthy snacks has increasingly become a topic of concern for consumers, and 54% of consumers hope that snacks can supplement nutrition.
So the question is, are the ice cream sold in the Chinese market really “healthy”? According to the data of foodaily, GlobalData and Mintel in 2017, ice cream with “health concept” has accounted for more than 8% of the total sales in the Chinese market. In the next five years, the ice cream market with “health concept” will rise synchronously with the ice cream market.
However, judging from the “calorie” index, many ice cream / ice cream are not “low calorie food” at present. Titanium media · Ti Du Tuwen has roughly estimated the calorie data of the top 1 single ice cream sold by 13 ice cream flagship stores. It is found that the average calorie of 13 ice creams included in the statistics is about 1009.3 kilojoules per 100g of ice cream, which is far higher than the definition of low calorie food in the general rules for labels of prepackaged special food, that is, not more than 170 kilojoules per 100g.
Nowadays, the ice cream market in China has reached 160billion yuan, ranking first in the world. According to the data of the prospective industry research institute, from 2015 to 2021, the market scale of the ice cream industry increased from less than 90billion to 160billion, with a cumulative increase of more than 90% over the six years.
However, in terms of per capita ice cream consumption, China’s ice cream market still has a large room for growth. According to GlobalData, China’s per capita ice cream consumption is expected to reach 2.9kg in 2021, about double that of 2011 10 years ago. Although the per capita ice cream consumption of 2.9kg is higher than the Asia Pacific average (2.1kg), there is still a gap compared with the global per capita ice cream consumption of 4.5kg.