Editor’s Note
This article explores how Zhong Xue Gao leveraged AI to design its new “Sa’Saa” ice cream series, priced at 3.5 yuan, which sparked significant online buzz. It highlights the brand’s innovative approach to product development and marketing in the competitive dessert market.
By playing with the ChatGPT concept and lowering its price to 3.5 yuan, Zhong Xue Gao topped the trending list on Weibo. Recently, Zhong Xue Gao held its first annual new product launch event, introducing the new “Sa’Saa” series designed primarily by AI and a new dessert under the “Zhong Xue Gao’s Cake” line called “Dan Sheng”.
Shortly before this, Zhong Xue Gao had officially announced a collaboration with Baidu’s ERNIE Bot. It is reported that the design and development of Sa’Saa utilized several mainstream AI products, including ChatGPT and ERNIE Bot.
Rumors about Zhong Xue Gao “lowering its profile” had been circulating in the market for months. Earlier reports suggested a new sub-brand named “Zhong Xue Bu Gao” (meaning “Zhong Xue Not High”) would be priced at 3.5 yuan.
With the integration of AI, “Zhong Xue Bu Gao” served as the project’s internal codename, eventually launching as “Sa’Saa”.
Industry insiders believe that Zhong Xue Gao, known for its marketing prowess, is launching new products to capitalize on the AI trend and attract young consumers.
Public information shows that the Ecuadorian Pink Diamond, which propelled Zhong Xue Gao to viral fame five years ago, was priced at 66 yuan. Historically, its mainstream price range has been 10-20 yuan per piece. Now, the 3.5 yuan Sa’Saa has become the cheapest product Zhong Xue Gao has ever launched.
Industry analysis points out that last year’s online complaints about “ice cream assassins” and subsequent regulatory actions are important context for Zhong Xue Gao’s launch of a 3.5 yuan ice cream this year. In the summer of 2022, “ice cream assassins” became a hot social topic, mainly referring to high-priced ice creams “hiding” among regular ones, leading consumers to be forced into an expensive purchase at checkout to avoid embarrassment. In response, market regulators at various levels increased inspections, guiding businesses to strictly comply with the “Regulations on Clearly Marked Prices and Prohibition of Price Fraud”; they also encouraged rational consumption and urged consumers to use their “voting power” to weed out gimmicky, overpriced ice creams from the market.
Zhong Xue Gao’s move towards “democratization” also reflects a broader trend among new consumer brands. Public information indicates that over the past year or two, several brands have attempted to shed their high-price stereotypes. In February 2022, Heytea announced it had completed a comprehensive price adjustment initiated earlier that year and would no longer launch new beverage products priced above 29 yuan. On March 17, 2022, Nayuki announced a significant price reduction, launching an “Easy” series priced between 9-19 yuan, and promised to introduce one new product under 20 yuan each month.
On its path to breaking away from the singular image of an “expensive ice cream” brand, Zhong Xue Gao has made many attempts since its founding in 2018.
Public records show that in September 2020, Zhong Xue Gao launched the ready-to-eat meal brand “Li Xiang Guo,” selling premium dumplings, wontons, and buns; it also ventured into desserts, launching “Zhong Xue Gao’s Cake” in April 2021. Prior to the latest Sa’Saa, Zhong Xue Gao had also launched a more affordable ice cream brand, “Li Daju,” in 2019. Currently, a Li Daju ice cream is priced around 5 yuan.
Latest figures show that the best-selling product in Li Daju’s Tmall flagship store has not surpassed a monthly sales volume of 100 units.
The lackluster performance of the 5-yuan Li Daju, and the attempt to enter the 3-yuan ice cream market with the highly topical Sa’Saa series, reflect Zhong Xue Gao’s determination to capture a larger market share.
Behind the expansion of its product price range are considerations for Zhong Xue Gao’s own development. Public data indicates that the five-year-old Zhong Xue Gao has achieved annual sales exceeding 1 billion yuan. However, China’s ice cream market size reached approximately 167.2 billion yuan in 2022, meaning Zhong Xue Gao still has significant room for growth within the broader industry. From an industry perspective, as the market enters a phase of precise segmentation, Zhong Xue Gao’s布局 across different ice cream price points can meet diverse market demands and broaden its customer base.
Research by iiMedia Consulting found that in 2022, the acceptable price range for a single ice cream for most netizens was between 3-5 yuan, accounting for 37% of respondents; some accepted lower prices, with 11% accepting 1-3 yuan; while those accepting prices above 10 yuan were fewer.
Whether the AI-created affordable product can usher in a new highlight moment for Zhong Xue Gao remains unknown. What is clear is that the ice cream market is already dominated by many well-established brands familiar to consumers.
According to data from the China Research Puhua Institute, China’s current ice cream market is led by a first tier consisting of Yili, Wall’s, Nestlé, and Mengniu, which are essentially national brands with a combined market share exceeding 50%. A second tier includes brands like Bright Dairy, Hongbaolai, Deshi, and Tianbing, which hold significant market shares in specific regions. In terms of product structure, foreign brands like Nestlé and Häagen-Dazs occupy most of the domestic high-end market and part of the mid-range market; domestic brands like Mengniu, Yili, and Bright Dairy focus on mid-range products, accounting for about 45%; regional established companies like Deshi and Tianbing, along with small and medium-sized local private enterprises, target the low to mid-range market, accounting for about 30%.
Some analysts believe that the 3.5 yuan price point also means Zhong Xue Gao is entering the territory of giants like Yili and Mengniu, where new consumer brands will engage in close combat with established ice cream manufacturers. Currently, consumer attention towards new domestic brands in third- and fourth-tier cities is generally on the rise, and brands that seize the initiative may discover new consumption opportunities in these下沉 markets. Sa’Saa could be a clever move for Zhong Xue Gao.
However, not everyone agrees with this view.