【China】The ‘Ice Cream Assassins’ Have Disappeared, But Mengniu Earns 50 Billion from Ice Cream

The summer of 2023 saw record-breaking high temperatures, but the ice cream industry seems to have missed its own summer.
On August 13, the topic “Hangzhou ice cream and popsicle shops see 30% worse business than previous years” trended on social media. An industry insider close to the cold beverage wholesale sector revealed to 36Kr that competition in the cold beverage industry has intensified this year, sales have been sluggish, and distributors have been commiserating with each other. A short essay titled “In Memory of Cold Beverage Sellers” circulated on social media.
Those feeling the chill most acutely are the “ice cream assassins” that aggressively marketed themselves last summer. According to 36Kr’s observations, in the same freezer at the same Lawson convenience store, at least a quarter of the space was occupied by Zhong Xue Gao last summer. This year, only one flavor of Zhong Xue Gao, “Waxberry,” remains.
In media reports, “the disappearing ice cream assassins” has become a key phrase for the year. Even the representative assassin brand “Zhong Xue Gao” has started to lower its profile, launching a budget version called “Sa’Saa” priced at 3.5 yuan in March.
However, the situation for traditional ice cream brands seems completely different from Zhong Xue Gao’s, reflected not only in their unshakable positions in freezers but also in their sales data.
According to the TOP 50 best-selling ice cream/popsicle list for Q2 2023 released by FoodTalks, the top ten spots are almost all occupied by classic products from Yili and Mengniu: Chocliz, Bitter Coffee, Suibian, Green Mood… with median prices at 5 yuan or below.
In their 2022 financial reports, Yili’s cold beverage business revenue reached 9.567 billion yuan, a year-on-year increase of over 30%. Meanwhile, Mengniu, after partnering with Moutai, reported ice cream business revenue of 5.6524 billion yuan in 2022, a 33.3% year-on-year increase. This marks the third consecutive year of double-digit growth for Mengniu’s ice cream business.
With the arrival of an industry winter, the entire ice cream market appears to be polarizing: new players stumble, while old giants feast.

Zhong Xue Gao once single-handedly expanded the imagination of the ice cream market.
In 2018, Zhong Xue Gao launched a 66-yuan “Ecuador Pink Diamond” ice cream on Tmall, claiming to be made from rare natural pink cocoa and meticulously crafted by master developers, with a cost of 40 yuan alone. Founder Lin Sheng famously stated,

The high price did not dampen consumer enthusiasm. This first-generation “ice cream assassin” sold out 20,000 units within 15 hours of listing and generated countless discussions on Xiaohongshu.
Riding the wave of consumption upgrades, Zhong Xue Gao topped Tmall’s 618 ice cream category sales charts for three consecutive years starting in 2020. Its revenue doubled to 800 million yuan in 2021, and its valuation quintupled in 2022, exceeding 4 billion yuan.
Following Zhong Xue Gao’s lead, more ice cream brands began raising their price benchmarks: Dove’s 29-yuan dark chocolate ice cream, Heytea’s 17-yuan Grape Jelly ice bar, Yili’s 20-yuan Xujinhuan… A 2022 Financial Times report noted, “Some ice cream brands have seen price increases exceeding inflation.”
Before the summer of 2022, Zhong Xue Gao was the expensive outlier in the freezer. However, the batch emergence of “ice cream assassins” not only stung consumers but also meant Zhong Xue Gao faced more competitors—clashing in freezers with fellow new consumption leaders like Heytea, Daily Black Chocolate, and Oatly, while also confronting established giants like Yili, Mengniu, and Moutai.
Outside the freezer, premium ice creams might also face cross-category competition from new-style tea drinks and artisanal gelato.

As social currencies for post-meal treats, ice cream and milk tea are in fact competitors. As early as 2021, media reported that in many city core business districts, Häagen-Dazs stores had given way to Heytea and Nayuki. Now, with new categories like lemon tea and yogurt层出不穷, young people’s stomach capacity is almost insufficient.
“Gelato” is another hot new category this year. Venchi in Beijing’s Guomao and Sanlitun, and Corner Cone Gelato near Shanghai’s Wukang Building are newly popular网红 stores. Searching for “gelato” within a 2km radius of “Shanghai Fumin Road” on Dianping yields 18 results, with average prices concentrated between 30-40 yuan.
Considering gelato’s Italian cultural roots, handcrafted preparation, on-site scooping, and fancy store environments suitable for Xiaohongshu check-ins, compared to the 10-40 yuan industrial product Zhong Xue Gao, it seems one could say “you get what you pay for.”
However, for Zhong Xue Gao and similar brands, the biggest challenge isn’t an overcrowded赛道 but weakened consumer desire.
On one hand, it was embroiled in a PR crisis over “not melting when burned”; on the other, consumer spending willingness weakened. The “ice cream assassin”背负骂名, reflected in sales data. According to Jing参谋, during the peak sales season from May to August 2022, Zhong Xue Gao’s sales volume同比下降10%.
In March this year, Zhong Xue Gao shifted from its past high-priced 66-yuan Ecuador Pink Diamond image and launched a budget version—the 3.5-yuan Sa’Saa (a sub-brand of Zhong Xue Gao).

For Zhong Xue Gao, however, the budget market is a more complex world.
In the ice cream market, the sub-10-yuan budget segment remains mainstream, and traditional ice cream brands represented by Yili, Mengniu, and Walls牢牢占据 this market. In the ice cream market, the CR3 reaches 43%.
Zhong Xue Gao’s entry into the budget market意味着深入 the heartland of Mengniu and Yili. Zhong Xue Gao faces the same难题 as Genki Forest—a vast disparity in channels, products, and supply chain capabilities compared to the giants.

This iron rule applies to both the beverage and ice cream markets. In 2021, after five years of effort, Genki Forest’s offline terminals突破1 million, which was only one-fifth of Coca-Cola’s terminal count.
The same story is happening with Zhong Xue Gao. In 2020, Zhong Xue Gao entered the offline market,凭借 higher channel fees than traditional ice cream products, entering nearly 400,000 freezers in over 200 cities. But by then, Yili had over 6 million terminal outlets nationwide, penetrating下沉 markets like capillaries—with nearly 1.096 million乡镇网点 alone.
The gap is not just in quantity but also in attractiveness to channels. For channels, selling one Zhong Xue Gao yields higher profit, but that前提 is the product sells well. Now, with高价 ice creams not moving, distributors lack motivation to stock them.
Traditional ice cream companies with richer product portfolios are also more resilient to market changes. Taking Mengniu as an example, it walks on two legs at the product level—occupying the mass market with budget products like Suibian and Green Mood, becoming the “ice cream guardians” in consumers’ mouths; and挖掘新增量 through collaborations with Moutai and Disney to share the premium market. Last year, Moutai ice cream累计销量 nearly 10 million cups, achieving sales of 262 million yuan.
Well-funded traditional ice cream companies also hold advantages in the supply chain. For any brand wanting to scale and develop long-term, the supply chain is an unavoidable环节. In 2021, Genki Forest suffered 1 billion yuan in sales losses due to erythritol supply shortages, forcing it to invest in suppliers directly.
The past three years have also brought great uncertainty to global supply chains. Starting from 2020, major ice cream manufacturers began building factories. For instance, Mengniu planned to invest 1.5 billion yuan in 2022 to build production lines. Estimating with 2021 data, this investment额约等于 Zhong Xue Gao’s revenue for two years without spending a dime.
Zhong Xue Gao founder Lin Sheng once shared at an investor gathering: one must first become an internet sensation, then transition from sensation to brand. In the past, Zhong Xue Gao could become an expensive网红 brand靠与众不同的 products,制造话题, and外围造势. But selling cheaply is a contest of channel management, cost control, and economies of scale.

Now, Mixue Ice City in the neighboring milk tea赛道 has already driven the price of a cone down to 3 yuan靠供应链优势. The downgrade path for the ice cream assassins is not an easy one.