Zhong Xuegao (钟薛高), a premium Chinese ice cream brand, once known as the “Hermès of ice cream” among Chinese consumers, recently found itself facing public scrutiny again after the 2022 controversy caused by video clips of its ice cream melting at unusually slow speed, leading to concerns that the product could contain harmful ingredients as well as other issues including unpaid wages, frozen assets, and accusations of fraudulent practices. However, in the 2nd week of March, Zhong Xuegao caught the attention of Chinese consumers again for #the price of Zhong Xuegao’s ice cream dropped from 60 yuan to 2.5 yuan# (钟薛高售价从60元降到2.5元).
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From altar to altercation: netizens react to Zhong Xuegao’s tumbling prices
Zhong Xuegao’s drastic price drop has surprised Chinese consumers. Many netizens were shocked by the significant profit margin indicated by the price drop and some netizens even expressed their feeling of being deceived and raised the question #is Zhong Xuegao kind of an “IQ tax”# (钟薛高是不是智商税). “The ice cream assassin has stepped down from the altar,” a netizen from Beijing commented.
The significant price drop, accompanied by various accusations revolving around false advertising, such as claiming to contain zero added water but including it on the product ingredient list, has led Chinese consumers to question if the value of the products can justify the price. For premium brands like this, the Zhong Xuegao case can serve as a wake-up call to ensure that their pricing is an accurate reflection of the value of their products to avoid potential issues like this.
Brand resilience in the wake of Zhong Xuegao’s challenges
How a company responds to a crisis can significantly affect its long-term viability. Businesses should have robust crisis management plans in place to address issues promptly, communicate transparently with stakeholders, and take decisive action to rectify any wrongdoing. Building brand resilience through proactive measures can help mitigate the impact of negative publicity or controversies. Besides, Zhong Xuegao’s case may draw attention to regulatory gaps or shortcomings in advertising and labeling practices. Other businesses should stay informed about relevant regulations in their industry and ensure compliance to mitigate the risk of regulatory scrutiny or penalties. The integrity in marketing, product claims, and pricing strategies is important to avoid potential backlash and damage to their reputation.
What to know about the latest development of Zhong Xuegao
- Once esteemed as the “Hermès of ice cream,” Zhong Xuegao faced renewed public scrutiny due to concerns over product quality, unpaid wages, and accusations of fraudulent practices, compounded by a drastic price reduction from 60 yuan to 2.5 yuan.
- The dramatic price drop sparked astonishment among Chinese consumers, who questioned the brand’s integrity and speculated whether it represented an “IQ tax,” while accusations of false advertising, such as misleading claims about ingredient lists, fueled skepticism about the product’s value.
- Zhong Xuegao’s case underscores the importance for premium brands to ensure pricing aligns with perceived value to prevent consumer distrust and backlash, highlighting the necessity for transparent marketing and pricing strategies.
- Effective crisis management, transparent communication with stakeholders, and compliance with industry regulations are imperative for businesses to safeguard their long-term viability and reputation, emphasizing the need for proactive measures to build brand resilience and avoid regulatory scrutiny.
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