According to the latest judicial information, the Jiading District People’s Court in Shanghai has issued a high-consumption restriction order against Zhong Xue Gao Food (Shanghai) Co., Ltd. on March 11. This order specifically directs the company and its legal representative Lin Sheng, who is the founder of Zhong Xue Gao, not to engage in high consumption or consumption activities that are not essential to life and work. This restriction stems from an arbitration case filed on February 19, 2024, and according to the progress of the case, Zhong Xue Gao has been enforced to pay more than 810,000 yuan.
Recently, the Zhong Xue Gao brand has suffered continuous negative news, from being labeled as an “ice-cream assassin” to exposures of arrears in staff salaries, frozen shares in the company, and even being marked as a person subject to enforcement. The brand, once popular on the internet, now faces serious challenges. Since August 11 and 22 of last year, Zhong Xue Gao’s WeChat public account and Weibo account have ceased updating.
In terms of pricing, Zhong Xue Gao had been questioned by professional anti-counterfeiters in 2022, when an 18-yuan ice cream was estimated to cost only 1.32 yuan, with a gross profit margin as high as 93%, exceeding that of the well-known liquor Moutai. However, in the latest price adjustment, Zhong Xue Gao reduced its price to 2.5 yuan, making the previous cost estimate seem more reasonable. The price reduction began last year, with some classic series products reduced to 4.99 yuan, while the current price in the official flagship store is still around 11.9 yuan. There have been special clearance sales for Zhong Xue Gao on platforms like Pinduoduo, with 10 pieces selling for only 50 yuan. At the same time, consumers reported that in February this year, 20 pieces of Zhong Xue Gao could be purchased for 55 yuan, which is only 2.75 yuan each.
Once priced at dozens of yuan per piece, some products like the “Ecuador Pink Diamond” reached 66 yuan each. Now, with the significant decrease in average prices, the market demand for Zhong Xue Gao products has substantially weakened.
In addition, in October 2023, Zhong Xue Gao was exposed for owing wages, with netizens blowing the whistle on social media. Upon investigation, it was found that not only former employees, but even current employees at the company’s headquarters, were owed two to three months’ wages. The Zhong Xue Gao headquarters, located at the International Center of Dongfang Fisherman’s Wharf in Yangpu District, Shanghai, was once its prime office area. However, now, upon further inquiry by reporters, the company has vacated the office floors on the 23rd floor, and all staff are concentrated on the 3rd floor for work, reflecting the pressure the company is currently facing.
Recently, according to several insiders in the industry, since 2023, Zhong Xue Gao may be facing layoffs close to half of its scale. This strategy has been explained as to cut costs and improve efficiency. Various signs indicate that the company’s office space management adjustments aim to optimize resource allocation, reducing space to save costs where necessary. As for future recruitment plans, this will depend on the company’s overall development strategy.
An insider at Zhong Xue Gao shared his view on the company’s current staff configuration. He pointed out that to ensure the stability of company operations, each key position is staffed with the necessary number of employees. He himself has been working at Zhong Xue Gao for two to three years, and his senior colleagues around him remain stable, and none have left due to layoffs. Even as the company faces severe challenges, there have been no changes in the top management team and core middle-level, and everyone is still tirelessly seeking solutions.
It is noteworthy that since December 2023, Zhong Xuegao has encountered a series of share freezes. Statistical data shows that the four new share freezes all took place at the Shanghai Railway Transport Court, involving Shanghai Zhongyuan Ltd., Zhongmao (Shanghai) Food Science and Technology Co., Ltd., Zhongjia (Shenzhen) Food Co., Ltd., and Orange Cat Food (Shanghai) Co., Ltd., with the total frozen shares nearing 5 million yuan.
Entering February 2024, Zhong Xuegao added three more share freeze records, involving funds of 20 million yuan, 10 million yuan, and 5 million yuan, respectively, with the execution court being the People’s Court of Xiuzhou District, Jiaxing. The affected companies include Unique Interest Food (Shanghai) Co., Ltd., Panzhu Have Joy (Shanghai) Biotechnology Co., Ltd., and Zhongjia (Shanghai) Trading Co., Ltd., all of which are wholly-owned by Zhong Xuegao Food (Shanghai) Co., Ltd.
