03:30
It is usual for customers to complain that the price of some products is too high, but it's certainly NOT usual when customers ask companies to raise their prices. Bright Food, one of the oldest food brands in Shanghai, is having one of those rare moments, with its ice cream products. Mi Jiayi finds out more.
Summertime weather in Shanghai is not nice, the scorching heat goes on and on for about 40 days, with daytime temperatures reaching 35 or sometimes even over 40-degree Celsius. That's the time when frozen foods like ice cream come to the rescue, helping people to chill out. It's been 60 years since China started to make its own ice cream, and one of the first companies to do that was Bright Food. It's best-known ice bar flavors are red bean, green bean and salty soda, usually selling for only around one yuan. But this week, Bright Food got a surprise, many customers were asking it to raise the price. People were saying they couldn't find their favorite classics in the convenience stores, and they think the reason is that the prices are so cheap the stores can't make any money on them. We took a look, and they seem to be right.
MR. HUANG, BRANCH OWNER C-STORE "Of course we like products with higher prices because they make more money, but we also need some low price products to attract customers. Still, for some convenience stores, anything below two yuan is just too hard to make money on."
We talked to the ice cream unit at Bright Food to find out what they're thinking.
ZHAO JUN SHANGHAI YIMIN NO.1 FOODS "We made this decision because a large portion of our customers are people working outdoors and old people. They are pretty sensitive to prices, and they buy boxes of them at a time."
Zhao says they barely break even making the three most popular flavors, but have developed new products with higher added-value to support the business. A recent report from Mintel shows that the sales volume of ice cream in China has been in decline for two years, but that the market value just keeps growing. Things are getting pricer.
LORIS LI, ASSOCIATE DIRECTOR MINTEL FOOD & DRINK "The ingredients are getting more expensive. The price of vanilla has gone up, since most of it is produced in Madagascar, which has been suffering from natural disasters. The price of chocolate has also gone up. Milk powder has also gotten more expensive. More customers want better quality products, and that isn't cheap."
But that doesn't mean low-priced ice cream is doomed. There are new sales channels for the old-school products, new retail business. It turns out, online retail platforms like He Ma, Ele.me and Tmall supermarket are very interested in adding them to their shelves.
MA ZHENLIANG , GENERAL MANAGER HE MA STORE SHANGHAI "Our choice of products is based on our big data analysis of customer needs. Not only elderly people, but a lot of young customers are also buying it. Customers nowadays are very picky, they will stay with you if you get them what they want. It's not really about prices anymore."
Whatever it's about, for many people ice cream is a must-have summer treat, not just a handy way of staying cool. That keeps the business booming. The total retail market for ice cream in China reached 61 billion yuan in 2017, and estimates say it should grow 5 percent a year for the next five years.