03:08
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.
Bright Food is well known for its ice cream products, usually selling for only around one yuan (about 0.14 US dollars). And the old company got a surprise this week as many customers asked it to raise the price. Those customers couldn't find their favorite classics in the convenience stores. And the sellouts were blamed for the cheap price and that stores can't make any money on them.
“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,” a branch owner of C-Store told CGTN.
Bright Food responded to the online buzz, saying that their production costs have gone up earlier this year, and no price-rising plan has been considered recently.
“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 from time-to-time,” said Zhao Jun from Shanghai Yimin No.1 Foods – the subsidiary company of Bright Food.
Bright Food’s popular product three-color ice cream. /Photo from Bright Food official weibo
Bright Food’s popular product three-color ice cream. /Photo from Bright Food official weibo
The total retail market for ice cream in China reached 61 billion yuan (8.94 billion US dollars) in 2017, and is estimated to grow five percent each year for the next five years. But the growing production costs are a common problem in the ice cream business. A recent report from market consulting company, Mintel, showed that the sales volume of ice cream in China has been in decline for two years, but that the market value has kept growing.
“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,” said Loris Li, Associate Director for Mintel’s Food and Drink.
However, low-priced ice cream is not doomed. E-commerce provides new channels for these old-school products. Online retail platforms like He Ma, Ele.me and Tmall supermarket are very interested in adding them to their shelves.
“Our choice of products is based on our big data analysis of customer needs. Not only elderly people, but a lot of young customers also buy it. Customers nowadays are very picky. It's not really about prices anymore,” said Ma Zhenliang, General Manager for He Ma Store Shanghai.
Whatever it's about, for many people ice cream is a must-have summer treat, a part of the season and not just a handy way of staying cool. And that sentiment keeps the business booming.