This summer sees the explosive virality of ice cups. These are cups of ice available from convenience stores or supermarkets that you can add your preferred beverages to either at home or outside. Not only did Ele.me see a tenfold YoY increase in orders, but Nongfu Spring also released its version of a 3.5 RMB (0.48 USD) ice cup. In fact, the entrance of Nongfu Spring into the ice cup competition was reportedly the reason why the average price of ice cups rose from 2 RMB (0.28 USD) to 3.5 RMB. Until Mixue Bingcheng (蜜雪冰城, also called Ice Cream & Tea) intervened.
The affordable Chinese tea chain quickly released a 1 RMB (0.14 USD) version of the ice cup. It was initially welcomed by many because the price of a cup of frozen water had risen too much. However, this was the beginning of a lose-lose situation. It started online, with consumers creatively using the Mixue ice cups for other drinks, drinks from other tea or coffee chains or even making their own concoctions. People then began to bulk order these 666ml large ice cups. What followed was a communication breakdown between the brand and its franchised branches.
Staff from some branches were unsure how to make these cups and others denied sales saying the ice cups were not available. Some branch managers weren’t so friendly about customers enquiring about the new products, with many online sharing stories of stores denying them service. Some branches even required customers to make other purchases before providing ice cups, causing a comparison with sales strategies from certain luxury brands. On 11 July Mixue Bingcheng issued an apology for the behaviour of its staff, with the reason being that the demand was too high and there was not enough ice. On Weibo, China’s Twitter-like platform, the topic “Mixue Bingcheng respond to branches refusing to sell ice cups” (#蜜雪冰城回应门店拒卖冰杯#) reached number 4 on the Hot Search list with 65.26 million views.
However, pundits quickly pointed out that it was actually due to the low profitability of the ice cup for franchisees that caused them to avoid providing this product. Mixue Bingcheng has been known to derive most of its profit from selling materials and ingredients to franchisees, and the low-price ice cup was actually generating a loss for franchisees because people who buy these would not purchase anything else. On Weibo, the topic “Mixue Bingcheng’s 1 RMB ice cups enrage two sides of working people” (#蜜雪冰城1元冰杯惹怒两拨打工人#) topped the Hot Search list with 210 million views. The two sides refer to customers and its staff. Indeed, as the competition deepens in the tea and coffee sector, the conflict of interest between large chains, franchisees and staff members begins to show, as seen in the Manner Coffee case.
