Introduction:
Once upon a time, holding a cup of Häagen-Dazs was a symbol of ritual and status for urban white-collar workers and young petite bourgeoisie in China. The slogan “Love Her, Treat Her Häagen-Dazs” gave this American ice cream brand a “premium filter” in the Chinese market. However, times have changed. Today, Häagen-Dazs is facing severe challenges.
Recently, several media outlets reported that General Mills is considering selling its Häagen-Dazs China operations and has partnered with Morgan Stanley to explore a potential deal. Behind this news lies the harsh reality of Häagen-Dazs’ double-digit annual declines in foot traffic at its stores across China. Once the king of premium ice cream, why has Häagen-Dazs “fallen from grace” in China? How can we dissect the deeper reasons behind its cooling presence in the market?
Once Glorious “Premium Myth,” Crisis Emerges in Recent Years
In 1996, Häagen-Dazs officially entered the Chinese market and quickly captured consumers with its positioning as a “premium imported ice cream.” In the 1990s, when the average monthly salary was just a few hundred yuan, Häagen-Dazs priced a single scoop at 25 yuan (approx. USD $3.50), and a fondue set could cost two to three hundred yuan (USD $28–$42), yet it still attracted a large number of consumers in pursuit of a “refined lifestyle.”
In its early days in China, Häagen-Dazs adopted a “luxury logic” pricing strategy—shaping a premium brand tone through high prices, supplemented with refined in-store decor and romantic marketing campaigns (such as “If you love her, take her to Häagen-Dazs”), successfully distinguishing itself from ordinary ice cream brands. Around 2010, Häagen-Dazs’ growth rate in the Chinese market once exceeded 20%, and the number of stores surpassed 200, becoming synonymous with high-end ice cream.
However, in recent years, the brand’s halo has gradually faded. According to reports, from 2019 to 2023, Häagen-Dazs saw an average annual decline of about 15% in foot traffic at its China stores, with some locations even experiencing negative growth.
Its high-price strategy once gave it a commanding lead, but now, competitors are everywhere:
- International brands: Italian brand Venchi and Japan’s Nissei attract consumers with more diverse flavors and trendier marketing.
- Domestic premium brands: Local players like Zhong Xuegao and Xu Jinhuan have risen through Guochao (Chinese-style) branding and online channels, with some products priced even higher than Häagen-Dazs.
- Luxury brand crossovers: Brands like Gucci and Dior have launched co-branded ice creams, further siphoning off premium customers.
Consumers Have Changed: Young People No Longer Pay for “Brand Premium”
Surveys show that Gen Z consumers have become increasingly immune to the “halo effect” of imported brands and now care more about cost-effectiveness and social attributes. “Häagen-Dazs’s price (about 40 yuan per scoop, or approx. USD $5.60) far exceeds its actual experience. Young people would rather choose cheaper, internet-famous ice cream for the photos.”
Moreover, reviews of Häagen-Dazs on social media have weakened its premium image. On platforms like Xiaohongshu and Douyin, users often complain:
“For the same price, I’d rather buy two Heytea ice creams,”
“Tastes like Baxi (a Chinese brand), why is it three times more expensive?”
Experts point out: “Häagen-Dazs lacks product innovation. For over a decade, its core offerings are still classic scoops and fondue, while competitors are constantly launching new flavors, creative shapes, and co-branded products.”
Channel Dilemma: High Offline Costs, Weak Online Growth
Häagen-Dazs has long relied on offline stores, but high rent and labor costs have squeezed profits. Since 2021, Häagen-Dazs has gradually shut down many loss-making stores in Beijing, Shanghai, and other cities. It then tried entering supermarkets and online channels, but results were limited.
Its sales on e-commerce platforms lag far behind local brands like Zhong Xuegao. “Its online marketing lacks buzz, and high cold chain delivery costs make it hard to gain market traction.”
Behind the Sale Rumors: General Mills’ “Letting Go” Strategy?
In April this year, Reuters reported that General Mills is considering selling its Häagen-Dazs China business, with Morgan Stanley already in contact with several potential buyers. If a sale materializes, the new owner may need to completely reinvent the brand’s positioning and channel strategy, or else it will be difficult to reverse the downward trend.
Why the decision to sell?
- Strategic realignment: In recent years, General Mills has focused on core businesses such as pet food and cereals, shedding segments with weak growth.
- Intensifying competition in China: The high-end ice cream market has shifted from a blue ocean to a red ocean; Häagen-Dazs finds it hard to replicate past success.
- Capital realization: If the sale goes through, General Mills can free up capital to invest in other areas.
From “the Hermès of Ice Cream” to “considering a sell-off,” Häagen-Dazs’s journey in China serves as a textbook case of premium brand localization. Its early success stemmed from precise positioning and marketing, while its current predicament lies in its failure to keep pace with the times.
In the future, regardless of who takes over Häagen-Dazs, a thorough “brand revitalization” will be essential to win back the Chinese market. After all, today’s consumers are no longer buying into the mere illusion of “premium.”
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.