Ningji buys Häagen-Dazs, not for the brand but for the thrill.

June 2, General Mills officially announced: it has authorized the business of its Häagen-Dazs ice cream stores in Mainland China to an investment group centered around Ningji. The media mostly reported this as an “acquisition.” But these are not the same thing. What General Mills sold is the qualification to open Häagen-Dazs stores in Mainland China. The brand remains General Mills', Häagen-Dazs in supermarket freezers is still theirs, and if the brand image collapses further in the future, it's General Mills' loss—Ningji just got a license, so they can continue to open stores using the "Häagen-Dazs" name. What did General Mills sell? The operational burden and future losses—the hot potato. **This store is already a story of contraction** In 2019, Häagen-Dazs had 557 shops in China. By May this year, only 262, with just 205 in Mainland China—a halving in 7 years. Revenue has also shrunk, from $800 million in FY2019 to $730 million in FY2024, and it's still declining. Even worse, this contraction is actively losing to competition. Häagen-Dazs’ average transaction price is 58.36 yuan, while DQ, which also sells ice cream, is 23.17 yuan. It’s not that consumers don’t spend; they just don’t think the price gap is justified. DQ has actually accelerated its expansion in China: from 2022 to 2024, it added 800+ stores, now totaling 1,695. General Mills’ CEO was blunt in the earnings call: “Store profit margins are low, but fixed costs are high.” In FY2024 Q2, international operating profit fell 31% year-on-year, and Häagen-Dazs China was one of the main drags. The overall market didn’t give any support. In 2024, Yili’s ice cream revenue dropped 18.4%, Mengniu’s ice cream dropped 14.1%—it’s not just one company, the whole ice cream market is shrinking. There’s an even more direct number: At Mid-Autumn 2023, a certain distributor sold nearly 1 million yuan worth of Häagen-Dazs mooncake gift boxes; by Mid-Autumn 2024, the same distributor sold only tens of thousands of yuan—a 90% drop in one year. Gift boxes are Häagen-Dazs’ core high-margin product in China, and also the “gift logic” Ningji plans to rely on—this logic’s foundation is collapsing. **Why does Ningji want to take over?** Ningji has over 3,000 tea drink franchise stores, backed by Tencent, ByteDance, and Shunwei. Founder Wang Jie has always said she wants to benchmark against Danaher, building a multi-brand acquisition/ integration platform. Häagen-Dazs is the first signal of the "N brand strategy" taking shape. Ningji’s calculations are easy to understand. Over 73% of Häagen-Dazs stores are in shopping malls, where lease costs are huge if done normally; taking over stores is like getting a batch of commercial properties via a one-off licensing fee. Ice cream has the gift property that tea drinks lack—seasonal products like mooncake gift boxes have high margins and, logically, could complement tea drinks. Longer-term, Ningji’s digital site selection, supply chain and franchise operations can empower Häagen-Dazs, which is the core narrative Wang Jie borrowed from Danaher: use their own operations platform to turn acquired brands into new “species.” This logic has some merit, but doesn’t avoid a fundamental problem. **It sells information asymmetry, not ice cream** To understand Ningji’s predicament, you first need to know how Häagen-Dazs initially succeeded in China. When Häagen-Dazs entered China in the late 1990s, it relied on a narrative: this is high-end ice cream from the West, prestigious as a gift, stylish to eat. That narrative worked because of information asymmetry—most Chinese consumers didn’t know that Häagen-Dazs in U.S. supermarkets is often a dollar a tub, a big 828ml container sells for $5.99, and in Japanese supermarkets it’s just ten yuan a box. That wall of information was smashed by the internet over the past decade. Meanwhile, high-end domestic alternatives rose rapidly. At the 2019 Singles Day, “domestic high-end popsicle” Zhongxuegao beat Häagen-Dazs to become Tmall’s ice cream category sales champion—the "imported premium" label was directly challenged for the first time. Later, “consumption downgrade” sentiment dominated the market, consumers shifted from "buying expensive" to "buying value", and a 58-yuan cup of ice cream began being called a "price assassin." In 2021, Häagen-Dazs was exposed for fake advertising—a product claimed to be “100% chocolate coating,” but was found to be cheap cocoa butter substitute. Brand credibility took another hit. **Changing owners won’t solve the problem** Häagen-Dazs’ problem in China was never lack of operational competence. Site selection, product quality, store experience—they never lagged other ice cream brands. The real issue: the faith supporting a 58-yuan price has collapsed. Changing to a Chinese owner doesn't change this premise. If Ningji’s answer is “lowering the price”—cutting average transaction price toward DQ’s 23 yuan—that’s essentially destroying the last bit of brand premium themselves. After the price cut, Häagen-Dazs stores will be no different from mall corridors with Mixue Bingcheng outside, and location premium will evaporate. If the answer is "hold price, innovate, collaborate"—this path is already done. In 2024, Yang Mi was hired as spokesperson, collaborations produced batch products, but traffic still dropped double digits, gift box sales fell 90%. There’s another specific contradiction: Ningji is a franchise system, Häagen-Dazs has always been direct-owned. The core value of direct operations is quality control—this is the logic behind high average prices. Once franchising is introduced, consistency gets hard. Switching from direct to franchise saves Ningji money, but may accelerate brand decline. **Now, timing.** Ningji’s 2026 strategy just shifted focus from rapid expansion to single store profitability—their own 3,000 franchise stores are still adjusting. Now, taking over a loss-making brand needing deep restructuring at the same time means a real risk of resource dispersion. By the way, the oft-cited “store location” logic is also fading. Facing renewal pressures, Häagen-Dazs has already begun shifting from CBD core districts to more mainstream commercial areas—the gold store locations are actively being diluted. **What did General Mills get?** Financial terms undisclosed. Highly unlikely it’s a big sum—the less chance terms are public, the uglier the price usually is. What General Mills got is more of a stop-loss exit than cash: transferring ongoing losses from direct stores, while retaining supermarket retail, and continuing to collect brand licensing fees. For General Mills, it’s a cost-effective retreat. There’s a slight short-term positive effect for General Mills stock (GIS.US)—the market interprets clearing out China stores as good news. But the China store business is a tiny fraction of overall revenue, so limited impact. No direct A-share target. The ice cream track (Yili, Mengniu) sees confirmation of high-end ice cream contraction, but that’s old news—the market already priced it in. Ningji is not publicly listed, so there’s no direct tradable asset. **What to watch next** The deal is expected to go through by year-end. Three signals to watch: Ningji’s first pricing move after takeover. Maintain 58 yuan, or launch lower-priced products? This reveals Ningji’s real integration approach—and decides if this deal is brand rebuilding or brand consumption. Häagen-Dazs’ Mid-Autumn gift box sales data this year. Last year already fell 90%, this year’s number is Ningji’s first integration report card. Whether Ningji has subsequent brand acquisitions. If a second acquisition happens, Danaher’s strategy is real; if Häagen-Dazs is a one-off, strategic significance needs to be reevaluated. Risk Warning and Disclaimer The market is risky, invest with caution. This article does not constitute personal investment advice, nor does it take into account individual users’ specific investment objectives, financial situations or needs. Users should consider whether any opinion, viewpoint or conclusion herein is suitable for their circumstances. Invest at your own risk.