(Yicai) May 29 -- Zhongxuegao started e-commerce livestreams yesterday in a bid to restore the Chinese ice cream maker’s flagging revenue and pay outstanding staff salaries.

Zhongxuegao has had operational problems in the past year, resulting in tight cash flow and delays in salary payments, founder Lin Sheng said live on air yesterday. 

Reports of salary arrears emerged in February, and some suppliers claimed the Shanghai-based company had ceased production. Its flagship store on the online shopping platform Taobao sells only three products, one of which is out of stock.

In the livestream studio, the number 729 was posted in the background, which Lin said was the number of Zhongxuegao’s employees who have yet to be paid. The broadcast had nearly 800 fans on its first day.

A number of prominent Chinese business leaders, including celebrity entrepreneur Luo Yonghao, have turned to livestream selling in recent years as a new avenue for business and marketing. Luo, who founded debt-ridden phone maker Smartisan Technology, drew 48 million viewers and generated more than USD15.5 million in sales over the course of his first three-hour broadcast in April 2020.

Founded in 2018, Zhongxuegao rapidly became an ice cream sensation in China. Between 2019 and 2022, it beat Häagen-Dazs to become the top ice cream brand in China by sales during the Double 11 shopping festival by racking up over CNY100 million (USD14 million).

Zhongxuegao was also known for its high prices, which Lin said the gross margins were similar to those of milk tea and coffee.

But there was controversy in 2022, when an experiment found that its ice cream did not melt for an hour even at a room temperature of 30 degrees centigrade. Zhongxuegao said its production was fully compliant with laws and regulations.

Editors: Shi Yi, Tom Litting