Recently, the Chinese Internet celebrity food brand “Zihi Guo” which rapidly gained fame with its self-heating hot pot, has applied for bankruptcy liquidation. Its parent company, Hangzhou Jinlingyang, has already exceeded over 140 million yuan in executed amounts.
Public information indicates that Hangzhou Jinlingyang currently has executed amounts exceeding 140 million yuan, and the related bankruptcy liquidation process has been initiated. Creditors are required to declare their claims by May 7th, with the first creditors’ meeting scheduled to be held on May 14th.
According to a report by “Metropolis Express” on May 6th, Zihi Guo was once one of the representative brands of Mainland China’s Internet celebrity gourmet foods, appearing frequently in variety shows, TV dramas, elevator advertisements, and live streaming platforms, and setting a sales record of “selling 5 million pots in 10 minutes”. Zihi Guo once attracted many celebrities to promote its products, leading to a rapid increase in the brand’s popularity.
From 2018 to 2021, Zihi Guo completed 5 rounds of financing, with its valuation reaching as high as 7.5 billion yuan at one point, with institutions such as China International Capital Corporation (CICC) and Legend Capital participating in investments.
It was reported that during the expansion phase, Zihi Guo relied heavily on intensive marketing efforts. The marketing expenses of Zihi Guo at one point exceeded 40%, while research and development investment accounted for less than 1.3%. In 2020, the company’s revenue reached 958 million yuan, but sales expenses were as high as 293 million yuan, resulting in a loss of 151 million yuan that year. By 2021, sales expenses further escalated to 431 million yuan, expanding the loss to 314 million yuan.
In 2022, Hangzhou Jinlingyang briefly turned losses around by reducing sales expenses, but subsequently, revenue plummeted by more than 17% year on year. By 2024, the company was forced into execution for owing 11.25 million yuan in advertising fees to Focus Media, and the founder, Cai Hongliang, was frequently subject to high-consumption restrictions.
In 2023, Lotus Health Industry Group Co., Ltd. planned to invest 300 million to 600 million yuan to acquire a portion of Zihi Guo’s parent company’s equity, with the corresponding company valuation ranging from approximately 1.5 billion yuan to 3 billion yuan. However, the deal did not materialize in the end.
Public reports revealed that the founder of Zihi Guo, Cai Hongliang, previously established the snack brand “Baicao Wei” and sold it in 2016. In 2018, he launched the self-heating food brand Zihi Guo. Over the following years, the brand expanded rapidly with the help of capital and marketing strategies.
Multiple media outlets reported that Zihi Guo quickly entered the market through endorsements, entertainment sponsorship, elevator advertisements, and completed multiple rounds of financing under capital support, with its valuation once reaching 7.5 billion yuan.
However, due to changes in the financing environment, unsustainable marketing expenses, and increasing operational pressure, the company’s financial situation gradually deteriorated. Hangzhou Yuhang District Court officially accepted Hangzhou Jinlingyang’s bankruptcy liquidation application on March 6th this year.
According to a report by “Fast Technology” on May 6th, before entering bankruptcy liquidation, Zihi Guo’s online flagship store was still offering discounted sales, while offline channels were gradually being removed.
“Metropolis Express” reported that Zihi Guo products are now scarce in some convenience stores in Hangzhou. However, the “Zihi Guo flagship store” on Taobao is currently still operating, with some self-heating rice and hot pot products still being sold.