Auction Platforms Become Startup Playbooks: The Zhong Xuegao Case

Zhong Xuegao sold 508 intangible assets through an auction platform on September 14, two days after the collapsed ice cream brand was name-checked by Luo Yonghao on Weibo. The buyer, a newly formed food company, walked into the ice cream business for 21.1 million yuan — trademark hoard, patents and all.

Luo's September 12 complaint about a rival ice cream — "It tastes much worse than Zhong Xuegao, I miss Zhong Xuegao" — reignited public debate around the brand. On September 16, the reborn Zhong Xuegao appeared at the Tianjin Ice Cream Expo. The sequence, as reported by 36Kr, reads like a marketing script.

The asset package tells its own story about defensive strategy. Of the remaining auctionable assets, 492 are registered trademarks. Zhong Xuegao had preemptively registered lookalike marks — Zhong Bugao, Zhong Xuedi, Zhong Xue Bugao, Song Xuegao — to block counterfeiters. It also filed across unrelated categories: ammunition and fireworks, fitness equipment, jewelry and watches. The bankruptcy estate included 8 patents alongside the trademark portfolio.

Tianyancha records show the buyer entity, Changsha Zhong Xuegao Food Co., Ltd., was established in August this year and is backed by Changsha Hujia Food, whose Royal Xiaohu brand sells frozen food but no ice cream. The auction gave the group an entry into a new product category without building a brand from zero.

The patent arbitrage

Patents on auction platforms are a seriously undervalued asset pool, the report argues. Auctioneers price them for quick cash conversion, while entrepreneurs should weigh prior R&D costs and future benefits — the gap between the two is the arbitrage opportunity. The listings range from a bulb-shaped decanter to an automatic crab-binding machine, a ganoderma lucidum cultivation method and a mushroom-shaped cat litter box.

The market punishes carelessness. In April 2025, JD Auction listed a batch of Disney merchandise confiscated by customs: 16 keychains, 34 hair bands, 32 hair accessories and 653 dolls. A poster claiming to be the original owner, @Strawberry Flavor on Xiaohongshu, hinted there were "271 green Belles" inside, suggesting limited-edition LinaBell plush toys that traded for thousands of yuan each. Onlookers pegged the batch's value above 210,000 yuan.

The auction drew 135 registered bidders and 37,508 onlookers. After 60 rounds, a 32,000-yuan starting price climbed to 280,000 yuan; with a 5% commission and 1% service fee, the deal closed near 296,000 yuan.

The buyer then found only dozens of strawberry LinaBells. The "green Belle" turned out to be Gelatoni, a character priced at roughly one-tenth of the strawberry LinaBell. Netizens revalued the batch at just over 120,000 yuan. Yet the buyer, Claw, an online claw machine operator, converted the loss into advertising and sourced popular prizes for its own platform — turning a bad flip into a marketing buy.

Equity and the rules of the game

Beyond bargains, equity auctions tied to judicial enforcement offer stocks below market expectations, but the discount usually hides complexity. Experienced bidders study the shareholder background, financial status and dividend records first, and check whether the equity carries pledges or freezes before bidding, according to the report. Bulk equity sales matter to a wider audience: when a major shareholder's stake goes under the hammer, the taker, the size and the intent can move the stock.

For sellers, the platforms solve a distribution problem. The commercial asset section of JD Auction and the commercial institution auction section of Alibaba Auction list personal bulk second-hand items — factory buildings, leftover inventory, machine tools — that traditional second-hand markets won't absorb. Automatic bidding removes haggling and lets the market set the ceiling. Buyers nationwide see reserve prices without traveling.

Human exploration of auction platforms remains, by the report's estimate, less than 1% of what the format offers. For founders short on capital, the same listings function as due-diligence files: what a bankrupt peer's equipment sold for is a concrete answer to what a business actually costs to run — and the failures on display are cheaper tuition than any MBA.