General Mills Inc's recent decision to sell its Haagen-Dazs ice cream shops on the Chinese mainland to an investor group that includes Ningji, a fast-growing Chinese tea brand, signals intensifying competition in the country's ice cream market, amid consumer desire for constant relevance and innovation.

Under the terms of the deal, the buyer will receive an exclusive license to operate Haagen-Dazs-branded ice cream shops and gifting businesses on the mainland. General Mills will retain ownership and operations of Haagen-Dazs retail and food service channels in China outside of the licensed outlets. Financial terms were not disclosed. The transaction is expected to close in 2026, pending regulatory approvals and customary closing conditions.

The move aligns with General Mills' "accelerate strategy", which focuses on prioritizing brands and channels with the highest potential for profitable growth, said the company. Since 2018, the company has reshaped its portfolio, divesting nearly a third of its net sales base through acquisitions and divestitures.

Haagen-Dazs has relied on its premium positioning in China since opening its first store in Shanghai in 1996. However, the brand has faced steady contraction: according to industry tracker canyandata.com, Haagen-Dazs operated 262 stores in May 2026, down from more than 550 locations at its 2019 peak. However, the broader Chinese ice cream market continues to expand rapidly.

Research by the Zero Power Intelligence Group shows the ice cream market size growing from 120 billion yuan ($17.69 billion) in 2020 to 200 billion yuan in 2024, with projections reaching 250 billion yuan by 2030. Despite overall market growth, Haagen-Dazs has struggled to capture a strong share of the market, being outpaced by emerging domestic competitors.

The brand remains one of the top players in China's limited-service ice cream segment, ranking third in food-service transaction value in 2025, according to Euromonitor International. It ranks behind domestic rival Mr. Wildman and US-based Dairy Queen.

Mr. Wildman specializes in fresh gelato and operates 1,326 stores.

Ningji, founded in 2021, is primarily known for its lemon-flavored handmade beverages, priced around 15 yuan on average. The company grew rapidly with backing from investors including ByteDance, Tencent and Xiaomi, but its store count has stabilized at 1,799 outlets, according to canyandata.com.

In recent years, coffee and tea beverage chains have continuously diversified their menu, adding bakery items, desserts and recently, ice cream and gelato. Even so, integrating the premium Haagen-Dazs business into Ningji's value-oriented beverage-focused model could be a challenge for the new owners, according to industry observers.

Consumption analyst Yang Huaiyu said that Ningji's move to buy Haagen-Dazs locations is aimed at leveraging the high-end brand equity to achieve a leap, thereby breaking free from the low-price involution plaguing the tea beverage market.

"Haagen-Dazs stores come with a built-in high-net-worth customer base and prime spots in core business districts, which can quickly compensate for Ningji's shortcomings in high-end scenarios," Yang said.

Yang added that the deal would also allow Ningji to expand its product matrix, establishing a differentiated advantage in the fiercely competitive lemon tea track. "By moving beyond a single-category focus, the brand can mitigate the risks of market saturation and price wars," Yang said.