Chinese Dairy Brand Defies Backlash, Refuses to Pull Controversial Ads

The company behind the ads has responded to the backlash, stating that the ads are simply a creative concept aimed at recruiting milk cows, and that they have obtained permission from Boss直聘 to use their design elements. The company claims that the ads are meant to convey their commitment to the welfare of their milk cows, and to showcase the favorable environment of their pastures. However, many netizens remain unconvinced, with some arguing that the ads are tone-deaf and insensitive. Others have raised concerns about the potential for trademark infringement, and have questioned the company's business model, which involves selling "adoption" packages to customers.

The controversy surrounding Adopt a Cow's ads is not the company's first brush with criticism. In 2022, the company's IPO application was put on hold by the China Securities Regulatory Commission, which requested that the company provide additional information on its business practices and risk management. The company has also faced allegations of engaging in multi-level marketing practices, which it has denied. Despite the backlash, Adopt a Cow has stated that it does not plan to withdraw the ads, and will continue to promote its brand and products through creative and eye-catching marketing campaigns.

The company's decision is likely to be closely watched by regulators and consumers alike, as the debate over the ads and their implications continues to unfold. Founded by Xu Xiaobo in 2016 in Hangzhou, Adopt a Cow has developed into a comprehensive enterprise that integrates cow farming, pasture cultivation, tourism, feed processing, and dairy product sales. The company's unique "raising" model, which allows customers to adopt a cow and receive benefits such as milk and dairy products, has contributed to its rapid growth. According to publicly available data, Adopt a Cow has experienced remarkable revenue growth, with annual revenues of approximately 8.65 billion yuan, 16.50 billion yuan, and 25.66 billion yuan in 2019, 2020, and 2021, respectively.

However, the company's high sales expenses have raised concerns in the market. From 2019 to 2022, the company's sales expenses totaled 13 billion yuan, with sales expense ratios exceeding the industry average in 2021 and the first half of 2022. In contrast, the company's research and development expenses were relatively low, totaling only 750 million yuan from 2019 to 2021. The company's plans for an initial public offering (IPO) on the Shanghai Stock Exchange were terminated in February 2024 due to the withdrawal of the underwriter. The China Securities Regulatory Commission had previously raised 48 questions about the company's IPO application, including concerns about the source of its milk, food safety, and potential violations of laws related to pyramid schemes and illegal fundraising.

Despite these challenges, Adopt a Cow remains a notable player in the dairy industry, with a strong brand presence and a loyal customer base. The company's ability to navigate the complexities of the Chinese market and address concerns about its business model will be crucial to its long-term success. As the company continues to evolve and adapt to changing market conditions, its future prospects will depend on its ability to balance growth with regulatory compliance and social responsibility. The controversy surrounding the ads has sparked a wider discussion about the ethics of advertising and the social responsibility of companies, with many netizens calling for the company to withdraw the advertisement and issue a formal apology.