On October 26, the sparkling water brand Yuanqi Forest was listed on Weibo’s hot search for being “worn wool”. “12 bottles of 6.85 yuan”, “3 boxes of actual payment of 15.55 yuan”… Consumers posted orders on the Internet, saying that “the sheep was bald.” There are even more consumers who directly ordered products with an original price of 158,000 yuan, but paid less than 32,000 yuan. Netizens snapped up frantically, and the sales of store products soared.
On the evening of October 28, the Yuanqi Forest e-commerce team officially issued an open letter stating that the incident was caused by an operating error by the operating personnel, and disclosed that the total value of the store orders generated by this error was tens of millions. During this period, a total of 140,500 users in the Yuanqi Forest online store placed orders. The largest order received by the store was 41,000 boxes, and there were 451 orders for more than 50 boxes. In response to this incident, Yuanqi Forest decided to stop all sales at the Taobao store by mistake, and announced that it would send a box of 15 bottles of white peach sparkling water to the 140,500 users who placed orders to face the team’s mistakes.
At the warm-up period of Double Eleven, the farce of Yuanqi Forest took place too “smartly”. Is it an operational error or deliberate marketing?
Denying that the valuation exceeds tens of billions, it is too early to benchmark the giants
According to the company’s data, Yuanqi Forest was established in 2016 with a current registered capital of 274 million yuan. It is mainly engaged in sugar-free and low-calorie products. Since receiving the angel round of investment in May 2018, Yuanqi Forest has gone through 6 rounds of financing. The latest round of financing was completed at the end of March this year. Many old shareholders, including Rong Capital and Longfor Capital, continued to follow suit. After this round of investment, Yuanqi Forest is valued at US$6 billion. Compared with the last round of valuation of about 2 billion US dollars, an increase of nearly three times.
Yuanqi Forest is favored by capital. A few days ago, the market reported that “the valuation of Yuanqi Forest is approaching US$15 billion”, but Yuanqi Forest has responded that the news is not true.
In recent years, as the most representative dark horse in the soft drink market segmentation track, Yuanqi Forest has achieved remarkable results. Official data show that in 2019 and 2019 on Double Eleven, the Yuanqi Forest brand jumped to the top of the beverage list with sales of 2.26 million bottles and over 20 million bottles, respectively. In 2020, brand sales achieved a year-on-year increase of 344%. For two consecutive years, Vitality Forest has beaten Coca-Cola, Pepsi, Nongfu Spring and other traditional beverage giants to win Tmall andJingdongDrinks are the top sellers, and industry insiders begin to compare them with brands such as Nongfu Spring and Coca-Cola.
From the perspective of company performance, in 2020, Nongfu Spring’s operating income will be 22.877 billion yuan and net profit will be 5.277 billion yuan; in 2020, Coca-Cola will have revenue of approximately 211.4 billion yuan (approximately US$33 billion) and net profit of approximately 49.75 billion yuan. Yuan (approximately 7.7 billion U.S. dollars). According to data released by the Dolphin Club, the sales scale of Vitality Forest in 2020 will be 2.7 billion yuan. Combining with the previous Yuanqi Forest founder Tang Binsen set a sales target of 7.5 billion yuan in 2021 at the dealer conference, it is not difficult to see that there is still a big gap between Yuanqi Forest and the industry giants, and it is too early to compare.
The offline competition is fierce Price is still a pain point
In order to open up offline channels, in December 2020, Yuanqi Forest set a goal of launching 80,000 freezers in the spring of this year. The launch should be completed by April this year at the latest, and a corresponding incentive system has been formulated. Will get 200 yuan reward, supervisor will get 100 yuan reward. With limited consumption scenarios, Yuanqi Forest’s move is bound to occupy the terminal space of other brands. The first to bear the brunt is the traditional beverage giants represented by Nongfu Spring.
A “freezer defense battle” between “upstarts” and “giants” has begun. The Nongfu Spring Prospectus shows that as of May 31, 2020, its brands have covered more than 2.43 million terminal retail outlets nationwide, of which more than 480,000 terminal retail outlets are equipped with “Nongfu Spring” freezers. Faced with the launch plan of “Freshness from the Tiger’s Mouth”, Nongfu Spring took the lead in launching a confrontation and launched the “God of Wealth from Heaven” campaign: that is, if a merchant displays their own sparkling water in the refrigerator of the vitality forest, each one will be displayed. A bottle of Nongfu Spring Sparkling Water, a bottle of Changbaixue, which is priced at 3 yuan at the Nongfu Terminal, will be capped 48 bottles. The “Freezer Defence War” is in full swing, and the chances of victory in the vitality forest are not yet known.
However, it is worth noting that whether it is online marketing or offline channel product sinking, high product prices are still a pain point for Yuanqi Forest. At present, the sales of Yuanqi Forest Products are mainly concentrated in chain convenience stores such as 711, FamilyMart, Hema, and Bianlifeng in first- and second-tier cities. According to FamilyMart’s data, the price of most ordinary drinks is between RMB 3 and RMB 3.5; the price of Yuanqi Forest is between RMB 4.5 and RMB 5. Most of the consumers are born in the 85s and 90s, accounting for up to 94%; gender comes up Look, women account for 60%.
However, the price of Yuanqi Forest’s products is obviously not dominant in the sales of third- and fourth-tier cities. An agent of Yuanqi Forest in a fourth-tier city told Investor.com: “The unit price of Yuanqi Forest’s products is high, and consumption in small cities is low, resulting in average sales, and the company’s heavy cargo pressure. In addition, a box of Yuanqi Forest leaves the factory. The price has been raised by 11 yuan in less than two years, and now selling a box of vitality forest sparkling water is not as profitable as mineral water.”
Sparkling water starts a battle for research and development as a new driving force?
According to the Zhiyan Consulting Report, the sales of China’s flavored sparkling water market will increase from 3.58 billion yuan to 5.81 billion yuan from 2018 to 2020, and the scale is mainly contributed by Yuanqi Forest. Forward-looking data show that my country’s bubble water market is expected to reach 32 billion yuan by 2025.
After Yuanqi Forest was favored by the market, the long-silent soft drink market was instantly ignited, and the bubble water also ushered in a blowout development. Coca-Cola launches sugar-free sparkling water AH-HA, Pepsi launches bubly sparkling water, Yili launches Yiran dairy sparkling water, Wahaha launches Angry Bobo sparkling water… Yanjing Beer, Tsingtao Brewery, Mengniu and other food companies have also entered sparkling water. market.
According to the “2020 Water Drinking Innovation Trend Report”, compared to drinking water, flavored beverage products (tea,juiceEtc.) The life cycle is short, generally 2-3 years. Liu Chang, chief analyst of the food and beverage industry of Tianfeng Securities, believes that the development of domestic sparkling water is still immature, and that sparkling water with a partial beverage attribute is greatly affected by consumers’ psychology of dislike the old and the new. The update speed of bubble water products with comprehensive flavors is directly proportional to the brand barrier. The faster the speed, the higher the barrier.
Yuanqi Forest, who knows this well, always focuses on innovative research and development. Yuanqi Forest said that the company will iterate products based on user data feedback to ensure the speed and level of new product development. Since April this year, Yuanqi Forest has successively launched four flavors of sparkling water, including cherry blossom white grape, sea salt pineapple, hawthorn, and pomegranate red raspberry. The new speed of the product is evident.
On October 26, Yuanqi Forest officially announced its “Three 0 Factory” strategy (that is, gradually achieving the goal of zero preservatives, zero pollution, and zero carbon on the basis of self-built factories), and announced that all its sparkling water will no longer add sodium benzoate, Preservatives such as potassium sorbate. At the same time, according to some data disclosed by the company, in the past year, Yuanqi Forest has added more than 30 beverage flavors, and the average product development period is 5.5 months. As of September this year, the company’s R&D costs have increased by 350% year-on-year, which is among the same type of companies. The highest proportion.
Nowadays, in a fiercely competitive environment, it is no easy task for the vitality forest to stand out. At present, the homogeneity of beverage products on the market is serious. Whether it is using erythritol sugar substitutes or the main zero preservatives, it is only a matter of time before the hot products are “copied” by the peers. No new substitutes can be found, and later consumers will inevitably have them. Taste fatigue. If high R&D costs are added to make the product prices higher than peers, whether consumers can continue to pay is also a question.