For the Chinese functional beverage market, this new business model may bring a potential change.
Speaking of Thailand Tencel group and its owner Xu family, most consumers may not be familiar with it, but its Red Bull trademark is well-known. TiSi group is a Thai food and beverage company. Xu Shubiao, the founder of TiSi group, developed the Red Bull brand of functional beverage in 1975, which opened the wealth legend of Xu family.
Red Bull entered the Chinese market in the 1990s. At that time, the brand took root in China through the joint venture Red Bull Vitamin Beverage Co., Ltd. and in the following 20 years, it has made its Red Bull Vitamin functional beverage into a super beverage with annual sales of more than 20 billion yuan. During this period, the specific operation of the joint venture was operated by Huabin group, and Tencel group, one of the shareholders, played the role of trademark licenser.
Until 2016, the situation of harmonious and friendly cooperation came to an abrupt end. After that, the two sides had differences about the authorization of Red Bull series trademarks, which led to a complicated and long legal litigation stage. Until now, there is no final result. In this gap period, Huabin still holds Red Bull Vitamin functional beverage, while Tencel group, as the trademark holder, has launched a strong offensive. Through its local partner Guangzhou Yao energy beverage Co., Ltd., it has launched Red Bull Annaiji, and united with Pusheng Food Sales Co., Ltd. to introduce Red Bull Vitamin flavor beverage from Thailand, so as to seize market share. This is also the origin of Xu Xinxiongs new model.
New business model
What you see in the meeting is that red bull annagi has more elements. This is only one part of our Chinese brand promotion and product promotion strategy. In the next stage, we will have more publicity activities involving different products, Xu Xinxiong, CEO of Tencel group, revealed that a series of more actions will follow.
Recently, Tencel groups China market is indeed frequent. In May this year, the company announced that it would make a series of investment in China in the next three years, with a total amount of 1.06 billion yuan, including the establishment of a new production plant in Huairou District of Beijing. Xu Xinxiong further introduced that the plant construction plan is progressing smoothly, and there will be some progress in site selection before the end of this year.
In addition to strengthening investment, in September this year, Tencel groups Chinese partners added another heavyweight company, six walnut parent companies, Yangyuan beverage. It is understood that from the perspective of cooperation, Yangyuan beverage is the distributor of Guangzhou Yao energy beverage Co., Ltd., and will be responsible for the operation of Red Bull Annaiji beverage in the market north of the Yangtze River.
Tencel group has been constantly moving, and its operation mode in the Chinese market is also relatively unique, that is, tence groups China strategy is completed and implemented through Chinese partners, and tence group has given high trust to Chinese partners. Xu Xinxiong said that this is the global business model of Tencel group - it will find local partners, gather their own experience and technology with local partners to achieve product sales and open the market. In the Chinese market, we have adopted a new partnership and a new business model. The new business model is consistent with the global strategic layout of Tencel group, and a strong international business network is established by working together with local partners who trust each other.
Why is this a new model? In order to understand the new model, we should return to the trademark dispute of Red Bull. To understand simply, as the founder and owner of Red Bull, the Xu family represented by Xu Xinxiong authorized the Red Bull trademark to Red Bull Vitamin Beverage Co., Ltd., which was operated by Huabin group represented by Yan Bin. During more than 20 years of close cooperation between the two sides, Red Bull Vitamin Beverage Co., Ltd. has operated Red Bull Vitamin functional beverage in the Chinese market, making it a well-known brand of functional beverage and taking the top position in the functional beverage market.
However, with the different definitions of trademark authorization period and cooperation mode between both parties, Tencel group and Huabin have launched a more fierce confrontation since 2018. Tiansi group launched the liquidation of Red Bull Vitamin Beverage Co., Ltd. the two sides were involved in several lawsuits, but no result has been found.
This is just the first step. At the end of 2019, Thailand Tencel introduced Red Bull imported from Thailand into the Chinese market, namely Red Bull Vitamin flavor beverage. Pusheng company was responsible for the distribution, which dropped the second step.
Today, Yangyuan drinks have joined the sales camp. According to Xu Xinxiong, Yangyuan beverage is the distributor of Guangzhou yaoneng, which can help tence group establish a perfect distribution network and become a part of this ecology. I believe that based on such a model, we will do better in the future. Moreover, such cooperation with local partners will also help us to innovate products, improve production capacity and build brand image Establish and maintain close contact with consumers and build channels to make the development process faster and more agile.
More than two Red Bulls
It is precisely because of the promotion of Tiansi groups new business model that there are very interesting phenomena in the market: if you observe carefully, consumers will find that there are three Red Bull products with similar appearance and similar price on the shelf of the same supermarket: Red Bull Vitamin functional beverage, Red Bull Vitamin flavor beverage and red bull annagi. If you dont pay attention to the words on the product can, it is easy for consumers to confuse, and the latter two products are products arranged by Tencel group.
When will this triplet situation end? In the interview, Xu Xinxiong didnt mention the trademark dispute, but he stressed that let our authorized Red Bull products become the only authentic Red Bull recognized in the market when describing the goal of Tencel group. However, as the two sides are still in litigation, Xu Xinxiongs goal has not been achieved, and the coexistence of three Red Bulls will continue. Another person familiar with the matter told our reporter that everything depends on the final judgment. At present, there is a gap between the two sides.
In red bulls triplets, both products are arranged by Tencel group, which inevitably makes the outside world understand it as internal competition. In the face of our reporters question of which product to focus on, Xu Xinxiong responded: we attach great importance to both products, and we will launch more related activities in the future to let consumers know more about these two products. This is also one of the important strategies of Thailand Tencel group to build a global brand house. We will seize the market of each segment and meet their different needs.
From Xu Xinxiongs introduction, we can find that Tencel groups plan does not only include these two products. He further said: we also plan to make our Red Bull products a leader and leader in Chinas energy beverage market, and become the industry benchmark. Therefore, we need to constantly understand consumers and push forward different products according to their different consumption preferences and taste preferences to meet different audiences. On future plans, he further said: whether there are investment and construction plans for the new plant, we think that with the continuous growth of sales volume and customer demand, it is necessary for us to improve our production capacity. We are also starting to have some thinking and similar planning in this regard.
Can you break the game?
In the matter of winning the Chinese market, Tencel group is in a fierce position. If you input Red Bull in Baidu, the advertisement that shows first is Red Bull Annaiji - strong attack. In the market, some industry insiders have disclosed to our reporter that the strategy of Tencel group and its partners is to face the attack. Where there are Red Bull Vitamin functional drinks, there are red bull annagi and Red Bull Vitamin flavor drinks. In terms of dealer policy, the strategy of Tencel group is lower price and more rebate to attract more retailers.
Although the firepower is fully opened, the opponents that Tiansi group has to face can not be underestimated. According to the data released by Huabin group, the sales of Red Bull Vitamin functional beverage in 2019 is about 22.3 billion yuan, with a year-on-year growth of 5%. It is the largest functional beverage brand in China. And Tiansi groups Red Bull anaiji plus imported version of Red Bull Vitamin flavor beverage into the market only less than two years ago. It is understood that the sales of two new brands of red bull in China in the first half of 2019 exceeded 1 billion yuan. However, the beverage industry said to our reporter that the former position is hard to shake, unless one day Huabin really can not use the Red Bull trademark.
Xu Xinxiong also expressed the great challenge of the market to our reporter. But in his view, the biggest challenge is to seize the needs of consumers. If you dont catch the needs of consumers, the market competition we are facing will be very difficult. This is also an important point for us to strengthen our cooperation with local partners. In this way, we can better understand Chinese consumers through them.
The way to deal with the challenges has returned to the cooperation with local enterprises. Xu Xinxiong gave full affirmation and hope to the partners. When talking about the criteria for selecting partners, he said: first of all, the two sides should trust each other, and their goals, areas of interest and attitudes should be consistent; secondly, the ability of partners is also very important, which is related to whether the business of Tencel group can be actually increased.
What are the capabilities of partners? The market is the final test. In the future, we will see whether Guangzhou yaoneng, Pusheng and the newly added Yangyuan drinks can shake the more than 20 billion yuan of Red Bull Vitamin functional drinks.
Source: Economic Observer: Wang Xiaowu, editor in charge_ NF