After the news that Liu Zhen confirmed her resignation spread, the topic of Yuanqi forest going to sea has been hotly discussed. In 2019, Yuanqi forest starts its international journey. At the beginning of 2021, its international business division became independent. In April of that year, the brand completed a strategic financing of US $500million, and frankly said that it would be used for going to sea. Less than a year after the launch of the brand’s flagship bubble water on Amazon, an American e-commerce platform, bliss Dake, general manager of the U.S. region, and Liu Zhen, head of international business, left one after another. Bubble water, which once topped Amazon’s top 10 list, also saw a decline in sales. The changes of business executives in overseas areas and the internal shocks of Yuanqi forest have come one after another, and accompanied by the comprehensive encirclement and suppression of Yuanqi forest by “two pleasures” in the Chinese market. Although Yuanqi forest has built its own factory, which has difficultly split a domestic supply chain, it is still difficult to control the overseas business affected by the uncertainty of the epidemic situation, shipping logistics and other factors. On the one hand, the cost of going to sea is still high. The construction of overseas factories, the formation of local teams and maritime logistics all consume a lot of financial and material resources; On the other hand, the running in with the local market started almost from scratch. The marketing promotion of the new market, the distribution rate of offline channels, consumer acceptance, and even the details of the product manual on the bottle are all problems.
At present, Yuanqi forest has entered more than 40 countries and regions, including the United Kingdom, the United States, France, Australia, Singapore and so on. Its star products bubble water, burning tea and milk tea are the main products for going to sea.
But overseas fishing is not easy. According to the current overseas pricing, the price of Yuanqi forest is slightly higher than the bubbling water created by liangle. However, in the overseas bubbling water market, the access negotiation of offline channels and the quality inspection of product components are a tough battle. All these put forward higher requirements for the sea going of Yuanqi forest.
Starting from Liu Zhen’s resignation, we tried to figure out the performance of Yuanqi forest in the American bubble water market for more than a year, and tried to explore the more complicated details and long chains behind the drink going to sea.
Changes and shocks
The business of Yuanqi forest in the United States has changed quietly, and the event of senior management change has set off a corner. When the media focus on Liu Zhen, they often ignore the direct person in charge of the US business. Bliss Dake, currently a market VP named true terpenes in Oregon, was responsible for the launch and operation of Yuanqi forest in the United States from February 2021 to January 2022.
He first served as the market leader of tea brands such as golden leaf and mighty leaf, and then worked for soft drink beer brands such as rogue. From his experience, he is familiar with the soda and bubble water markets in the United States.
(Figure source @bliss Dake personal LinkedIn)
However, bliss Dake left after only one year in Yuanqi forest, which is quite rare in his career. According to public information, his working hours in mighty leaf, gloden leaf and other tea brands are 11 years and 4 months and 2 years and 7 months.
At the end of March this year, a number of Chinese media exposed the news of Liu Zhen’s resignation. According to the insider’s statement to Caijing Tianxia weekly, Liu Zhen’s actual resignation time was even earlier. At the end of 2021, “she just kept flying books and didn’t want to attract outside attention.”.
If Liu Zhen, who is in charge of overseas business, does leave at the end of 2021, it makes sense that bliss Dake left Yuanqi forest in January of the next year. The boss has gone, so I have no reason not to go.
The change of senior executives in international business is not a good signal for the outside world, but also a huge pressure for the internal of Yuanqi forest. Liguoxun, vice president, mentioned in the media communication on April 15 that a new senior executive who “has achieved financial freedom and completed Internet entrepreneurship” will take over the international business.
Frankly speaking, Liu Zhen didn’t do badly, but he may not meet internal expectations. During her tenure, Yuanqi forest successively won the Singapore HCS health logo and the Australian “Health Star” logo, and entered the mainstream sales channels in Europe and the United States, especially the Asian supermarkets. In addition, Yuanqi forest has also entered the online channel of Wal Mart in the United States.
But internal expectations go far beyond that.
According to latepost, the internal revenue target set by Yuanqi forest in 2022 is 10billion yuan, and the year-on-year growth rate has dropped to 37%. Compared with the brilliant results of 260% year-on-year revenue growth in 2021 and 309% in 2021, Yuanqi forest is significantly slower.
Over the past five years, Yuanqi forest has experienced a rapid rise from the initial stage to a slowdown in growth, not only in the collection figures and documents, but also in tangbinsen’s public speeches. From 2020 to 2021, the ambitious entrepreneurial leader was still talking about the spirit of piracy and courage, but now he is gradually fading out of the public view.
Liguoxun became the person who replaced tangbinsen and spoke for Yuanqi forest. His way of speaking is more modest and gentle. Behind his caution is the performance pressure that Yuanqi forest has to face.
Capital’s high expectations for it are obviously putting more pressure on this new brand. It is believed that tangbinsen was originally born on the Internet and was used to the world of high heels. However, there is an essential difference between the FMCG industry and the Internet game industry. The performance index that is almost twice as high as one year is really difficult for drinks.
There must be shocks under difficulties.
It is rumored that Yuanqi forest is quietly slimming down, affecting ordinary employees and enterprise executives. Many media reported that the organizational structure of Yuanqi forest had been adjusted, and many departments had been merged or abolished. Zonghao, vice president in charge of brand operation, and ran Hao, vice president in charge of human resources, had also left.
Ranking and competition
Faced with difficulties at home and abroad, the short-term brilliance of overseas business also made Yuanqi forest place high hopes on going to sea. After all, by the end of 2021, Yuanqi forest bubble water had entered the top 10 of Amazon bubble water for the first time, and was the only Chinese brand to enter the list. It’s not all luck. The competition in the domestic beverage market in the United States is already fierce enough.
Although liangle occupies the majority, it cannot completely eat up the whole market. Among the non-alcoholic drinks, Dr. Keurig pepper and monster Beverage Corporation are important players in the first tier. They have many soft drink product lines.
(Figure source @monster official)
Even in the field of bubble water subdivision, the competition is still fierce.
La Croix, a local brand of bubble water from Wisconsin in the United States, has become a dominant company. Paris water, Santo pello and Voss, which occupy the top of the domestic bubble water disdain chain, cannot take the lead. Consumers already have a variety of choices and maintain high loyalty to the brands they have consumed.
(Figure source @ Amazon official website)
The popularity of family cars in the United States and the consumption of beverages by family size determine that the sale of sparkling water is mostly carried out offline, and it is bought in boxes. Consumers will not find it difficult to mention the large amount. Instead, the habit of buying in boxes has increased the cost of brand migration, which makes American consumers hesitate instinctively when choosing a new brand: if they buy so many cans, what if they are not good to drink? However, offline supermarkets will be more picky when selecting brands, and the entry threshold will be higher. For example, supermarkets targeting high-end and healthy life, such as PCC and whole food market, may prefer some local brands or zero calorie sugar free drinks. As a foreign brand, it will be more difficult for Yuanqi forest to enter the market. In the U.S. head Asian Supermarket h mart, you can find vitality forest on the shelf. However, its placement has no advantage. The unit price of about $3 is often surrounded by items of $1. Even if consumers want to taste the fresh food, they will hesitate a little after seeing the price tag. However, in the face of the “buy 2 get 1 free” or “buy 2 get 3 free” activities launched intermittently by local supermarkets such as Safeway and QFC, the unit price of Yuanqi forest seems to be less attractive.
Although the U.S. business team of Yuanqi forest has made every effort to attack offline, it is still difficult to open up a situation in the local mainstream market based on its previous domestic marketing experience. Chinese are still the main consumers. You can even find them in some Chinese restaurants. According to the official information of the brand’s US website, currently, the points that can be purchased offline are mainly concentrated in California, Huazhou, Texas and some east coast cities on the west coast, and the central and northern regions have not been explored on a large scale.
(Figure source @ official website of Yuanqi forest in the United States)
The channel data on the official website also shows that offline supermarkets including 99 Ranch market, Berkeley bowl marketplace, H mart and Woolworths can purchase Yuanqi forest, but 99 Ranch market, which accounts for the highest proportion of channels, is essentially a Chinese supermarket. Although Wal Mart has been settled online, the taste is not very complete. Amazon may be the online purchase channel with the most complete taste at present. However, there are also certain places, such as Yami and WEEE in Asia! Consumers’ comments on Yuanqi forest are all pretty good.
Reflection and questioning
In the comments on the Amazon page of Yuanqi forest, there are two main points that have been highly discussed, one is brand attributes and sources, and the other is product ingredients and additives. This is the most important concern of the harsh American consumers. Someone directly left a message asking, is this a Chinese brand or a Japanese brand? Looking at the packaging design, I feel very Japanese. Looking at the text description, it is made in China, which makes consumers fall into great confusion. Brand consistency from the inside out is important for American consumers. If it is bubble water from China, it may need to highlight more Chinese elements. Of course, this element is not a common panda, bamboo or dragon. However, the huge Japanese word “Yi” on the bottle makes consumers instinctively doubt the product.
Modern Chinese magazine has published articles about it,
“The word” Qi “in Japanese borrows from the word” Qi “in Chinese, and there are some differences in the expression of meaning between the two. The explanation of” Qi “in Guangci yuan is vague and generalized, such as” things full of heaven and earth “and” the motive force of life “. In Da CI Quan,” Qi “is In addition to air, atmosphere and other natural phenomena, it refers to a person’s mental or psychological state. Its meaning tends to the interior of the human body, which is somewhat similar to the “heart” in Chinese.
Wei Ye, comparison of meaning and cultural connotation between Chinese “Qi” and Japanese “Qi”, College of Arts, Liaoning University, 2016
From the perspective of word evolution, if the word “Yi” is selected and magnified to the most prominent position of the bottle, it seems that Japanese brands can also be understood. After the flourishing of Yuanqi forest, the public may have forgotten that the brand was involved in the storm of “pseudo Japanese design” at the beginning. A tea gift box sold later was also questioned to have similarities with the Japanese tea brand lupicia. The shortcut that the brand took in the design at the beginning has to be double repaid now. In the harsh and fastidious American market, these dividends that have been swallowed up by brands should be spit out little by little. In addition to brand attributes and sources, American consumers have never stopped heckling product ingredients. Why does bubble water, which is called 0 calorie in the bottle product manual, still contain 12 grams of carbohydrates, while bud, a competitor of Pepsi, can achieve 0 sugar, 0 fat and 0 calorie.
In addition, consumers are also very sensitive to sweeteners. Since many flavor drinks in North America use natural flavor essence, the bottle description of the American version of Yuanqi forest is marked with “artificial essence”, which makes consumers who are more inclined to choose healthily abandon this product. In terms of the longer supply chain, the cost of going to sea is still high. Compared with digital electronics, fashion retailing and other categories, beverage items are lower in value but heavier, and are easy to be damaged during transportation. Consumers’ dissatisfaction with the sunken bottom of cans can also be seen in Amazon comments. Of course, the brand has also made localization adjustments and efforts. For example, previously, the shelf life of bottled bubble water was only 270 days. After the overseas bubble water was replaced by aluminum cans, the shelf life could be extended to 540 days, leaving enough flexibility for the global logistics of drinks. Perhaps more overseas consumers have not been curious about this product because they have not tasted it. In an Amazon comment, a female consumer said that since my husband accidentally drank this drink in a Boqi store, he almost searched the supermarkets around to see where they sold it.
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