On March 12, Yuanqi Forest Official Micro announced the results of a product taste survey during the World Expo. The results showed that in the Middle East, white peach, summer black grape and cactus flavors are popular among locals, and these flavors are not much different from the tastes of consumers in China.
This is the second time that the outside world has seen the news that the Yuanqi Forest has gone to sea after the Yuanqi Forest ranked in the top ten of the Amazon.
Since the state put forward the "going out" strategy in the mid-to-late 1990s, going to sea has become a thick development vein of China's business history. For more than 20 years, one mature industry after another and a number of powerful enterprises have gone abroad to open a journey of internationalization.
Previously, we have witnessed the success of the internationalization of China's home appliances, mobile phones and mobile Internet enterprises. Nowadays, it is the turn of the tide to go to sea to take the new consumption track that is not represented by the Yuanqi Forest. According to the official information of Yuanqi Forest, as of now, it has been exported to more than 40 countries and regions overseas.
On the other hand, as one of the leaders of the new consumption track, Yuanqi Forest has become the "target of everyone" in the Chinese mainland market. Not long ago, Sina Technology reported that in China, PepsiCo and Coca-Cola have each established a combat policy with the core goal of "killing" the Yuanqi forest sparkling water at the internal meeting in 2022. As we all know, Pepsi And Coca-Cola are sworn enemies in the soft drink field, and the two companies have been fighting for more than a century, but this time in order to deal with common opponents, there is a rare consensus.
At a time when the country is encountering two pleasures, continue to increase the internationalization strategy, is this a wise way to break the siege for Yuanqi Forest? Is the Genki Forest fully prepared?
01
Yuanqi Forest, invading the hinterland of giants
One can go a day without eating but not a day without drinking water.
Because of this, soft drinks, as one of the drinks, have always been a huge market. According to Euromonitor data, the global soft drink market size was $770.058 billion in 2020. Such a large market naturally has the ability to incubate large-market capitalization companies. In the global soft drink industry, Coca-Cola has competitive products in various segments, so it has also become a leading enterprise in the soft drink industry, accounting for 14.9% of the share. In addition, PepsiCo, Nestlé and Danone ranked second, accounting for 7.2%, 2.8% and 2.0% respectively.
Although this distribution of market share means that new entrants still have a place, it is not easy to win, because the international giants have a strong brand influence and supply chain control - the media has previously reported that in China, a foundry of Yuanqi Forest has been personally called by an international giant to ask its foundry to terminate its cooperation with Yuanqi Forest. Not only that, the former has also been chased and blocked by international giants in the production line of beverage bottle preforms and carbonated beverages.
In addition to the giants' supply chain control, the food and beverage industry also has its particularity. Special is special, you need to obtain the import "ticket" of each country first, that is, you need to complete the food safety compliance certificate. Only by completing compliance and obtaining the "access license" of the product can it enter mainstream consumption channels such as local supermarkets and convenience stores.
However, the difficulty is that many overseas countries have strict requirements for imported products, and they are not the same. For example, in North America, the United States, and Canada, compliance requirements are clear and rigorous; in Asia, Indonesia, Thailand, South Korea, and the Philippines have the most stringent compliance and access requirements. Before the product is imported into these four countries, it needs to pass the country's FDA (Food and Drug Administration) inspection, require the product to complete similar standards to the US FDA, and provide a special nutrition facts list before it can be imported, otherwise it cannot complete customs clearance.
At present, Yuanqi Forest has entered more than 40 countries and regions, so it is bound to spend a lot of effort on compliance. Taking Singapore, Indonesia, and Malaysia as an example, although the geographical distance of the three countries is not far, the Halal certification (halal food certification) to be carried out for Muslim consumers is very different, whether it is the regulatory authorities of various countries, the certification link, or the depth, and it is necessary to make sufficient preparations to cope with the common and non-common requirements of different certification systems.
The complexity of compliance certification materials also means that products need to meet the different strict requirements of different countries in terms of food safety and health, and need to rely on the hard power of products to obtain "tickets" from different countries one by one. The customs and customs of different countries are different, and it is necessary to consider the consumption habits, taste preferences and religious beliefs of user portraits in each market.
Singapore is a typical high-demand country. In order to control the occurrence of diabetes and obesity, as early as 2019, Singapore has announced that it will completely ban the advertising of high-sugar beverages, and launch a grading labeling policy to classify the nutrition of beverages sold in China. In addition, local consumers are also more inclined to consume health products. It is understood that in 2020, Yuanqi Forest has been approved by the Singapore Health Promotion Agency (HPB) to use the "Health Choice Symbol" (HCS) logo and enter the local mainstream channels.
02
The hardest to get out on the sea track
In 2009, Baishishan became the first drinking water manufacturer in the domestic soft drinking industry to go abroad, and since then, Nongfu Spring and Wahaha have also opened an international journey. But over the past few years, there have been very few food and beverage brands that can be called successful.
Food and beverage companies go to sea, not only in the long distance to go to sea, but also in impressing overseas consumers and becoming their mainstream choice - not only products need to meet consumer preferences, enterprises also have to ensure the stability of the supply chain.
Packaging can also pose challenges. Due to factors such as overseas consumers preferring to drink chilled drinks, the overseas packaging of Yuanqi Forest Sparkling Water was changed to aluminum cans. Aluminum cans have a more bubbly feeling after being chilled, and the capacity of 330ml is more in line with the consumption habits of overseas consumers to drink at one time. But there are also many problems caused by aluminum canning.
Long sea voyages are a major uncertainty. Usually, it takes 50-60 days for products to be transported from China to warehouses in the United States, but under the influence of the epidemic, the queues in and out of the port and the congestion of routes have increased the transportation time, and the products have faced more bumps and violent transportation during loading, unloading, and maritime transportation.
Yuanqi Forest has long faced the problem of violent transportation leading to the bursting of whole cases of beverages and high wear and tear rates.
Yuanqi Forest dealers told reporters that the way to solve the loss rate of Yuanqi Forest is to conduct multiple violent tests before the product is determined and packaged, simulating the problems that may occur: the product is dropped from a height of one or two meters and from different angles more than a dozen or twenty times to simulate violent transportation; the product is placed in the summer at a high temperature and placed outdoors for a period of time in the winter to verify whether there will be a problem due to temperature; let a box of products be transported two or three times in the country over a long distance to simulate long-distance shipping. In addition, the packing method and the yard box method have been adjusted during sea freight.
Before shipping in overseas warehouses, the relevant person in charge of Yuanqi Forest will often spend hours in the early morning to troubleshoot problems and solve them one by one, so meticulous that it is necessary to teach service providers how to pack and wrap tape across the screen to make the packaging more secure. At present, the loss rate of Yuanqi Forest in e-commerce has been greatly reduced, and its customer complaint rate about packaging is smaller than that of the same category of goods sold on the Amazon platform in the United States.
Under the impact of the epidemic, the lack of recovery of port throughput capacity has become a global problem, and compared with before the epidemic, the cost of shipping has increased by about ten times, and the cost of onshore logistics has also increased by about 50%. However, for yuanqi forest, which is determined to go to sea, the shortage of overseas channels may be a more difficult problem than the cost increase.
It is understood that Yuanqi Forest's e-commerce channel in Australia has experienced a quarter-long out-of-stock. This figure means that products do not arrive in Australia until six months after they are reported, and some products with shorter shelf life are at risk of becoming interim products as soon as they arrive in Hong Kong.
For international enterprises such as Coca-Cola that have established strong brands, occupied the minds of users, and have a stable supply chain, the probability of stock-out is extremely small, but for emerging brands such as Yuanqi Forest, the lack of stock will increase the trust of local distributors or terminal retailers in products, and will also face the risk of being forgotten by consumers.
Judging from the layout of the 40+ countries and regions where Yuanqi Forest went to sea and the mainstream consumption channels in the local area, what it wants to do is not only the business of overseas Chinese, but more like it wants to build an international brand. It's just that the food and beverage industry has no previous experience to learn from in terms of overseas products, channels, supply chains, brand building, etc., and it needs yuanqi forest to forge a new road.
03
Courage and patience are indispensable on the way out to sea
Overseas, Chinese food and beverage companies are not completely without good news. In December 2021, its overseas version of aluminum can sparkling water broke into the Top 10 of amazon sparkling water best-selling list in the United States, and at the same time won the top 3 of the new sparkling water list. Yuanqi Forest thus became the first and only Chinese brand to enter the Top 100 and Top10 of Amazon's beverage best-selling list in the United States.
Crouching Tiger, Hidden Dragon, Coca-Cola, PepsiCo, Nestlé, Danone, St. Pellero, Dr Pepper, etc. in the US sparkling water market have been deeply cultivated for many years. After Yuanqi Forest launched on Amazon in the United States in May 2021, it took only six months to enter this list, which can be regarded as a small milestone in the cross-border sea of Chinese food and beverage - its products have zero brand recognition in the North American market, and the price is 1.5-2 times that of competitors, which is not dominant.
Moreover, Yuanqi Forest has entered the mainstream consumption scene of many countries. For example, in Australia, it conquered the mainstream supermarket chain Woolworths; in Malaysia and Singapore, it entered the local mainstream channels such as 7-11.
Referring to the overseas paths of other industries, the reason why TRANSSION can become the "king of Africa" is that in addition to the low-price strategy, the most important thing is to do a good job in localization. For example, according to the market situation of African consumers generally holding multiple SIM cards, it has specially designed a dual-SIM dual-card or even a "four-card four-wait" mobile phone, and specially established a dark-skinned portrait database to form a unique localized dark-skinned photography technology.
Different countries and different markets, language and culture, customs, user needs, aesthetic preferences are very different. If any enterprise wants to achieve international success and truly face global consumers, it must formulate strategies according to the characteristics of different regional markets and local conditions. To use a noun to express it, that is, "Glocal (Global+Local)" - both a global vision and a localized thinking, so as to be noticed in overseas mainstream consumer channels.
China has become the world's factory in the more than four decades of reform and opening up, but going abroad and exporting enough independent brands to the world is the embodiment of national competitiveness and international status. To this end, the 14th Five-Year Plan also clearly writes that it is necessary to enhance the influence and competitiveness of independent brands and take the lead in cultivating a number of high-end brands in the field of consumer goods.
Entering the global market to become an international brand is the only way for any mature enterprise to go from excellent to excellent, and it is also a long-lasting and challenging road. Even if Yuanqi Forest has made some small achievements overseas at present, and stands on the stage of the World Expo as a new domestic product to face global consumers, its internationalization strategy has only just begun, and the next road, courage and effort are indispensable.
*The above content does not constitute investment advice, the market is risky, investment should be cautious, please judge and make decisions independently.