China Business Daily (reporter Zhou Zijing text/photo) In previous years, the Red Bull River and Lake, which was still very lively, have been relatively deserted this year. Recently, Wanlishi announced the sale of 20% of the equity of Reignwood FMCG Sales (Fujian) Co., Ltd. (hereinafter referred to as Reignwood FMCG), which is responsible for the sales of Red Bull, Warhorse and other products in the Chinese market. In the terminal market, a reporter from China Business Daily visited a number of supermarkets in Beijing and found that the area of "China Red Bull" products displayed in multiple supermarkets was much less than before, and energy drinks such as Dongpeng Special Drink occupied a place. Can "Red Bull China" continue to cow?
Wanli Stone sells a 20% stake in Reignwood FMCG
On the evening of August 13, Wanlishi announced that it intends to transfer its 20% stake in Reignwood FMCG for 2.58 million yuan. The buyer was Reignwood Investment (China) Limited (hereinafter referred to as Reignwood Investment). Reignwood Investment is a wholly-owned subsidiary of Reignwood International Investment (Group) Co., Ltd. (hereinafter referred to as Reignwood Group), the operator of Red Bull Vitamin Functional Beverages (hereinafter referred to as "Red Bull China"). After the completion of the above transaction, Wanlishi will no longer hold the equity of Reignwood FMCG.
This incident can be traced back to November last year, when Wanlishi announced that it had signed a cooperation framework agreement with Reignwood Group, according to which Reignwood Group would set up Reignwood FMCG in Xiamen, and then Wanlishi would acquire not less than 20% of the equity through equity transfer and other means.
It is worth noting that Reignwood FMCG is a major profit pillar of Wanli Stone. According to the data, in November and December last year, Reignwood FMCG achieved revenue of 662 million yuan and net profit of 31.41 million yuan. Wanlishi's revenue for the whole year last year was only 950 million yuan, and the net profit attributable to the mother was only 12.09 million yuan. In the first quarter of this year, Reignwood FMCG revenue was 1.041 billion yuan and net profit was 117 million yuan; in the same period, Wanlishi's net profit was 23.9806 million yuan.
What is the concept of the 2.58 million yuan asked for the sale of wanlishi's equity? According to the data, Wanlishi originally increased its capital at a price of 2.5 million yuan, while as of March 31 this year, Reignwood FMCG had total assets of 821 million yuan and net assets of 161 million yuan.
Zhou Siwen, a researcher at Shenzhen Zhongwei Zhiyan Consulting Co., Ltd., told China Business Daily that with reignwood FMCG's net assets of more than 160 million yuan, Wanlishi's asset sale does not seem to be cost-effective. Deeper reasons may be reignwood group concessions in interests, or there may be other deals that are more favorable to Wanlishi.
"China Red Bull" products have been reduced in the display area of many supermarkets in Beijing
According to Wanlishi's previous disclosure, Reignwood FMCG undertakes the sales control function in the eastern region and is directly managed by Reignwood FMCG Group (hereinafter referred to as Reignwood FMCG Group). Reignwood FMCG's current main business is "China Red Bull", Warhorse, Guobei Shuang and Vita Coco and other operating products of Reignwood FMCG Group. Reignwood FMCG Group is a company established by Reignwood Group in 2015 to diversify its beverage sector.
In addition to the changes in the equity level, reignwood FMCG Group's main single product "China Red Bull" has not performed as well as in the past. When the reporter of China Business Daily visited a number of supermarkets in Beijing, such as Wumart, Wal-Mart, and Hualian, he found that the area occupied by the "China Red Bull" product display was much less than before.
A supermarket sales staff revealed to the China Business Daily reporter, "In the first two years, in the functional beverage exhibition area, 'China Red Bull' can occupy more than half of the area, and now it includes Dongpeng Special Drink, Lehu, Devil's Claw, and Li Health Care. In his view, "China Red Bull" wins in brand power, while Dongpeng Special Drink, Lehu and other products are more cost-effective.
In a Wumart supermarket in Dongcheng District, Beijing, the China Business Daily reporter noted that the retail price of Lehu was 10.9 yuan / group (250ml in four cans), equivalent to 2.725 yuan / can; the retail price of "China Red Bull" was 33.5 yuan / group (250ml in six cans), equivalent to 5.58 yuan / can; the retail price of Dongpeng special drink was 17.9 yuan / group (250ml in six cans), equivalent to 2.98 yuan / can, "China Red Bull" pricing is relatively high.
The Tianfeng Securities report also shows that the unit price of Dongpeng special drink 250ml is 2.52-2.66 yuan / can, the unit price of 250ml of "China Red Bull" product is 6.17 yuan / can, the unit price of 250ml of Red Bull Annegi (a functional beverage product launched by Thai Tencel) is 5 yuan / can, and the unit price of 330ml of Zhongwo's physique energy functional drink is 4.5 yuan / can, and the "China Red Bull" has the highest price.
Can "Red Bull China" continue to cow?
In addition, "China Red Bull" was also "sniped" by Thai Tencel. In fact, since 2018, Reignwood Group and Thai Tencel have been in constant disputes, and they have repeatedly confronted the court.
The latest development in the two lawsuits is that on January 5 this year, Tencel of Thailand issued a statement saying that the Supreme People's Court finally rejected the appeal of Red Bull Vitamin Beverage Co., Ltd. (hereinafter referred to as the joint venture), and the final judgment once again clarified that the ownership of the "Red Bull Series Trademark" belongs to Tencel Thailand. In this regard, Reignwood Group said that the company will carefully study and judge the second-instance judgment and will safeguard its legitimate rights and interests in accordance with the law through all possible legal channels, including applying for retrial and filing a protest.
It is understood that on December 21 last year, the Supreme People's Court rendered a final judgment on the dispute over the ownership of the "Red Bull Series Trademark" between the joint venture company and Tencel thailand: the appeal of the joint venture company was rejected, the first-instance judgment made by the Beijing Higher People's Court on November 25, 2019 was upheld, and the ownership of the "Red Bull Series Trademark" belonged to TENCEL thailand.
Thai TENCEL dealers revealed to the China Business Daily reporter that a supermarket removed "China Red Bull" products
For example, in January this year, Kunlun Hospitality, a subsidiary of PetroChina, which has 20,000 stores, issued a notice on stopping cooperation with "Red Bull of China", and in order to further avoid legal risks, it sent another letter in June to emphasize measures such as "strictly prohibiting procurement and returning inventory" against "Red Bull of China".
"China Red Bull" products have also been "sniped" by Thai Tencel for many times, and reports of the removal of "China Red Bull" products have frequently appeared in the news. Some Dealers of Thai Tencel revealed to the China Business Daily reporter that the relevant personnel of Tencel Company in Thailand often expressed that the trademark ownership of "China Red Bull" expired and is being removed one after another, encouraging dealers to firmly promote Red Bull Annegie and other Thai Tencel products, and they often forward pictures of "China Red Bull" products in the circle of friends.
Thai Tencel dealers revealed to the China Business Daily reporter that some products of "China Red Bull" were investigated
In the face of thai Tencel's step-by-step approach, "China Red Bull" has been tired of coping, and recently has been affected by the products of newly listed companies such as Dongpeng Special Drink. Zhou Siwen revealed to the China Business Daily reporter that the brand publicity of "China Red Bull" in the past two years has been insufficient, resulting in its brand power continuing to weaken, and its market share has gradually been seized by brands such as Dongpeng Special Drink and Lehu. As brands such as Dongpeng Special Drink and Lehu continue to sink in the market, and advertising is overwhelming to attract young people, the market share of "China Red Bull" may continue to decline in the future.
Mintel Consulting reports that in the past two years, the market share of "Red Bull China" has been declining. From the perspective of sales volume, from 2018 to 2020, reignwood Group's annual market share was 49.6%, 46.5% and 45.6%, respectively, while the market share of Dongpeng Special Drink was 15.8%, 19.9% and 20.6%, respectively. From the perspective of sales, from 2018 to 2020, reignwood Group's annual market share was 68.7%, 66.7% and 65.9%, respectively, while the annual market share of Dongpeng Special Drink was 8.7%, 11.3% and 11.7% respectively in the same period.
Mintel reports on the market share of the leading players in the functional beverage market
Xu Xiongjun, founder of Jiude Positioning Consulting Company, told China Business Daily that the listing of Dongpeng Special Drink has played a boost to its brand and sales. At present, "China Red Bull" is facing trademark disputes and the squeeze of Dongpeng Special Drink, and the growth potential and brand potential are obviously frustrated.
However, some experts expressed different views, FMCG industry analyst Zhu Danpeng told the China Business Daily reporter that with the Dongpeng special drink and other products into the Beijing supermarket channel, "China Red Bull" to give up part of the display area is normal, because the supermarket for the functional beverage category display area is fixed. However, due to the current expansion of the overall functional beverage market, "Red Bull China" still has a strong brand power, and there should be no sharp decline in performance in the future.