Dialogue with Li Guoxun, vice president of the new consumer brand | Yuanqi Forest: Traffic is a double-edged sword for enterprises

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Yuanqi Forest was established in 2016, aiming at the "sugar-free" track, with revenue of 2.7 billion yuan in 2020, an increase of 309% year-on-year.

What is the logic of investment in the consumer sector? Has the investment boom entered a cooling-off period? The ice cream industry is rife, is the internet celebrity brand anxious? Sugar-free tracks are pouring into more and more competitors, what are the challenges facing the traffic era? The consumer circle has entered the "Z generation", what are the opportunities?

Recently, the Beijing News Shell financial reporter interviewed Li Guoxun, vice president of Yuanqi Forest, Xu Zhihua, CEO of Peak Sports, Lin Sheng, founder of Zhong Xuegao, Ma Jun, partner of Kaihui Fund, and Ji Wei, founding managing partner of Huaying Capital.

Li Guoxun said that this year's Yuanqi Forest faces two challenges, including another upgrade of production capacity and quality. For the sugar-free track, "from the perspective of market potential, it is still in a very early stage".

Beijing News Shell Finance: How to look at being regarded as an Internet celebrity and what problems are the company facing at present?

Li Guoxun: The success of a product is not only based on marketing promotion, but also needs high-quality products and word-of-mouth drive, which is the foundation of Yuanqi Forest brand building.

The challenge facing Yuanqi Forest this year is, on the one hand, the production capacity, on the other hand, the quality upgrade again. This year we have three factories put into operation to ensure our demand for capacity and quality.

Beijing News Shell Finance: Yuanqi Forest has carried out a diversified layout in recent years, in addition to drinks, it has also entered the fields of light food, catering and alcohol, such as cooperation with Chundu ham sausage, Shanghai Libo beer, etc. What is the basis for this?

Li Guoxun: Consumers' requirements for healthy life are constantly improving, and less oil and less salt have now become a major core demand for everyone's daily purchase of food. It is on this basis that Yuanqi Forest innovates, develops and invests in healthy snack products, hoping to better meet the diversified needs of today's young consumers. We believe that China's consumer sector is facing a broader space, and we are willing to continue to explore new consumer goods based on the ultimate pursuit of product quality.

The old name of the diet circle represents the common memory of many Chinese. Now, more and more time-honored brands are integrated into the current fashion trend, and if they want to develop the brand to a younger age, the goal of Yuanqi Forest is to open a new round of resource integration for these old brands.

Beijing News Shell Finance: At present, the sugar-free track is pouring into more and more competitors, and veteran beverage brands such as Coca-Cola and Master Kong have also launched sugar-free drinks.

Li Guoxun: Dongxing Securities released a series of reports on "sugar-free" food and beverages in June this year, which showed that the size of China's sugar-free beverage market in 2019 was 9.87 billion yuan, accounting for only 1.25% of the overall soft drink market, and the current development stage is similar to the golden decade of The development of Sugar-free Beverages in Japan from 1985 to 1995. For example, about 70% of Japan's tea drinks in 2019 are sugar-free tea drinks, while China's sugar-free tea accounts for only 5.2%, similar to the early days of the rise of sugar-free drinks in Japan.

Yuanqi Forest in the early stage of the establishment of the brand, but also did a full survey of the beverage market, the current Chinese obese population continues to grow, each age group has the need to lose fat and lose weight, the main group is reflected in young white-collar workers and students. The "Healthy China" Special Action on Reasonable Diets also specifically proposes to encourage consumers to reduce their intake of sucrose. Therefore, from the perspective of market potential, sugar-free is still in a very early stage.

Beijing News Shell Finance: The consumer circle is talking about "Generation Z", how long do you think the opportunities brought by "Generation Z" to China's new consumption track will have a window?

Li Guoxun: "Generation Z" is the main consumer group of beverages, whether the product itself is high-quality, healthy, and whether it can bring more pleasant spiritual enjoyment is the main focus of "Generation Z". Coupled with the rise of new brands of domestic products under the trend of national tide, the "Z generation" is also more willing to support Products made in China and Chinese brands, and will not have excessive fascination and worship of foreign brands.

Conform to the trend of the industry to choose the right track, carefully do a good job of products, coupled with the support of a new generation of consumers represented by the "Z generation", the opportunity for the consumer industry has always been there, but only brands that have been trusted by users for a long time can stand out in the wave of new consumption.

Beijing News Shell Finance: How do you think about the impact of traffic on consumer goods brands?

Li Guoxun: Traffic is a double-edged sword for any industry and enterprise, bringing explosive models and a lot of attention to the brand, while also allowing the brand to face the inspection of the market and consumers, which requires us to always maintain the adherence to product quality. In fact, the Internet brings more experience to consumer enterprises is not traffic logic, but to use the Internet spirit to do a good job in products, maintaining the ultimate pursuit of product quality and user experience.

Beijing News shell financial reporter Zhao Fangyuan Editor Wang Jinyu Proofreader Wang Xin