Once upon a time, the emergence of e-commerce made countless traditional enterprises fall into the anxiety that they could not survive without embracing the Internet.
But now, the "backlash" brought by e-commerce platforms to traditional enterprises is also coming little by little.
To this end, Red Bull went against the times and completely blocked e-commerce platforms.
Full blocking, maximum punishment
Recently, Reignwood FMCG Group (Reignwood is a China Red Bull Production Company, hereinafter referred to as China Red Bull) has attracted much attention. They announced that they would completely shut down 2B, 2C and regional community e-commerce platforms, and took resolute and strict measures.
Source: Food internal reference
Specifically, since April 18, a comprehensive shutdown and supply ban has been launched on all relevant e-commerce platforms across the country, requiring the closure of all e-commerce platforms involved in disrupting market order at low prices within one month.
At the same time, with the production date of April 10, 2024 as the boundary, the products before this date will be severely punished according to the highest penalty standard, and the rushed goods after this date will be regarded as illegal supply to the e-commerce platform, and will be punished according to the penalty standard for illegal goods flow of e-commerce.
Not only that, China Red Bull has also established a blacklist system, and will severely punish those who violate the rules to blacklist customers.
The general manager of each business unit is clearly the first person responsible for the suspension of the e-commerce platform, if there is a violation, will face a series of severe penalties, the first warning, the second deduction of the quarterly evaluation amount of 20,000 yuan, the third deduction of the quarterly evaluation amount of 40,000 yuan, more than three times according to the severity of the situation, in accordance with the cadre management system to be demoted, demoted and transferred.
In fact, some war zones have already "previewed" the relevant person in charge before, and some e-commerce platforms such as small programs, Taobao, Jingdong Shopkeeper, and Wanquan are also on the list.
This series of measures is nothing more than China Red Bull in order to stabilize the price of products, ensure channel profits, prevent the phenomenon of goods channeling, and improve the distribution enthusiasm of channel customers and the efficiency of goods sales and circulation.
Of course, this is not the first time that China Red Bull has banned e-commerce platforms.
As early as 2018, the Guangzhou branch of China Red Bull took a similar action against Alibaba Retail, and banned all dealers, distributors, and direct suppliers in the southern battlefield area from supplying to it.
Source: Food internal reference
Now, the chaos of the e-commerce platform on the FMCG market has forced China Red Bull to take tough measures again.
In addition, China's Red Bull is not the first company to ban e-commerce platforms.
In 2017, COFCO Coca-Cola Xiamen Plant won the first bottling plant of COFCO Coca-Cola, and the first thing they did when they came to power was to cut off their cooperation with JD.com.
These tough measures may hinder the innovation and development of enterprises to a certain extent, but the phenomenon of goods fleeing and the chaotic disorder of market prices are more of a headache.
The logic of today's e-commerce platforms is this: if you don't cooperate with me, it doesn't matter, I will buy from the customers below you, buy at a low price, and then completely disrupt your market. When that happens, you'll have to come to me.
Source: Jingdong's official Weibo
You must know that FMCG products are often in the position of cannon fodder on e-commerce platforms, mainly used to attract traffic. Because dealers and consumers are very sensitive to price, in this era of big data, even if consumers are stupid, they know that the market price of a can of Red Bull is 6 yuan.
If you can buy it at a price of 2.5 yuan a bottle on the e-commerce platform, it is a big discount, and they will believe that the price of other products is not slaughtered. Relying on a can of Red Bull that is 2.5 yuan cheaper, consumers may be slaughtered for tens or hundreds of dollars on other products, but they are unaware of it.
However, after the terminal store sees the price on the e-commerce platform, the first reaction will be that the dealer is cheating on himself, it turns out that they can get the goods at such a low price, their hearts are really dark. The second reaction is that the manufacturer is not kind, ignoring the phenomenon of indiscriminate prices; the third reaction is that it is not profitable to do this brand, so it is better to change to another brand.
There is a basic common sense in the FMCG industry: once the price is broken, the product is not far from death. Therefore, in order to stabilize the market, China Red Bull can only completely ban e-commerce platforms.
Dealer "backstab"
Judging from the previous actions of China Red Bull, its products are not directly supplied to e-commerce platforms, and it is also expressly prohibited from supplying to e-commerce platforms to maintain market order.
However, Chinese Red Bull is flooded on e-commerce platforms, why is that?
"Among them, the abandonment of some old dealers is particularly eye-catching. Each province has at least one or two such dealers. Their departure is painful, because these old dealers can account for 5%-10% of a province's sales every year. It's hard to fill that gap. An industry insider familiar with China's Red Bull said.
Source: Internet
This also reflects from the side that China Red Bull may have overcapacity and high inventory pressure.
In addition, some Chinese Red Bull dealers revealed that some dealers are facing huge pressure on annual sales tasks. If you fail to complete the mission, you will not only lose various benefits and rewards, but also face severe penalties. In order to survive, they have to take the risk of selling at low prices and cross-regional goods through e-commerce platforms, which will cause a series of problems, but at least temporarily alleviate the situation.
It can be seen that dealers' turning to e-commerce platforms to supply is actually their helpless move under heavy pressure.
After all, e-commerce platforms offer them the opportunity to broaden their sales reach, reach more consumers, and increase the likelihood of completing their tasks.
In fact, the contradiction between brand owners, e-commerce platforms and offline distribution systems has been around for a long time.
The 2017 Yijiu Batch Incident and the 2018 Nongfu Spring Incident all highlighted the problem of price gouging.
Looking at Wuliangye's measures in 2017, in order to rectify the market order, it resolutely terminated its cooperation with 6 illegal dealers, some of whom were precisely cooperating with e-commerce platforms, resulting in products "flying around" across the country and the market was in chaos.
Source: Internet
Although the e-commerce platform has exacerbated the problem of price confusion, it has also provided new channels for dealers. However, this kind of "apostasy" behavior has deepened the contradictions between all sides.
How to balance the interests of all parties is the key, there is no absolute right or wrong in this game, only mutual understanding and cooperation can find a solution.
Internal and external troubles, fierce competition
With the rise of e-commerce platforms, China's Red Bull's sales have been affected to a certain extent, but the seven-year dispute with its parent company, Thailand's Tencel, is the most critical factor in its sales decline.
And this also brings opportunities for other brands to rise, and its Middle East Peng Special Drink is undoubtedly the biggest beneficiary.
Since entering the market in 2009, Dongpeng Special Drink has performed extremely well.
Data show that from 2003 to 2010, its output value increased by an astonishing 12 times to 250 million.
In 2018, its sales exceeded the 5 billion mark, and it was successfully listed in 2021, becoming a leading brand of functional drinks in China.
Source: Dongpeng Special Drink Official
At the same time, China's Red Bull's market share fell from 82.1% in 2012 to 53.3% in 2021, while Dongpeng Special Drink climbed from 4.7% to 16.7%, which clearly reflects the strong role of Red Bull's internal friction in promoting Dongpeng Special Drink.
In this dispute, Red Bull and the two sides should carefully consider whether to continue the stalemate or shake hands and make peace.
Continued strife does not benefit either side.
As a first-line brand in the industry, China Red Bull's attitude towards e-commerce platforms also reflects the dilemma of "share and order" faced by the entire industry.
Nowadays, the competition in the functional drink market is becoming more and more fierce, and the market challenges faced by Red Bull in China are becoming increasingly severe. Under the impact of e-commerce platforms and the "backstabbing" of dealers, China Red Bull, which is worried about internal and external troubles, has to take tough measures such as comprehensively blocking e-commerce platforms to stabilize the market. This also reflects its helpless choice in dealing with the impact of e-commerce and market challenges.
In addition, it also shows the many challenges faced by the FMCG industry in the era of e-commerce. In the future, how to achieve a balance between the interests of all parties still needs to be further explored and tried.