On the evening of August 16, Guangzhou Pharmaceutical Group and Jiaduobao issued separate announcements, and the Supreme People's Court ordered Jiaduobao to immediately stop using relevant advertising words and compensate Guangzhou Pharmaceutical Group for 1 million yuan. For JIADUOBAO", "Red Can Herbal Tea Renamed Jiaduobao" and other related advertisements, it was ruled that it did not constitute false publicity.
Photo/ JDB official website
However, the two sides still have a 1.44 billion account to be calculated. In July 2018, Guangzhou Pharmaceutical Group received the First Instance Civil Judgment of the Guangdong Higher People's Court on the legal dispute over the trademark "Wang Laoji". According to the judgment, JDB needs to compensate Guangzhou Pharmaceutical Group for economic losses and reasonable rights protection costs totaling RMB1.441 billion. To this day, the lawsuit is still pending.
Wang LaoJijiaduobao fought, which seriously injured the entire herbal tea industry. Over the years, the two sides have set off a price war - a series of measures to buy three get one free, buy four get one free, so that the entire industry's profit margin has suffered Waterloo. Some industry insiders have cried that the price war between Wang Laoji and Jiaduobao has been fought, and the herbal tea industry has entered the edge of low profit or no profit, and "the whole industry is gone."
"Afraid of fire, drink Wang Laoji", since 2003, this brainwashing slogan has swept the country and also won wang Laoji. However, no one expected that a jar of herbal tea had triggered a tug-of-war that had lasted for more than a decade.
Wang Laoji was founded in the Light Dynasty of the Qing Dynasty (1828), the founder Wang Zebang, is recognized as the ancestor of herbal tea. After the founding of New China, Wang Laoji in the mainland was taken over to the public and later assigned to guangzhou pharmaceuticals, while Wang Laoji in Hong Kong was continued to be operated by Wang's descendants.
The development of the old herbal tea is tepid, but Chen Hongdao sees business opportunities from this old brand. After obtaining the formula from the descendants of the Wang family in Hong Kong, in order to make the mainland business unimpeded, in 1997, Hong Kong Hongdao Group Co., Ltd. signed a trademark licensing contract with Guangzhou Yangcheng Pharmaceutical Wang Laoji Food and Beverage Branch, which was valid for a total of 20 years. Since then, the green box Wang Laoji of pharmaceutical attributes belongs to The Guangzhou Pharmaceutical Group, while the red can Wang Laoji of beverage attributes belongs to Jiaduobao.
It can be said that JIADUOBAO has largely revitalized Wang Laoji, an old herbal tea. Statistics show that in 2007, the total sales volume of Wang Laoji herbal tea has exceeded 5 billion yuan, surpassing Coca-Cola and Red Bull to become the first in the annual sales of canned beverages in the country. In the Wenchuan earthquake in 2008, Chen Hongdao donated 100 million yuan to the disaster area in the name of JDB Group, and this act of love pushed Wang Laoji to the throne of "national drink".
The subsequent outbreak of the "Wang Laoji" dispute can be called a historical drama in China's herbal tea industry.
In 2010, the "Wang Laoji" trademark was valued at 108 billion yuan. Also in this year, Guangzhou Pharmaceutical issued a lawyer's letter to Jdb requesting the withdrawal of the "Wang Laoji" trademark. In 2011, the sales of JIADUOBAO Red Can Wang Laoji exceeded Koukola's, reaching 16 billion yuan, but at that time, the sales of Green Box Wang Laoji were less than 2 billion yuan. Under the "red eyes", love and kill each other.
The outbreak of war began with two controversial agreements. In 2001 and 2003, Li Yimin, then vice chairman of Guangzhou Pharmaceutical, accepted bribes totaling HK$3 million from Hongdao Group twice, signed two "supplementary agreements", collected about 5 million yuan in trademark royalties per year, and extended the lease period of the trademark to 2020.
During the arrest, Chen Hongdao himself confessed that the bribe was paid to prolong the use of the trademark at a low price. The Guangzhou Pharmaceutical Group considered the sub-agreement invalid and took it to court, but the war between the two sides had only just begun.
The first battle of trademark competition - who should be called "Wang Laoji". Until July 16, 2012, the Beijing Municipal First Intermediate People's Court finally ruled that JDB banned the trademark of Wang Laoji, and this bureau, Guangyao sheng. JDB subsequently renamed the product "JDB Herbal Tea";
The second world war of slogans. Jiaduobao's advertising slogan "the country's leading sales of red can herbal tea renamed Jiaduobao", Wang Laoji believes that false publicity, will mislead the people, let people think that the two are the same product. The court ruled that JDB should withdraw all publicity, pay compensation and publicly apologize;
The third battle is the "Red Can Controversy" – who can use the Red Can. In August 2017, a few years after the tug-of-war, the court ruled that both parties could jointly enjoy the rights and interests of the packaging and decoration of "Red Can Wang Laoji Herbal Tea" without harming the legitimate interests of others.
According to the rough statistics of the media, from the color of the packaging, the font to the slogan, the two sides have been in court more than 20 times, involving an amount of 5 billion yuan.
In December 2014, JDB, which lost the first instance trial, responded by posting a self-deprecating poster on Weibo, calling itself "two firsts" - "the first in the world to be herbal tea, and the first to last in the lawsuit." Chen Hongdao, who paid bribes, has been on the run for 12 years.
Years of "war", in addition to the market's test of herbal tea, has also caused great losses to Jdolbao - re-branding, brand packaging, huge compensation, poor management, executive departures and so on.
It is hard to imagine that if Chen Hongdao had chosen to create a brand independently after getting the ancestral formula of Wang Laoji, instead of renting the trademark of "Wang Laoji", what would be the pattern of the Chinese herbal tea market today?
"Unexpectedly, Wang Laoji and Jia duobao fought, but they did it with Qizheng." This joke shows the helplessness of the industry.
In recent years, Guangzhou Pharmaceutical Group and Duojiabao "sword and light sword shadow", the price war between the two sides to buy three get one free, buy four get one series of measures, the entire industry profit margin suffered "Waterloo". Some industry insiders have cried that the price war between Wang Laoji and Jiaduobao has been fought, and the herbal tea industry has entered the edge of low profit or no profit.
This is reminiscent of jianlibao, which once had unlimited scenery. At that time, Jianlibao's failure was not because there were no consumers to buy, but because dealers could not see profits and refused to sell, which is the same as the situation of the herbal tea industry today.
A bleak reality lies in front of us: herbal tea sales have fallen short of the past geometric growth and have entered a period of stability. The data shows that between 2009 and 2012, the herbal tea category maintained a rapid growth rate of 16%-18%, while the growth rate of the herbal tea market in the first half of 2015 was zero. After 2016, the banner of Tongrentang herbal tea stopped, and the layoffs of Jiaduobao stopped production, and the industry was "riddled with bad luck".
In fact, in the entire beverage market, the living space of the herbal tea industry has been repeatedly squeezed. According to data, in 2016, the herbal tea industry market accounted for 8.8% of the entire beverage industry market share, ranking the fourth largest category in the beverage industry, with sales revenue of 56.12 billion yuan, an increase of 4.2% year-on-year, compared with 10% in 2015.
In the case of the rapid development of the health industry, herbal tea, which was originally born from Chinese herbal plant drinks, should have followed this trend to harvest a bigger cake. But now, this "cake" is getting smaller and smaller.
At present, the herbal tea industry has entered a period of decline, which has become an indisputable fact. Looking back, years of strife have squeezed out many small businesses and potential competitors, but if the giants still focus on fighting, this industry will be finished.
Some insiders have said bitterly that if Guangzhou Pharmaceutical Group and Jiaduobao fight non-stop, continue to use too much media resources and capital in the country, damage the image and reputation of the herbal tea industry, overdraft consumers' good feelings for herbal tea categories, consume brand influence, and harm the herbal tea industry.
Looking back at the history of China's herbal tea industry, it is not difficult to find that it is not easy to survive in this segment of the market. In the past decade or so, there has been an endless stream of "players" entering the market, but most of them can't even pick up the market, and they have been washed down by the torrent of the market and photographed on the beach.
Like Wang Laoji, many players come from pharmaceutical companies. According to the data, Xiangxue Pharmaceutical launched Shangqing herbal tea in 2007, and once vowed to target revenue of 2 billion yuan within five years. However, the reality is very bone, its actual annual sales in 2007 there are 13.9667 million cans, to 2009 but only 3.3219 million cans, to 2010 is a net loss of 26.7 million yuan, the product has long been basically discontinued.
Looking back, Shangqing drink was born in the herbal tea market in a period of rapid growth, but when it failed, it was still in the rapid growth of herbal tea. Zou Wenwu, a well-known marketer, once commented: This product, when it comes out, has no characteristics, from the name to the concept is a failure, coupled with the red jar and the operation of the medicine, and finally doomed to a cold and cold ending.
In the early days, blue cans of herbal tea also appeared on the market. In 2008, Founded in 1991 with 5 billion assets and its signature product Wanji ginseng tablets, Wanji Group launched the blue can of "Wangille Herbal Tea" and hired Hong Kong actor Zhang Weijian as an endorsement, aiming to be the Pepsi Cola in the herbal tea market. Unfortunately, the large-scale advertising bombardment has not played a continuous role in stimulating consumption, and Wangile has basically stopped production.
Interestingly, most herbal tea brands like to ask big stars to spend a lot of money on "wholesale" ads.
In 2008, the pharmaceutical company Ruinian International launched Shunpai herbal tea, hired Ge You as the brand image spokesperson, from CCTV to local satellite TV, and also hired a team of professional managers, aiming to compete for the third position in the field of herbal tea.
However, after only two or three years, this product disappeared from the market. In 2010, Kangmei Pharmaceutical launched the first bagged Juhuang tea for the first time in Guangdong, and hired Li Bingbing to help, but the market operation has always been tepid, which can be said that the return to Kangmei has always been cold.
Among the many "players", the most thunderous is the launch of the Overlord Herbal Tea by the Overlord Group. In 2010, Bawang Group, known as the "family of traditional Chinese medicine", launched an herbal tea product and hired Zhen Zidan to endorse it.
In 2011, the sales revenue was 167 million yuan, accounting for 18.8% of the total performance of Bawang Group, but then the development of Bawang Herbal Tea took a sharp turn, with revenue of 17.583 million yuan in 2012 and only 790,000 yuan in the first half of 2013. According to the data, on July 1, 2013, Bawang Group stopped producing and selling herbal tea, leaving a laughing stock.
Of course, the fallen "martyrs" do not stop there, they fully prove the difficulties and obstacles of this road. Looking back at the past decade of Chinese herbal tea, there is not only the dazzling legend of Wang Laoji replacing Coca-Cola as the "first can" of China in 2008, but also the infinite sighs caused by the "tug-of-war" between Wang Laoji and Jiaduobao.
This is destined to be a battlefield of mixed sorrows and joys, and in the next decade, where will Chinese herbal tea go?
(Source: Investment Community)