A drama related to life and nourishment is being staged in the Chinese business world.
The "son" is Red Bull, one is the Reignwood Group that is raising Red Bull, and the other is Thai Tencel, which is fertile Red Bull. Since 2016, the two parties have had several lawsuits and several debates, which have seriously affected the stability and prosperity of the market order.
The ancients have long answered: "The grace of life is greater than man, and the grace of nurturing is greater than heaven." On one side, threatened by "benefit", the steady development of the other side may tell us what is the best answer.
Red Bull's Reignwood Mark
"Drink Red Bull when tired and sleepy", this slogan that many people are familiar with and used for eight years has established Red Bull's status as the king of functional beverages in China. It even surpassed Coca-Cola to become the number one beverage.
The inventor of Red Bull Beverage is Xu Shubiao, the founder of Thai Silk Group. In the early 1990s, Xu Shubiao wanted to come to the mainland to build a factory on his own, but because he was not familiar with the Chinese market and policies at the time, he finally failed to do so.
On November 10, 1995, in the "50-year Agreement" (hereinafter referred to as the "Agreement") signed by TENCEL Thailand and China Red Bull and its shareholders, China Red Bull enjoys exclusive production and sales of Red Bull beverage products in the Chinese market Legal rights. The shareholders of China Red Bull are Yan Bin and his Reignwood Group.
Since then, Reignwood Group and Chairman Yan Bin have played a decisive role in the key links of Red Bull Beverage's access to the Chinese market and Chinese trademark registration. Together with a large number of advertisements and marketing, Red Bull has become a part of the memory of many Chinese.
In order to adapt Red Bull to the Chinese market, Yan Bin adjusted the Red Bull brand's trademark from traditional Chinese to simplified Chinese. Even Red Bull's "red" was written by Yan Bin himself. Red Bull's later iconic "Golden Can" packaging can design was also completed by Reignwood and Yan Bin, and applied for the design patent of Red Bull Beverage (Patent No.: ZL96307886.0).
In the early days, Red Bull's development in China was not smooth.
In the 1990s, the Chinese beverage market began to enrich, and it was no longer just carbonated beverages controlled by Coca-Cola and Pepsi, but tea beverages, purified water, fruit and vegetable juice beverages, lactic acid bacteria protein beverages, herbal teas, etc. appeared. In 1995, China Red Bull appeared. , Bringing the concept of "functional drink" to China for the first time.
Since people at the time didn't know what a functional drink was, Yan Bin's China Red Bull only spent 200 million yuan in marketing in the first year. It should be known that the box office of Chinese movies was only 950 million yuan.
In the 1996 Spring Festival Gala, Red Bull invested hundreds of millions of dollars in advertising to inform Chinese people that "Red Bull has come to China." Later, Red Bull won the naming rights for the opening ceremony of the Spring Sugar and Wine Party in March of that year and hosted the "Red Bull Night" reception. While inviting celebrities and distinguished people from all walks of life to participate, it also gained a reputation on the channel sales side.
But the cultivation and development of a brand is not only achieved through advertising, but more importantly, products.
At that time, the products Red Bull sold in China were imported products and had not been improved. Therefore, although many sales agents were signed on Spring Sugar in 1996, the results were poor at the end of the year, and even 100 boxes of them were not sold. In the end, China Red Bull suffered huge losses in 1996 and 1997.
Some people attribute the poor sales of China Red Bull to prices, but Yan Bin believes that this is still a product problem. After personally driving the roller to destroy the unqualified and expired products, he began to lead China Red Bull to hold product inspections and technical meetings, and finally adjusted the formula of Red Bull drinks to the tastes of Chinese consumers, and established the later "vitamin functional drink" Formula and content.
After that, China Red Bull began to develop rapidly throughout the country. December 25, 2020, is China Red Bull’s 25th birthday. On the same day, China Red Bull’s official website announced that as of December 24, sales had completed 22.815 billion yuan, exceeding the sales target set at the beginning of the year; in 25 years, "Red Bull Vitamin Functional Drink "The cumulative sales exceeded 200 billion yuan.
"The packaging/decoration will remain unchanged for 25 years, the retail price will remain the same, and the formula and taste will remain the same. This is a miracle in the beverage industry." This is the pride of Yan Bin and China Red Bull. But the cruelty of time is here. Red Bull in China has not changed, but TENCEL, which had a good relationship with Reignwood Group, has changed.
Tencel's Red Bull Attempt
TENCEL Thailand was founded by Xu Shubiao in 1956. After Xu Shubiao's death in 2012, his son Xu Xinxiong took over as the chairman of the board of directors of TENCEL Pharm. After officially taking charge of Tencel, Xu Xinxiong began the global predatory path of Red Bull's brand value. EFDI (Energy Food and Drinks Inc.), the sole authorized distributor of Red Bull Beverages in the Philippines, is one of them.
TENCEL’s authorization period for EFDI is from 2003 to 2013, but in 2012, TENCEL United blatantly combined with another distributor MDI (Maryland Distributors Inc.) to conduct illegal sales during the authorization period and tagged the product. "The only authorized dealer" label.
EFDI sued with indignation. According to the ruling of the Deputy Minister of Justice of the Philippines in 2012, Tencel and MDI violated relevant laws and sentenced the responsible persons to imprisonment and high fines. Xu Xinxiong was the first fire extinguished.
However, the Philippine market seems to be just a rehearsal field for Xintencel's "big picture". Its real target is the Chinese market, especially the Chinese Red Bull, which has entered the harvest period through more than 20 years of market development. Having never invested a penny in the Chinese market, Xu Xinxiong and Tencel put forward greater requirements on the distribution of dividends in the Chinese Red Bull market. They had serious disagreements with Reignwood Group, and the Red Bull case with trademarks as its core officially broke out.
The war was still initiated by Tencel. In 2016, Thailand Tencel filed a lawsuit against China Red Bull and no longer authorized the latter to produce Red Bull. In 2018, Thailand Tencel tried to liquidate "China Red Bull", but it was not approved by the board of directors, and China's administrative and judicial departments did not support it.
China Red Bull clearly pointed out in the statement that during the 22 years of operation of the joint venture company, China Red Bull’s "product trademark" has never been registered by TENCEL Thailand. During his lifetime, Thai Tencel founder Xu Shubiao did not register the trademark because he agreed that “the product trademark is the asset of the joint venture”; after Xu Shubiao's death, the current controller of Thai Tencel, Xu Xinxiong, tore up the contract and preemptively registered the trademark in 2018. China Red Bull is advancing related lawsuits involving the restoration of the true ownership of the trademark.
Like the practice in the Philippines, TENCEL has already started its own Red Bull China plan to unilaterally change its partners to devour the market before the legal process is officially opened.
In 2017, before the expiration of the China Red Bull joint venture on September 29, 2018, TENCEL of Thailand had already acquired Guangzhou Yao energy drink and began planning to use the latter’s production line and "blue hat" (health food certificate) in China. The Mainland publicly produces and sells Red Bull Beverage products, and launched the "Red Bull® Anaiji Beverage" in China.
Due to the taste of American ginseng in the formula, Red Bull® Anaiji Beverage was not recognized by the market and its sales were bleak. Due to market pressure, Thai Tencel simply bypassed the supervision of health food and directly launched the non-healthy ordinary drink "Red Bull® Vitamin Flavored Beverage". Moreover, the packaging/decoration of gold cans is almost the same as that of Red Bull in China, which has caused a large number of consumers to mistake it as a "Red Bull Vitamin Functional Drink".
In fact, there are obvious differences in the ingredients of the three Red Bull, and the two versions of the "Red Bull Vitamin Flavored Drink" have different ingredients. There are health foods with health functions and ordinary foods. Foods that belong to different categories are very similar in outer packaging and are sold together, which can easily mislead consumers and be suspected of infringing consumers' right to know.
Behind Tencel's extensive and "non-skilled" behavior is its attempt to accelerate the opening of the Chinese market with Red Bull. Xu Xinxiong, the head of the company, has long been fond of the Chinese market.
Therefore, while prosecuting China Red Bull and its downstream sales and upstream raw material providers nationwide, although the litigation dispute with China Red Bull has not been clarified, Tencel is already eager to use two products with completely different tastes but extremely similar packaging. Reaping the "Red Bull" brand dividend: A road to consume the "Red Bull" brand has begun.
Who hurt the "Red Bull" dispute?
In fact, the Red Bull case may not be unfamiliar in China. The trademark cases of Wanglaoji and Jiaduobao opened a protracted public course on business competition for Chinese people. Although one of them won in the end, we all know now that this war between the boss and the second in the industry not only killed the third but also hurt the two themselves. The more serious consequence is that the entire herbal tea industry shrinks sharply. .
This is a vivid lesson for Red Bull's future. In 2015, before the Red Bull case officially broke out, China Red Bull achieved an operating income of 23.07 billion yuan, surpassing Coca-Cola and becoming China's No. 1 single beverage product.
According to statistics, the compound sales growth rate of energy drinks from 2014 to 2019 is as high as 15.02%, and it is one of the fastest-growing sub-categories of various beverages in China.
"Benefiting from (China) Red Bull's market education and leadership, the energy drink market has grown faster than the overall functional drink market in the past 10 years and has become the main driving force for the growth of China's functional beverage industry", a research institute Said.
But after the Red Bull case broke out, Red Bull Beverage does not seem to benefit from the 15% compound growth rate of China's functional drinks. According to data released by China Red Bull, as of December 25 last year, China Red Bull's 2020 sales increased by 500 million yuan year-on-year.
As for Tencel, its Red Bull development plan does not seem to be smooth.
As mentioned above, in 2018, Tencel recruited entrepreneurs who had left after working for Red Bull in China. In April 2019, it launched the Red Bull Anaiji beverage with the original energy formula, and the American ginseng additives have a slight bitter taste; 2019 At the end of the year, Tencel introduced the imported version of Red Bull from Thailand, but because it did not get the "blue hat" approval, the name could only be a vitamin flavored drink.
A distributor of Shandong Tiansi Red Bull said in an interview with the media that at first, consumers were not used to the taste of American ginseng. Later, they also introduced the imported version of Red Bull and distributed the imported version and American ginseng version to the store in proportion.
This kind of "arbitrary" product sales conversion has brought the inconvenience of terminal sales to a certain extent, and even the loss of benefits. It seems that Tencel does not have the patience to polish the market with the agents. Once the agents cannot produce quickly, Will be unilaterally terminated and abandoned.
According to media reports, Pusheng, who is doing terminal sales for Tencel Red Bull in 2019, actively contacted Ge Zhengbiao, who has been engaged in beverage product distribution in Caoxian, Shandong, and signed a cooperation agreement from December 16, 2019 to January 31, 2021.
At the beginning, due to the sluggish sales of American ginseng version of Red Bull, Ge Zhengbiao had a large inventory backlog. Therefore, in August 2020, when Pusheng asked Ge Zhengbiao to prepare 200,000 yuan for stocking, he made a request to suspend the remittance stocking on the grounds of consuming the existing stock. , But in the end, Pusheng unilaterally forcibly terminated the cooperation with Ge Zhengbiao and looked for a new agent locally.
It is Ge Zhengbiao, these small agents and small and micro enterprises, that enable the "Red Bull" to penetrate into every corner of China and enter the millions of households in China. Tencel, who is eager for success, hurts itself eight hundred. “The market war between Tencel and Reignwood is still relatively large. Dealers have thought about it. Don’t be cannon fodder.” Such a complicated Red Bull sales has caused many small agents. Guilty.
In China's real economy, small and micro enterprises and individual industrial and commercial households have always been the objects of concern. Their prosperity and stability are the cornerstones of the development of China's real economy. There may be thousands of methods for commercial competition, but none of them should be the goal.
Of course, the business competition among enterprises hurts not only the enterprises themselves. Agents like Ge Zhengbiao are not the only unrelated victims affected in the Red Bull case. Consumers are ultimately hurt.
After Tencel launched two Red Bull drinks, three Red Bull products appeared on the market. One is Reignwood’s old Red Bull, which is also known to many people as Red Bull, one that uses American ginseng formula, and the other is the same as Reignwood. Red Bull's same Tencel imported Red Bull. Among them, the packaging of the latter two Red Bull and the old Red Bull are highly similar.
For consumers, the appearance of the three products is tantamount to a disaster. "Three products and three formulas, if I buy it myself, I won’t be able to tell the difference if I don’t read it carefully." "It’s the consumers who are injured. If they don’t look carefully, they paid for the health food and bought a bottle of beverage. , The loss is big"... the consumer said with emotion.
It is understood that various complaint platforms have received a large number of complaints about buying these two Red Bull drinks by mistake. In July 2020, some consumers even filed a complaint with the relevant market supervision department under the pretext of being confused by similar packaging. The similar packaging "is sufficient to cause people to mistakenly believe that they are products of others or have a specific connection with others."
* Source: Network
Products with similar appearances and similar formulas appear together on the same market and on the same shelf. This kind of thing that was originally an "exception" in the world has now become a reality in China.
Brands are created jointly by enterprises and consumers, and are a kind of spiritual cognition accumulated in the minds of consumers through long-term products and services. The formation of the "Red Bull" brand was created by China Red Bull and countless Chinese people for more than 20 years. Tiansi confuses consumers with similar packaging, and the "Red Bull" brand is also invisibly consumed.
Conclusion
Chinese business is evolving rapidly, and business ethics are also changing, but "Xinyi" is still an essential quality for a successful company and a qualified entrepreneur.
With the rapid development of China’s economy, the various laws and regulations of Chinese business are also improving, but faith and trustworthiness are still the starting point of all laws and regulations. It is the saying that people cannot stand without faith, and business cannot be achieved without faith. .