The situation of the new consumer track is not sunny at the beginning of the year.
Sina Finance has learned that the year-end bonuses for the main departments of Genki Forest have not been issued, and although front-line employees have received their year-end bonuses, they have shrunk significantly compared to previous years. According to sources, Coca-Cola and PepsiCo have given Genki Forest an ultimatum: Genki Forest sparkling water will be eliminated this year.
Many signals show that Genki Forest’s days are not good.
“Coca-Cola and PepsiCo had a meeting, determined to kill Genki Forest”
Genki Forest “not good”, a senior FMCG industry executive directly concluded.
And back in 2021, Genki Forest faced a double attack from Nongfu Spring and Coca-Cola. For example, Zhong Yanyan launched the “God of Fortune” sniper war, with real money to besiege Genki Forest, the store as long as the Nongfu Spring products into Genki Forest’s freezer, you can get the same amount of long white snow mineral water. In the FMCG world there is a saying, mess with who do not mess with Nongfu Spring, because Zhong is belligerent, will end up very bad.
But the game came from Tang Binsen does not care about these rules of the circle, he is more interested in breaking the silence of the traditional beverage circle. Genki Forest’s offline freezers are a direct challenge to Nongfu Spring.
On the other hand, industry insiders close to the middle and senior management of Coca-Cola told Sina Finance: “Coke said that in 2022, there will be no more sparkling water from Genki Forest on the market; both sides of Coca-Cola and PepsiCo have had a meeting and are determined to eliminate Genki Forest.”
Unlike Nongfu Spring’s gun rubbing, Genki Forest has touched the lifeblood of both Coca-Cola and PepsiCo.
In terms of category, sparkling water and Coca-Cola have similarities. The two colas’ biggest concern is that if Genki Forest continues to promote sugary drinks (including Coke) as unhealthy, coupled with parental control over their children’s Coke, Coke is likely to be lost to the next generation of children, replaced by a generation of sparkling water drinkers.
In the sparkling water market, Genki Forest is also facing pressure from multiple products such as Nongfu Spring, Coca-Cola and Wahaha. However, it is an obvious fact that Genki Forest has not yet sniped the market with a bigger product other than sparkling water. But Genki Forest is not a big single product strategy, Red Bull, Yeshu and other single product lines of the world model it has not eaten through. Most importantly, there is no threshold for sparkling water, and Genki Forest has done a good job of educating the market about 0 sugar and 0 fat, but the product can be done by anyone.
For example, in March 2018, Genki Forest only launched a real sense of breaking the circle product 0 sugar 0 card soda sparkling water, 7 months later, Heytea launched a low-calorie stevioside as a source of sweetness, claiming a 90% reduction in calories compared to cane sugar tea. Heytea tried to counter the impact of sugar-free bottled drinks by implementing low-calorie sweeteners in ready-made tea in offline stores.
Sina Finance visited a number of offline supermarkets and found that the most popular product in Genki Forest’s online sales is still sparkling water.
And unlike traditional network popular products, Genki’s sales have gradually been skewed offline. This means that Genki Forest is under the same pressure as traditional businesses to deal with offline staff management. One obvious indicator is that Genki Forest’s sales force is increasing, and the large number of salespeople is diluting the year-end bonuses of veteran employees.
However, tea beverage industry observers Ma Lei also directly point out the expansion risk of Genki Forest: “Nongfu Spring and Wahaha are cutting people, before on a person can achieve more than 2 million sales; but these years, is to add people, may not have the actual benefit, offline is too competitive.” But the high cost of beverage logistics, naturally not suitable for online sales, offline is the inevitable direction of Genki Forest.
Last December, according to media reports, Genki Forest is making extensive adjustments around the organizational structure, while founder Tang Binsen will put more effort into channels, sales management and product development. The move was interpreted by industry insiders as a positive one.
“Tang Binsen personally grasps the channel now, which means they are not having a good time.” A former top executive of a leading FMCG company analyzed.
Another snobbish move is that Genki Forest has been doing new retailing since the second half of last year, selling smart cabinets. “New retail is like a convenience store, the valuation will not be too high. Traditional FMCG companies are growing to a certain extent after they start to do new retail, Genki Forest should be forced to do smart cabinets.” The aforementioned leading FMCG enterprise former senior analysis.
Accused of inflated valuation, new consumer investment cooling
On the other hand, the overall reduction in investor enthusiasm for new consumption, this statement has been very obvious in 2021. the second half of 2021 began, the number and amount of new consumption financing have declined significantly. According to industry statistics, there were only 127 new consumer investment and financing events in August, compared to 153 in July, a 17 percent drop.
“The valuation is inflated and the return is unclear,” an investment circle source said.
In November 2021, it was reported in the media that Genki Forest was about to complete a new round of financing of nearly $200 million, led by Temasek and followed by a number of old shareholders such as Sequoia China and Warburg Pincus. With that, Genki Forest’s valuation also rose several times to a new high of $15 billion within a year’s time. In the same period, Master Kong’s valuation hovered around $12.5 billion, lower than Genki Forest.
“Compared with Master Kong, Uni-President, Genki Forest’s costs and profit margins are there, compared to these two he is inflated; we can not say it is a Netflix or Internet genes on the special case, online sales are easy to meet the top, Genki is now also offline sales accounted for the majority, and traditional FMCG enterprises more and more like”, the former senior analysis of a leading FMCG enterprise said.
At the end of last year, Chayan Yuese was exposed to the salary civil strife. At the beginning of 2022, the news of layoffs from Heytea and Wenheyou also broke the cold water for the cooling of new consumption. Taking Wenheyou as an example, last year Wenheyou successively obtained B rounds and C rounds of financing. Among them, the investors in the B round are Sequoia China Fund, IDG, and Warburg Pincus, with an amount of 500 million yuan. Sources close to Wenheyou have revealed that the valuation of Wenheyou in this round has exceeded 10 billion yuan.
Shenzhen Wenheyou, which opened with a queue of 50,000, has completely “changed its face” after six months
In July 2020, Guangzhou Wenheyou opened with an area of 5,000 square meters and a three-story building; in April 2021, Shenzhen Wenheyou opened with an area four times that of Guangzhou, but both stores experienced a short period of hustle and bustle at the peak of their opening period and then fell into a cold business situation. Shenzhen Wenheyou changed its signboard directly after six months of opening, and “Super Wenheyou” became “Old Street Oyster Market”, with all the decoration style, resident merchants and food categories changed.
When you search for stores related to Super Wenheyou in Guangzhou on Dianping, most of the ratings of famous old stores in Guangzhou such as Chen Tianji, Apo Niu Za and Yong Li Restaurant are around 3.5 points, with low ratings.
Conclusion
In the new consumer track, Genki Forest and Heytea are the leading companies. The situation at the beginning of the year is not sunny, with news of layoff tide, year-end bonus shrinkage and store closure. If you look at it optimistically, that is, after the high-speed development, companies are beginning to make internal adjustments, which may also be a transformation to consolidate their internal strength. Source