---
title: "A Bottle of Drink Earns This Shanwei Family 45.4 Billion"
description: "In 2003, a state-owned beverage factory in Shenzhen that couldn't even pay wages was transferred to 20 employees for less than 2.54 million yuan. Eighteen years later, it became the 'first energy drink stock' with total assets of 6.7 billion yuan by the end of September 2021. This company is Dongpeng Beverages, which has been grabbing market share from Red Bull and is now the second-largest player in the energy drink industry. Listed on May 27, its total market value surged past 100 billion yuan after a series of limit-up days."
author: "有趣有料有价值"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-12-23"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/a-bottle-of-drink-earns-this-shanwei-family-45-4-billion-37840318/"
markdown: "https://xinjignxiao.com/en/articles/a-bottle-of-drink-earns-this-shanwei-family-45-4-billion-37840318.md"
original_source: "https://mp.weixin.qq.com/s/sP3_NGHMzZ714ZDOUzwAWQ"
translation: "https://xinjignxiao.com/zh/articles/%E4%B8%80%E7%93%B6%E9%A5%AE%E6%96%99-%E8%AE%A9%E8%BF%99%E4%B8%AA%E6%B1%95%E5%B0%BE%E5%AE%B6%E6%97%8F%E6%8C%A3%E5%88%B0454%E4%BA%BF-37840318.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/a-bottle-of-drink-earns-this-shanwei-family-45-4-billion-37840318/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# A Bottle of Drink Earns This Shanwei Family 45.4 Billion

> In 2003, a state-owned beverage factory in Shenzhen that couldn't even pay wages was transferred to 20 employees for less than 2.54 million yuan. Eighteen years later, it became the 'first energy drink stock' with total assets of 6.7 billion yuan by the end of September 2021. This company is Dongpeng Beverages, which has been grabbing market share from Red Bull and is now the second-largest player in the energy drink industry. Listed on May 27, its total market value surged past 100 billion yuan after a series of limit-up days.

Source: Shijie (ID: ishijie2018) Author: Lei Yanpeng
In 2003, a state-owned beverage factory in Shenzhen that couldn't even pay wages was transferred to 20 employees for less than 2.54 million yuan. Eighteen years later, it became the 'first energy drink stock' with total assets of 6.7 billion yuan by the end of September 2021.
This company is Dongpeng Beverages, which has been grabbing market share from Red Bull. Now, it's the second-largest player in the energy drink industry.
On May 27, Dongpeng Beverages went public, and after a series of limit-up days, its total market value surpassed 100 billion yuan, a glorious moment. As of the close on December 3, its market value had fallen to 76.5 billion yuan, but that's still nearly seven times Chengde Lulu or two times Yangyuan Drinks.
In the six months since listing, Dongpeng Beverages has been swarmed by institutional research, with 'fund manager No.1' Zhang Kun conducting research three times. The actual controller, Lin Muqin, a businessman from Shanwei, Guangdong, and his family, also made the 2021 Forbes China Rich List with a wealth of 45.4 billion yuan.
However, Dongpeng Beverages' rapid growth has partly benefited from Red Bull's 'stumble.' Moreover, the growth rate of China's energy drink industry may halve in the future compared to previous years, but Dongpeng Beverages has a single product structure, with energy drinks accounting for about 95% of revenue, of which the 500ml gold bottle Dongpeng Special Drink accounts for 63%.
Additionally, for Dongpeng Special Drink, which follows a high cost-performance route, moving upmarket won't be easy.
**Differentiated Competition, Avoiding Red Bull's Edge**
Tired and sleepy, drink Red Bull or Dongpeng Special Drink? This isn't a joke.
Because Dongpeng Beverages' development is closely related to Red Bull.
In 1995, Thai-Chinese businessman Yan Bin introduced RedBull, a tonic beverage from Thailand's TCP Group, starting the story of Red Bull in China. At the 1996 Spring Festival Gala, Yan Bin spent over 100 million yuan on advertising: 'Red Bull comes to China,' making all Chinese people aware of Red Bull.
(Yan Bin)
'Red Bull' is the brand, and the product is called 'Red Bull Vitamin Functional Drink.' **At that time, people didn't know what Red Bull was, and there was no mention of 'functional drinks' in relevant national standards; internationally, functional drinks refer to soft drinks with health benefits.**
The national standard at that time classified soft drinks, with only 'special purpose drinks' being similar: beverages that adjust the composition and proportion of natural nutrients to meet the nutritional needs of specific groups.
Red Bull was pioneering for China's functional drink market. However, for a long time, 'functional drinks' was just a social term. It wasn't until 2016 that the national standard introduced the concepts of energy drinks and functional drinks.
When Red Bull's slogan—'Drink Red Bull when thirsty, drink Red Bull when tired or sleepy'—resounded across the country, Dongpeng Special Drink, now the 'second-in-command' in the energy drink world, was still struggling in the Guangdong market.
Dongpeng Beverages' predecessor was Dongpeng Industrial. In 2003, this bankrupt Shenzhen state-owned enterprise was transferred to 20 employees, led by Lin Muqin, for 2.5366 million yuan for 100% equity. After restructuring, through several equity transfers and capital increases, Lin Muqin became the actual controller of Dongpeng Beverages.
Lin Muqin, born in 1964, is from Shanwei, Guangdong. Before joining Dongpeng Industrial in 1997, he worked at a beverage company in Shenzhen for many years. According to reports from Caijing National Weekly, Lin Muqin and his younger brother Lin Muhang (now director and executive president of Dongpeng Beverages) were workshop heads at a Red Bull OEM factory in China, accumulating rich experience.
Red Bull's popularity made many companies see opportunities. After Red Bull applied for a health food approval certificate, Dongpeng Industrial also applied and launched Dongpeng Special Drink. At that time, Lin Muqin was already deputy general manager of Dongpeng Industrial.
In the first few years after Lin Muqin took over, Dongpeng Beverages didn't develop much. Although it had many beverage categories, it lacked distinctiveness, **until the end of 2009, when it launched PET-bottled Dongpeng Special Drink, changing the situation.**
(Lin Muqin)
At that time, after years of development, Red Bull had captured 90% of China's energy drink market. For Dongpeng Special Drink to break through, it had to grab market share from Red Bull, which was like pulling teeth from a tiger's mouth.
What to do? Dongpeng Special Drink engaged in differentiated competition to avoid Red Bull's edge.
**In packaging, Dongpeng Special Drink uses PET bottles**, while almost all energy drinks on the market were metal cans. Cans preserve the original flavor and are easy to transport long distances, but the downside is that once opened, they must be finished; if not, they're hard to carry. PET bottles are more portable and dust-proof; if you can't finish, just screw the cap back on and carry it with you.
**In price, Dongpeng Special Drink offers great value.** Red Bull's main product is 250ml, priced at 6 yuan per can, presenting a high-end image. Dongpeng Special Drink's same-capacity product costs only 2-3 yuan per bottle.
The main consumer groups for energy drinks are drivers, blue-collar workers, couriers, delivery riders, medical workers, and white-collar workers who work overtime. To a certain extent, Dongpeng Special Drink's differentiated positioning has been successful.
In 2013, Red Bull changed its well-known slogan—'Drink Red Bull when tired or sleepy'—to 'Your energy, beyond your imagination.' This made Dongpeng Beverages see an 'opportunity.' Dongpeng Beverages invited Nicholas Tse to endorse Dongpeng Special Drink and adopted a new slogan—'Tired and sleepy, Dongpeng Special Drink'—and bombarded the market with it.
**From its inception, words like 'imitation' and 'copying' have followed Dongpeng Special Drink.** However, under the strong encirclement of the giant Red Bull, Dongpeng Beverages still managed to break through. By 2015, Dongpeng Special Drink's share of China's energy market had risen from 3.9% in 2011 to 5.3%, while Red Bull's had fallen from 89.6% to 76.5%.
But in advertising, whether to drink Red Bull or Dongpeng Special Drink when tired or sleepy is confusingly similar.
##### **Red Bull in Trouble, Dongpeng Special Drink Accelerates**
On May 27, the night of listing, Dongpeng Beverages held a listing appreciation dinner at the Shangri-La Hotel in Shenzhen.
At the dinner, Dongpeng Beverages' chairman and president Lin Muqin specifically thanked Yan Bin of Reignwood Group, saying he introduced Red Bull to China, cultivated the first generation of consumers' awareness of functional drinks, and promoted the development of the entire category.
**In a sense, Red Bull not only played a leading role but also educated the Chinese market. Today, energy drink brands of all sizes have benefited to some extent, and Dongpeng Special Drink is no exception.**
In terms of market share, by 2020, Dongpeng Special Drink's share had increased to 15.4%, while Red Bull's had shrunk to 52.1%. From the change in share, it seems Dongpeng Special Drink has grabbed a lot of Red Bull's market.
In fact, if it relied solely on its own strategy, Dongpeng Beverages might not have developed so quickly. **In recent years, Red Bull has trapped itself, giving Dongpeng Special Drink an opportunity for rapid development to some extent.**
Red Bull originated in Thailand. In the 1960s, Thai-Chinese Xu Shubiao's TCP Group developed a drink called Krating Daeng, which was later introduced to the international market by an Austrian businessman and named RedBull. In the early 1990s, TCP wanted to enter the Chinese market but failed due to policy reasons.
This drink's success in the Chinese market is thanks to Yan Bin. In 1995, Yan Bin's Reignwood Group signed a cooperation agreement with TCP, establishing Red Bull in China in Shenzhen, with exclusive rights to operate Red Bull in the Chinese market.
**After 20 years of cooperation, each was fine, but differences emerged in 2016.**
After Xu Shubiao's death, his children had disagreements with Reignwood Group over the cooperation agreement regarding Red Bull in China. Since 2016, they have resorted to legal action over the authorization period and trademark issues, leading to a tug-of-war.
In December 2020, the Supreme People's Court ruled that the 'Red Bull series trademarks' belong to TCP, but whether the authorization period is 20 or 50 years remains undecided. In 2021, related lawsuits continued.
Outside the courts, there have also been major conflicts in the market.
Currently, there are mainly four Red Bull products in the Chinese market: 1. Red Bull Vitamin Functional Drink (i.e., Red Bull China, operated by Reignwood); 2. Red Bull Vitamin Flavored Drink (imported from Thailand); 3. Red Bull Anaeji Drink (launched by TCP and Guangdong Yaonengliang); 4. Austrian-imported RedBull (blue can).
Red Bull Vitamin Flavored Drink and Red Bull Anaeji Drink were launched by TCP in 2019 to counter Reignwood's continued operation of Red Bull China. In packaging, these two drinks are extremely similar to Red Bull China's product, with the same price and specifications.
At the same time, TCP and related parties have also used legal means to compete for Red Bull China's channels. The Beijing Chaoyang District People's Court ruled in May this year that Beijing Hualian Supermarket must stop selling the allegedly infringing products, i.e., product 1 above.
Additionally, for product 1 operated by Reignwood, its 'Red Bull JD Self-operated Flagship Store' shows as closed, and its Tmall flagship store can't be found either. The stores for Red Bull or RedBull that can be found on JD and Tmall are all operated by the relevant parties of products 2, 3, and 4 above.
**Under these measures, Red Bull China's growth has almost stalled.** This also led Reignwood to launch its own brand 'Zhanma.'
These Red Bull stories seem unrelated to Dongpeng Special Drink. In fact, **the disputes of the 'leader' Red Bull have given other brands space and time to develop, especially Dongpeng Special Drink, which closely follows Red Bull.**
In 2017, Dongpeng Beverages launched a large-capacity 500ml Dongpeng Special Drink, continuing the PET bottle + dust-proof cap packaging, with a retail price of 5 yuan per bottle, adding volume without increasing price. Once promoted, it gained consumer favor and quickly became the company's main product.
Its own efforts, combined with changes in the external competitive environment, have pushed Dongpeng Beverages into an acceleration phase.
In 2020, Dongpeng Beverages' revenue was 4.959 billion yuan, and net profit attributable to the parent was 812 million yuan, 1.7 times and 2.7 times that of 2017, respectively. In the first three quarters of 2021, its revenue was 5.56 billion yuan, and net profit attributable to the parent was 996 million yuan, both exceeding last year's full-year levels.
**Success from the Big Single Product, Worry from the Big Single Product**
With Red Bull China in trouble, Dongpeng Beverages has focused on promoting energy drinks. So far, this strategy has been successful. However, it also reflects the problem of a single product structure.
**Dongpeng Beverages' product lineup includes three types: energy drinks, non-energy drinks, and packaged drinking water.**
What exactly is an energy drink? Here, we need to introduce the current relevant national standards.
Beverages can be divided into packaged drinking water, fruit and vegetable juices and their drinks, protein drinks, carbonated drinks, special purpose drinks, flavored drinks, tea (type) drinks, coffee (type) drinks, and other categories. Special purpose drinks refer to liquid beverages that contain specific ingredients to meet the needs of all or certain groups.
Special purpose drinks can be further divided into sports drinks, nutrient drinks, energy drinks, electrolyte drinks, etc. Among them, **energy drinks are products that contain a certain amount of energy and add appropriate nutrients or other specific ingredients to supplement energy for the body, or accelerate energy release and absorption.** Dongpeng Special Drink belongs to this category.
According to the current national standard implemented in 2016, products that can claim specific health functions are functional drinks. Dongpeng Beverages states that Dongpeng Special Drink has obtained a health food approval certificate, so it can also be called a functional drink.
Whether or not a health food approval certificate is obtained is crucial. If obtained, on one hand, it serves as a credit endorsement; on the other hand, it allows appropriate promotion according to the filed functions. There are also differences in formula additions; some non-'health food' energy drinks cannot add exogenous caffeine.
Guosheng Securities pointed out in a July research report that well-known energy drink products with approval certificates include Red Bull Vitamin Functional Drink (Red Bull China), Red Bull Anaeji, Dongpeng Special Drink, Lehu, Zhanma, and Libaojian.
In other words, not all energy drinks can be called functional drinks. Therefore, energy drink is a more inclusive term for this sub-industry.
Energy drinks generally have effects such as 'supplementing energy,' 'anti-fatigue,' and 'refreshing.' **Dongpeng Special Drink contains white sugar, taurine, lysine, caffeine, inositol, niacin, vitamin B6, vitamin B12, and other ingredients.**
For Dongpeng Beverages, the core product is energy drinks, mainly Dongpeng Special Drink.
**From 2018 to 2020, the proportion of energy drink sales revenue to Dongpeng Beverages' main business revenue was 95.51%, 95.50%, and 94.32%, respectively. In the first three quarters of 2021, this proportion rose to 96.20%.**
Dongpeng Special Drink products include gold bottle special drink (250ml and 500ml), gold can special drink (250ml), and gold brick special drink (250ml). Newly launched products include carbonated energy drink Dongpeng Jiaqi and zero-sugar special drink.
**By 2020, the sales revenue of 500ml gold bottle products accounted for 62.51% of Dongpeng Beverages' main business revenue. In other words, the company not only has a single product structure but also heavily relies on a big single product.**
At the same time, the gross margin of the 500ml gold bottle is higher than that of the 250ml products. In its 2021 semi-annual report, Dongpeng Beverages stated that the continuous increase in sales of the 500ml gold bottle drove rapid growth in sales revenue and net profit.
Dongpeng Beverages' non-energy drinks include Yougan Lemon Tea, Chenpi Special Drink, Chrysanthemum Tea, Winter Melon Drink, and Qingliang Tea, among others. Packaged drinking water mainly includes Dongpeng Water (natural drinking water). However, these products contribute very little.
Additionally, Dongpeng Beverages is rooted in its home market of Guangdong, cultivating it for many years. By 2020, revenue from the Guangdong market still accounted for over 55%. Now, Dongpeng Beverages is striving to expand into larger markets.
However, during the years Red Bull was in trouble, not only Dongpeng Special Drink developed rapidly, but also brands like Tizhi Nengliang and Lehu. In 2020, the combined market share of these two brands was almost equal to that of Dongpeng Special Drink. The market share of brands counted as 'others' is also growing, indicating that **competition in the energy drink market is intensifying.**
In recent years, China's energy drink track has had relatively high prosperity. According to Euromonitor data, the compound annual growth rate of sales volume from 2014 to 2020 was 13.5%, but from 2021 to 2025, it will drop to 6.9%.
For Dongpeng Beverages with a single product structure, today's 'safety' also means future 'danger.' Moreover, for Dongpeng Special Drink, which follows a cost-performance route, moving upmarket in the future will likely be difficult.
Global People once reported that over the years, Lin Muqin has developed a habit: every time he drives through a highway service area, he looks at the trash cans to count how many bottles are his own.
Lin Muqin says this keeps him vigilant.
References: 'Discussing Dongpeng Again When It Spreads Its Wings to Dance,' Guosheng Securities (Except for separately noted sources, the above images are from Visual China)
**Are you 'watching' me?**


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671