---
title: "A Micro-History of China's Consumption Changes: Dongpeng Lists, Red Bull Battles, Yuanqi Rises"
description: "As consumer preferences shift toward healthier beverages, functional drinks are losing favor. Dongpeng Beverage recently went public as the 'first functional drink stock,' but its market is being squeezed by new competitors like sugar-free and low-sugar drinks, while capital flows to new brands."
author: "葛煜"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-06-13"
language: "en"
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# A Micro-History of China's Consumption Changes: Dongpeng Lists, Red Bull Battles, Yuanqi Rises

> As consumer preferences shift toward healthier beverages, functional drinks are losing favor. Dongpeng Beverage recently went public as the 'first functional drink stock,' but its market is being squeezed by new competitors like sugar-free and low-sugar drinks, while capital flows to new brands.

**Consumer Turn: Functional Drinks Fall Out of Favor**
Last week, Dongpeng Beverage successfully listed, becoming the 'first functional drink stock.' Contrary to the continuous surge in Dongpeng's stock price, the functional drink market is being squeezed by competitors from new tracks. As mass consumers begin to pursue healthier beverages, sugar-free and low-sugar drinks are rising, and capital is turning its attention to various new brands. Functional drinks are no longer the darling of the era.
Recently, the stock price of Dongpeng Beverage, which just completed its IPO, has been soaring.
Within less than a week of listing, Dongpeng Beverage first surged 44% on its debut day, then hit the daily limit the next day, and opened with a one-word limit on Monday. As of press time, Dongpeng Beverage's stock price rose from the issue price of 46.27 yuan to 107.31 yuan, with a market value of 42.925 billion yuan.
Functional drinks emerged in the 1980s and 1990s. Red Bull entered the Chinese market in the early 1990s, Dongpeng Tequin was launched in 1997, Lehu appeared in 1998, and Wahaha's Qili came later, in 2012.
Due to their refreshing effects and catchy advertisements, functional drinks led by Red Bull and Dongpeng Beverage have long been representatives of national beverages.
In recent years, people's consumption concepts have shifted from pursuing sensory stimulation to pursuing health, and zero-calorie, low-sugar, and sugar-free products have become popular in the consumer field. **In addition to the impact on the carbonated beverage market, functional drinks with additives like taurine are also being squeezed by competitors because they are not as 'healthy.'**
In the past, a catchy slogan like 'Tired and sleepy? Drink Dongpeng Beverage' could spread across the streets, and sponsoring major domestic events could boost brand awareness. Now, many brands use '0 sugar, 0 calories' as a selling point and use product reviews, check-ins, and other tactics to compete for consumer mindshare.
Now, 'everlasting second place' Dongpeng Beverage has taken the lead in IPO, but bottled beverages are under siege from coffee, milk tea, and new-style tea drinks. **Before Dongpeng Beverage's IPO, its latest financing and Red Bull's latest financing were in 2017 and 2015, respectively. After that, a large number of financing events occurred for new consumer brands like Luckin Coffee, Genki Forest, and Heytea.**
As consumption habits change, the market share of functional drinks can only be continuously squeezed.
****-01-******Dominance**
The first functional drink originated in 1983, before the Internet era, when people's knowledge of new things came from newspapers and televisions.
That year, the Sanshui Winery in Foshan and the Guangdong Sports Research Institute developed a beverage, naming it Jianlibao for its purported 'health' benefits. At the time, its founder Li Jingwei defined Jianlibao as a drink that 'can help athletes recover quickly and is also suitable for ordinary people.'
The following year, the Chinese women's volleyball team achieved a 'three-peat' at the Los Angeles Olympics, and Jianlibao, as the preferred beverage of the Chinese Olympic delegation, gained national attention and became known as the 'Oriental Magic Water' among foreigners. Subsequently, Jianlibao sponsored sports events such as the National Games and the Sixth National Games, becoming a household name and once the 'No. 1 national beverage brand.'
**By the 1990s, advertising gradually became a direct driver of sales.**
Jianlibao's advertisements even appeared on CCTV, with the slogan 'If you want to be healthy, drink Jianlibao' spreading far and wide. When Zong Qinghou founded Wahaha, he followed Jianlibao's path and used 'Drink Wahaha, and your appetite will be good' as his slogan.
Jianlibao's marketing approach influenced not only Wahaha but also Red Bull, which initially used 'Cars need gas, I need Red Bull' and later switched to familiar slogans like 'Thirsty? Drink Red Bull. Sleepy or tired? Drink Red Bull' and 'Your energy is beyond your imagination,' becoming a nationwide favorite.
In addition to advertising during the Spring Festival Gala, Red Bull also heavily sponsored various sports events.
In 1996, Red Bull held the China-Thailand football match; on November 25, 2003, Red Bull became the NBA's partner in China. Subsequently, through wingsuit flying, the Qiantang River International Surfing Competition, the National Badminton Tournament, and hundreds of thousands of offline channel activities and promotions each year, Red Bull's image became increasingly associated with 'sports and energy.'
**In the era before the Internet was widespread, marketing methods such as TV advertising and sports event sponsorship indeed significantly boosted sales of functional drinks and deeply ingrained their image in people's minds.** 'At its best, Red Bull sold 6 billion cans a year and had 50 factories,' said Yan Bin, chairman of China Red Bull, proudly.
Red Bull's success inspired many, and Dongpeng Tequin was one of the imitators. However, with the rise of the Internet and changing consumer habits, this playbook gradually stopped working for functional drinks.
****-02-******Falling Behind**
In the Internet era, people no longer rely solely on newspapers and televisions to accept new things, which greatly shortened the cycle of brand building.
At that time, the functional drink market gradually stabilized. After Red Bull became embroiled in trademark disputes, Dongpeng Tequin, Lehu (backed by Dali Group), and others like Mizone, Wahaha, and Nongfu Spring all launched related functional drinks, but none could shake Red Bull's top market share.
**Compared to the three-decade-long tug-of-war in functional drinks, new consumer brands better cater to the preferences of today's youth and can quickly attract market attention in four to six years or even less.**
For example, the popular new consumer beverage brands in recent years, such as Genki Forest, Saturnbird Coffee, and Heytea, have all used Internet marketing to quickly build brand awareness.
In addition to sponsoring popular variety shows, Genki Forest also placed advertisements in subway stations across cities. On Xiaohongshu, there are over 50,000 related posts about Genki Forest, all consisting of KOL reviews and product recommendations. In terms of promotion, Genki Forest uses low-sugar and healthy concepts to meet consumer needs.
**At this time, functional drink brands were still using old marketing methods.** Dongpeng Beverage launched catchy ads like 'Youth means staying awake to fight' and 'Tired or sleepy? Drink Dongpeng Tequin.' After Dongpeng Tequin invested 150 million yuan in marketing during the 2018 FIFA World Cup in Russia, Lehu quickly spent to become the official functional drink of the 2019 FIBA Basketball World Cup.
To promote its youth strategy, Dongpeng Tequin changed its slogan to 'Youth means staying awake to fight' in 2015. Additionally, Dongpeng Tequin sponsored TV dramas like 'The Lost Tomb Reboot' and 'Home,' launched a co-creation contest with Douyin, and sponsored sports events such as the Chinese Super League, street basketball, and the World Drone Racing Championship.
China Red Bull launched a new functional drink brand called 'War Horse.' To please young people, War Horse sponsored the League of Legends Pro League, embedded in the online variety show 'The Rap of China' and popular dramas, and held events like the 'War Horse Basketball - Marbury Training Camp.'
War Horse's investments have had mediocre results. In terms of channels, War Horse is not as dominant as Red Bull was in the functional drink market, and its marketing capability is even inferior to Genki Forest, which rose to fame in recent years through the 'low-sugar, sugar-free' concept.
Facing the Internet marketing war of new brands, established functional drink brands appear somewhat strained.
****-03-******Changing Positions**
With the shift in consumption concepts in recent years, the demand in the beverage market has changed. People's choice of beverages has shifted from simply 'tasty' to sugar-free, low-sugar, and healthier options.
As market demand changes, the focus of the capital market also shifts, with more funds flowing to new brands. Naixue's Tea is frequently rumored to be going public, while Heytea has secured three rounds of financing with cumulative amounts exceeding 100 million yuan. Adopt a Cow has received three rounds of financing, and Genki Forest has received as many as six rounds.
**All signs indicate that new consumer brands in various fields are carving up the vast beverage market, while the more segmented functional drink market is being squeezed.**
Essentially, the continuous squeezing of functional drinks in the vast beverage market stems from their own lack of 'healthiness.'
For a long time, functional drinks led by Red Bull, Dongpeng Tequin, and Lehu have contained taurine, which only has a refreshing effect and is not in line with the health trend pursued by today's youth.
Looking at the players on the capital track now, such as Adopt a Cow and Genki Forest, they have respectively attached the labels of 'healthy' and '0 sugar' to cater to consumers' health concepts.
**Functional drinks not only face pressure from competitors in other tracks but also have to accept these players reaching into their own bowl.**
Genki Forest launched a new functional drink called 'Alien's Electrolyte Water,' printing '0 sugar, 0 calories' on the bottle and positioning the product's selling point as '0 taurine.' In contrast, functional drinks that focus on refreshing effects and contain additives like taurine appear even less 'healthy.'
Seeing the rapid growth of sparkling water, soda water, and other carbonated beverages in the past two years, Dongpeng Tequin made some changes last year by launching 'Dongpeng Jiaqi,' an energy nutrient beverage that adds carbonated bubbles to the functional drink base.
But adding the character '気' does not equate the drink with 'health,' and this new product ultimately received a lukewarm response.
In the first thirty years, functional drinks relied on the advantages of traditional advertising marketing, through sponsorship of major domestic events like the Spring Festival Gala and the Olympics, as well as catchy slogans, to occupy a leading position in the vast beverage market.
Now that the market's consumption vane has changed, consumers prefer healthier beverages, capital focuses on drinks with 'healthy' labels or new-style tea drinks that appeal to young people, and functional drinks are no longer the darling of this era.
Source: Zinc Finance (ID: xincaijing)
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