On March 16, Guangzhou Baiyunshan Pharmaceutical Group Co., Ltd. (hereinafter referred to as "Baiyunshan") released its 2016 annual report. The report disclosed the performance of its three main business segments, including Wanglaoji herbal tea.

In 2016, Baiyunshan's total operating revenue was RMB 20.036 billion, a year-on-year increase of 4.76%; total profit was RMB 1.945 billion, a year-on-year increase of 19.47%; net profit attributable to shareholders of the listed company was RMB 1.508 billion, a year-on-year increase of 15.97%.

Wanglaoji Herbal Tea Revenue Approximately 7.7 Billion Yuan, Flat Compared to Last Year

Baiyunshan's business mainly involves three segments: "Great Southern Medicine, Great Health, and Great Commerce." In 2016, the revenues of these three segments were RMB 6.906 billion, RMB 7.769 billion, and RMB 5.748 billion respectively.

Among them, the Great Health business increased by 0.01% year-on-year, basically flat compared to the previous year, with a profit margin of 40.73%. It is worth noting that the main products of the Great Health business include Wanglaoji herbal tea, bottled water, throat lozenges, turtle jelly, and solid beverages. Baiyunshan also stated in the annual report that the main source of revenue for the Great Health business is Wanglaoji herbal tea. Thus, in 2016, Wanglaoji herbal tea's revenue was approximately 7.7 billion yuan.

However, a Wanglaoji corporate insider stated that Wanglaoji herbal tea sales revenue has three statistical calibers: first, calculated according to the pharmaceutical caliber, corresponding to output value; second, according to the FMCG caliber, i.e., calculated at market retail prices; third, according to the ex-factory price caliber. The Wanglaoji herbal tea data disclosed in Baiyunshan's annual report is based on the ex-factory price caliber. If calculated according to the FMCG caliber, Wanglaoji herbal tea's revenue in 2016 should have exceeded 16 billion yuan.

Expanding Catering Channels and Entering the Plant Protein Beverage Market

Baiyunshan stated that in 2016, it further consolidated and enhanced the brand influence and market position of Wanglaoji herbal tea, actively promoted the diversified development of Great Health product categories, and established a Great Health product system. The main work carried out included the following:

First, vigorously expand catering channels. In 2016, Wanglaoji, centering on the main line of "Marketing Catering Year" , vigorously expanded catering channels and promoted new development in the catering market through cooperation with large catering enterprises.

Second, seize consumption seasons and create a gift market to maximize the market for Wanglaoji herbal tea.

Third, enrich marketing content and forms. In 2016, Wanglaoji consolidated the brand and market position of Wanglaoji herbal tea through various forms, including initiating the establishment of the China Time-Honored Brand Alliance, developing campus football, establishing the Wanglaoji Scholarship with Tsinghua University, carrying out the "Let Love Go Home on Time" activity, cooperating with Zhejiang Satellite TV's popular show "Challenger Alliance," bundling the popular IP "Report Boss" Season 2, and launching cross-border marketing with Taobao and mobile games.

Finally, Wanglaoji also actively promoted the diversification of Great Health products. Taking the opportunity of the Summer Davos Forum, it launched new low-sugar and sugar-free Wanglaoji herbal tea products. It cooperated with Shanxi Dazhai Beverage to develop and expand the walnut milk beverage market , and cooperated with related enterprises and institutions to operate Great Health chain experience stores, aiming to achieve diversified development of the Great Health category.

Regarding the work plan for 2017, Baiyunshan mentioned in the annual report that Wanglaoji Great Health will continue to follow the brand strategy of "fashion, technology, and culture," promote the "four modernizations" of the Wanglaoji brand: popularization, massification, modernization, and internationalization, continue to strengthen channel construction such as catering, develop a large product portfolio for Great Health, and enhance the quality and efficiency of Great Health.

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