Source: Finance World Weekly (ID: cjtxzk) Author: Niu Geng, Editor: Hua Ji **After 30 years, Robust has been revived, but the market may no longer have room for it. According to Beijing Business Today, Robust bottled water will be sold in Chengdu and Chongqing in 360ml and 550ml sizes. The product itself still has the familiar green packaging, and only the name evokes memories of its legendary past. 30 years ago, He Boquan started from a health products company, made Robust the largest yogurt drink brand in China, and spent a record 10 million yuan to buy the mysterious formula of legendary coach Ma Junren. When the scandal broke and the formula was revealed to be a piece of waste paper, He Boquan had already sold Robust to French giant Danone and was enjoying the California sunshine with hundreds of millions in cash. Behind He Boquan, Zong Qinghou of Wahaha was still fighting with Danone. China's eight largest beverage factories, under a mistaken assessment of the situation by leaders, were sold cheaply to foreign brands and then shelved, ceding the Chinese beverage market without a fight, becoming a shameful memory for a generation. This continues to this day, as national beverage brands are still being revived to make up for past mistakes. The story of Robust and He Boquan has become the best annotation of Chinese brands in that era of confusion and inferiority, and it still evokes sighs today. 01 From National Pride to Traitor: The Wild Past of Robust The birth of Robust is the wildest story of that era. He Boquan worked as a private teacher, leather shoe vendor, and town youth league secretary. At 28, he was transferred to be deputy director of the town pharmaceutical factory, where he first came into contact with Robust. In 1989, with 950,000 yuan invested by the town government, he founded Zhongshan Robust Health Products Co., Ltd., with a signature product being a yogurt drink. Although called a yogurt drink, the product claimed to be a "new generation of high-grade natural health drink for the human body" and was once sold out. In 1992, Robust's output value was 80 million yuan, and in 1993 it became the largest yogurt drink brand in the country, holding the top spot for six consecutive years. One night, He Boquan read an article in the newspaper about Ma Junren in Liaoning, who liked to collect Chinese herbal medicines in ethnic minority mountain areas and concocted a magical prescription. "At 6:30 in the morning, the girls arrived at Ma Junren's house on time, each drinking a bowl of hot soup, then turned and ran to the playground, running lap after lap tirelessly..." At that time, Ma Junren was a national sports hero. The girls he trained were invincible, having just won three gold medals at the World Athletics Championships in Stuttgart, Germany, ranking second in the world and shocking the nation. He Boquan was overjoyed. He flew to Liaoning and offered 10 million yuan to buy the coach's secret formula. After some hesitation, Ma Junren held up an enlarged check for 10 million yuan and handed the envelope containing the secret formula to He Boquan under the flash of cameras. Many years later, people learned that the formula was a piece of waste paper: Ma Junren's success was due to giving the girls large doses of stimulants, which is a later story. With the fame of national hero Coach Ma, He Boquan named the new product "Life Energy" and auctioned distribution rights nationwide, quickly recovering 10 million yuan and valuing the product at 1 billion yuan. Robust also expanded its products to cola, drinking water, and even tea drinks, engaging in a nationwide war with Zong Qinghou's Wahaha. Robust gradually lost to Wahaha. In 1998, He Boquan paid 12 million yuan to McKinsey for a diagnostic report, which was more for publicity than practical use. In 1999, Robust's trademark was about to expire: originally a state-owned brand, the trademark was leased from a Guangzhou state-owned enterprise, and it had never been able to become the owner. In March 2000, a beleaguered He Boquan decided to exit and formed a joint venture with French Danone. Danone held 92% of the shares, reportedly paying 2.88 billion yuan, while He Boquan and four other founders held only 3%. Many years later, it was discovered that the company was not even a Sino-foreign joint venture but was approved as a wholly foreign-owned enterprise: He Boquan had already made up his mind to leave. "Old He simply sold Robust to Danone and withdrew from Robust," an industry insider analyzed. He Boquan was also labeled a "traitor": when Wahaha and Bright Dairy were fighting with Danone to protect national brands, He Boquan "waved his sleeve" and left without any attachment. In 2001, Danone-controlled Robust's sales were nearly 1 billion yuan, while its biggest rival Wahaha's sales had exceeded 6 billion yuan. Danone blamed He Boquan and made them pack up and leave. On November 30, at an emergency meeting of all employees, He Boquan held his speech and said: "To respect the decision of the major shareholder, the five managers including myself have made a collective decision to resign." Before he finished, the stage was already in tears, and they sang Zhou Huajian's "Friends" before hastily leaving. Thus, this well-known national brand of the 1990s came to an end in He Boquan's hands. While Zong Qinghou traveled through rural areas, laying out channels nationwide, He Boquan was enjoying the California sunshine with hundreds of millions in cash. Afterwards, he founded Today Capital and invested in companies such as 7 Days Inn, Noah Holdings, and iKang Healthcare. To this day, on the Hurun Rich List, He Boquan's wealth is 5.5 billion yuan, ranking 728th, while his old rival Zong Qinghou's family wealth is 90 billion yuan, ranking 16th in China. 02 National Brands Reborn, but No Room in the Market Not only Robust, but the millennium also became a watershed for many national brands: state-owned enterprise restructuring, introduction of foreign capital, and the covetousness of giants. Compliant enterprises were mostly controlled by foreign capital, their brands shelved, and they faded from the market. Those that resisted, like Wahaha and Bright, broke with foreign capital to preserve their brands and still have a place in the market today. In recent years, shelved brands have been gradually released, constantly evoking people's memories. Coca-Cola entered China in 1927. In 1984, a photo of a Chinese citizen holding a Coca-Cola appeared on the cover of Time magazine as a symbol of China's great changes. Fighting Coca-Cola became a concern for national brands. In 1994, after restructuring, Arctic Ocean introduced Pepsi-Cola and established four joint ventures, three of which quickly went bankrupt. One held the "Arctic Ocean Soda" brand but shelved it, and the company completely became a channel for Pepsi's imported products. This ultimately proved to be a "detour" due to lack of experience. Arctic Ocean leaders later revealed, "At that time, Arctic Ocean was doing very well; there was no need to partner with others." Another leader revealed, "The joint venture was required by higher-level leaders. In fact, Arctic Ocean had been holding on for several years, but finally couldn't hold on anymore." After being frozen for more than a decade, in 2007, Yiqing Food Group negotiated with PepsiCo to take back the Arctic Ocean brand, with the condition that it would not produce carbonated drinks under that name for four years. In 2011, Arctic Ocean was re-launched around Beijing. Although the price was high, it successfully entered restaurants with the taste of memory. Besides Beijing's Arctic Ocean, Guangzhou's Asia Soda was also delayed by Pepsi. This soda factory was founded by Li Zhiyang, a former employee of Watson's Soda Factory, and had orange juice, sarsaparilla, and white lemon flavors. It was considered the world's best-tasting sarsaparilla soda (a plant-based carbonated drink). "You may have my good breath, but not my long-lasting; you may have my long-lasting, but not my good taste" was a memory of Guangzhou in that era. In 1993, Asia Soda also formed a joint venture with Pepsi and then disappeared. In 2002, after difficult negotiations, the Chinese factory took back the brand and established Guangzhou Asia Beverage Co., Ltd., which was incorporated into Guangzhou Xiangxue Pharmaceutical Co., Ltd. in 2009. In January 2011, after nearly 20 years, Asia Soda was revived, with the slogan "Finally found that feeling" on the bottle. Tianfu Cola, Bawangsi Soda, Laoshan Cola, Shanhaiguan Soda, and Wuhan Erguang Soda all faced the same fate. This is a unique mark of that era of inferiority. Take Tianfu Cola as an example: it once had 108 bottling plants in China and a market share of up to 75%. But when facing the impact of Coca-Cola and Pepsi, the relevant authorities assumed that domestic brands had no chance of winning and designated the eight largest domestic beverage factories to cooperate with Coca-Cola and Pepsi respectively. Foreign capital almost slaughtered all Chinese beverage companies without a fight. In contrast, the disputes between Danone and Bright, and between Danone and Robust and Wahaha, seem to have more business ethics. After the millennium, Chinese beverages gradually regained confidence and took back brands to compete with foreign giants. But local companies seem to swing between inferiority and arrogance. In 2008, Coca-Cola, which had failed to crack the Chinese juice market, tried to acquire Huiyuan Juice for $2.4 billion. Huiyuan's boss Zhu Xinli said, "It's never wrong to sell a company like a pig for 100 years," echoing He Boquan's attitude back then. The deal was ultimately blocked by the Ministry of Commerce. Lang Xianping said that Coca-Cola's mistake was not being low-key enough and not fast enough. "The large-scale acquisition by foreign capital is not happening; it is ending. Many industries have already been carved up by foreign capital." But ironically, the global financial crisis subsequently broke out, Huiyuan's valuation shrank significantly, and cash was scarce. If it had been sold to Coca-Cola at that time, it would have been a sure profit. Subsequently, family succession failed: Zhu Xinli's son Zhu Shenghua was not up to the task, and his daughter Zhu Shengqin was willing to take over but had been spoiled by her father since childhood and didn't understand the hardships of entrepreneurship or business人情. After 2013, Huiyuan fell into a funding shortage, with rising debt ratios. In March 2019, it nearly failed to pay debt interest and faced delisting pressure. Wahaha, which successfully fought with foreign capital back then, also faces the dilemma of aging channels and no successor. Zong Qinghou looked down on e-commerce and once called Ma Yun's "Five New" "nonsense." Now Wahaha has to use WeChat business and Pinduoduo channels to sell health drinks, but the era when he and He Boquan "conquered the world with health products" has long passed. Now, even if Robust mineral water returns to the market, such a low-margin product faces the problem of convenience stores refusing to stock it. Times have changed, and the distribution model of Chinese beverages has been completely transformed. Whether young people, who are fond of drinks with "cute" and "small" names, are willing to pick up the plain Robust bottled water again is also a challenge. -END-