How outstanding is Yuanqi Forest? Here are three pieces of information:

  • During Tmall's 618 shopping festival in 2019, Yuanqi Forest sold a total of 2.26 million bottles, securing the top spot in the beverage category.
  • During Double 11 in 2019, Yuanqi Forest ranked second in nationwide online sales, beating Coca-Cola and Pepsi.
  • Founded only four years ago, Yuanqi Forest is reportedly valued at 4 billion yuan.

Setting aside the data, in the eyes of ordinary people, it is also a beverage dark horse that dominates convenience store chains like 7-Eleven and floods Xiaohongshu with posts. However, this is not a "good" topic for self-media, as it has been covered multiple times before, but Yuanqi Forest's success seems to have something beyond the traditional marketing perspective.

What is the traditional marketing perspective? This perspective is usually better at summarizing than attributing. I can give you an example: Because Yuanqi Forest has the most distinctive label ( ), matches ( ) lifestyle, conforms to ( ) aesthetics, and is positioned towards the trendy/female/white-collar among ( ), with innovative upgrades in product taste/ingredients/packaging, therefore they succeeded. In the above parentheses, you can fill in the brand's slogan and the name of the demographic, such as "young people" or "post-00s."

Of course, this is not wrong, but why did they make these decisions? What was the basis for these decisions? Was there anything special in the execution process? What is the reason and confidence behind Yuanqi Forest's claim to be an "internet company"?

This article will start with the background of its founder and attempt to clarify:

  • How did Yuanqi Forest identify market trends and ride the fast train of industry development?
  • How did Yuanqi Forest plan product design to precisely appeal to target users?
  • What MarTech tools can assist in decision-making and product digitalization?

-01- The Mysterious Founder Few people care to report on this, but according to public information, Yuanqi Forest, established in April 2016, had a registered capital of only 1 million yuan, with the main investor and controlling shareholder being Tang Binsen.

Who is Tang Binsen? Outsiders may not know, but this person is a legend in the internet world.

When the internet was rising, Tang Binsen, who started his business in college, led his team to develop internet psychological testing products, once ranking first in the field, but with mediocre revenue. In a speech, he mentioned this experience and cited Bayesian probability theory to explain: "No matter how awesome you are, if the industry you're in is bad, and your base probability is poor, you're just a fool. Remember that firmly." (The original words were direct, so no need to censor.) "We are in a big trend, and we can only go along with it; no one can change this trend. You should think about one thing: is the situation stronger than the person, or is the person stronger than the situation? What is the situation? Is this industry good or not? If no one has made money in this industry before, or the best company only makes a little money, and you say I can emerge and transform this industry, making it earn ten times more? Do you think that's possible? This is a real mistake, thinking that our appearance can transform this industry. It's impossible."

So he switched to an industry he favored: video games.

In 2008, Tang Binsen founded智明星通 (Elex Technology), and soon developed a web game that once dominated the internet's rise and fall, the earliest全民游戏 (game for all), which both the elderly and children were addicted to, and even overseas countries fell for it—

Happy Farm!

Surprised? The Yuanqi Forest you drink today actually comes from your vegetable-stealing forest years ago. The so-called燃茶 (burning tea) and corn silk tea (健美轻) might even be "grown" by you yourself.

Since then, Tang Binsen has been on a winning streak:

  • In 2012, Elex Technology recorded revenue of 600 million yuan and net profit of 76 million yuan with the hit game "Empire War," and received investment from Tencent and Innovation Works.
  • In 2014, Elex Technology launched the mobile game "Clash of Kings," which ranked first in overseas revenue for Chinese mobile games.
  • In 2015, "Clash of Kings" recorded revenue of 2.4 billion yuan.
  • In 2016, Elex Technology ranked 16th in App Annie's 2015 Top 50 Global Publisher Awards, third among Chinese companies, behind only Tencent and NetEase.

Here's the key point: In a comment from a former employee, it was revealed that Tang Binsen is actually a person who doesn't play games.

So let's guess: does he like drinking beverages?

In fact, Tang Binsen had no prior background in packaged beverages in terms of capital, talent, or supply chain, and even now relies on production by Changshu Toyo and Uni-President's Tongshi factory (with rumors of building his own factory). But a sad fact for the beverage industry is that in 2016, Tang Binsen, who crossed over from the internet, still managed to hit this industry hard.

We usually think that "blockbusters" are accidental, but in his case, the accidental became inevitable.

What is the wealth code behind Yuanqi Forest?

This is actually a very typical example that embodies the old-new battle of marketing thinking in the digital age—this is not only the glory of Yuanqi Forest but also reveals that a new generation of marketers will eventually take over the entire market with overwhelming force.

The following will be divided into three parts: "Riding the Trend," "Precise Products," and "Operational Methods," to deconstruct Yuanqi Forest's growth trilogy. People will eventually understand that so-called industry barriers cannot stop these supernovas—

-02- Yuanqi Forest's "Riding the Trend" Understanding the founder's "industry base probability" philosophy explains why he chose the FMCG beverage industry.

Looking back from the current situation, according to reports, Yuanqi Forest's offline sales cover 53 convenience store chain systems, and online, it has opened Tmall flagship stores, JD flagship stores, and Xiaohongshu official stores.

Apart from Tmall and JD being basic e-commerce operations (and relatively late), there are two noteworthy points:

1. The Rapid Rise of Convenience Stores On May 9, the China Chain Store & Franchise Association released the "2018 China Chain Top 100" list. Among the various formats in the chain top 100, convenience stores grew the fastest: the sales scale of the top 100 convenience store companies increased by 21.1% year-on-year, and the number of stores increased by 18.0%, with 11,944 new stores, accounting for 62.5% of the total new stores in the top 100.

In contrast, companies mainly operating large supermarkets saw average sales growth of 2.5% and average store growth of 3.6%, both significantly lower than the average growth of the top 100. What is the difference between convenience stores and traditional mom-and-pop shops? Take the 7-Eleven downstairs as an example: they have dedicated milk cabinets, hot food cabinets, coffee machines, microwaves, deli counters, and a complete cold chain logistics and warehousing system.

Therefore, in addition to providing a better dining environment, they can offer products that mom-and-pop shops don't have, such as bread with shorter shelf life, freshly ground coffee, cooked food like fish balls and cart noodles, and dairy products that require cold chain transportation (note this, as it will be mentioned later).

**In short, convenience stores are essentially exquisite life stations, a gentle haven for the overworked office workers. From a win-win cooperation perspective, how can one ride the fast train of convenience store rise? What unmet needs do exquisite convenience stores have?

First, look at the customer base. According to 7-Eleven statistics, consumers aged 20 to 40 account for 88% of convenience store shoppers. In terms of customer composition, office workers are the main consumer group. Therefore, convenience stores need premium food and beverage products that are distinct from other channels, precisely targeted at young white-collar workers, with higher average transaction values and gross margins.

This leads to three cooperation directions:

  • Beverages and foods that require on-site preparation or light processing, such as freshly ground coffee and cart noodles. This business relies on the catering supply chain to provide quality ingredients at good prices. This track currently sees rapid rise of players like Meituan Kuailv, Meicai.com, and Haidilao's Shuhai, but from the composition of competitors, it's a track that requires deep accumulation in the catering industry (like Meituan and Haidilao);
  • Premium packaged snacks. In addition to traditional potato chip brands like Lay's and Oishi, there are new entrants like Langligelang and Dangouliang, which from their names are particularly young, open-minded, and relatively expensive brands. Notably, Yuanqi Forest has been continuously laying out cheese products that are between beverages and snacks and rely on cold chain transportation.
  • Premium packaged beverages. This is Yuanqi Forest's entry point. For example, 5-6 yuan per bottle of soda and tea drinks (Yuanqi Forest, Rancha), 7-8 yuan functional drinks (Alien), and 10 yuan per bottle of milk tea (Yuanqi Forest·Ru Cha).

Compared with brands like Coca-Cola, Red Bull, and Uni-President, you'll find that Yuanqi Forest is generally 50% or even 100% more expensive than similar products, and uses more refined ingredients, such as using milk powder instead of cheaper non-dairy creamer (commonly known as creamer) in its milk tea.

2. Xiaohongshu, Which Holds Young Women's Phones There are many reports about Xiaohongshu, but a fact often overlooked is that Xiaohongshu is a platform highly dependent on mobile devices.

Unlike social platforms like Weibo, Douban, and Bilibili, Xiaohongshu actually has no PC service.

When you open Xiaohongshu's official website on a computer, you'll find the cover page guides you to download the APP. Even the "Community Selection" section only displays 20 items, and when you scroll to the bottom and see a "View More" button, don't click it—clicking it will still prompt you to download the APP.

This strategy is not without basis. This generation of young people prefers mobile phones over TV and computers; statistics show they spend about 5 hours a day on their phones.

Secondly, Xiaohongshu, which is mainly female-oriented, seems to be a platform that has a grudge against sugar.

Searching for keywords like "sugar control," "sugar quitting," and "sugar cutting" together yields over 100,000 notes. Additionally, the word "calories" has over 360,000 notes, and "calorie" has over 100,000 notes.

Interestingly, if you search for sour, sweet, bitter, and spicy separately:

  • "Bitter" has over 390,000 notes,
  • "Sour" has over 890,000 notes,
  • "Spicy" has over 1.18 million notes,
  • While "Sweet" has over 2.62 million notes, and even "Sugar" has over 1.5 million notes.

Young women are a huge contradictory group: they fear sugar like a tiger, yet they have an extreme preference for sweetness. It's no wonder that Yuanqi Forest, which adheres to "0 sugar, 0 fat, 0 calories," is so popular.

-03- Yuanqi Forest's "Precise Products" As mentioned above, Yuanqi Forest aims to reach young, health-conscious white-collar workers (especially women) through precise channels like mobile phones and convenience stores.

Inspired by Tang Binsen's internet gaming background, we realized that the best way to investigate this group's aesthetic preferences is to look at mobile game design trends.

After all, when asked verbally, they might say they prefer high-end elegance, but what games they secretly like cannot be faked.

So what mobile games have women been keen on in recent years?

"Travel Frog" for everyone's son, the dress-up game "Miracle Nikki" for everyone's daughter, "Onmyoji" which once rivaled "Honor of Kings," and the once-popular "Mr. Love: Queen's Choice"...

Don't say anything, look at the pictures, and you'll find a secret:

They're all in Japanese style!

Whether or not this is the truth behind Yuanqi Forest's design decisions, its founder, as a science guy, likely completely abandoned his own subjective aesthetics and based brand design solely on research results.

It's ruthless.

Secondly, Yuanqi Forest's overall design planning aligns well with insights from some data reports.

Those who frequently read data reports will understand that for the same thing, different reports based on different data sources and research methods will have discrepancies in specific values, but the overall data trends are usually consistent.

Take the "Ipsos: 2019 China Food and Beverage Packaging Trends Insight Report" as an example. The report shows that 83% of consumers are very willing or relatively willing to buy products with novel and unique packaging. What kind of packaging is more likely to attract attention? The top factor for eye-catching packaging in consumers' minds is:

Innovative product names on packaging (63%).

This might be one reason why Yuanqi Forest uses the uncommon character "気" instead of "气."

Additionally, the report shows that consumers pay special attention to nutrition and health-related information on packaging, with those aged 24+ and consumers in first-tier cities having stronger health and nutrition awareness.

89% of people pay attention to production date/shelf life, 76% pay attention to health/nutrition-related claims, such as sugar-free, no additives, etc., and 73% pay attention to the nutrition ingredient list.

Now, looking back at Yuanqi Forest's products, where slogans like "0 sugar, 0 calories, low fat, 0 trans fatty acids" are always prominently displayed, do you understand something?

Of course, we can also summarize the pros and cons of its "Japanese-style" and "marketing-oriented" design based on marketing intuition.

First, the advantages. For new entrants, highly focusing on a relatively niche aesthetic style actually provides a certain asymmetric competitive advantage: big brands like Coca-Cola, Master Kong, and Wanglaoji cannot afford to go all-in on such a niche style to counter competitors, as it doesn't align with their broad audience's aesthetics and may harm their existing brand strategy.

But new brands targeting segmented audiences don't have these concerns.

Secondly, small boats turn easily. As Elex Technology CEO Tang Binsen once said in a sharing, "In a world without rules, the most effective method is to quickly trial and error." Yuanqi Forest's soda not only has flavors like sour plum soup and cucumber, but also has layouts in segmented fields like cold-chain yogurt and healthy functional drinks.

But of course, there are disadvantages. When marketing and data orientation become too "rational," it often lacks true "sentiment," leading to accusations of plagiarism and pseudo-Japanese style. Recently, several negative articles about Yuanqi Forest have quietly appeared online, which are potential risks that need attention and avoidance.

However, when it comes to "pseudo-X style," brands like Jordan Sports, Peak Sports, Metersbonwe, Baleno, Giordano, Mark Fairwhale, Dicos, Oude Flooring, Marco Polo Tiles, Shien Milk Powder, Biostime (France), Sophia Wardrobe, and Da Vinci Home...

A host of domestic brands are eager to speak but hold back.

Jordan himself has come knocking; Van Gogh, Marco Polo, and Da Vinci should be grateful they're not in the mortal world.

Indeed, our domestic brands need more cultural confidence, but business is about making money. Commercial design largely depends on consumers' aesthetic preferences, and at a higher level, it essentially depends on the development level of our cultural industry.

Don't just point fingers at Yuanqi Forest; also appreciate the rarity of brands like Li-Ning and Florasis that have sparked the national trend.

-04- New Marketers' "Operational Methods" According to a report by CompleteSpectrum, half of senior leaders (50%) say digital transformation is about adjusting the digital image to better fulfill brand promise and brand experience. Nearly a quarter (24%) say it involves coordinating cohesive online strategies to better generate and utilize leads, while 14% call it automating digital marketing through customer-facing technology. Even 2% say digitalization is about improving the website's aesthetic appeal.

Only 9% say digital transformation means more effectively measuring the ROI of digital channels.

But here's the interesting part: although definitions vary, 94% of senior leaders still say digital transformation is a top priority on their 2019 agenda.

This makes us realize that in deconstructing the Yuanqi Forest case, we need to show more case details, even down to the work content of digital marketers.

This time, we'll use data research and product development as examples.

"Please note that the following does not mean Yuanqi Forest uses these technical tools internally, but rather the cutting-edge applications that Wan Gong Digital has learned about in the fields they excel in."

As we all know, the authenticity of traditional user questionnaire surveys has a certain ceiling. Besides limited scale, one issue is that survey respondents are often not random enough, and another is that there is often a discrepancy between users' actual behavior and their answers.

For example, even a seemingly random approach like "stopping people on the street to ask" is actually influenced by location (e.g., residential or commercial area?) and time period (e.g., rush hour), so the respondents are not completely "random."

Another example: when asking users face-to-face "which facial cleanser brands do you like," male users' answers, whether "L'Oreal Men Expert" or "Mentholatum Men," are often not reliable, because they usually use whatever the women in their household buy and use.

When you see "them" carrying boxes of Rancha, Ru Cha, and Yuanqi Forest sparkling water home, it's actually "them" (women) placing orders after watching Xiaohongshu and Li Jiaqi.

But marketing technology (MarTech) can break through the concerns of traditional methods. For example, through programmatic advertising channels, you can allocate weights for different times, channels, and audiences, and use multiple methods to identify real answers, automatically deduplicate, and achieve truly controllable random surveys.

Secondly, "smart questionnaires" can also break through human limitations while intelligently and real-time adjusting the next question based on different users' answers, using artificial intelligence (AI) to achieve large-scale "human" intelligence.

And ordinary people can hardly imagine how wild MarTech is in helping product development.

"Small steps, fast iteration" is a well-known effective strategy, but product development, launch, and seeing results take time. How can you make it "fast"? When you have 10 packaging design proposals, each with 10 different contentious details (e.g., should the main image feature a celebrity photo or a real fruit shot), do you really need to produce and sell all 100 possibilities?

If you do that, you'd go bankrupt before you even start taking small steps.

A feasible MarTech approach is to first create product ads for these ten design proposals, put them on e-commerce platforms, test users' click-through rates, browse completion rates, and collect user reviews. Then, for different audiences and device models, automatically change different colors, themes, layouts, and other detail elements, and obtain comparisons and feedback.

Not just 100 possibilities, but the pros and cons of 1,000 different combinations can be precisely measured and presented as a concise, visualized data report on the decision-maker's desk.

With this, decision-makers can quickly and cost-effectively learn which platforms, which people, and which design proposals work best, and maximize ROI through intelligent delivery.

But then again, don't traditional marketers also wish for truly random surveys and understand the value of small-scale, multi-combination, fast testing? No, Wan Gong Digital always believes that the logic of marketing has never changed, and marketing technology is just helping people better realize that "ideal original intention."

We drive cars not to replace our legs, but to go faster.

-05- Conclusion Someone once asked why Elex Technology always made particularly good money among game developers. Tang Binsen said: When others were still in China, he went to Russia; when others went to Russia, he went to Brazil; when others followed to Brazil, he had already been to sixteen countries.

When Tang Binsen, with an internet background, founded Yuanqi Forest, the secret of "speed is the key" remained unchanged: ride the fast lane of convenience store rise, attack niche markets that big brands cannot reach, identify emerging social media platforms like Xiaohongshu, and plan products based on the data profiles of this segmented user group, cleanly and decisively appealing to them.

Behind it all, there is likely a "special forces" team skilled in using advanced marketing technology and tactics.

This high-level speed, or "agility," is the true wealth code. It is said that Tang Binsen often mentions the "geographic arbitrage" theory of Alexander Tamas, former partner of DST, to others: the world has never been and will never be in a so-called "flat state," and successful businessmen compete to be the first to exploit information gaps for profit.

The enemy is arriving at the battlefield in 60 seconds. Is your industry ready?

Source: Private Domain Traffic Observation (ID: gh_8a0eb58fba1a)