---
title: "Deep Dive | From 800 Million to 8.5 Billion: The Digital Code Behind Dongpeng Beverage's Surge and Industry Insights"
description: "Dongpeng Beverage's digital transformation, starting from a simple QR code promotion, evolved into a comprehensive F2B2b2C channel integration, driving sales from 800 million to 8.5 billion yuan. This article explores the key steps, challenges, and industry implications of Dongpeng's digital journey."
author: "任文青Andy"
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published: "2023-06-27"
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# Deep Dive | From 800 Million to 8.5 Billion: The Digital Code Behind Dongpeng Beverage's Surge and Industry Insights

> Dongpeng Beverage's digital transformation, starting from a simple QR code promotion, evolved into a comprehensive F2B2b2C channel integration, driving sales from 800 million to 8.5 billion yuan. This article explores the key steps, challenges, and industry implications of Dongpeng's digital journey.

**Introduction: "We need to find a safe and effective way to reach consumers with promotions."**
**Author** | Ren Wenqing Andy
**Review** | Wang Qiang
**Layout** | He Wen

**Preface**
In 2021, the ranking in China's energy drink industry changed. By tonnage, Dongpeng surpassed Red Bull for the first time to become the number one energy drink brand in China.
In 2022, Dongpeng Beverage achieved operating revenue of 8.505 billion yuan. According to Nielsen data, Dongpeng's sales share in China's energy drink market rose from 23.4% to 26.62%, ranking second. Its sales volume share rose from 31.7% to 36.7%, maintaining the top position.
When it comes to Dongpeng, people often think of the topic of its bottle caps being used as ashtrays by truck drivers, or the catchy slogan "Tired, sleepy? Drink Dongpeng Special Drink." It seems that Dongpeng's success is more about marketing. However, **there is a crucial factor behind Dongpeng's achievements today: digitalization.**
Currently, all FMCG companies care about digitalization, but only a few do it well. Dongpeng's digital practice has become an industry benchmark. However, media coverage of Dongpeng's digitalization mostly stays at technical operations like "one product, one code" and "one yuan joy," with few articles providing systematic interpretation and in-depth analysis.
The New Distribution Digital Research Institute conducted an in-depth study of Dongpeng's digitalization case and compiled the core content into this article.
**What was the starting point of Dongpeng's digitalization? How did they increase scan participation rates? Why did they expand from consumer C-end to store b-end? How did they achieve bC integration and ultimately connect the channel chain of manufacturer-distributor-store-consumer?**
By answering these questions, we will finally analyze: **What obstacles exist in the digitalization of marketing and channels for current FMCG companies? What inspiration and reference can Dongpeng's practical experience provide for the industry?**
If you are an industry practitioner interested in digitalization, reading patiently will surely inspire you.

#### **Dongpeng's Digitalization Was Explored Step by Step**
**Many FMCG companies now have digitalization planning departments and study Dongpeng as a case. Why did Dongpeng get ahead in digitalization?** As of 2023, Dongpeng has over 2,000 distributors, directly connects with 2.8 million+ terminals, and has 160 million (deduplicated) scanning consumers, basically achieving the F2B2b2C channel link. Dongpeng provides a good practical case that can serve as a reference for planning. But looking back at Dongpeng's digitalization journey, it was actually explored step by step. The starting point of Dongpeng's digitalization came from a sentence: **"We need to find a safe and effective way to reach consumers with promotions."** Before 2015, Dongpeng had been running "one more bottle" promotions. Many brands were doing this at the time, and they all faced the same problem: severe counterfeiting and heavy losses. Dongpeng was no exception. In this situation, many brands stopped. But Dongpeng's boss said we need to find a safe and effective way to reach consumers. At that time, WeChat red packets had just come out, and the Dongpeng team thought: can we use WeChat red packets to give benefits to consumers? In May 2015, Dongpeng launched a QR code marketing campaign based on WeChat red packets. This was the starting point of Dongpeng's digitalization. That year, Dongpeng's sales were about 800 million yuan.
**Low scan rates for QR code marketing are a common industry problem. Dongpeng faced even more severe problems at the beginning: consumers didn't know about it and weren't in the habit. How did Dongpeng handle it?** In fact, Dongpeng had some favorable conditions in terms of timing. In 2015, the technical conditions for QR code marketing were all in place, and consumers were curious about scanning codes to win red packets. The problem was how to promote it initially and get them to participate continuously. Several points were important.
**First, combine online and offline for deep education.** In 2016, Dongpeng ran market activities around "scan to win red packets" all year. For example, they created a series of promotional materials for offline consumer interaction, and online media ads always promoted this theme at the beginning.
**Second, Dongpeng's red packet activity had to be "real."** The bottle caps with "prize" written on them always had a red packet, while those without prizes said "no prize." This is very counterintuitive, but Dongpeng believed it was correct. Many brands set a certain winning rate, thinking they could get a higher scan rate with a fixed investment. But in reality, if consumers scan once or twice and get nothing, will they be interested in scanning again? Dongpeng's "realness" made consumers know that Dongpeng would never deceive them, so they were willing to scan Dongpeng.
**Another point: Dongpeng kept iterating on red packet gameplay.** For example, half price for the second bottle. After scanning, if consumers scan another bottle within 24 hours, they get a red packet. Through data analysis, they could identify which new consumers were brought in by the red packets. Another example: targeted big prizes to ignite local markets. They manually placed them in factory stores; salespeople would bring a bottle when visiting stores and put it in the small store's freezer. When workers bought and scanned at noon, they would definitely win! The scene was very lively. Stores that usually sold ten to twenty boxes could sell several hundred boxes that month.
From 2015 to 2018, Dongpeng was doing C-end scan marketing activities.

#### **bC Linkage, Pushing Back the Channel Link**
**Why did Dongpeng's digital marketing expand from consumer C to store b?** Many brands are now doing C-end QR code marketing, but only as a way for new product promotion or product promotion. Two important roles in the channel chain, distributor B and terminal small b, are not touched. In 2018, Dongpeng started activities for terminal small b, which actually originated from distributor demands. At that time, many distributors said, can we also give red packets to our customers (terminal small b)? So after the bottle cap code, Dongpeng launched the box code. After receiving the goods, terminal owners could scan the code on the box to get red packets, ranging from 5 to 8 yuan, or even dozens of yuan per box. But this project was not very successful. Problems arose. For example, store owners usually ordered 3 or 5 boxes, but with the promotion, they suddenly ordered 30 boxes, first collecting the red packets and then selling the goods slowly. When the intensity decreased, they would cut off the codes and put them in drawers, waiting for a bigger promotion to scan. This defeated the original purpose. Giving red packets to terminals was to encourage them to stock more, but ultimately the goods had to be sold to consumers. This method only promoted buying in, not selling out.
**In this form, the activities for small b and C were separated. How to achieve bC integration and the linkage of distribution and sell-through?**
**"One Yuan Joy" played a key role.** One Yuan Joy is well known in the industry: consumers give the store owner 1 yuan, take a bottle of drink, and then the store owner verifies with the manufacturer. The logic is simple, but the operation is not easy. Dongpeng also iterated through trial and error.
**In 2019, Dongpeng launched "One Yuan Joy" called the "bottle cap recovery version."** What does that mean? Store owners had to collect the bottle caps from "One Yuan Joy," then return them level by level through distributors and dealers to the factory for destruction. Later, Dongpeng found a way to destroy them at the distributor level, but it was inefficient and still couldn't avoid counterfeiting.
**In 2020, Dongpeng launched the "merchant verification version," achieving "no cap recovery."** Consumers give 1 yuan and the cap to the store owner, who scans the code to get a verification voucher, and then the upstream helps the store owner verify. To do this, Dongpeng launched a new "merchant membership system," discarding all previous merchant registration information from b-end red packets. Dongpeng specially made promotional videos and trained salespeople to guide store owners.
**Why were store owners willing to join the merchant membership system?** First, they needed to register in the new merchant membership system to scan the box code for red packets. Second, with "One Yuan Joy," they got 1 yuan for free, and through this system, they also got extra red packets for verifying consumers. Third, they needed to use this system to find upstream for verification.
**Merchants scan box codes for red packets and scan cap codes for verification vouchers. The merchant membership system linked the box code and cap code.**
**Why were upstream parties willing to verify for stores?** Because each level had incentives. Stores gave 24 vouchers to the postman (distributor) to exchange for a box of goods. The postman only needed to give 23 vouchers to the dealer, and the dealer gave 22 vouchers to Dongpeng (early incentives for dealers, later canceled). In this way, Dongpeng quickly obtained over a million real and effective terminal registered members. To date, there are 2.8 million members, and about 40,000 postmen have registered in the system.
**The "merchant verification version" of "One Yuan Joy" not only improved efficiency and solved the counterfeiting problem, but also achieved "bottle-box linkage," enabling bC linkage and pushing back the link from C to b to B.**

#### **Channel Expenses Are the Handle for Digitalization**
**How does Dongpeng's approach to connecting the channel chain differ from other manufacturers' thinking?** Many manufacturers are thinking about how to connect the F2B2b2C channel chain. Their approach is forward, from distributor to terminal to consumer, but Dongpeng's practice is the opposite. Among these, **the expenses given to consumers and terminals are the key handle.** But in fact, the red packets given to consumers and terminals are only part of the expenses. **For any manufacturer, channel expenses including display fees, free goods, etc., are huge. Only by integrating them can true channel digitalization be achieved.** So based on early results, Dongpeng has done a lot of work, such as building its own SFA and DMS systems, promoter management systems, smart freezer management systems, etc. These systems help Dongpeng "manage people well and serve terminals well."
For example, Dongpeng's previous SFA system couldn't meet requirements, so they decided to develop their own, based on actual scenarios and business needs. Traditional expense approval, such as display fees and free goods, is reviewed level by level, which is time-consuming and not transparent. Dongpeng's SFA execution is integrated with the terminal merchant mini-program, solving traditional expense approval through digitalization. Salespeople are responsible for display fee placement in terminal stores. If standards are met, they operate on SFA, and the store owner's system generates a voucher. Then the postman verifies the voucher for them, just like verifying promotional vouchers. Dongpeng achieved direct expense investment through digitalization, including promotional red packets, display fees, free goods, etc. **With data support, quantifiable and analyzable, this makes Dongpeng's expense placement more precise and effective, greatly improving the expense ratio.**
**Besides direct expense investment and connecting the channel chain, what other value does it bring?** Linking the inner box code and inner cap code makes it easy to achieve five-code linkage (pallet code, outer box code, inner box code, outer cap code, inner cap code), completing the channel link. There are many other values.
**For example, channel inventory and shelf life control.** In the traditional way, how do companies know channel inventory? They ask salespeople to count. At the distributor level, it's okay; at least they can give numbers, but the deviation is large. Below the distributor, such as sub-distributors and terminal stores, it's impossible to obtain. As long as the terminal store scans the code when opening the box, Dongpeng knows when this box left which distributor, which terminal it reached, and roughly how long it will take to sell. Although scanning doesn't mean sold, it's very close. Dongpeng sets the period from shipment to distributor to terminal store scan as channel inventory. This data is real-time. Through it, Dongpeng can know the channel inventory status of different regions and distributors, which ones sell fast and which slow, allowing them to control shipments and have corresponding salespeople speed up sell-through.
**Also, cross-region sales control.** Because shipments to distributors are fixed, they sell in their responsible areas. Terminal stores can only get normal red packets by scanning. If goods cross regions, the red packets obtained by terminal scanning are greatly reduced or none. This reduces the space for profiting from cross-region sales.
**In addition, there are many other values.** For example, for terminal store owner surveys, just pop up a questionnaire, and after filling it out, they get a verification voucher, and everyone is happy to do it. Dongpeng can get real feedback from 300,000 terminals through 300,000 bottles of drinks. Traditional survey methods could never achieve this. Another example: Dongpeng's consumer interaction platform has accumulated a large number of consumer users. Cooperating with Tencent through big data analysis, they can clearly know Dongpeng's consumer profile. At the same time, it is also a huge traffic entrance, possibly surpassing a local TV station, enabling cross-industry cooperation.

#### **Obstacles to Digitalization and the Path to Implementation**
**Many companies say they want to connect the channel chain, some even invest significant resources and energy, but the results are not ideal. Why can Dongpeng succeed, or what are the common obstacles for companies?** A core key to Dongpeng's digitalization success is the boss's support. **Digitalization is a top leader project, no doubt.**
The boss personally leads the digitalization project steering committee, with all relevant departments participating, including finance, HR, supply chain, etc. This is very difficult for many companies. **Departmental silos are a huge obstacle in the digitalization process.** Many companies, whether initiated by the IT department, sales department, or brand department, face obstacles when pushed from a single level. Digitalization involves many departments, each with its own ideas and interests. A lot of work may be done, but just because of one sentence from finance or an opinion from the quality assurance department, it can't move forward.
Besides departmental silos, another important point is **allowing trial and error, which requires patience.** Dongpeng's digitalization took 5 to 8 years. Based on its own experience, Dongpeng hopes to help companies shorten this to 2 to 3 years, but for many companies, this is still long. Because although many bosses have this awareness and strong determination to push digitalization, the actual implementers are professional managers. This leads to low tolerance for error, and if results aren't seen in the short term, both upper and lower levels lose patience.
The problem for many companies now is **the lack of systematic digitalization planning and path, and even if there is, it's difficult to implement effectively due to the obstacles just mentioned.**
This leads to a current situation where digitalization is talked about as a strategy, but actual digitalization actions are mainly in two areas: **One is short-term marketing activities initiated by brand or sales sides, using QR code marketing for new product promotion or product promotion. The other is forward-pushing distributors to use their systems, and strengthening SFA operations for salesperson management.** This is far from true digitalization.
**Besides internal company issues, external service providers are also an important factor.** There are many digitalization service providers now, but most provide block-like services. If they are all block-like and fragmented, aiming to achieve a short-term demand, it's very difficult. Qualified service providers are important. They not only solve specific module problems but also need to have a long-term perspective and systematic planning ability.
**Assuming internal organization and external service providers are fine, what is the path to digitalization? Must it start from C to b? Dongpeng Special Drink has good gross margins and is a big single product. What about other categories?** Category is one dimension, but the core is expenses. No matter which FMCG product, expenses are not small. Dongpeng starting from the C-end was a choice at that time and development stage. When the brand is relatively weak, consider giving benefits to consumers. If the brand power is good, or expenses are not that high, consider starting from small b. Where to start depends on the specific situation. For example, in the foodservice channel, you can start from the promoter point, do it well, amplify it, and then extend. FMCG is large, with many sub-industries. Each industry must have its pain points or scenario problems that digitalization can solve. **Start from a point, break through small closed loops, and then achieve a big closed loop. The key is that behind each small closed loop, there must be long-term systematic thinking.**
For Dongpeng, the big closed loop has been achieved, but digitalization has no completion, only ongoing. Managing people well and serving terminals well still has much room for improvement. How to continuously optimize and precisely invest? How to spend 200 million yuan to achieve the effect of 300 million? This is ongoing. In addition, during Dongpeng's digitalization practice, they accumulated first-hand experience, insights, and the ability to build digital systems. It is understood that Dongpeng established Shenzhen Pengzhirui Digital Marketing Co., Ltd., which will operate as an independent third-party service company to help more companies accelerate the pace of marketing and channel digitalization and promote the development of industry digitalization.

#### **Final Thoughts**
In recent years, marketing and channel digitalization have been hot topics in the FMCG industry. Many companies say they are doing it, but actual progress is not smooth. I have always held the view that digitalization is still in its early stages. Studying practical cases can provide us with references and help us extract more universal guidance. This is also why New Distribution has insisted on reporting on digitalization practice cases. As a benchmark for digitalization, Dongpeng provides the industry with a successful case and a path reference. However, public reports or studies mostly stay at one or two concepts or technical explanations. This time, from an internal perspective, we systematically introduce Dongpeng's digitalization journey and experience thinking, hoping to inspire you. In the past two years, I have written many digitalization cases, including Dongpeng, and also systematic summaries based on various cases. If you are a practitioner in the FMCG digitalization field or pay attention to the industry's future development trends, I suggest you read them. New Distribution continues to focus on digitalization development and will have more exciting reports. Please stay tuned!

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Ren Wenqing, Dean of New Distribution Digital Research Institute, FMCG industry analyst, and host of the bC Integration column. Research areas include channel digitalization, distributor business growth, and new retail in FMCG.

**Extended Reading**


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