--- title: "Evergrande Spring: Dreams Are Fine, but First Survive the Sell-Through Hurdle" description: "Last month, reports emerged of layoffs and sales company mergers at Evergrande Spring, followed by Evergrande Property's 2014 results showing cumulative investments of 5.54 billion yuan in mineral water, 570 million in grain and oil, and 310 million in dairy, totaling 6.42 billion yuan, with none yet profitable. Chairman Xu revealed 1.3 million retail points, a 20,000-person sales team, and 767 water sales companies, while official data showed a 2.37 billion yuan loss in water last year. The article argues the real issue is sell-through and turnover, offering three suggestions: price water affordably (380ml at 2-2.5 yuan, 500ml at 3 yuan), leverage property management as a key advantage, and drop the 'Changbai Mountain' single-source narrative to reduce logistics and marketing costs, focusing on regional markets." author: "曾文忠 陈行军" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2015-04-19" language: "en" canonical: "https://xinjignxiao.com/en/articles/evergrande-spring-dreams-are-fine-but-first-survive-the-sell-through-hur-52a6facd/" markdown: "https://xinjignxiao.com/en/articles/evergrande-spring-dreams-are-fine-but-first-survive-the-sell-through-hur-52a6facd.md" original_source: "https://mp.weixin.qq.com/s/nuDZ-32dv7xR_gB42T37dQ" translation: "https://xinjignxiao.com/zh/articles/%E6%81%92%E5%A4%A7%E5%86%B0%E6%B3%89-%E6%A2%A6%E5%8F%AF%E4%BB%A5%E6%9C%89-%E4%BD%86%E5%85%88%E6%B8%A1%E8%BF%87%E5%8A%A8%E9%94%80%E5%85%B3-52a6facd.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/evergrande-spring-dreams-are-fine-but-first-survive-the-sell-through-hur-52a6facd/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Evergrande Spring: Dreams Are Fine, but First Survive the Sell-Through Hurdle > Last month, reports emerged of layoffs and sales company mergers at Evergrande Spring, followed by Evergrande Property's 2014 results showing cumulative investments of 5.54 billion yuan in mineral water, 570 million in grain and oil, and 310 million in dairy, totaling 6.42 billion yuan, with none yet profitable. Chairman Xu revealed 1.3 million retail points, a 20,000-person sales team, and 767 water sales companies, while official data showed a 2.37 billion yuan loss in water last year. The article argues the real issue is sell-through and turnover, offering three suggestions: price water affordably (380ml at 2-2.5 yuan, 500ml at 3 yuan), leverage property management as a key advantage, and drop the 'Changbai Mountain' single-source narrative to reduce logistics and marketing costs, focusing on regional markets. Source: Jin Xiaoshang Last month, reports first emerged of layoffs and sales company mergers at Evergrande Spring, followed by Evergrande Property's 2014 results, which showed cumulative investments of 5.54 billion yuan in mineral water, 570 million in grain and oil, and 310 million in dairy, totaling 6.42 billion yuan. To date, none of the three businesses have turned a profit. Chairman Xu revealed that Evergrande Group has set up 1.3 million retail points nationwide, assembled a sales team of nearly 20,000 people, and opened 767 mineral water sales companies. Official data indicates that the mineral water business lost as much as 2.37 billion yuan last year. Evergrande Group also stated that it has locked in 7.6 billion yuan in mineral water orders for 2015, with expected full-year sales of 4 billion yuan; the grain and oil business has locked in 3.7 billion yuan in orders, with sales of 2.5 billion yuan; and the dairy business has locked in 900 million yuan in orders, with expected sales of 500 million yuan. In three years, the three sectors will be listed separately in Hong Kong... Hearing this, I can only express admiration for Chairman Xu. Setting aside the logic of the sales data, the unclear product positioning, chaotic sales management, and massive personnel issues, I believe the real problem for Evergrande Spring is sell-through and turnover. Many industry experts have prescribed remedies for effectively improving product sell-through and turnover, but whether they truly fit Evergrande Spring is debatable, especially since many are just watching the wealthy Evergrande for laughs. I have been following Evergrande Spring closely, and many friends have worked there, so I have a basic understanding of its situation. Given the current state, I offer the following three suggestions for Evergrande Spring to break through: Suggestion 1: Since it's water for ordinary people, the price must be affordable! Adjust the 380ml to 2-2.5 yuan, the 500ml to 3 yuan, and temporarily abandon the 1.25L size. Currently, 3 yuan per bottle is the psychological price point for packaged water in the domestic market. Going higher narrows the audience and requires a compelling reason to convince consumers. Evergrande Spring's initial goal was to provide good water that ordinary people can afford, so if it's water for the masses, the price must be friendly! Since its launch, especially after the sales team from Nongfu Spring took over, the operation has completely replicated Nongfu Spring's market approach and management mechanisms, effectively operating as a mid-to-low-priced packaged water concept. After over a year of intensive advertising and promotions, Evergrande Spring's brand awareness is sufficient. If prices are adjusted to the 2-3 yuan range, consumers will easily accept it. Given that since 2014, Evergrande Spring has dared to do massive free giveaways and buy-one-get-one promotions, a price cut should be even more acceptable. If sell-through and turnover improve quickly after the price adjustment, and after six months of rapid market integration and stronger channel control, they can launch new packaging for premium water or a premium brand independent of Evergrande, perhaps fulfilling Chairman Xu's 'Evian' dream. Suggestion 2: Property management is your greatest advantage Evergrande Spring staff might rebut: we've been doing direct-drinking water community subscriptions in nearly 300 residential complexes across over 200 cities, and we've been doing well! I believe Evergrande Spring's biggest advantage is its property management, backed by the real estate giant Evergrande. Its advantage in property management is something no FMCG company can match or easily enter. Whether due to the sales team's fixed mindset or Chairman Xu's neglect, Evergrande Spring has been abandoning its greatest resource. Entering its own properties is simple, but that's not enough. Evergrande Spring can enter channels through Evergrande Real Estate's partners and strategic allies, and also through real estate associations to reach property management of real estate companies nationwide, which is just a matter of profit redistribution. In China, most people who buy homes at county level or above are families with certain economic strength. These people definitely have quality-of-life requirements, which perfectly aligns with Evergrande Spring's target consumer profile. Consumers typically buy large quantities of packaged water from supermarkets, shopping malls, gas stations, or communities. Communities include convenience stores, discount supermarkets, bakeries, water delivery shops, and also property management. Evergrande Spring could use promotions like free household drinking water for a year with home purchase, community water ticket giveaways, property service subscription gifts, community events and organization sponsorships, and family subscription discounts to firmly capture target consumers' purchases in communities. That is the true breakthrough for Evergrande Spring. Suggestion 3: Drop 'Changbai Mountain' and stop talking about 'one water source' Stop repeatedly promoting Changbai Mountain mineral water; just say 'mineral water'! Evergrande Spring's insistence on 'one water source for the world' inevitably leads to huge logistics costs. 'Changbai Mountain' is not a reason for consumers to pay; Nongfu Spring is also in Changbai Mountain, Master Kong is there, Coca-Cola is there... The benefits of dropping 'Changbai Mountain': first, everyone already knows Evergrande Spring is mineral water; second, it avoids other manufacturers from the same source hitching a ride and attacking; third, the source doesn't have to be fixed in Changbai Mountain, allowing multiple sources nationwide; fourth, it saves promotional costs—the longer the message Evergrande Spring carries, the higher the cost to reach consumers. After dropping Changbai Mountain, Evergrande should focus on a radius of 300-500 km from the source, especially within 200 km, concentrating resources and focusing operations. Don't covet the whole country or 100% distribution from provincial capitals to townships; that's meaningless and only disperses market resources, preventing synergy. Evergrande Spring should first seek breakthroughs in key markets within the radius, intensively cultivate channels, and adhere to this principle for at least three years without wavering. Finally, a suggestion on Evergrande Spring's organizational and personnel management. Insist on using professional people for professional tasks; don't have two systems in company management, or it will only lead to inefficiency and mutual blame. Replace unsuitable personnel, cut unnecessary positions, reduce management layers, appropriately merge prefecture-level sales companies, and trim redundant staff, especially in sales units that don't generate performance. In FMCG, there is no absolutely successful theory or method. Experts aren't always right. Only by enduring loneliness can you hold onto prosperity. Identify your direction, stick to your goals, don't be distracted by noise, criticism, or praise, persist on your path, and success will be near. Impressive data is the best response to onlookers and mockery. If Evergrande Spring continues as before, not to mention 40 billion, even 10 billion is doubtful, and it may truly become a joke of 'fast-moving consumer goods' (quickly disappearing products). 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