As the former 'No.1 national brand', Jianlibao has faced repeated setbacks in recent years and has now resorted to selling shares again. According to announcements, Hong Kong-listed Tianyun International will subscribe to 9.18% of Jianlibao Asia's shares for RMB 300 million. Selling shares is clearly to survive, but can the former national drink return to its peak in this changed market?
Jianlibao, selling shares to survive?
To stay alive, Jianlibao has continued to sell company shares. According to Tianyun International's announcement, the company will sign a subscription agreement with Jianlibao Asia to acquire 9.18% of its shares for RMB 300 million. After the subscription, Tianyun International will have an indirect effective interest of nearly 5% in Guangdong Jianlibao. However, subscribing to shares is only one of the goals of this move. In fact, the two parties will also cooperate closely in production, market expansion, and brand promotion to bring quality products to the world and achieve win-win results. Many are curious about Tianyun International, which is investing RMB 300 million to acquire Jianlibao shares. Public information shows that Tianyun International's main business includes fruit processing products and beverages, with its own brand 'Shiok Party'. Partnering with Jianlibao is indeed a case of each taking what they need.
In fact, this is not the first time Jianlibao has sold company shares. As early as 2016, Uni-President Group sold all its equity in Foshan Sanshui Jianlibao Trading Co., Ltd. to Guangdong Jianlibao Group for a transaction amount as high as RMB 950 million. It is worth noting that although the industries are completely unrelated, the purpose of Jianlibao selling shares is similar to that of Wanda Group, which has been in the spotlight recently – essentially to raise money.
According to disclosed financial reports, Jianlibao's revenue and net profit in recent years have shrunk significantly compared to its peak. Data shows that from 2021 to 2022, Jianlibao's revenue was RMB 1.95 billion and RMB 2.3 billion, respectively, with net profits of RMB 227 million and RMB 245 million. Interestingly, with the rise of the 'guochao' (national trend) wave, Jianlibao seems to want to use the offline market to reawaken consumers' childhood memories. In many offline restaurants and other places, Jianlibao can be seen in freezers. Unfortunately, many consumers cannot understand how Jianlibao went from 'Oriental Magic Water' to being ignored. What exactly has Jianlibao experienced over the years?
From 'Drink King' to losing its magic
Due to the passage of time, few may remember Jianlibao's glory days. At its peak, Jianlibao was called 'China's Magic Water' by Western media, and in the domestic market, it could make well-known brands like Coca-Cola and Pepsi feel inferior. There was even an asteroid named 'Sanshui Jianlibao Star' in space. All this glory came from the legendary experience of Jianlibao's founder, Li Jingwei.
In 1984, Li Jingwei officially established Jianlibao in Sanshui City, Guangdong Province, introducing the concept of sports drinks to the nation with a new image. At the Los Angeles Olympics that year, Jianlibao became famous as an official partner, and its revenue grew rapidly. Public data shows that in 1984, Jianlibao's sales were only RMB 3.45 million, but by 1997, sales exceeded RMB 5.5 billion. It not only became a national brand but also contributed half of Sanshui City's tax revenue.
In addition to impressive sales, Jianlibao's marketing methods during its peak were also quite eye-catching, such as inviting famous athletes like Li Ning to join, and pioneering 'pull-tab prize' packaging. To better enter the international market, it even spent USD 5 million to buy an entire floor of the Empire State Building in 1991. Li Jingwei, in his prime, often said to the media that in the Chinese market, Coca-Cola and Pepsi combined did not sell as much as he did.
However, after reaching its peak, Jianlibao's decline came quickly. In 1997, Li Jingwei wanted to relocate Jianlibao's headquarters, which directly led to the deterioration of relations between Jianlibao and the local Sanshui government. Although Li Jingwei pushed Jianlibao to the altar, as a state-owned enterprise, Li Jingwei was not the actual controller. Afterwards, Jianlibao changed hands multiple times, and as internal management became increasingly chaotic, the company's development was severely hindered. By 2021, Jianlibao's annual revenue had fallen to only RMB 3.1 billion, relying on a single hit product to barely survive, and its diversification path was difficult. The 'Oriental Magic Water' halo that once crowned Jianlibao has gradually faded. Even now, Jianlibao's average annual revenue is around RMB 2 billion, a significant gap compared to its glory days in the 1990s.
Can the national drink return to its peak?
Are there still many people drinking Jianlibao now? In response, a netizen said bluntly: 'If I hadn't seen Jianlibao in a restaurant by chance, I would have long forgotten this former national-level beverage brand.' Indeed, Jianlibao's popularity back then was partly due to the era's dividends. After all, in the 1980s and 1990s, even in the entire beverage market, consumers had fewer choices than now. While Jianlibao was struggling, Coca-Cola and Pepsi began aggressive marketing in China, and gradually, when it came to carbonated drinks, most consumers would think of Coca-Cola and Pepsi first. In the carbonated drink sector, Jianlibao has long been thoroughly defeated by its former rivals Coca-Cola and Pepsi. However, in recent years, with the awakening of health awareness, the emergence of sugar-free drinks has also left Jianlibao at a loss.
Among these, the rising star Genki Forest, which has been extremely popular in recent years, must be mentioned. From its establishment in 2016 to completing its first round of financing in 2018, Genki Forest, with its hit product sparkling water, reached a valuation of RMB 40 billion within just five years. Its rapid development even attracted joint 'encirclement' from international giants Coca-Cola and Pepsi.
Admittedly, the market still has prospects. According to data released by iiMedia Research, China's sports drink market is expected to reach RMB 21.6 billion in 2024, still showing good growth potential. How Jianlibao can seize the opportunity becomes crucial. In terms of new products, since 2020, Jianlibao has successively launched drinks such as micro sparkling water and electrolyte water, while also trying to catch up with trends through marketing to actively embrace young people. At a crossroads, Jianlibao has obtained funds by selling shares. How to deal with this unpredictable market and rediscover its own value tests the wisdom of current management.