Click "Read Original" for details In the just-concluded Double 11 shopping festival, Genki Forest, which was established only four years ago, was anything but "low-key." Not only did it secure the top sales spot in the water and beverage category on both Tmall and JD.com, but on Tmall, Genki Forest's transaction volume exceeded 10 million yuan in 37 minutes, surpassed last year's full-day total in 42 minutes, and grew 344% overall compared to last year. Since the beginning of this year, Genki Forest has been in the spotlight. Recently, according to the Qichacha app, Laomengle Beverage Co., Ltd., a wholly-owned subsidiary of Genki Forest, was established. Additionally, Genki Forest has filed multiple trademarks for "Ni Ke Zhen Xing" (You're Something Else), with international classifications including food, beer, and beverages. Clearly, the rapidly growing Genki Forest seems not to be resting on its laurels and is already planning new development paths. Undeniably, as a new consumer brand, Genki Forest has fought its first battle brilliantly. However, to establish a firm foothold in the fiercely competitive soft drink market, Genki Forest is still too "young." Will Genki Forest, eager to shed its "internet celebrity" label, become the next Nongfu Spring, or will it be replaced by an even newer brand? **-01-**The "Sparkling Water" Born from the New Consumption Wave Genki Forest's success can be attributed to two "coincidences." The first is riding the wave of new consumption. Data shows that the proportion of China's consumption in GDP has risen from 35% a decade ago to over 55%, and in the next decade, it is estimated to reach around 70%. For new brands like Genki Forest, this is undoubtedly a good era. This is also a key reason why, despite the market cooling due to the pandemic at the beginning of the year, consumer enthusiasm remained high, and many brands maintained good sales. In recent years, the Gen Z demographic, represented by those born after 1995 and 2000, has gained attention in the consumer market. Unlike previous consumer groups, Gen Z, labeled as "individualistic" and "niche," has significantly increased demands for healthy living, creating new opportunities for brands offering healthy teas and nutritional meal replacements. This is precisely Genki Forest's second coincidence: it successfully found a breakthrough in the competitive soft drink market with the concept of "sugar-free + sparkling." The concept of sugar-free is not new. In the past two years, major brands like Coca-Cola and Sprite have launched sugar-free series. Although they provided psychological comfort to some health-conscious consumers, they were also criticized for "poor taste." As for sparkling water, in terms of taste, it is similar to carbonated drinks, and there are many soft drink brands producing carbonated beverages, making it even harder to stand out. To cater to the "healthy, low-calorie" consumption concept while ensuring taste, Genki Forest created its 0-sugar, 0-fat, 0-calorie sparkling water. Consumers can enjoy the pleasure of carbonated drinks without the "weight gain crisis" from sugar, and with refreshing flavors like white peach and kalamansi. It can be said that Genki Forest found the most suitable product path and successfully won the hearts of a large number of consumers. On Genki Forest's Tmall flagship store, based on comprehensive indicators, the top-ranked products, aside from milk tea, are almost all sparkling water. However, this does not mean Genki Forest has secured its position in the sparkling water market, as there are many followers. One group is major brands represented by Coca-Cola. As early as 2017, Coca-Cola acquired the Mexican sparkling water brand Topo Chico from bottler Arca Continental for $220 million. In March this year, Coca-Cola officially launched its new brand AHA, which focuses on low-calorie sparkling water. Another group is milk tea brands represented by Heytea. Previously, Heytea attempted to incorporate soda flavors into tea, but the taste was not ideal. The latest "HEY BOTTLE" series chose to highlight fruit aromas while reducing sweetness, quickly gaining approval from some consumers. Recently, promotions for "HEY BOTTLE" have been appearing on platforms like Douyin and Xiaohongshu. Sparkling water products do not have significant technical barriers. Although Genki Forest entered the market early, facing numerous competitors, whether it can maintain sales growth remains uncertain. **-02-**The Next Nongfu Spring? With its hit product facing threats, it may be time for Genki Forest to consider new questions: Should it continue rapidly iterating to create hit products, or shift focus to building a brand? Judging from Genki Forest's recent actions, it seems to have intentions of building a brand. Recently, Genki Forest upgraded its brand logo for the first time, changing the controversial character "気" to the Chinese character "气." The official statement says the new logo will be gradually applied to all product lines. Because of the "気" in the logo, Genki Forest was once labeled as "fake Japanese style." Now that the character has been changed, it shows the company no longer wants to ride the Japanese wave and intends to build a local brand. If it builds a brand, it inevitably has to benchmark against major brands. In some decisions, Genki Forest seems to be moving closer to Nongfu Spring. First, in marketing tactics. Genki Forest's advocacy of "0 sugar, 0 calories, 0 fat" and Nongfu Spring's "a little sweet" both seem to exploit conceptual loopholes. The former uses erythritol, a sugar substitute that may not be healthy for long-term consumption, while the latter's "a little sweet" is hard to perceive directly through taste. Second, in production bases. According to Nongfu Spring's official website, it currently has 137 automated production lines in operation, including 106 for drinking water and 31 for beverages. As is well known, Genki Forest previously relied on OEM production under Jianlibao, the "first brand of national beverages." In July this year, Genki Forest's first production base was established in Chuzhou, Anhui, with three production lines, expected to produce 450 million bottles annually upon completion. According to a Genki Forest spokesperson, three more self-built factories will be completed this year: the second phase of the Chuzhou base, a production base in Guangdong, and a new factory in Tianjin. It is not hard to see that after "fake Japanese style," "OEM brand" will be the next label Genki Forest aims to shed. Finally, in brand marketing, both companies have coincidentally focused on "public welfare activities." Nongfu Spring launched its "One Cent Project" in 2001. In 2017, Nongfu Spring partnered with the UK's Comic Relief for the "Red Nose Day" IP, providing 250,000 free lunches to children in impoverished mountainous areas of China. After the pandemic outbreak at the beginning of the year, Nongfu Spring actively participated in volunteer work, donating and delivering packaged water products to medical staff, military and police, and relief agencies in major hospitals across the country, together with its distributors. As for Genki Forest, in mid-June, when COVID-19 resurged in Beijing, Genki Forest donated several boxes of beverages to the external team formed by Beijing Anding Hospital. On November 14, the "Genki Forest Guardian of Beautiful Villages Photography Exhibition" opened at the Xie Zilong Imaging Art Museum in Changsha, Hunan. It is reported that since the beginning of this year, Genki Forest has provided targeted protection and donations to 10 beautiful villages in Hunan, Xinjiang, and other regions. Of course, drawing the conclusion that "Genki Forest has the potential to become the next Nongfu Spring" based solely on these similarities is somewhat far-fetched. Compared with Nongfu Spring, a leading beverage company established in 1996, Genki Forest's disadvantages are more apparent. 1) No competitive advantage in main products: Nongfu Spring's mineral water series is a necessity, while Genki Forest's main products are not, making it difficult to gain an advantage in competition; 2) Production relies on major OEMs: Although it is also laying out self-built bases, catching up with Nongfu Spring in a short time is almost impossible; 3) Products have not formed a matrix: Existing hit products like "milk tea" and "sparkling water" have no obvious technical barriers and can easily be replicated or surpassed by mature brands; 4) No significant advantage in sales channels: Genki Forest, which started in convenience stores, has begun to enter online channels, but compared with Nongfu Spring, which has deep channel experience, it clearly has no major advantage; 5) Weak brand voice and negative labels: "Fake Japanese style," "fake health," "OEM brand"... Genki Forest, which already has a small brand voice, carries many negative labels, and it will not be quick to shed them all. Clearly, compared with Nongfu Spring, the two are not on the same level, and Genki Forest has a long way to go. **-03-**The "Internet Celebrity" Label Is Hard to Shed; Both Hit Products and Brand Must Be Pursued Looking further, it seems not easy for Genki Forest to abandon its "internet celebrity" identity and focus solely on branding. After all, in terms of product sales, it still relies on hit products like sparkling water and milk tea to make money. Well-known beverage brands have also not neglected the creation of hit products. Examples include Coca-Cola's once-popular "Qoo," Wahaha's "Nutrition Express" and "Pirch Tea" that once sold out. But relying solely on hit products is hard to build a brand. A good example is Prince Milk Tea, which once held a "leading position" in China's lactic acid bacteria beverage industry. Prince Milk Tea was launched in 1997. At that time, China's lactic acid bacteria market was not as saturated as it is today. With its sweet and sour taste, Prince Milk Tea's lactic acid bacteria drink successfully won the favor of many consumers. In 2001, Prince Milk Tea's revenue was 50 million yuan, and by 2007 it reached 2 billion yuan, a 40-fold increase. However, this once-successful brand has now almost disappeared. In April 2010, Prince Milk Tea Group declared bankruptcy. Although there have been reports in recent years that Xinhualan and Sanyuan Group will jointly participate in the "restructuring" of Prince Milk Tea Group, it is clear that it is too late for Prince Milk Tea. There are many reasons for Prince Milk Tea's decline: signing "high-risk" betting agreements, expanding production bases aggressively... But one reason cannot be ignored: a single product line. At its peak, Prince Milk Tea Group did not continue to iterate products after "Prince Milk Tea." Instead, it invested heavily in building production bases and expanded into other areas such as food, children's clothing, media, and real estate. Relying solely on a single "hit product" to establish a brand was clearly a miscalculation for Prince Milk Tea. It can be said that its decline was inevitable. "Hit products" and "brand" are complementary. If a company overemphasizes one over the other, it may lead to irreparable consequences. Therefore, for Genki Forest, rather than choosing between "creating hit products" and "building a brand," it is more about finding a balance between the two. **-04-**Conclusion Riding the wave of new consumption, we have witnessed the rise of domestic brands like Perfect Diary, Genki Forest, and Saturnbird Coffee. However, in terms of brand growth paths, they have only completed the first stage of "0 to 1." The next stage is the key to testing whether a brand can achieve long-term success. Whether Genki Forest, struggling between "hit products" and "brand," can deliver a satisfactory answer remains to be seen. Source: Mantis Finance (ID: TanglangFin) Author: Tu Lin