Guozi Shule. This brand, founded in 2019, has rarely been in the news except for receiving angel round financing from three capital firms in 2020 and A-round financing from two capital firms in 2021. How did the previously quiet Guozi Shule suddenly make big players in the food and beverage industry wary? Let's first look at its performance: In July 2023, Lv Xiaotong, founder and CEO of Weimu Capital, stated on Xiaohongshu that Guozi Shule "went from 0 to 1 billion yuan in just two years." In the currently hot sugar-free tea sector, according to the "2024 (Summer) Sugar-Free Ready-to-Drink Tea Category CR13 Groups and Rankings" released by MaxWin Intelligence Station, from April to May, Uni-President ranked sixth, while Guozi Shule ranked third; from June to July, Uni-President moved up one place to fifth, and Guozi Shule ranked fourth. Image source: @MaxWin Intelligence Station In the sub-category market share TOP15 SKUs and year-on-year growth rates, from April to May, Guozi Shule's Zhi Zhi Oolong 500ml appeared with a year-on-year growth rate of over 750%, becoming the only sugar-free tea product in the Top15 not belonging to Nongfu Spring or Suntory. Achieving such success in a short time is attributed to its differentiated strategies in channels, marketing, and products. Deep Cultivation of Offline Channels Betting on Convenience Stores Offline channels have always been a major focus in the beverage industry. In comparison, e-commerce platforms have complex pricing systems, difficulty in controlling cross-channel sales, high traffic costs, and expensive logistics for heavy beverages. Online orders are mostly repeat business based on bulk stocking, making it not a critical battleground for new brands. Guozi Shule understands this well. Quiet entry, starting with offline small-format channels in first- and second-tier cities. FoodPlusHub reported that Guozi Shule focuses on first- and second-tier cities as its core markets, while also relying on a distributor network to cover lower-tier markets. Among various offline channels such as hypermarkets, large/small supermarkets, convenience stores, and grocery stores, unlike predecessors like Uni-President who built extensive distribution networks and seized large retail spaces, the young Guozi Shule chose to bet on convenience stores. Image source: @Guozi Shule Sugar-Free Tea According to MaxWin data, as of July 2023, compared to Genki Forest, Nongfu Spring, and Coca-Cola, Guozi Shule had a clear advantage in convenience store market share and began increasing its share in grocery stores. Conversely, its share in large supermarkets and hypermarkets was significantly lower than these more mature beverage brands. A characteristic of small formats like convenience stores and grocery stores in the beverage industry is that hot-selling products have smaller capacities but higher average transaction values and relatively higher gross margins. Moreover, convenience stores are faster and flatter than other channels, not requiring the time and effort of building traditional distributor networks, making it easier to complete product shelving and display in a shorter cycle. The initial approach was simple and pragmatic, increasing shelf share to boost sell-through rates. Guozi Shule's approach in convenience stores is also very traditional: pursuing high shelf share. This is a classic business logic: the more facings on the shelf, the greater the chance of sale. Before 2023, Guozi Shule mainly bought more cooler facings and placed products next to star products, simply and efficiently promoting sales. After 2023, it also began trying various ground promotion and promotional methods. For example, in August 2023, Guozi Shule partnered with designated FamilyMart stores in Shanghai to give away exquisite merchandise to customers purchasing "Jasmine Longjing." Image source: @Guozi Shule Duoduo Lemon Tea In November of the same year and in May this year, Guozi Shule successively announced that the "Yao Liu" CP from the hit ancient drama "Lost You Forever" would serve as spokespersons for its two product series. Since then, offline channels have seen elevator ads, large screens, store takeovers, fridge magnets, and other advertisements, as well as promotions like free spokesperson cards, stickers, and other merchandise with purchases. Image source: @Guozi Shule Sugar-Free Tea @Guozi Shule Duoduo Lemon Tea From Guozi Shule's early channel layout and investment strategy, it's clear that compared to many emerging brands with substantial funding that pursue grand scale and publicity from the start, it prefers to enter quietly and "wait until making money to talk." It can be said that it is the precise layout of channel strategy that enabled Guozi Shule to complete rapid accumulation and growth, allowing it to show a "dark horse" posture in the fiercely competitive "thousand-tea war." Marketing in Ways Young People Like The slogan "Born powerful, making drinks young people like" is not only Guozi Shule's brand and product positioning but also its marketing positioning. The young Guozi Shule sells beverages to young people through CP endorsements, game IP collaborations, and interactive lottery activities on social media platforms. In terms of spokespersons, it's either silent or sensational. After the first season of "Lost You Forever" became popular, while many drama fans were still emotional about the "Yao Liu" CP (Tan Jianci as Xiang Liu and Yang Zi as Xiao Yao), Guozi Shule, which had never issued any endorsement invitations before, immediately invited Tan Jianci, whose nickname is "Duoduo," to endorse its Duoduo Lemon Tea series. Image source: @Guozi Shule After the endorsement announcement on November 6, 2023, Guozi Shule launched a star selection task called [Drink Duoduo with Tan Duoduo] for fans, where they could share creative KV or photos of Tan Jianci with Duoduo Lemon Tea to win a total prize of 10,000 yuan. On May 6, 2024, two months before the second season of "Lost You Forever" aired, Guozi Shule announced Yang Zi as the spokesperson for its sugar-free tea series, playing on the homophone "Guozi Shule, Guo and 'Zi' are ripe." Thus, the on-screen "Yao Liu" CP and the off-screen "Jian Bing Guo Zi" CP both endorse Guozi Shule. Image source: @Guozi Shule Sugar-Free Tea In the promotional video starring Yang Zi, Guozi Shule's sugar-free tea is defined as "the sugar-free tea young people prefer to drink," with the selling point of "not bitter, not astringent, with a good aftertaste" to persuade young people not to seek bitterness, and highlighting the competitive advantage of "selling 200 million bottles a year" to attract consumer attention. Before the drama aired, multiple topics related to Guozi Shule's sugar-free tea spokesperson Yang Zi quickly occupied the hot search list. During the drama's broadcast, whenever Xiao Yao had a highlight scene, Guozi Shule would appear at the right time; outside the drama, Guozi Shule leveraged Tencent Video OpenDay to create offline interactive events, guiding online attention, interaction, and discussion. In the end, topics related to the spokesperson and drinking Guozi Shule while watching the drama accumulated over 330 million reads. Image source: @Guozi Shule Sugar-Free Tea & Weibo topic page In addition, Guozi Shule invited Tan Jianci and Yang Zi to live-streaming rooms to promote Duoduo Lemon Tea and sugar-free tea respectively, directly driving conversions. These two teas are now the top two bestsellers in Guozi Shule's Tmall store, showing the ultimate use of fan effect. In terms of collaborations, it grasps the daily preferences of the target group. On August 22, 2024, Guozi Shule collaborated with the legal romance reasoning mobile game "Tears of Themis," launching Duoduo Lemon Tea with custom labels of the four male protagonists. In the game, a custom business card [Lemon·Duoduo] was launched for players; outside the game, buy-one-get-one merchandise promotions were simultaneously launched across online and offline sales channels, precisely targeting young anime fans, especially the otome group. Image source: @Guozi Shule Duoduo Lemon Tea On August 27, Guozi Shule's sugar-free tea also partnered with Fliggy, offering summer travel gift packages and up to 1,000 yuan travel funds online for travel and outdoor enthusiasts; offline, it held a summer buddy tea party at Xixi Wetland Park in Hangzhou, attracting a wave of fans to check in. Image source: @Guozi Shule Sugar-Free Tea In terms of social media building and operation, it locks onto platforms and methods that young people love to watch and play with. Guozi Shule currently focuses on WeChat, Weibo, Xiaohongshu, and Douyin, attracting followers through frequent interactive lottery activities; WeChat serves as the main brand promotion platform, gathering major brand and product events and new actions; Weibo, Xiaohongshu, and Douyin serve as its main product promotion platforms, with separate accounts for sugar-free tea and Duoduo Lemon Tea. Additionally, Guozi Shule has conducted influencer seeding on Xiaohongshu to encourage user-generated content. At the end of September 2024, Guozi Shule's Duoduo Lemon Tea followed Genki Forest's sparkling water in sponsoring the iQiyi hit variety show "Hello, Farming Boys 2," but its character descriptions of the ten boys on Xiaohongshu were criticized by "Hehuoren" fans, leading to an apology statement and removal of the content. Although this move attracted some backlash, it undoubtedly strengthened brand presence. Image screenshot from Xiaohongshu After several years of accumulation, Guozi Shule has also begun increasing its marketing investment, striving to stand closer to young people and bring the brand into more people's视野 and lives. Product First, Brand Second Being a Barometer for Hot Beverage Categories As mentioned earlier, Guozi Shule's product logic is based on young people's preferences and following hot categories, rather than focusing on creating blockbuster products as many established brands do. Moreover, in product packaging design and naming, Guozi Shule emphasizes the product itself over the brand. Product innovation logic = following hot beverage categories. From launching its first product series "Qidan" in October 2020 following Genki Forest's sparkling water, to the "Dun," "Cha Hanhan," "Duoduo Lemon Tea," "Vitality Water Balance," and "Shu Nai Cha" series in 2021, to the "Bing Tao Cha" and "Xiao Guo Zhi" series in 2022, and finally to the fruit tea, cold-chain juice, and sugar-free tea series in 2023, each has been either an annual industry star or a seasonal hot category. Taking sugar-free tea as an example, although Suntory oolong tea appeared in China as early as 1997, it wasn't until 2018 that the sugar-free tea category entered a rapid growth phase due to deepening health and sugar-free consumption awareness, and by 2023 its market size growth rate had reached 110%. Guozi Shule, originally focused on fruit-flavored beverages, also accelerated its entry into the sugar-free tea track. It can be said that its rapid emergence is partly due to the timely launch of sugar-free tea products, capturing the category's market dividend. Image source: Guozi Shule Tmall flagship store Its cold-chain juice series also includes many popular regional specialty fruits, such as Chaoshan oil citrus and yellow peel, which first became popular in the new tea drink sector in the summer of 2021. Oil citrus is a post-meal digestive fruit and fruit tea for Chaoshan people, while yellow peel fresh fruit and drinks have always been the "childhood taste" for people in Guangdong, Guangxi, and Hainan. Seeing their potential, Guozi Shule began sourcing from Guangdong, Guangxi, and Yunnan, launching a variety of novel compound juice drinks such as guava/lemon/wax apple/star fruit/Summer Black grape oil citrus and white peach yellow peel. Image source: Guozi Shule official website Focusing more on consistent product design than brand exposure. Interestingly, Guozi Shule's initial products were often spotted by consumers on crowded shelves because of their young, novel, humorous, and high-appearance packaging design, paired with product names highly consistent with the packaging tone, making many consumers instantly want to try them. For example, the "Qidan" series fully reflects national trend culture in packaging design, using fruit colors and popular illustrations to visually show product flavors. The product names not only echo the flavors but also cleverly use homophones, such as the cute pink white peach flavor "Tao Qi Dan," the fresh green grape flavor "Qing Qi Dan," and the bright golden pineapple passion fruit flavor "Xiang Qi Dan." Image source: @Guozi Shule The "Cha Hanhan" series, with its round, chubby, and cute bottle design, lives up to its name from appearance alone, and it's hard to find a more fitting name than "Cha Hanhan." Guozi Shule also gave the three products in this series a group name: Traffic Light. Image source: @Guozi Shule The sparkling tea in the fruit tea series is specially made in a classic soda bottle shape, paired with the Maillard color scheme commonly used in beer bottles, easily evoking the bubbles that burst out after opening. The cold-chain juice and sugar-free tea series use a flat square bottle design, with fonts and patterns on labels that combine national style with modern aesthetics, making them more "eye-catching" on shelves. Image source: Guozi Shule Tmall flagship store In contrast, the "Guozi Shule" brand name and logo are so small on these products that they are hard to notice unless you look closely, so many people initially don't know which company makes these distinctive drinks. Guozi Shule's products follow trends for new launches, flavors follow trend directions, packaging is fashionable, and names are easy to remember and spread, meeting current young people's aesthetics and preferences, enabling faster, more direct, and more precise reach to more target groups. After Gaining Fame Earning the fear of "industry veteran" Uni-President is a testament to Guozi Shule's five years of entrepreneurship. It's worth noting that Guozi Shule still has shortcomings to address in channels, marketing, and products. In channels, Guozi Shule's strength in offline small-format channels may become its "constraint" in the future. In chain convenience store channels, frozen display is key. Once more "Uni-Presidents" target it and push it out of coolers, Guozi Shule will be more passive. On the other hand, the absorption capacity of convenience stores and grocery stores is ultimately limited, and sales personnel may face pressure to push inventory or inflate performance. In marketing, although Guozi Shule has been trying to stand with more young people, it must be understood that "changeability" and "diversity" are the norm for young people, requiring the brand to have the ability to always understand the minds of young people of each generation. As the "Farming Boys" meme incident shows, Guozi Shule still has homework to do. The "trend-chasing" approach in product innovation is not always successful. As reported by @Interface News·Entrepreneurship Frontline: "Even if Guozi Shule adopts a strategy of continuously following hot categories, it always faces competition with giants and a wide range of competitors. How to break through under multiple sieges is a problem Guozi Shule needs to face at every stage." Overall, although Guozi Shule is a "dark horse" in the beverage industry, even making predecessor Uni-President look up to it in the sugar-free tea field, it is still young and has room to grow.