Since JDB started making herbal tea, too many companies have rushed into this pit. But apart from Heqizheng, which has a bit of fame, how are the others doing? Don't mention Wanglaoji—that was also built by JDB; they just picked up a ready-made product. Look at how many herbal tea brands Guangyao has.

Since Wanglaoji and JDB split, I've rarely written about herbal tea, but looking back at early articles observing this category's development online, most are still mine.

Recently, a brand called Evergrande Herbal Tea reappeared in people's视野, attracting industry attention. After verification by self-media, it was found that this product has nothing to do with Xu Jiayin's Evergrande; it's just a product created by Evergrande Hi-Tech Company. Poor Xu Jiayin has been burdened with various criticisms of "being unkind to his father," and after posting pictures on social media, criticism poured in.

But it doesn't matter—whether it's Evergrande's herbal tea or Evergrande Hi-Tech's herbal tea, the essential outcome won't be good. Like Tongrentang Herbal Tea launched earlier this year, succeeding in the herbal tea market is extremely difficult. Unless you've prepared 10 kidneys, this is destined to be a losing battle. Most people can't even stir up the market before being swept away by its currents and dashed on the beach.

Here, I won't analyze how many ways Evergrande Herbal Tea might die; let's just look at how many powerful companies have fallen on the herbal tea road over the years, and you won't envy those herbal tea products anymore.

Baiyunshan Herbal Tea—Repeatedly operating the market like clouds drifting by

Baiyunshan Herbal Tea—Kouyan E Qing product was a herbal tea product relaunched by Baiyunshan Hutchison Whampoa Chinese Medicine Co., Ltd. in 2007. Its formula originated from "Baiyunshan Kouyanqing" granules.

After several painful struggles, Kouyan E Qing herbal tea was renamed Baiyunshan Herbal Tea. Although they invited big star Sun Honglei as spokesperson, the market showed no improvement, basically in a state of neither dead nor alive. It's expected that Baiyunshan Herbal Tea will soon be cleared from the market because Baiyunshan has Wanglaoji as a treasure, making Baiyunshan Herbal Tea seem very unimportant.

Die a few times and you'll know what death tastes like!

(Comment: This is a spectacle. Guangyao has so many herbal tea brands: Pangao Shou, Li Shizhen Herbal Tea, but none except Wanglaoji has succeeded. And under the Wanglaoji brand, there are many products: Dahongqi, Neigong, Ji Dongli, Cordyceps Drink, Xia Sang Ju—except for herbal tea, none are alive. Xia Sang Ju still owes dealers various fees. Apart from markets others built, what are you good at? Oh right, you're good at lawsuits.)

Shangqingyin Herbal Tea—Cleaned up before it could get hot

Xiangxue Pharmaceutical launched Shangqingyin Herbal Tea in 2007, targeting revenue of 2 billion yuan within five years, but actual annual sales fell from 13.9667 million cans in 2007 to 3.3219 million cans in 2009, and by 2010 it had a net loss of 26.7 million yuan. It has now ceased production. Xiangxue Pharmaceutical owns beverage products like Jindian Sarsi, Asia Sarsi, Asia Bilin, Asia Orange Treasure, and Chrysanthemum Honey. In 2015, its soft drink sales were 84.61 million yuan out of total revenue of 1.465 billion yuan, accounting for 5.78%.

Shangqingyin was born during a period of rapid growth in the herbal tea market, but it also failed during that growth. This product had no distinguishing features from the start; from its name to its concept, it was a failure. Coupled with a red can and pharmaceutical-style operations, its fate was destined to be cold and lonely.

Clear, but I can't catch fire.

Wanjile—Ending so quickly is a first

In 2008, Wanjie Group, established in 1991 with assets of 5 billion yuan and its signature product Wanjie American Ginseng Tablets, launched blue-can "Wanjile Herbal Tea" and hired Hong Kong actor Dicky Cheung as spokesperson, aiming to become the Pepsi of the herbal tea market. But the massive advertising bombardment didn't sustain consumer stimulation, and Wanjile has basically ceased production.

It can be said that Wanjile Herbal Tea ended before many people understood it, just like Dicky Cheung, who has always been hardworking but never really became popular—it came quietly and left quietly.

Fast but doesn't want to be hot.

Juhuang Tea—Chrysanthemum withered, beauty gone

Juhuang Tea is a health tea containing natural Chinese herbs under Kangmei Pharmaceutical Group, made from Hangzhou white chrysanthemum, wolfberry, licorice, and boat-fruited sterculia, with heat-clearing effects. Currently, this product is basically stagnant, with no highlights in market performance.

In 2010, Kangmei Pharmaceutical first launched bagged Juhuang Tea in Guangdong, with a prescription personally crafted by traditional Chinese medicine expert Professor Deng Tietao, plus continuous technical improvements and new marketing concepts. By 2013, Kangmei Juhuang Tea had developed into four varieties: bagged, tin can, boxed, and PET.

Juhuang Tea invited Li Bingbing to support, but market operations remained lukewarm, and returns to Kangmei were always cold. Although the product is still sold in the market, its impact on herbal tea is almost zero.

Chrysanthemum withered, chrysanthemum yellow, soon it will be yellow.

Shunpai Herbal Tea—Ruinian is good, but Shunpai never went smoothly

Shunpai Herbal Tea is a product under Ruinian International, a famous Chinese pharmaceutical company, with Ge You as brand spokesperson, officially launched in 2008. The formula of Shunpai Herbal Tea originates from a herbal tea family in the Lingnan region of the Qing Dynasty, and the family's herbal tea made with this formula received the honor of "National Intangible Cultural Heritage No. 41 Secret Formula."

Ruinian Group also adopted a large-scale approach in operating Shunpai Herbal Tea, hiring professional manager teams, aiming to compete for the third position in the herbal tea field and surpass Heqizheng to become the second in China's herbal tea sector. Shunpai also invited famous actor Ge You as spokesperson, bombarding from CCTV to local satellite TV, but the market quickly collapsed. Within just two or three years, it disappeared from the market. This shows how dangerous the herbal tea market is; it's not something ordinary people can handle.

After drinking Shunpai, why am I still not smooth?

Bawang Herbal Tea—Facts prove that forcing the issue doesn't work

In 2010, Bawang Shampoo launched Bawang Herbal Tea, and industry criticism poured in. Sure enough, within two years, Bawang Herbal Tea fell on the road to hegemony. Despite poaching many JDB talents, it ultimately couldn't escape the fate of Farewell My Concubine.

Bawang Group, claiming to be a "traditional Chinese medicine family," launched herbal tea in 2010 and hired Donnie Yen as spokesperson. In 2011, sales revenue reached 167 million yuan, accounting for 18.8% of Bawang Group's total performance, but then Bawang Herbal Tea's development plummeted: revenue in 2012 was 17.583 million yuan, and in the first half of 2013, it was only 790,000 yuan. On July 1, 2013, Bawang Group stopped producing and selling herbal tea. Bawang Group's total revenue in 2015 was 232 million yuan, with a net loss of 110 million yuan.

Brother, look carefully, I'm not Jackie Chan!

Renhe Bupa Huo—Not afraid of fire, but really didn't catch fire

Bupa Huo Herbal Tea is a new-generation herbal tea developed by Renhe Group Food Co., Ltd. in 2010. Based on Chinese herbal medicine, Renhe Group developed and summarized a type of healthy herbal beverage with effects like clearing heat and detoxifying, and quenching thirst—Bupa Huo Herbal Tea.

At the beginning of its launch, Renhe Group built a strong team, fully absorbing the experience of predecessor pharmaceutical companies, adopting an independent company operation model, and operating with professional manager teams. Although Renhe came with 10 kidneys to do Bupa Huo, within just two or three years, the market was a complete failure, becoming a burden to the company. Bupa Huo and Renhe parted ways. To this day, dealer issues remain unresolved.

Behind my cold exterior is a passionate fire.

Taiji Herbal Tea—You're good at medicine, but you can't play Tai Chi with herbal tea

In 2013, Taiji Group launched a herbal tea beverage with a formula developed by a team led by Wang Yongyuan, an academician of the Chinese Academy of Chinese Medical Sciences. The taste is less sweet than familiar herbal teas on the market, and the packaging is blue cans.

Although Taiji Company confidently declared at launch that initial annual production and sales would reach 100 million cans (bottles), with sales revenue of 300-500 million yuan, and planned to achieve sales scale of 2-5 billion yuan after five years, within less than two years, Taiji Herbal Tea had become a laughingstock in the market. Not only did the market not improve, but its image was also terrible. Seeing this packaging, I just want to say: if you want to do such a big thing, at least design a decent package. A product like this is worse than death.

So the core of Taiji's failure is that they were too good at playing Tai Chi. Companies that can't even bother to design packaging aren't worth discussing brand and market with.

Making herbal tea isn't playing Tai Chi; you need real kung fu!

Fusenyuan Herbal Tea—Good herbal tea doesn't hurt the stomach, but hurts the heart?

In 2015, Henan Fusen Pharmaceutical laid out its herbal tea industry, launching Fusenyuan Herbal Tea and hiring Guo Donglin as spokesperson. The slogan was "Old herbal tea doesn't hurt the stomach."

This product is somewhat riding on coattails. Guo Donglin has a deeply ingrained advertisement for Jiangzhong Jianwei Xiaoshi Tablets, and he does have a stomach-nourishing image in consumers' minds. So inviting Guo Donglin for Fusenyuan Herbal Tea was a good strategy, but can your later actions keep up? To put it bluntly, you don't even have a Baidu Baike entry—how can people trust your product?

Good herbal tea doesn't hurt the stomach, but it also shouldn't hurt dealers' hearts!

Tongrentang Herbal Tea—Come guess what I'll do?

Tongrentang Herbal Tea began its layout in July 2015, mainly sold at Tongrentang stores and some supermarkets, and quietly entered JD.com, achieving sales of over 80 million yuan in half a year.

At this year's Spring Sugar Fair, according to data released by Tongrentang, cumulative intended contract signing amounted to 300 million yuan. Tongrentang also plans to push two tea drinks (herbal tea and Maca Oolong Tea) into the mass consumer market, selling through supermarkets, convenience stores, and other mass channels, expanding distribution channels as a precursor to its overall "big health strategic layout."

Many experts have privately discussed this product with me, saying it's thoughtful in effort, decent in design, and powerful in brand. But it's born at the wrong time. Tongrentang Herbal Tea's future is uncertain; we'll know next year how it goes.

Three hundred years of craftsmanship, you know!

According to data compiled by relevant media, at least 18 pharmaceutical companies have entered the herbal tea market, including many giants with annual revenue exceeding 10 billion yuan, but most have not performed well. (Renhe is omitted here.)

Why haven't these powerful pharmaceutical companies succeeded in herbal tea?

First, they were purely envious and playing around, lacking strategic product focus.

Pharmaceutical companies have high profit margins; on the profit lists of listed companies, after banks come pharmaceutical companies, then liquor companies. They look down on beverages. They launched herbal tea purely because they were unhappy seeing JDB raking in money, so they seized the opportunity to jump in. But they found the herbal tea waters too deep and couldn't afford to burn money. With battles everywhere, it wasn't their turn. They quickly retreated to their old business to live comfortably.

Second, outdated channel models failed to grasp core channels.

Most pharmaceutical companies relied on original pharmaceutical channels, which are relatively closed and depend on relationships, without experiencing fierce market competition. They thought having a few pharmacy chains would sell beverages, but found they couldn't sell at all. The main channel for herbal tea is primarily food service, with an all-channel sales model. Many companies missed the opportunity to develop food service channels, thus missing the chance to compete with Wanglaoji and JDB, and were eventually forced out of the market.

Third, product appeals followed and imitated, lacking brand differentiation.

Pharmaceutical companies thought consumers buying medicine care about efficacy, so they would definitely pay for herbal tea from pharmaceutical companies. But they didn't know that JDB transformed Wanglaoji from medicine to beverage, solving consumers' psychological barriers and making herbal tea a refreshing plant-based functional drink, not a plant-based functional medicine. In this cognitive environment, pharmaceutical companies' preconceived notions led them into a dead end in product operation. Although they sold according to beverage standards, the medicinal nature was too strong and lacked differentiated appeals, usually just saying "clears heat" like JDB. This caused products to lose their position, making it hard to achieve anything in the market. As a result, pharmaceutical companies followed JDB for ten years, and more than twenty companies ended up in a state of life and death.

Fourth, wrong market entry strategy missed the entry window.

Most companies that followed Wanglaoji and JDB initially entered the market in the Guangdong and Guangxi regions, their home bases. These markets are mature for herbal tea, already fully satisfied by JDB and Wanglaoji, and channels are well stocked. Therefore, companies found it hard to establish their own market bases. The relatively successful Heqizheng Herbal Tea chose to enter the Jiangxi market, where JDB and Wanglaoji were weaker, established a base, and then entered Guangdong and Guangxi, quickly achieving market status.

Advice for New Entrants

The entire herbal tea category is currently in decline, and the market has been fully cultivated by Wanglaoji and JDB. For latecomers, establishing their own market and achieving success in such an environment is very difficult, requiring huge investments in manpower, materials, and finances, and may only yield small gains.

So no matter what kind of enterprise enters the herbal tea market, the current environment only allows opportunistic entry—hit and run, take what you can. Never use large-scale operations, as that would be like killing a thousand enemies at the cost of eight hundred of your own. The many fallen predecessors have fully proven the difficulties of this path. For dealers, don't expect big gains; fully weigh your channel characteristics and control market investment costs to avoid becoming a sacrifice for manufacturers. In the end, you'll have to clean up the mess yourself.

Dedicated to those still struggling in the herbal tea market!

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