Imported Red Bull lands, but the road ahead is uncertain. On April 8, Beijing Business Today reporters found that Thailand's T.C. Pharma's imported Red Bull Vitamin Flavored Beverage (hereafter 'Thailand Imported Red Bull') appeared in Beijing supermarkets. Previously, due to the unresolved dispute between T.C. Pharma and Hua Bin Group over Red Bull Vitamin, and the former's authorized product Red Bull Anji (launched via Guangzhou Yao Energy) being poorly received by consumers due to taste, T.C. Pharma established a branch in Beijing to operate imported products, which the industry calls 'Plan B'. The appearance of Thailand Imported Red Bull in Beijing is the concrete implementation of Plan B. Industry insiders believe that Thailand Imported Red Bull, with a taste similar to Hua Bin Group's Red Bull Vitamin, can compensate for Red Bull Anji's shortcomings, but Red Bull Vitamin has a clear advantage in distribution channels. The success of Thailand Imported Red Bull hinges on its channel expansion capabilities. -01- New product appears According to Beijing Business Today reporters, Thailand Imported Red Bull, under T.C. Pharma, appeared in Beijing Yonghui Superstores. Packaging information shows that the manufacturer is T.C. Pharma, the China general agent is Shenzhen Pu Sheng Food Sales Co., Ltd. (hereafter 'Pu Sheng Food'), production date December 23, 2019, shelf life 18 months. The main ingredients of Thailand Imported Red Bull include guarana extract, taurine, inositol, niacin, sunset yellow, and B vitamins. Beijing Business Today reporters compared and found that the main ingredients are basically the same as Hua Bin Group's Red Bull Vitamin, except it lacks caffeine. Additionally, Thailand Imported Red Bull uses a similar gold can as Red Bull Vitamin. During an interview, a T.C. Pharma representative told Beijing Business Today reporters that Thailand Imported Red Bull's taste differs from Red Bull Anji, removing the ginseng flavor to meet different consumer taste preferences. Thailand Imported Red Bull was officially launched in December 2019 and is currently sold in offline markets across 22 provinces and online platforms like JD.com. Despite being an imported product, Thailand Imported Red Bull's price is comparable to Red Bull Anji and Red Bull Vitamin. JD.com data shows that a 24-can case of Red Bull Vitamin sells for 139 yuan, Red Bull Anji for 132 yuan, and Thailand Imported Red Bull at 35 yuan for 6 cans, equivalent to 140 yuan for 24 cans. It is understood that Red Bull Vitamin was produced in 1998 under a license from T.C. Pharma to Hua Bin Group. In 2018, T.C. Pharma claimed the license had expired, but Hua Bin Group argued it was for 50 years. The two parties disagreed and initiated legal proceedings; the dispute over the license term is still pending in court. To seize opportunities in China's functional beverage market, T.C. Pharma authorized Guangzhou Yao Energy to launch Red Bull Anji functional beverage, with Pu Sheng Food handling operations. At the end of 2019, T.C. Pharma established T.C. (Beijing) Enterprise Management Co., Ltd. (hereafter 'T.C. Beijing') in Beijing. At the end of March 2020, T.C. Pharma established T.C. Red Bull, a wholly-owned subsidiary of T.C. Beijing, engaged in import/export and food sales, which the industry calls 'Plan B'. -02- Targeting Hua Bin Xu Xiongjun, a strategic positioning expert and founder of Jiude Positioning Consulting, believes that at the corporate structure and product level, T.C. Pharma is accelerating its layout in China to directly compete with Hua Bin Group's Red Bull Vitamin. It is understood that Red Bull Anji uses the formula of Guangzhou Yao Energy's functional beverage, which includes ginseng, giving it a ginseng taste inconsistent with the familiar Red Bull Vitamin flavor, making it hard for consumers to accept. However, according to regulations, the formula of functional beverages cannot be changed. An insider revealed that Red Bull Anji launched in May 2019, with annual sales not exceeding 500 million yuan in 2019, and 60% of goods became distributor inventory, a result that T.C. Pharma found unsatisfactory. In Xu Xiongjun's view, the poor sales are mainly due to Red Bull Anji's taste not matching consumer habits. Among many reviews on JD.com, consumers complained most about Red Bull Anji's taste. Some comments said, "The taste is off, it has a strange flavor." Some even questioned if Red Bull Anji was counterfeit, commenting, "Is this genuine? It tastes different from Red Bull, a bit fake." For the newly launched Thailand Imported Red Bull, some consumers said, "This is imported Red Bull; the taste is no different from the domestic one." Regarding T.C. Pharma's accelerated layout in China through the new product Thailand Imported Red Bull, a Hua Bin Group representative told Beijing Business Today reporters that there is no comment at this time. -03- Setbacks in implementation Although the intention to benchmark against Red Bull Vitamin is strong, T.C. Pharma's strategy to accelerate Plan B through Thailand Imported Red Bull is not smooth. Beijing Business Today learned that Pu Sheng Food is recruiting distributors, but distributors are not optimistic about Thailand Imported Red Bull's prospects. A former distributor recruited by Pu Sheng Food told reporters that Thailand Imported Red Bull's current franchise policy is demanding, requiring significant upfront investment from distributors. Given the market response to Red Bull Anji and the comparison with Red Bull Vitamin, Thailand Imported Red Bull has no absolute advantage, so he refused to become a distributor. Regarding the demanding franchise policy, Xu Xiongjun said, Thailand Imported Red Bull is imported from Thailand, with higher logistics costs, and T.C. Pharma and Pu Sheng Food have relatively high investments, so the franchise policy is demanding. However, Chinese consumers are not currently enthusiastic about imported foods, and Red Bull Vitamin has a large base of loyal fans and stable sales channels, making it difficult for Thailand Imported Red Bull to achieve widespread distribution in the Chinese market. Data shows that Hua Bin Group's Red Bull Vitamin currently has over 5,000 core distributors and 600,000 terminal outlets nationwide. In 2019, Hua Bin FMCG sales were approximately 24.1 billion yuan, up 6.2% year-on-year. Among these, Red Bull Vitamin sales were approximately 22.3 billion yuan, up 5% year-on-year. In the view of Zhu Danpeng, a Chinese food industry analyst, besides the gap in scale with Red Bull Vitamin, Thailand Imported Red Bull has not yet obtained the 'Blue Hat' certification for functional beverages. "Without the Blue Hat, Thailand Imported Red Bull cannot be promoted as a functional beverage. Compared with functional beverages on the market like Red Bull Vitamin, Lehu, and Dongpeng Special Drink, Thailand Imported Red Bull's disadvantage is obvious," Zhu said. Source: Beijing Business Today