If we talk about competition in the FMCG industry, the beverage category is absolutely the most intense—there is no category with fiercer competition; it can be described as a red ocean. Wanting to stand out in a red ocean market, or quickly build awareness and shape a brand, offers almost no possibility. Even if it does, it either requires spending heavily or, in the past, targeting a niche channel with heavy investment, focusing on sales volume before brand building. But in today's fully satisfied market, such cases are rare. The market is always full of variables and imagination. In 2019, a brand that had only been around for two years—starting external new product recruitment in December 2017—achieved near-universal recognition in the industry and annual sales of 300 million yuan by 2019. That brand is Hankow Erchang. Ms. Kimi, founder of Hankow Erchang Recently, New Distribution interviewed Ms. Kimi, founder of Hankow Erchang. In a low-involvement, highly homogenized FMCG beverage industry, how did Hankow Erchang manage to stand out? Behind their reputation as a 'hit-making machine,' what opportunities did they identify? -01- In 1.5 Years, What Did Hankow Erchang Do? Before June 2018, Hankow Erchang's sales area was limited to Wuhan, which Kimi called the 'trial-and-error' stage. After June, Hankow Erchang truly began its expansion, starting with Shanghai, then Beijing, and subsequently opening 6+1 major regions: Central China, North China, South China, East China, Northwest, Southwest, plus one 'special zone'—Shanghai. Each province's layout extended from provincial capitals to tourist cities. In early channel selection, Hankow Erchang first entered high-end and premium supermarkets represented by Ole'精品超市, and dining-bar channels like Beer Lady. Kimi admitted that Hankow Erchang is positioned as a 'new trendy beverage,' so over the past 1.5 years, compared to traditional small retail stores, they had fewer placements, focusing more on modern KA, premium supermarkets, and chain bakeries and fresh fruit stores, while controlling circulation channels. For Hankow Erchang, 2019 was the first year; the brand value and price system were not fully stabilized, so they were not in a hurry to enter circulation channels. For an innovative consumer brand, especially in the early stages of building, making a product suitable for all ages is unrealistic. Therefore, Hankow Erchang targeted young female consumers as its core group, centering on the 'she economy' and their all-day, all-scenario lifestyle. Recently, Li Jiaqi's livestream sold out all of Hankow Erchang's products in 15 seconds, which was actually a precise match of target user groups. In 1.5 years, Hankow Erchang expanded beyond Wuhan to major cities like Beijing, Shanghai, and Guangzhou, covering mainstream modern channels and systems including FamilyMart, Lawson, and Hema, essentially completing mainstream market coverage. 30,000 convenience stores—that's the achievement Hankow Erchang has made. Of course, channel selection is inseparable from the product's value positioning and insight into market demand. -02- An 8-Yuan Bottle of Beverage Sells More Than Just Soda! Whether within the industry or among downstream distributors, the most concerning issue is Hankow Erchang's pricing. An 8-yuan soda, far above peers, always makes people wonder, 'Is it worth it?' Kimi told New Distribution: First, from the product itself, it is a carbonated real juice beverage with real juice added; the orange soda has 60% juice content. Real ingredients, healthy and delicious, and rich taste experience are the foundation for the 8-yuan price. Not only that, but beyond the product itself, the original visual packaging and brand core are also very valuable. Hankow Erchang's target audience is mainly urban women aged 15-35, who generally have their own lifestyle, are non-conformist, independent, have strong aesthetic needs, and pursue a quality life. So the product or brand connotation itself aims to convey not just a bottle of soda, but a diverse and healthy eating attitude, a beverage brand that reflects a lifestyle—not a cold, thirst-quenching product. In short, in Kimi's understanding, besides being tasty and healthy, today's young consumers pursue product connotation and visual aesthetics, and are willing to pay a premium for it. Additionally, from the external market environment, the mainstream beverage price band for domestic brands is generally below 6 yuan, while imported beverages are above 15 yuan, leaving a blank space in between. By positioning at 8 yuan, Hankow Erchang deliberately avoids competition on both sides, fitting the consumption upgrade environment of 'a bit more expensive, much better.' To fully embody the 'trendy' culture, Hankow Erchang launched commemorative sodas in various cities, using local dialects as design inspiration and city-specific landscapes and cultural elements as main visuals, evoking consumers' sense of identity and pride in their city's cultural symbols. At the same time, Hankow Erchang periodically launches topical limited-edition products, such as the 'Cheer Up Lychee' inspirational soda, the 'Confession Bottle' love soda, and the 'Face-Changing Bottle' meow soda. These are what Hankow Erchang internally calls 'traffic-driving products.' Besides traffic-driving products, Hankow Erchang also has a product line called 'regular products.' Through personalized traffic-driving products, Hankow Erchang achieves brand communication and social interaction; while regular products, in addition to driving sales, also help build broader brand awareness. In Kimi's understanding, she believes the product itself can be the core carrier of brand communication, using the product to generate topics and share more brand stories, rather than relying solely on external carriers or advertising. Hankow Erchang pays more attention to the scenario-based and personified nature of each product, connecting with consumers emotionally. That is the marketing logic behind an 8-yuan beverage. Hankow Erchang has always been called a 'hit-making machine' externally. Kimi told New Distribution that the core reason for continuous innovation is that our team is this core consumer group; we are KOLs ourselves, and we know what young consumers like and prefer. Simply put, 'I understand you.' When the product's taste and visuals resonate with young consumers, hits come naturally. -03- Hankow Erchang Is Just the 'Highway'; There Are Bigger Moves Ahead Frankly, focusing on trendy culture output is not economical for an innovative brand. Brand value and culture output are long-cycle, continuous work that cannot be completed overnight. From a business perspective, it is not cost-effective. Regarding this, Kimi explained: That is indeed true, but for us, as a startup consumer brand, we must present the most eye-catching things to gain market attention and downstream partner attention. You can think of 'Hankow Erchang' as a billboard; we will spare no effort to continuously build this brand. Not only that, once we have successfully built Hankow Erchang and have stable, trusted channel partners, we will continue to launch new categories, new brands, and new products that suit the mass market. Having entered the FMCG circle, we never think about short-term business; we have a complete market plan. In November 2019, Hankow Erchang's parent company Hengrunshi Operations Management Company launched a new brand of equal magnitude—Parallel Universe—with two series: the low-alcohol flavored prepared wine series 'Parallel Universe' and the aromatic sparkling water series 'Wind Fire Forest Mountain.' Kimi positions Parallel Universe as 'a girl's first drink.' At the channel level, it reuses Hankow Erchang's existing channel resources, focusing on entering catering and bar channels. Subsequently, in May 2020, Hengrunshi launched another sub-brand under Hankow Erchang—Zhengqi Workshop—belonging to the juice sparkling water series, with the positioning 'Delicious is guilt-free, sugar-free is king,' and invited artist 'Lamu Yangzi' as spokesperson. As a relatively affordable real juice sparkling water series within the Hankow Erchang brand system, its channels will lean more toward modern convenience stores and traditional circulation channels. After nearly two years of accumulating consumer insights, brand awareness, and building a downstream channel highway, Hankow Erchang's next step is to continue shaping a good beverage brand. At the same time, through a 'refreshing' product matrix, let consumers gradually enjoy the different lifestyle experiences that Hankow Erchang brings them. Summary: Looking back at the beverage market over the past two years, innovation by leading FMCG companies is actually more about sustaining innovation—putting a new package and logo on a new subcategory. In recent years, the most prominent innovators have been Genki Forest and Hankow Erchang. However, the innovations of Genki Forest and Hankow Erchang are fundamentally different. Genki Forest's innovation, in fact, is a big step forward in product upgrading within the existing market, combined with consumption quality upgrades, to meet consumers' pursuit of health and taste. Hankow Erchang's innovation, on the other hand, is more like opening up a brand-new market, using a new product to satisfy consumers' pursuit of life, social interaction, and trends. Hankow Erchang is not just upgrading the product itself but also expanding the product's external expression. Undoubtedly, such innovation is not easy to truly break through in the market. Currently, Hankow Erchang can be said to have successfully completed the stage from 0 to 1. How far and how big it can go next, we will wait and see. But regardless, they deserve our applause! Focusing on new distribution for FMCG distributors / new marketing cases for brand owners For communication, you can add WeChat by long-pressing. When adding, please indicate your company, position, and name.