By Yin Taibai, Source: Chuang Daily (chuangribao) When it comes to premixed cocktails, I immediately think of RIO, because in recent years RIO has not only sparked hot topics on Weibo multiple times but also appeared in many popular TV dramas with a "very aggressive" attitude. It has to be said that RIO has done a great job in building brand association. But such a great brand has been hit by negative news frequently since August this year. What's going on? Back in the day, RIO was considered the product with the most potential to surpass 10 billion yuan in sales. Its net profit growth in just one year reached as high as 300%. Revenue once exceeded 1.6 billion yuan. ▼ In addition, it spent heavily to sponsor popular variety shows like "Running Man" and embedded ads in hit TV dramas like "Silent Separation," aggressively capturing 65% of the market share. ▼ But that wasn't enough. To maintain its dominant position in the market, RIO also invited big stars like Yang Yang and Amber Kuo as brand ambassadors. At its peak, RIO often sold out, becoming a hot commodity that fashionistas scrambled to buy. ▼ However, what no one expected was that the bubble of the 10-billion-yuan market suddenly burst. Over the past two years, RIO has been losing money hand over fist, and the money earned back isn't even enough to cover advertising costs. Even the parent company has started to see RIO as a burden. ▼ It has to be said that this unexpected turn came as fast as a tornado. Today, I'm going to dig into why RIO, a "fake hit product," became popular among young consumers overnight and then fell from grace just as quickly.

RIO's Initial Position Was Awkward and Nearly Got It Killed

RIO was first born in bars and nightclubs in Shanghai, where beer, foreign liquor, and beverages had already divided the market equally, each with deep pockets and strong influence. ▼ Following behind the three big brothers—beer, foreign liquor, and beverages—RIO was in an awkward position. If you call it a beverage, it's also somewhat alcoholic; if you call it alcohol, people treat it as a drink. To avoid provoking the foreign liquor big brother, RIO pondered for a long time and decided to set the unit price at 20 yuan, hoping to grab a small piece of the pie from the leftovers of foreign liquor. ▼ But unexpectedly, while RIO's pricing made foreign liquor disdain it, it made the beverage big brother quite dissatisfied. Cola and Sprite besieged RIO in distribution channels, fearing RIO would steal their business. Unable to afford to offend the beverage companies, RIO quickly raised the unit price to 30 yuan, but this price fell into the range of beer. The beer companies, which had been watching coldly from the corner, got angry: "How dare you!" They immediately launched a collective attack. Tsingtao Beer was the first to strike, directly buying out all channels in nightclubs and bars. Budweiser followed closely, doubling the number of promoters. The two giants used a two-against-one tactic to firmly suppress RIO. ▼ But that wasn't the end. Heineken, Guinness, and other brands also joined the fray, surrounding RIO. RIO, lacking experience, ultimately lost due to being outnumbered. RIO's initial efforts failed. After being bullied by the three big brothers in turn, it accumulated debts exceeding 25 million yuan. At the same time, its competitor, Breezer, wasn't doing much better. The two cocktail brands stared at each other, not knowing what to do. ▼ Breezer Cocktail Just then, Breezer, which was also losing its shirt, moved all its products to online sales. The vibrant colors and variety instantly made Breezer look classy, and within less than a year, sales exceeded 30 million bottles. Inspired by this, the half-dead RIO quickly adjusted its strategy, targeting fashion-conscious young people, especially young women. ▼ For this group, they enjoy lively gatherings and parties. Drinking beverages doesn't liven things up, and drinking alcohol can lead to losing composure. The precise positioning of "young sisters' youthful drink" was stylish, refined, and trendy, which immediately left Breezer in the dust. By 2010, RIO had achieved profits of over 10 million yuan.

RIO Attracted Attention Through Ubiquitous Product Placements

Having just survived a life-and-death crisis, RIO didn't let its guard down. Instead, it took the opportunity to enter major supermarkets and expanded from Shanghai and Shenzhen to the entire East China, North China, and Southwest regions. After the intensive layout was completed, RIO occupied over 40% of the shelf space for premixed drinks in supermarkets, while Breezer held less than 20%. The rest was divided among small brands that followed the trend. By early 2013, RIO's sales had exceeded 58 million yuan. ▼ At this point, RIO keenly realized that market education was initially complete, and the next step was how to press the advantage. So throughout 2014, RIO frantically used TV dramas and films to increase exposure. First, it spent 200 million yuan to deeply embed ads in the popular variety show "Running Man." The ubiquitous RIO successfully brainwashed viewers, and sales that year soared to 980 million yuan, nearly 8 times higher than the previous year. ▼ Having tasted success, RIO then sponsored "Day Day Up" and placed many awkwardly hard ads in over 10 Chinese and foreign TV dramas, including "Silent Separation," "Boss & Me," and "She's Lovable to Me." ▼ RIO, which was almost killed by the three big brothers, finally turned things around. But showing off like this didn't seem enough to vent its frustration, so it spent heavily to invite popular stars like Zhou Xun as brand ambassadors. ▼ After a series of celebrity endorsements, hot drama placements, reality show sponsorships, and overwhelming cocktail ads, RIO instantly became a "hit product." In the first half of 2015, sales exceeded 1.6 billion yuan, officially establishing its dominance in the industry.

Why Did the Arrogant RIO Lose Money Hand Over Fist?

However, to many people's surprise, RIO, which once sponsored everything under the sun, was reported to have suffered huge losses of nearly 200 million yuan. Now its products can't even be sold, and distributors across the country are complaining loudly. RIO's situation seems far from optimistic. In my view, the popularity earned through gimmicks doesn't represent victory. RIO's Waterloo can be attributed to the following three reasons: 1. Over-marketing, causing aversion RIO placed too much emphasis on marketing. The screen-dominating placement marketing was dazzling, and it focused all its energy on attracting consumers' attention while ignoring the product itself and consumer experience. Naturally, people's acceptance was worn down by the constant presence of RIO. ▼ Still from "Silent Separation" Actually, everything has its limits—even ordinary people understand this. However, RIO, busy with self-amusement and making money, continued to persist in entertainment marketing without any sign of retreat. In reality, RIO's advertising expenses have always been alarmingly high. In 2015 alone, it burned 330 million yuan. Even when revenue and net profit dropped significantly, advertising expenses still reached 154 million yuan. This approach of putting the cart before the horse is simply reckless. 2. Blind arrogance, overestimating the market size Looking at the development of premixed cocktails in recent years, it's not hard to see that it was hyped by advertising, media, and merchants. In the era of information explosion, the brand communication triggered may not always be beneficial to the company. ▼ Moreover, as a brand-new category, it requires at least several years or even a decade of consumer cultivation. The process of trying to grow too fast made RIO lose its cool. Mistakenly believing it could keep soaring, RIO was actually in a self-imposed "Great Leap Forward" period. It even blindly set unrealistic performance goals, ultimately leading to product backlog and a sales deadlock. 3. Low customer loyalty bought with money Money is not omnipotent. Users attracted solely by spending money on advertising, without core competitiveness, have quite unreliable loyalty. Especially since RIO's main consumer group is young people who are passionate about fashion. But if you can be fashionable, other brands can too, and they can be even more fashionable. Moreover, the post-80s and post-90s generations are inherently a generation that chases novelty. ▼ The reason RIO was able to quickly open the market in the early stage was mainly due to seizing the first-mover advantage. However, as its fame grew, it attracted many peers and giants to join. This single marketing model of purely grabbing attention is easily replicated, so RIO couldn't retain the users it bought with money. This is a classic case of inviting wolves in but being unable to resist their attack. Who can be blamed for ending up where it is today? God, when He wants to destroy someone, first makes them mad. Marketing bought with money is actually just hooliganism. -END- The best learning platform for FMCG distributors in China Focusing on providing professional, practical, and actionable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Boost Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brands | 016 Distributor B2B Transformation | [Long press QR code to follow]