---
title: "JDB, Wanglaoji Feud Shows Unified a Chance in Herbal Tea?"
description: "Unified's herbal tea product 'Xiancao Shuangshuang' has been renamed 'Xiancao Liangcha' to emphasize its herbal tea positioning. As Unified's performance declines, it sees an opportunity in the herbal tea market amid the JDB-Wanglaoji dispute, but experts doubt its potential due to market saturation and brand recognition challenges."
author: "刘洋 叶静"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-09-26"
language: "en"
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# JDB, Wanglaoji Feud Shows Unified a Chance in Herbal Tea?

> Unified's herbal tea product 'Xiancao Shuangshuang' has been renamed 'Xiancao Liangcha' to emphasize its herbal tea positioning. As Unified's performance declines, it sees an opportunity in the herbal tea market amid the JDB-Wanglaoji dispute, but experts doubt its potential due to market saturation and brand recognition challenges.

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**Recently, Unified's 'Xiancao Shuangshuang', which has seen lukewarm sales three years after launch, has quietly been renamed 'Xiancao Liangcha' to highlight its herbal tea positioning.**
In recent years, Unified's performance has been declining. Through measures such as closing factories, layoffs, and price increases, its 2017 performance stabilized, but product-side improvements have been less obvious. To optimize its product structure, Unified has begun adjusting its products, and the herbal tea dispute between Wanglaoji and JDB has shown Unified an opportunity. Industry insiders believe that although JDB has lost some market share in its battle with Wanglaoji, its brand awareness remains. Unified's attempt to seize the market space left by JDB through the renaming of 'Xiancao Shuangshuang' is not an easy task. At the same time, the growth rate of the domestic herbal tea market has shown signs of fatigue in recent years, and Unified has missed the best timing for incremental growth in herbal tea beverages.
**Renamed 'Herbal Tea' Three Years After Launch**
Three years after launch, Unified has finally given its 'Xiancao Shuangshuang' a clear positioning. Recently, Unified renamed its herbal tea product 'Xiancao Shuangshuang' to 'Xiancao Liangcha', and in an upgrade, added 'new particles of herbal tea' to the product, highlighting the feature of containing grass jelly particles. It is understood that Unified's 'Xiancao Liangcha' uses metal can packaging, with a specification of 310 ml and a retail price of 4 yuan per can. A Unified spokesperson said the product is mainly sold in the South China region and distributed through a dealer model.
A Beijing Business Today reporter found that the product is not listed on Unified's official Tmall flagship store; currently, consumers can only purchase it through other Taobao shops. Searching for 'Unified Xiancao Liangcha' on the Taobao platform yields only 8 shops selling the product, with the highest monthly sales being just over a hundred transactions.
Regarding the absence of Unified's 'Xiancao Liangcha' from the flagship store, Xu Xiongjun, a strategic positioning expert and founder of Shanghai Jiude Positioning Consulting, believes this may be related to the product's poor market sales. "Although online distribution costs are low, brand flagship stores consider the product's market sales performance when selecting items to list, just like offline stores. If the product's sales are not outstanding, they will not rashly list it," he said.
In fact, as early as 2014, Unified launched the predecessor of 'Xiancao Liangcha', 'Xiancao Shuangshuang', but due to low consumer awareness, the product's sales have been mediocre. "'Xiancao Shuangshuang' was initially limited to the southern market. Southern consumers, upon seeing the herbal ingredient, basically equate it with herbal tea, but northern consumers do not have this concept, so the product's market awareness is not high. Moreover, 'Xiancao Shuangshuang' did not find its unique selling point or product positioning, leading to poor market performance," said brand marketing expert Lu Shengzhen.
Regarding the reason for renaming 'Xiancao Shuangshuang' to 'Xiancao Liangcha', a Unified spokesperson said the main purpose is to highlight the 'herbal tea' attribute of the product, allowing consumers to more intuitively recognize that the product contains 'herbal grass' and providing consumers with more choices of herbal tea plant beverages.
Zhu Danpeng, an analyst at China Food Industry, believes that after the two domestic herbal tea giants Wanglaoji and JDB became embroiled in disputes, JDB faced multiple crises. Unified's renaming of the product from 'Xiancao Shuangshuang' to 'Xiancao Liangcha' to highlight its herbal tea attribute shows that Unified wants to seize the opportunity in the current herbal tea industry and hopes to fill the market gap left by JDB.
In Xu Xiongjun's view, Unified's performance in recent years has been unsatisfactory. Unified has been trying to launch new products to stimulate sales growth, but with little effect, and Unified has fallen into a development bottleneck. Currently, Unified has begun adjusting its products and optimizing its product line; clarifying the positioning of its herbal tea products is part of the adjustment.
**Declining Performance Forces Product Optimization**
It is worth noting that for Unified, adjusting its product structure has become an important part of boosting overall performance. Data shows that in the first half of 2018, Unified's revenue was 11.224 billion yuan, a year-on-year increase of 6%; net profit was 714 million yuan, up 25.4% year-on-year. In the first half of 2017, Unified's revenue was 10.886 billion yuan, a year-on-year decrease of 7.1%; net profit was 570 million yuan, a year-on-year decrease of 26.5%.
Zhu Danpeng believes that from an overall operational perspective, in the first half of 2018, Unified's performance did not change much from before. The previous factory closures, layoffs, and price increases became important means to support Unified's profit growth in the first half of 2018. "Especially price increases, because they stimulated the entire channel," he said.
At the beginning of the year, Unified issued a price increase announcement stating that from January 23, 2018, the retail price of products from its dairy and beverage division would increase by 1-3 yuan per item, mainly involving tea drinks and juices; instant noodles also increased in price at the same time, with an increase of 1-2 yuan per item.
In the first half of 2017, Unified was exposed to forcing employees to leave and closing factories in Xuzhou and Shijiazhuang. According to Unified's 2017 semi-annual report, as of June 30, 2017, Unified had approximately 29,000 employees, a year-on-year decrease of nearly 4,000.
It is worth noting that although Unified's revenue and net profit increased in the first half of 2018, they still do not match its performance in the first half of 2016. Data shows that in the first half of 2016, Unified's revenue was 11.713 billion yuan, and net profit was 775.2 million yuan.
With poor performance, Unified has been actively adjusting its products and optimizing its product structure. In the herbal tea market, in 2018, one of the herbal tea giants, JDB, faced multiple crises, leading to poor market performance and creating development opportunities for Unified's herbal tea products. Subsequently, Unified renamed 'Xiancao Shuangshuang' to 'Xiancao Liangcha', clarifying the product's herbal tea positioning and intending to enter the herbal tea market.
**Market Shrinking, Space Narrow**
Regarding how the renamed 'Xiancao Liangcha' will compete in the domestic market, a Unified spokesperson told Beijing Business Today that in the future, Unified will gradually promote 'Xiancao Liangcha' to all regions of the country for sale. "In the context of the rise of new retail in recent years, we will combine the company's e-commerce channel and gradually list it for sale," he said. However, in the view of industry insiders, whether in terms of the external environment or the product itself, the development space for Unified's 'Xiancao Liangcha' is very narrow.
In recent years, the growth rate of domestic herbal tea market sales has shown signs of fatigue. Data shows that from 2009 to 2012, the domestic herbal tea category maintained high growth of 16%-18%, but by 2016, the herbal tea market sales reached 56.12 billion yuan, with a growth rate of only 4.2%, lower than the 10% in 2015. Zhu Danpeng said that as the domestic herbal tea market further shrinks, it is not easy for Unified to gain market share in this market.
At the same time, facing established herbal tea products such as Wanglaoji, JDB, and Heqizheng, Unified's 'Xiancao Liangcha' itself does not have much differentiation. A Beijing Business Today reporter noted that the ingredients of Unified's Xiancao Liangcha mainly include grass jelly, white sugar, honey, herbal grass, Luo Han Guo, honeysuckle, and Prunella vulgaris. The main ingredients of JDB and Wanglaoji include white sugar, herbal grass, frangipani, microcos paniculata, chrysanthemum, honeysuckle, Prunella vulgaris, and licorice. The two have some similarities in ingredients. A citizen surnamed Han, who had purchased Unified's 'Xiancao Shuangshuang', told Beijing Business Today: "The taste is similar to other brands' herbal tea, just with more grass jelly than Wanglaoji and JDB."
Lu Shengzhen believes that Unified's 'Xiancao Liangcha' highlighting herbal grass particles is just to find its own unique selling point and show differences from products like Wanglaoji and JDB, but the barrier of this appeal is not strong. In Zhu Danpeng's view, Unified's 'Xiancao Liangcha' focuses on the 'herbal grass' concept to reflect differentiation from other herbal tea products, but its innovation is insufficient.
In addition, in terms of brand awareness, the renamed Unified 'Xiancao Liangcha' is far behind Wanglaoji and JDB. Xu Xiongjun said that in consumer perception, herbal tea is already equated with JDB and Wanglaoji. Unified only launched its herbal tea product in 2014, entering the market late, so its awareness in the herbal tea industry is naturally lower than that of Wanglaoji and JDB.
"Unified's renaming of its herbal tea product, confirming the product's herbal tea positioning, and strengthening channel construction can, to a certain extent, enhance consumer awareness of the product and drive sales. But fundamentally, it will not make a significant contribution to performance," Xu Xiongjun admitted.
This article is sourced from Beijing Business Today.
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