Source: Red Star News, China Securities Journal, National Business Daily App
"3 cases, 36 bottles, total 10 yuan," "Someone grabbed 30,000 bottles," "30,000 orders were grabbed," "Yuanqi Forest had a bug last night and was stripped bare"... Early on the 26th, many netizens shared on Weibo their "spoils" from purchases at Yuanqi Forest's official Taobao store (not Tmall flagship store), along with screenshots of their orders.
From the shared orders, the original price of 79 yuan per case (12 bottles) of sparkling water was bought by some for 3 cases, with a final payment of 10.55 yuan, averaging about 3.5 yuan per case and less than 0.3 yuan per bottle. Even more extreme, someone directly ordered products worth 79,000 yuan at original price, paying only 15,800 yuan.
The business license for the above Taobao store uses Yuanqi Forest (Beijing) Food Technology Group Co., Ltd. After the incident, this 4-year-old store with nearly 50,000 followers has removed all products and posted a notice pleading with consumers who have placed orders to apply for refunds. The notice states:
"In the early morning of October 26, due to an operational error by one of our store's operations staff, a large number of ultra-low-priced orders far exceeded the actual inventory of our small store, and the resulting losses far exceeded our store's capacity to bear. Here, we sincerely ask for your help. Please apply for a refund in the backend to help our small store get through this difficult time."
Operational Error
On October 26, a netizen reported on Weibo that Yuanqi Forest's Taobao store had a pricing error, with the original 79 yuan per case (12 bottles) of sparkling water being bought for 3 cases, with a final payment of 10.55 yuan, averaging about 3.5 yuan per case.
Some netizens also showed even lower prices for 36 bottles, reportedly just a few yuan.
On social platforms like Weibo and Xiaohongshu, some consumers posted screenshots of orders for 1,000 cases, 10,000 cases, and even one consumer claimed to have ordered 30,000 cases at once.
According to a screenshot shared by one consumer, they purchased 1,000 cases for a total of 15,800 yuan, averaging 15.8 yuan per case, still far below the original price of 79 yuan per case.
Additionally, some consumers spent 19.49 yuan to buy 12 bottles of milk tea, which actually cost 129.9 yuan.
In response, netizens said this was not "fleecing wool" but directly "slaughtering the sheep."
The erroneous price caused sales of this sparkling water to surge by 300,000 orders, reportedly resulting in losses of over 2 million yuan for the store.
Some netizens commented: "If Yuanqi Forest acknowledges the orders, they lose 2 million yuan; if they don't acknowledge and close the store, they only lose the 1,000 yuan deposit."
Some netizens believe it was an employee mistake and unintentional, but others suspect it was deliberate marketing.
A screenshot circulating online shows a Taobao merchant group called "Yuanqi Forest Flash Sale Group," where a Taobao personal account claiming to be Zhang Along, the operations manager of Yuanqi Forest's official store, posted that due to his wife going into labor, the store's discount was "set incorrectly," causing "over 2 million yuan in losses to the company," and pleaded with users to cancel orders and request refunds. However, Yuanqi Forest told Red Star News that this was not an official employee's response.
According to Red Star News, on October 26, Yuanqi Forest responded: "It is confirmed that the Taobao store had an operational accident last night, and we are currently working on proper handling."
Similar "fleecing wool" incidents have occurred in the e-commerce industry before, with varying final outcomes.
On January 20, 2019, Pinduoduo's 100-yuan universal coupon marketing promotion had a major loophole, with a large number of new and old users flooding the platform to claim 100-yuan no-threshold coupons. Professional wool parties claimed thousands of 100-yuan no-threshold coupons at once, recharging 540,000 yuan in Q coins and 640,000 yuan in phone bills, causing Pinduoduo losses of over 100 million yuan.
After the incident, Pinduoduo immediately issued an official statement saying that a black-gray industry group exploited the loophole for improper profit, reported the case to public security authorities, and cooperated with relevant departments to crack down on the black-gray groups.
To recover losses, Pinduoduo ultimately forced refunds for physical orders and froze users' recharged Q coins and phone bills.
Before Pinduoduo, China Eastern Airlines also had the "China Eastern cabbage-priced air tickets incident." On November 17, 2018, due to system maintenance, China Eastern had an ultra-low-price bug, allowing users to buy first-class tickets for 90 yuan. After the incident, China Eastern also issued a notice, but unlike Pinduoduo, China Eastern's response was that "all tickets sold during system maintenance are valid and passengers can use them normally."
This shows that different incidents have different solutions.
Valuation Reaches 40 Billion Yuan
Yuanqi Forest was founded in 2016. According to data, it is a beverage company with internet+ genes, having "launched a series of sugar-free, low-calorie healthy products that are well received by consumers."
Regarding Yuanqi Forest's rapid rise within a few years of establishment, an investment professional once analyzed to a reporter from National Business Daily that Yuanqi Forest's positioning precisely solves the contradiction of young women who "love sweets but hate sugar, and love drinks but fear gaining weight."
"The positioning targets the precise group of young women, while fully utilizing the development of new internet media channels. The initial promotion chose online platforms like Xiaohongshu, whose main user base is young women, quickly forming a grass-planting effect."
Image source: Photo by reporter Chen Qing from National Business Daily (file photo)
The rapidly rising Yuanqi Forest attracted capital. Qixinbao information shows that it has had 5 rounds of financing so far. On April 9 this year, Warburg Pincus's official WeChat account posted that on April 9, Yuanqi Forest announced the completion of a new round of financing, with a post-investment valuation of $6 billion (approximately 40 billion yuan). The funds will mainly be used for factory construction, product R&D, and overseas market expansion. Warburg Pincus is the largest new investor.
An article from Gaorong Capital's official WeChat account on April 9 further showed that this round of financing was led by Sequoia Capital China, Warburg Pincus, and L Catterton, with Temasek, Gaorong Capital, Longhu Capital, and others following. The post-investment valuation reached $6 billion. The article also showed that Yuanqi Forest achieved sales of nearly 3 billion yuan in 2020.
On October 26, Li Bingqian, general manager of Yuanqi Forest's production center, revealed that under pressure from international giants, Yuanqi Forest faced supplier supply cuts multiple times from 2018 to 2020, so it began building its own factories.
Up to now, Yuanqi Forest's five major factories have a total planned investment of 5.5 billion yuan, covering a total area of over 1,000 mu. Once fully operational, total production capacity will exceed 5 billion bottles.
Currently, Yuanqi Forest's factories in Chuzhou, Anhui; Xiqing, Tianjin; and Zhaoqing, Guangdong have been completed and put into production, with an average product R&D cycle of 5.5 months and R&D costs increasing by over 350% year-on-year.
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