---
title: "Red Bull with Annual Sales of 23 Billion Yuan Faces Disappearance"
description: "It is one of China's most successful beverage brands, dominating the energy drink market for 20 years. With over 3 million sales outlets nationwide, it has built one of the world's most powerful commercial networks. In 2015, its revenue exceeded Coca-Cola's, reaching 23.07 billion yuan, making it the best-selling beverage in China. However, recent rumors of downsizing, production halts, office closures, and trademark expiration have cast a shadow over its prosperity. What lies ahead for China Red Bull?"
author: "张禄桅"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-01-03"
language: "en"
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---

# Red Bull with Annual Sales of 23 Billion Yuan Faces Disappearance

> It is one of China's most successful beverage brands, dominating the energy drink market for 20 years. With over 3 million sales outlets nationwide, it has built one of the world's most powerful commercial networks. In 2015, its revenue exceeded Coca-Cola's, reaching 23.07 billion yuan, making it the best-selling beverage in China. However, recent rumors of downsizing, production halts, office closures, and trademark expiration have cast a shadow over its prosperity. What lies ahead for China Red Bull?

It is one of China's most successful beverage brands, dominating the energy drink market for 20 years. With over 3 million sales outlets nationwide, it has built one of the world's most powerful commercial networks.
In 2015, its revenue exceeded Coca-Cola's, reaching 23.07 billion yuan, making it the best-selling beverage in China.
However, recent rumors of downsizing, production halts, office closures, and trademark expiration have cast a shadow over its prosperity. What lies ahead for China Red Bull?
**China Red Bull vs. Austria Red Bull: Who Made a Wedding Dress for Whom?**
Many people don't know that the gold-can Red Bull sold in China for 20 years is not the owner of the Red Bull brand. Nor do they know the relationship between the gold-can and silver-blue-can Red Bull.
1 is Austria Red Bull, 2 and 3 are China Red Bull
Red Bull (Thai: Kratingdaeng) was actually invented by Thai-Chinese businessman Chaleo Yoovidhya in 1966, originally intended to keep blue-collar workers like shift workers and truck drivers awake during overnight shifts.
Unexpectedly, the drink became a hit as soon as it hit the market, becoming one of Thailand's best-selling beverages. Chaleo wrote in his Thai biography: "Red Bull brings me 11 million baht in daily income (about 2.12 million yuan)."
In 1982, Dietrich Mateschitz, on a business trip to Thailand, discovered that Red Bull was effective in alleviating jet lag. He then approached Chaleo, and the two hit it off, each investing $500,000 in 1984 to hold 49% of shares (the remaining 2% held by Chaleo's son), jointly creating Red Bull GmbH. Although he conceded slightly in shares, Mateschitz was the actual operator of the company and the true driver of Red Bull's international expansion.
China Red Bull came 11 years later than Austria Red Bull. In December 1995, Yan Bin obtained the rights to operate the Red Bull trademark in China, setting up a factory in Shenzhen and establishing Red Bull Vitamin Drink Co., Ltd. After the Spring Festival Gala that year, the advertisement "Red Bull has come to China" brought it into the public eye.
Subsequently, China Red Bull adopted the most popular and effective strategy at the time—continuously airing prime-time TV ads. Its slogans like "Cars need fuel, I need Red Bull" and "Drink Red Bull when thirsty, and even more when tired or sleepy" became deeply ingrained in people's minds.
With the strong pull of advertising, China Red Bull established a nationwide distribution system within just a year or two, firmly capturing drivers, students, business owners, white-collar workers, and nightlife crowds, becoming the number one energy drink brand in China.
Unlike China Red Bull's extensive marketing, Austria Red Bull adopted an "extreme sports" strategy.
It sponsors sports events year-round, as well as extreme challenges like parkour, skydiving, skateboarding, drifting, surfing, and freestyle mountain biking. For example, in 2012, the "Red Bull Stratos" project saw Austrian skydiver Felix Baumgartner attempt to break the sound barrier with a dramatic jump from the edge of space, with his hot air balloon, parachute pack, and capsule emblazoned with the Red Bull logo. Forbes even wrote that "this could be the greatest marketing stunt of all time."
Austria Red Bull plays not only the role of sponsor but also content producer, focusing on content marketing, releasing about 5,000 videos and 50,000 images online each year.
Austria Red Bull truly established the Red Bull brand internationally, with a presence in 168 countries, earning the title of "Beverage King." However, this also served as a "wedding dress" for China Red Bull.
In 2002, China Red Bull's second-generation taurine-enhanced product directly adopted a silver-blue can packaging and English font highly similar to Austria Red Bull's. As consumers, it's easy to mistake it for a domestic version of Austria Red Bull.
In 2003, China Red Bull elevated its brand connotation from functional appeal to spiritual strength, adopting a marketing strategy similar to Mateschitz's, sponsoring sports teams and events domestically, with advertising often using blue as the base color, very similar to Austria Red Bull's global campaigns. This undoubtedly confused consumers further, making them think all ads and sponsorships were from the "same Red Bull," yet when purchasing, they chose the cheaper China Red Bull.
China Red Bull and Austria Red Bull are both licensees of the Thai Red Bull (TCP Group) trademark. They were originally two parallel lines that never intersected, each thriving in their own battlefield.
But people always like to throw stones into calm lakes, stirring up waves.
**Dark Clouds Pressing Down, Where Does China Red Bull Go?**
In March 2014, Austria Red Bull entered China, establishing Ruibu Beverage Trading (Shanghai) Co., Ltd. Over the past three years, it has been "silent" in the Chinese market, with little market promotion, brand building, channel expansion, or team growth, and sales have been lukewarm.
It was thought to be a case of not adapting to local conditions, but now it seems more like a calm lurking and observation before the storm.
At the end of 2016, the trademark authorization for China Red Bull was set to expire. Recently, news about Red Bull has been rampant. It's said that frontline sales reps would be transferred to distributors, who would pay their salaries; some county offices would be closed; staff would be outsourced to third-party companies; and more seriously, all five factories in China, except the Beijing factory, would halt production.
Earlier reports suggested that China Red Bull had successfully renewed its contract, and the layoff process was terminated, allowing staff to remain in their positions, with the renewal period being 10 years. However, this news has not been confirmed. To date, the official side has not formally responded to the trademark authorization issue.
China Red Bull entered China in 1995 and grew rapidly, once holding 80% of the energy drink market. As more beverage giants entered the field, China Red Bull maintained its dominance but saw its market share decline.
Now, the expiration of the trademark authorization has put China Red Bull in a tight spot. On one hand, competitors like Lehu and Dongpeng Special Drink continue to press hard; on the other, the true global king of energy drinks is encroaching. Where does China Red Bull go?
**1. Renewal of Authorization**
If the renewal succeeds and the trademark authorization is obtained, it might be the best outcome from a corporate management perspective.
China Red Bull's parent company, Reignwood Group, acquired a 25% stake in the American coconut water brand Vita Coco for $165 million in July 2014, launching Vita Coco coconut water products in September of the same year; in April 2015, it introduced the German children's drink Capri-Sun; and in January 2016, it acquired about 51% of the Norwegian premium bottled water brand VOSS for $105 million.
Such aggressive introduction of international FMCG brands might be to reclaim some market share, and also to prepare for the trademark expiration.
However, the performance of new products has been disappointing. 2015 results showed Capri-Sun at 231 million yuan and Vita Coco at 100 million yuan, which seem insignificant compared to the abundant cash flow of 23.07 billion yuan that Red Bull brought to Reignwood. And Reignwood's new energy drink "War Horse," set to launch in 2017, is also uncertain.
Therefore, Reignwood Group is not fully prepared; continuing to obtain the trademark authorization is the most direct and effective solution.
**2. Merger and Joint Operation**
Earlier reports suggested that Thai Red Bull hoped Austria Red Bull and China Red Bull would merge operations, but Austria Red Bull demanded a 40% stake, and negotiations stalled.
Born from the same root, why rush to harm each other? A merger would be a bonus for the Red Bull brand.
Austria Red Bull excels in marketing, while China Red Bull has channels. Over 20 years of market development, China Red Bull has over 30 companies nationwide, more than 3 million sales outlets, and a powerful commercial network, with unparalleled penetration in traditional channels.
Austria Red Bull has invested more in the brand over the years. In 2007, it established the Red Bull Media House, which has signed nearly 600 sports stars and has its own magazine, website, radio, TV, film production company, and record label, becoming a content marketing platform integrating "content creation, media platforms, and distribution channels." Additionally, Austria Red Bull owns four football teams, two F1 teams, and one ice hockey team.
If merged, China Red Bull could ride on Austria Red Bull's "extreme content marketing" bandwagon and legitimately borrow the east wind. Austria Red Bull could also leverage China Red Bull's strong channels to open up the Chinese market.
**3. Following JDB's Example**
Many have speculated, "Will China Red Bull be the next JDB?" In fact, apart from the trademark issue, there aren't many similarities.
For instance, the Chinese trademark "Red Bull" is registered in China, so Thai Red Bull cannot take away the Chinese name, whereas Wanglaoji's registration was with Guangzhou Pharmaceutical, not JDB. Also, Austria Red Bull's market is significantly larger than China Red Bull's, while at that time, Guangzhou Pharmaceutical's market was 2 billion yuan and JDB's was 20 billion yuan, which is why Guangzhou Pharmaceutical insisted on suing JDB to the end.
China Red Bull won't be the next JDB, but JDB's rebirth can offer some lessons. First, lawsuits in China are lengthy, taking at least three to five years, providing ample time for strategic adjustment. Second, when anticipating a possible loss, JDB began "de-Wanglaoji-ization," printing Wanglaoji on one side and JDB on the other, hinting to consumers that "JDB is Wanglaoji." Finally, they changed the advertising slogan, sponsored The Voice of China, and targeted ads precisely.
China Red Bull's gold can is deeply rooted in Chinese consumers' minds, and it holds the Chinese trademark for Red Bull. If it follows JDB's example, it could have a chance at rebirth, but it would be a bloody path with heavy costs.
Regardless of the outcome of negotiations between China Red Bull and Austria Red Bull, this trademark issue will cause turbulence in China's energy drink industry, as there are more spectators than actors, and a single move can affect the whole.
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