Click to read the original article for details. Today, it is fair to say that JDB is in the midst of a "great defeat." Especially as autumn deepens, the chill becomes more intense with each passing day, and JDB's bad news seems to be "getting better and better." Words like collapse and cooling off, which concern its future, are also full of chill. Can JDB, which once built a 20 billion yuan empire with a single red can, make a comeback? And what has led JDB into a situation of life and death? Some say that when an avalanche occurs, no snowflake is innocent. 01 Donate 100 million On May 12, 2008, a national disaster: the Wenchuan earthquake. Afterwards, major media and TV stations were filled with news from Wenchuan. At around 2 PM, the JDB team, including Chen Sheng (Chen Hongdao, Chairman of JDB Group, respectfully referred to as "Mr. Chen" within the group; he also has another title, "Boss"), was in a meeting in Hong Kong when they saw related news on TV. The news was broadcast quickly, lasting only about ten minutes, describing the disaster relief situation after the earthquake. Looking at the TV screen, Chen Sheng said expressionlessly, "Lao Yang, why don't we donate some money?" "Oh, okay, Boss, how much should we donate?" "Hmm, let's donate 100 million." "Donate 100 million..." And so, 100 million was donated. No one lingered on this matter and they returned to the normal meeting agenda. After the meeting, Lao Yang and his team quickly flew back to Beijing to implement the donation. A few days later, on the evening of the 18th, at a donation gala co-hosted by multiple ministries and CCTV, JDB Group, then the producer and operator of Wanglaoji, made a public appearance. "At this moment, every employee of JDB Group and Wanglaoji, like me, devoutly prays for the people in the disaster area, hoping they can soon be free from suffering and attain happiness. " At that time, the relevant person in charge representing JDB for the donation said at the gala. Those who know a little about JDB know that Chen Sheng is a Buddhist. And JDB's executives, following Chen Sheng's preference, are regularly influenced by Buddhist teachings each year, and that blessing of "free from suffering and attain happiness" is the best evidence. But who would have thought that karma was created at that moment. The donated 100 million was the cause, like a seed planted, which, due to different "soil," would bear different fruits in the future. The first fruit is related to Vanke. Because of JDB's 100 million donation, Vanke's 2.2 million yuan seemed a bit stingy. After all, in 2007, Vanke's net profit had already exceeded 4.8 billion yuan. This gave the public a lot of room for imagination: "One is the famous Vanke Group, the other is JDB, which is basically unknown"; "How many houses can 2 million buy? How many cans of herbal tea can 1 billion buy?" Indeed, as the complaints suggested, if it weren't for this 1 billion, the world would only know Wanglaoji, not JDB. Importantly, at that time in 2008, JDB's "good days" had only lasted a few years. In 2003, JDB's performance reached 600 million yuan; in 2002, its red-can herbal tea sales were only 180 million yuan; before that, for over a decade, JDB Group had transformed traditional southern herbal tea into a beverage, first selling it to southerners who knew its benefits, then to northerners who had no idea what herbal tea was. Of course, getting the whole nation to accept and like herbal tea was not easy, and early on, JDB was still climbing. Another fruit is related to wealth. As a listed company, Vanke's annual income is public, but JDB is a private company, and its financial data is not disclosed. Thus, the 100 million donation gave the public too much room for imagination, such as "If they donate 100 million, how much money does JDB have?" So, this unknown wealth and speculation were coveted by different people. For example, the media. A person who once "managed" the advertising for JDB's red-can herbal tea was hailed as a "killer" by advertisers in the media circle, and it was said that meeting him was harder than meeting the national leader. Then there was Guangzhou Pharmaceutical Group (GPG). 02 A Leased Brand There is a kind of child called "someone else's child"; there is a kind of "heart disease" called a leased brand. Before 2012, who knew that Wanglaoji was a brand leased by JDB? Moreover, with a low-key Chen Sheng who didn't show his emotions, even when red-can herbal tea sales reached over 10 billion, JDB was just a "behind-the-scenes" player, not coveting the spotlight. But that doesn't mean Chen Sheng didn't care. In 2000, at a temple. Chen Sheng asked a revered monk: "My brand is leased; should we make it big?" Probably because they were "acquaintances," Chen Sheng didn't avoid the topic, and all JDB executives present heard it. The monk didn't directly answer Chen Sheng's question but told a story, a story about a young monk. The story goes that there was a young monk in the temple who was very diligent and hardworking, doing many good deeds every day, never breaking precepts, and compassionate, but he couldn't resolve the attachment and suffering in his heart. The young monk asked his master what to do. The master asked the young monk to bring his alms bowl and then had him put walnuts, rice, water, and salt into the bowl in sequence. Before each new item, the old monk would ask the young monk, "Is it full?" The young monk said, "It's full." But each time, the next substance was added again until the young monk said "full." When the young monk seemed to have some insight, the master gave a new task. He had the young monk pour everything out of the bowl. This time, in reverse order, first salt, then water, then rice, and walnuts. As a result, after only a few grains of rice, the water overflowed, and the walnuts couldn't be added at all, no matter what. I don't know what Chen Sheng thought after hearing the story, but the reality is that JDB made the leased brand big, and in 2012, when GPG "took it back," public information showed that the brand value of Wanglaoji was 108 billion yuan. Later, with the interpretation of a "wise person," it was understood that the "walnuts" in the story represent wisdom. If a bowl can't even hold wisdom, how can it hold much else? Since it was a leased brand, there was a lease term. As the lease term approached, GPG said that previously the brand licensing fee was 5 million yuan per year, but from now on, that wouldn't work... The implication was that JDB was making so much money now. So, the two sides sat down to discuss and negotiate, but they couldn't reach an agreement. Few people know exactly what GPG demanded. There were rumors of 800 million yuan per year, but some said it depended on the specific calculation. According to international practice, the licensing fee is 2%-5% of turnover, but if GPG calculated based on brand value, it would be a huge amount. Of course, by 2011, JDB had the "confidence" to build its own brand, after all, that year, JDB took 70% of the herbal tea market share, about 18 billion yuan (the two sides started "negotiating" the brand lease renewal in 2011). May 11, 2012, was a day that changed JDB's "fate." On that day, according to the ruling of the China International Economic and Trade Arbitration Commission, the "Wanglaoji" Trademark License Supplementary Agreement and the "Supplementary Agreement on the Wanglaoji Trademark License Contract" signed between GPG and JDB's parent company, Hongdao Group, were invalid, and Hongdao Group was ordered to stop using the "Wanglaoji" trademark. Thus, the Wanglaoji trademark "returned" to GPG. Not only that, but a series of lawsuits followed, with endless disputes over interests. The red can, packaging, authenticity, advertising slogans... Unfortunately, in the early years, JDB lost almost all lawsuits and owed a large amount of compensation. Unexpectedly, in 2018, the court agreed to let both sides "share" the red can. However, in this six-to-seven-year struggle, the two sides ultimately chose price wars to hurt each other, leading to JDB's capital chain problems. Of course, the problem first arose from large expenditures. 03 Squandering Money How much does it cost to build a brand? No one can give an answer. Coca-Cola, which claims that even if the company were reduced to ashes in a fire, it would rise from the ashes as long as the brand exists, has a history of over a hundred years. But at that time, it was not easy for JDB, a relatively unfamiliar brand, to grow quickly and participate in the market battle with GPG. In 2012, JDB, which needed to become "popular" quickly, urgently needed a widely disseminated platform, and that platform later appeared—"The Voice of China." It was born against the backdrop of a talent show market that was like an economic crisis—full of scandals, hidden rules, and a crisis of trust. But the new production and business models made the show look extraordinary at that moment. Originally, Zhejiang Satellite TV had chosen P&G as the title sponsor, and P&G did intend to invest, but just before production, P&G suddenly cut its media spending for that year and didn't invest. As a "substitute," JDB's communication and negotiation with Zhejiang Satellite TV was, to some extent, a temporary move, but it was precisely this "temporary" nature that allowed them to finalize everything in just over ten days, a perfect match. Do you remember how popular "The Voice of China" was that summer? In a nationwide "carnival," along with the mentor's joke "I'll throw you a can of JDB," JDB also became popular. At that time, it was the intense stage of the battle between JDB and GPG. For the public, paying attention to JDB and The Voice was more interesting than the open and covert struggles between JDB and GPG. Regarding the title sponsorship fee, the outside world rumored it was 60 million yuan. If calculated by the input-output ratio of that year, JDB's venture investment was successful and worthwhile. After all, "Authentic Good Voice, Authentic Good Herbal Tea" resounded across the country that summer. "The Voice was a gift from heaven to JDB." This was not said by Chen Sheng but by a JDB executive at the time. Because of this, JDB couldn't miss the next two "title sponsorships": in 2013, 200 million yuan; in 2014, 250 million yuan. That was JDB's investment in The Voice. In fact, JDB herbal tea had become a completely new product in the second half of 2012. Because of the previous "low profile," JDB had raised someone else's child without considering itself. Changing consumers' habit of saying "give me a can of Wanglaoji" for over a decade to "give me a can of JDB" was not as simple as shouting. Fortunately, in 2012, with the help of The Voice and the concerted efforts of JDB people, performance did not decline. But on another level, in three years, JDB's visible investment in The Voice alone was over 500 million yuan. In reality, this amount was just the tip of the iceberg of JDB's media spending over the past three years. In those years, any influential media in various provinces had received "benefits" from both sides (JDB and GPG), not to mention mainstream media. Do you remember how, in order to compete, they held press conferences and briefings one after another; how they matched each other's hard advertising investments, often tit for tat. You sponsor, I sponsor; you support, I support... They embarked on an endless path of squandering money. Offline, in the channels, their ground activities were like a boxing match, with one side taking the stage after the other, and occasionally even coming to blows. Not only that, to motivate employees during the brand replacement, Chen Sheng decided to "increase salaries by 30%." At that time, Chen Sheng also said a sentence. He said, In our lives, there will be many experiences, some are painful, some are happy, but I think the experiences with these two brands will be a valuable asset in your lives. 04 The Rats in Our Own House The matters involving JDB and Zhonghong Co., Ltd., COFCO Group, and the dispute with ORG made JDB's "family background" gradually exposed. Whenever JDB's current situation is mentioned, it inevitably brings sighs. Some say JDB was brought down by lawsuits, others say JDB's capital chain broke. In short, from the surface, in 2018, JDB was already in a precarious state. In August of this year, both internally and externally, JDB was already turbulent and unbearable, but there were still distributors paying JDB, even though their money was still sitting in the accounts. They were still willing to believe that "JDB can still make it." Some salespeople even took the initiative to persuade distributors not to pay anymore, fearing that the money they had previously paid to the company would neither get them goods nor be refunded. Bad news came one after another. Some said the media were snobbish, eager to step on someone when they fall; others said JDB was sick and needed treatment, and couldn't be afraid of exposing scars. The situation today, JDB's "fall" to this point, was not caused by a single person, a single event, or a single reason... According to objective laws, no matter how complex the external reasons, they can't defeat internal unity. So, some said: "JDB has come to this point, and no one (among JDB people) is innocent. " Due to the boss's early experiences, whether it was illegal immigration or bribery, he could only sit in Hong Kong and watch JDB's development from afar. As the company gradually grew, factions and alignments naturally emerged, leading to internal strife and breeding corruption. Many who appear as "victims" today also played the role of rats in JDB's house, using their positions to pocket company money; and the internal corruption and decay had already spread "from top to bottom." Do you remember the JDB president's resignation incident in March that shocked the industry? For years, "personal reasons" and "development reasons" were the usual excuses and decency for JDB executives' departures, but Wang Qiang was different. The notice at that time showed that besides removing him from his position, Wang Qiang would also be "dealt with according to law. " If the company's decision only vaguely expressed dissatisfaction with Wang Qiang's tenure as JDB president, there were even more critical views that Wang Qiang "accelerated" JDB's decline. During his time overseeing both Kunlun Mountain and red-can herbal tea, factional struggles intensified. "Many veterans who had fought for JDB for over a decade were squeezed out"; originally, within JDB, there was a balance of power among marketing, sales, and supervision, but this pattern was broken in 2015 during his tenure. Thus, "the internal situation became more chaotic"; "expense verification lost constraints, making corruption easier"; "it was a mess, and no one thought about consumer education anymore..." Of course, there are many untold stories during this period. Zhonghong's announcement exposed JDB's financial problems and also revealed that Chen Sheng, far away in Hong Kong, could no longer see clearly JDB's development in mainland China. The executives' tendency to report only good news and downplay problems gave Chen Sheng wrong judgments or excessive hopes. Also, because of past experiences, the boss placed too much importance on controlling JDB... Now, the only thing that adds to the sadness is the saying, "When the nest is overturned, no egg remains intact." 05 The Legendary Chen Sheng To the outside world, and even to most JDB people, Chen Sheng is just a "legend" or a person in "stories." Because of his past, he couldn't participate in JDB's specific management and operations in mainland China. Because he had been an agent for Coca-Cola in the early days; made an eight-treasure porridge named after himself; failed with iced black tea and iced green tea... he had no choice but to make herbal tea, which no one was optimistic about, 20 years ago, and he used a leased brand. At that time, Chen Sheng, who swam to Hong Kong holding a basketball, had only a basketball. Not only was he penniless, but he also had no clothes, and he slept under a bridge for 33 days. It was a master at a temple who gave him a coarse cloth garment, and it was from then that he formed a bond with Buddhism. His first job to make a living was as a temporary porter for the Hong Kong agent of Yangchengcheng (a Singapore-listed company), and five years later, he became the general manager of Yangchengcheng Hong Kong. People who have met Chen Sheng say he is always "calm and composed," but occasionally he can be very scolding. In severe cases, he could scold for four hours, and loudly. Probably because he had experienced life and death and believed in Buddhism, Chen Sheng had his own understanding of suffering. He often told JDB executives: "If we can make everything in life enjoyable, knowing that the pain in life is just an experience, a lesson, and a process, how can our calm and peaceful hearts be disturbed by changes in circumstances? From facing that imperfection and incompleteness to accepting it, and then to enjoying that imperfection and incompleteness. " Some call this a state of spiritual practice. Chen Sheng meditates every day and can remain still for three hours. Even if someone wants to report to him, they have to wait until he finishes. He has a timer; when three hours are up, it makes a "ding" sound, and then he goes about his business. When holding meetings with executives, he always listens expressionlessly, at most asking, "How much have we sold now? What do you think?" Chen Sheng practices Buddhism and doesn't forget to bring his executives along. Every first lunar month, Chen Sheng arranges for some JDB executives to stay at a temple for a few days, listening to sermons and having meetings. His most common phrase is, "Just do as you said." But such a person doesn't wear Buddhist beads, doesn't set up a Buddhist altar, and can't even find a Buddhist scripture in his office. The only decoration in his office is a shabby basketball, framed in a crystal case, placed on the highest position behind his seat, and photography is not allowed. However, Chen Sheng also said a thought-provoking sentence: "Being a boss in this life is because I didn't accumulate virtue in my past life. " It is unknown whether, facing JDB's mainland market situation now, Chen Sheng can still meditate, practice Buddhism, and remain calm as usual... The Diamond Sutra says, 'All forms are illusory.' Or as the saying goes, 'Everything is fate; nothing is up to us.' ▌Postscript This article is a mosaic of many "stories." It is also the result of accumulated observations since the JDB brand crisis. It comes from many micro and subjective perspectives, seen or heard. Some things cannot be detailed or fully explained, just as legal truth and actual truth are not the same. Why start from 2008? Although, in most people's eyes, 2012 was the important turning point for JDB, the author and a few friends feel that 2008 was. That year, JDB's wealth was exposed; that year, JDB moved its headquarters to Beijing; that year, JDB first "showed its sword." Now, 2018, it's exactly ten years. More importantly, the author has never met Chen Sheng and has only a partial understanding of JDB's development over the past two decades. But over the past six or seven years, I have witnessed the occurrence and evolution of some major JDB events. I also hope to leave something behind as JDB's 2018 fiscal year comes to an end. Writer Wu Xiaobo published "Turbulent Decade, Big Water and Big Fish" (2008-2018) in 2017. The book describes the fate changes of some Chinese companies against the historical backdrop, and regardless of their current outcomes, good or bad, it is enough to trigger more thoughts about tomorrow. It is said that when things reach their extreme, they reverse. I hope that JDB, which is described as "nine deaths but one life," can usher in a glimmer of hope in the 2019 fiscal year. Source: Kuaixiao (ID: fbc180) On October 23-24, the 2018 China FMCG City Distribution Logistics Conference, hosted by New Distribution, will be held in Changsha. Industry bigwigs have sent their blessings; click the video to watch; more conference details below. 2018 China FMCG City Distribution Logistics Conference, at which New Distribution will invite industry bigwigs, FMCG warehousing and distribution experts, and distributors who have transformed into unified warehousing and distribution platforms, to discuss and answer questions about the future development trends of FMCG city distribution logistics and practical cases of distributor transformation to unified warehousing and distribution, hoping to bring you different inspiration and thinking! The specific meeting topics are as follows: List of Participating Companies In no particular order Hunan Zonglan Diandan Network Technology Co., Ltd. Jingbang (Wuhan) International Freight Forwarding Co., Ltd. Mengniu Dairy Qinghai Hanxiang E-commerce Co., Ltd. Unilever Services (Hefei) Co., Ltd. Shanghai Branch Huicong Hunan Xuan'ang Food Co., Ltd. Guangzhou Tongdaoren Information Technology Co., Ltd. Qingdao 888 Trading Co., Ltd. Uni-President Enterprises (China) Investment Co., Ltd. Hunan Province Zhongxiang Gongpei Logistics Co., Ltd. Shenglong Ingredients COSCO Shipping Logistics Warehousing and Distribution Co., Ltd. Guangxi Yongpai Liquor Co., Ltd. Shangqiu Kangrong Trading Co., Ltd. Jinan Dingzhong Economic and Trade Co., Ltd. Liaoning Bimai Agricultural Technology Co., Ltd. Kunming Xiongjia Trading Co., Ltd. Shaanxi Houheng Trading Co., Ltd. Guangzhou Dingwo Enterprise Information Consulting Co., Ltd. Shaodong Jiajiale Commercial Firm Boda Trading Industrial Bank Changsha Branch Wuhan Muchen Convenience Store Chain Co., Ltd. Fujian Fuxing Yuncang Logistics Co., Ltd. Guizhou Yilimi E-commerce Co., Ltd. Jiangxi Xiao Laoer E-commerce Co., Ltd. Jinshankoufu Shanxi Taihang Yuanjing Supply Chain Management Co., Ltd. Shanxi Dezhun Supply Chain Management Co., Ltd. Shaoyang Tongdeli Trading (Xiangbang Logistics) Huanfu Tongda Express City Distribution Beijing Xinjingxiang Food Co., Ltd. Wuhan Huizhong Tianhong Liquor Co., Ltd. Changsha Paide Biotechnology Co., Ltd. Chao'an Tuqiang Guizhou Yihe Bopin Supply Chain Management Co., Ltd. Jiangxi Kang'en Industrial Development Co., Ltd. Xiangtan County Yisuhe Town Yuhua Paper Store Luoyang Yuanlang Trading Co., Ltd. Tongchuan Yaozhou District Huayuan Supermarket Co., Ltd. Hunan Yongfu Jiujiu Trading Co., Ltd. Zhejiang Chengchengtong Logistics Co., Ltd. Chongqing Kaiguo Materials Trading Co., Ltd. Beijing Xianmaixianmai Data Technology Co., Ltd. Hanchuan Qixing Trading Co., Ltd. Tongxin Jiuzhiru Trading Co., Ltd. Guizhou Meiguo Guoguo Network Technology Co., Ltd. Hubei Anjie Logistics Co., Ltd. Hubei Kuaixiao Internet Technology Development Co., Ltd. ...... Representatives of Distributor Transformation (Proposed) In no particular order Chairman of Jiangsu Huashang City Distribution Network Co., Ltd. Rong Jun Chairman of Hubei Yijiaren Logistics Co., Ltd. Wang Bo General Manager of Sichuan Chengdu Xingrenxing Trading Co., Ltd. Jiang Shuming Chairman of Shandong Yunbang Warehousing and Logistics Co., Ltd. Liu Jichen Chairman of Chongqing Lingyu Consumer Goods Supply Chain Management Co., Ltd. Tu Mingyu Chairman of Guangzhou Zhongshan Wanrong Marketing Co., Ltd. Yang Su Chairman of Sichuan Bajie Supply Chain Management Co., Ltd. Yuan Xia Co-founder of Hubei Pengdun Meiyitian Supply Chain Management Co., Ltd. Li Qiangyun Chairman of Henan Xuchang Jiulegou E-commerce Co., Ltd. Zhang Jianyong Founder of Hebei Changyi Logistics Co., Ltd. Ma Haichao General Manager of Hebei (Chengde) Wulian Yuncang Co., Ltd. Meng Yucun Chairman of Xinjiang Urumqi Su'an Jinchi Logistics Co., Ltd. Zhang Xun Chairman of Jilin Sansheng Lianguo Zhang Hailing Founder of Hebei Dunjie Supply Chain Management Co., Ltd. Qiang Huitao General Manager of Hunan Damei Supply Chain Management Co., Ltd. Liao Lei ...... -END-