Genki Forest's official WeChat account has this tagline: from a seed, to a forest. Indeed, born in 2016, Genki is striding forward from a seed to a forest, and industry evaluations are becoming more and more pertinent: Genki Forest is one of the few new consumer brands that has successfully transitioned from online to offline, solidified its channels, and held its market. Yes, Genki has done two things right: it proposed the slogan 'reduce costs, increase efficiency, all in on sales,' unprecedentedly valuing distributors and co-building the market with them; and it continues to break through and innovate in categories with dividends. Seven years after its founding, Genki Forest, facing its 'seven-year itch,' is still keeping the pace in its own hands. For offense, it uses internet thinking to develop products; for defense, it relies on offline channels. Because for an FMCG company to become a giant, offline is always the main battlefield. Undeniably, Genki Forest's 'seven-year itch' is still full of vitality and vigor; its new stories are still being talked about with relish.
Deep Channel Cultivation, Category Growth
"Everyone says 2023 is tough, but I haven't felt it. This year, Alien electrolyte water sold like hotcakes; it's our best seller. We didn't decline; we grew," said a Genki Forest distributor. In September this year, data from the offline retail monitoring network '马上赢' on market share growth in the first half of the year showed that the sports drink category, represented by electrolyte water, continued the growth momentum of last year, with market share growth still reaching 35.76%, ranking second among all categories. Genki Forest's Alien electrolyte water once captured 50% of the sports drink share, successfully grabbing the attention of young consumers, becoming a rising force in the beverage market and the top choice for sports enthusiasts. Whether from distributor feedback or beverage market sales, in the sluggish consumer market of 2023, Alien electrolyte water continues to lead. Why? Yu Jian, General Manager of Kantar Worldpanel Greater China, once mentioned that Chinese consumers are becoming more mature, paying more attention to ingredients, origin, and the core of the product itself, and are increasingly concerned about health. Chinese consumers will continue to invest in health. Yes, big health, big track. According to a report by Qianzhan Industry Research Institute, the proportion of Chinese people who regularly participate in physical exercise reached 37.2% in 2020 and will rise to 38.5% by 2025; these consumers particularly value health factors, with 43% believing that electrolytes should be replenished after exercise, and 0 sugar and 0 calories being important purchase drivers. It is worth mentioning that Alien is the creator of the electrolyte water category, bringing it from niche to mainstream. New Distribution observed that this year Genki Forest is pressing on, strongly penetrating sports channels. With the theme 'Play sports, laugh with abs,' it held a sports carnival, offering sports enthusiasts a 'thousand-person group class + wild disco' experience, and gathered major trendy sports clubs, bringing giant sports games, fun pickleball, water gun battles, corgi sports meets, and Alien skateboarding to the scene. Moreover, Alien has officially partnered with NBA China, sponsoring the first domestic street basketball league—'Street Ball King.' The league brings together 8 top domestic street basketball brands like Porcelain Factory and Weiqiu, with 200+ professional players, a 6-city national tour, covering 500,000+ offline basketball fans, with 1 billion precise sports exposures, and buzz lasting from June to September, the peak season. In addition, Alien electrolyte water x A-SOUL launched the 'Electrolyte Girl' co-branded limited edition, with a flash mob at Shanghai FamilyMart, creating a hot sales record of 2,000 bottles in a single hour, nearly emptying store inventory that day, with limited merchandise being snapped up, triggering a buying frenzy and selling over 100,000 cases. Online, Alien electrolyte water launched a catchy song remix campaign with the hashtag #你会唱外外外星人吗# at the end of March, which exploded on social platforms where young people gather. On Bilibili, it dominated the top 10 hot list, with '外外外星人是个什么梗' trending on the overall hot search; on Douyin, netizens participated in dance remixes, with 500+ university dance clubs participating, and college students creating memes in dorms with '外外外星人.' It also collaborated with 'Yang Mi's esports mentor' Nanjing Hero Fearless, hitting the Weibo hot search twice, with fans showing off their purchases. Clearly, with continuous online buzz and stable sales in offline sports channels, the potential for electrolyte water consumption remains huge. While deepening channels, Genki is also extending vertically in the electrolyte water category. 'Alien Vitamin C Water' is the first new product after Alien electrolyte water, available in Sicilian Lemon and Cherry Cranberry flavors, priced at 5 yuan per bottle. Each bottle provides 100% of the daily vitamin C requirement, and compared to existing similar products, it is low sugar and low calorie, meeting users' daily nutritional needs. Currently, besides online e-commerce, Vitamin C Water is also sold in offline channels in Beijing, Jiangsu, Fujian, etc. Regarding this new product, a Genki Forest distributor said: The vitamin beverage track has huge growth potential, and Genki Forest's product development capability has proven itself in the market; it might be the next dividend product. From basic thirst quenching, to taste experience, to health attributes and emotional value, almost every sub-category follows the universal law of the beverage market and continuously upgrades. With the growing market favor for vitamin C beverages, this might be Genki Forest's second battlefield next year.
Self-Built Factories Reverse Promote Innovation, Product Line Blooms
"The sparkling water tastes great, and its best feature is that after opening and drinking, if you screw the cap back on and open it half an hour later, it still has a lot of fizz," said a Genki Forest distributor describing the cola-flavored sparkling water.
1. Continuous Innovation in Sparkling Water
This distributor personally tests every Genki Forest product. He is very optimistic about the cola-flavored sparkling water, whose biggest breakthrough is satisfying consumers' desire for the refreshing fizz of sparkling water while overcoming technical challenges to upgrade, meeting consumers' pursuit of health—that is, 0 sugar, 0 fat, 0 calories, and also 0 potassium sorbate, 0 sodium benzoate, and 0 aspartame. It can be said that this was a major technological innovation in the beverage industry at the time. When this cola-flavored sparkling water was launched, it attracted widespread media coverage. Building on this innovation, this year Genki has entered another major flavor track: lemon-flavored sparkling water. With this, the cola and lemon flavor families will cover a broader consumer base, and the sparkling water line now has a rich flavor matrix, including white peach, summer black grape, calamansi, lychee, and more. During this year's May Day holiday, Genki invested heavily to hold the first Genki Forest Music Festival, bringing together well-known domestic musicians and bands. As the first trendy music festival hosted by a beverage brand, it gained over 100 million exposures, with more than 40,000 young people igniting Chengdu over two days! Concurrently, Genki Forest sparkling water launched the #元气森林000主题曲挑战# challenge, which broke through circles among young consumers in less than two days on a single WeChat Channels video, achieving strong penetration! Traditional beverage brands might launch a new flavor every few years, but Genki Forest iterates products very quickly, and different flavors require different manufacturing processes, which demands strong interaction between production lines and R&D to promote innovation. It is reported that Genki has selected a site in Jiangsu for its sixth factory, which, when completed, will form a coverage of 5 major city clusters in North China, East China, South China, Central China, and Southwest China, further strengthening national supply capabilities. The keyword for these six factories is not 'production' but 'innovation.' In this regard, a Genki Forest distributor said that Genki has many innovative products and a strong ability to innovate.
2. Rapid Iteration in Tea Category
For example, in the tea category, there are Ran Tea, Milk Tea, and Ice Tea. As is well known, the 'sugar-free' trend in tea beverages is accelerating. According to Magic Mirror Market Intelligence data, in 2021, the top 10 tea beverage products by sales were almost entirely dominated by 'low sugar' and 'sugar-free' products. According to Euromonitor, the sugar-free tea beverage market will officially exceed 10 billion yuan by 2025, reaching 10.21 billion yuan, and is expected to reach 12.4 billion yuan by 2027. Ran Tea, a sugar-free tea beverage that debuted 5 years ago, sold well upon launch. This year, it has been fully upgraded, returning to the original intention of sugar-free tea, launching three flavors: jasmine tea, tangerine peel pu-erh, and mellow oolong. It is worth mentioning that each flavor of Ran Tea uses selected famous Chinese tea as the base, with carefully chosen raw materials, ensuring that 'Ran Tea is not astringent, with a sweet aftertaste' from the source. In addition to these three flavors, Ran Tea has innovatively launched 'Gardenia White Tea' this year, boldly using moonlight white tea from Jinggu, Yunnan, the 'birthplace of the world's tea.' Compared to traditional 'old white tea,' moonlight white tea is naturally fermented, smooth and not astringent, with the addition of gardenia aroma for a more distinct aftertaste, better matching the taste preferences of today's youth. In April this year, consumption trend forecasts showed a significant increase in white tea consumers, with growth in first-tier cities surpassing Longjing tea. The birth of Ran Tea Gardenia White Tea undoubtedly provides a more novel choice for the rapidly growing white tea consumption. In design, Ran Tea adopts a new Chinese minimalist style, refined and elegant, with the upper half using a classical book design and classical fonts to highlight historical and cultural significance. It reveals the natural color of the tea, making it visually more reassuring and appealing. In terms of price, Ran Tea directly enters the mainstream 5-yuan price band, covering a broader consumer base. On October 19, Genki Forest Ran Tea officially announced actor Sun Yang as its 'Hui Gan Experience Officer,' during which it gained three Weibo hot searches, with first-week exposure exceeding 100 million, and data continued to ferment, sparking widespread consumer discussion. On the day of the announcement, Genki Forest Ran Tea's e-commerce sales increased by about 400%.
Next is Milk Tea. In August this year, Genki Forest Milk Tea launched a 360ml new product, with a retail price of 6 yuan, more suitable for single servings. While maintaining the low-sugar selling point, the product's taste is 'infinitely close to handmade,' balancing health and taste, offering consumers the best value for money. In the three months since launch, sales have doubled, making it Genki Forest's dark horse for autumn and winter performance. At the same time, Genki Forest Milk Tea has insight into the 'emotional' value of milk tea for young people, proposing the brand slogan 'Low-sugar milk tea, simple happiness,' positioning milk tea as an 'emotional beverage' exclusively for young people. Milk Tea invited Tian Xiwei as brand ambassador, performing a viral video that sparked a nationwide 'drink milk tea hahaha' craze. On Xiaohongshu, discussions about 'low-sugar slimming milk tea,' 'milk tea happy sweet girl,' and 'milk tea hahaha attention seeker' continued to trend.
Finally, Ice Tea deserves special mention. 'Drink three fewer cubes of sugar per bottle' is its key product label. During the 2023 peak season, it leveraged the classic iced black tea spokesperson Richie Ren's 'defection' to recommend Ice Tea, creating a hit advertisement and topic. 'Ren Xianqi's Defection Strategy' became the highest-viewed and most-interacted video in Genki Forest's history! In June, Ice Tea launched a 900ml large bottle, catering to consumers' pursuit of value for money, and it performed well upon launch, with 'good sales! fast turnover!' and steadily increasing sales. In 2024, the Ice Tea product matrix will expand again, pioneering the use of -196°C liquid nitrogen lock-fresh cold-press black technology to interpret 'Ice Tea,' making it less sugary, icier, and tastier. Activities will also be upgraded, with cash prizes under caps and a doubled prize pool, with 900ml+450ml products participating, boosting Ice Tea sales. Looking at these three tea beverages, sugar-free and low-sugar are their biggest selling points. By innovating on existing categories and continuously exploring more potential new products, Genki's product matrix is beginning to bloom. Speaking of Genki's product matrix, a Beijing distributor mentioned to the author that Genki's product iteration speed is not only fast but also quality-assured. 'If you have time, you should visit their factories; seeing the factory gives us more confidence.'
Co-Building the Market with Distributors, Penetrating Market Capillaries
Indeed, during interviews with Genki distributors, one can clearly feel their confidence in the Genki brand: 'I've been a distributor for three years. In the second year, I lost money, but I didn't give up. Genki's products are very close to the market and consumers. In the third year, I started making money, and it's been stable ever since.' Regarding Genki's attitude toward distributors, this distributor said: 'Genki is becoming more mature. They don't just talk about valuing distributors; they actually implement it, which many manufacturers can't do.' How do they implement it?
1. Launching the 'Ark Co-Building' Project to Co-Build the Market with Distributors
In 2023, Genki Forest's sales chief Fan Jun led the launch of a project codenamed 'Ark Co-Building'—in Beijing, Shanghai, Guangzhou, Shenzhen, and core provincial capitals, Genki continues to deepen channels; in third- and fourth-tier cities, it subsidizes distributors to recruit co-building personnel; in fifth-tier and below cities, it hands over operations to distributors. Moreover, this year, Genki has invested more funds than in previous years to subsidize distributors for market development, training sales staff, and market promotion. This sustained high investment has also strengthened cooperation stickiness. The monthly 'business review' mechanism has made the connection between Genki and distributors closer, cooperation smoother, and problems resolved in a timely manner. It is understood that in June this year, Genki's national inventory absolute value decreased by more than 40% year-on-year, distributor shipment speed significantly accelerated, and inventory days at the end of June were 21 days, a healthy level. With the streamlining of distribution channels and the recovery of product sales, distributors' inventory turnover has become more benign, and inventory remains under control. From the severe inventory pressure in channels last year to a virtuous cycle this year, Tang Binsen described this year's Genki as 'a turn from darkness to light.' From the execution of regular communication mechanisms with distributors and the actual sales feedback of market products, Genki has truly implemented its slogan of valuing distributors!
2. Broadening Channel Penetration and Laying Out Lower-Tier Markets
In terms of penetration in lower-tier markets and core channels, Genki has also begun to advance boldly. A Genki distributor mentioned that Ice Tea sells very well in second- and third-tier markets. 'Once, on a business trip to Inner Mongolia, I found Ice Tea was very popular there, with many places scrambling for supply. Also, Zizai Shui (a product) sells fast in third- and fourth-tier cities.' Ice Tea, as Genki's first sweet tea, carries the momentum of the parent brand, targets the more down-market 4-yuan price band, broadens channel coverage, and within just 3 months of distribution, its outlets exceeded 450,000, the highest for any new Genki product. Consumer recognition is directly reflected in repurchase. Analysis of purchase behavior from cap-scanning users shows that during the peak season, repurchase users accounted for 24% of Ice Tea buyers, with repurchase users buying an average of 4.7 bottles per month. Yu Jian, General Manager of Kantar Worldpanel Greater China, mentioned that in 2023, Kantar Worldpanel expanded its market monitoring to China's towns for the first time. China's townships are a huge market, with a population accounting for 26% of China's total, and consumer goods accounting for 23% of the entire market. Moreover, according to Kantar Worldpanel, average spending in county-level cities is much lower than in first- and second-tier cities, but in some categories, such as baijiu, traditional Asian beverages, laundry products, and ambient milk, per capita spending is basically the same as in first- and second-tier cities. It is understood that in 2023, Genki continued to improve its lower-tier market coverage, completing over 50% coverage in county-level markets, and will continue to improve lower-tier coverage in 2024 to seize growth opportunities in county and township consumption. At the same time, in 2024, it will also focus on some potential prefecture-level city markets, concentrating resources to deepen and solidify, creating Genki's base areas!
In terms of channel construction, in 2023, Genki focused on tackling high-yield channels such as campuses, sports, and scenic spots, with rapid growth in cooperative outlets and an overall performance increase of nearly 50%, becoming an important part of this year's growth.
Final Thoughts
Looking at Genki Forest's entire business landscape, six factories serve as a strong supply chain backing, the product line is blooming, and the market is beginning to penetrate like capillaries into lower-tier markets. Starting in July this year, it sought breakthroughs in tourism channels, initially completing coverage of 30 core scenic spots. In 2024, it will continue to invest in high-yield channels such as schools, sports, and scenic spots, continuously enhancing distribution. While Genki Forest is 'attacking cities,' its 'defending the city' path is also launching a full-scale offensive. A Genki distributor raised a question: What are distributors most worried about? First, they fear the manufacturer will have problems; second, they fear the manufacturer will be irresponsible; third, they fear products won't sell. Clearly, Genki is continuously iterating and upgrading in product innovation, supply chain network expansion, and market and channel penetration capabilities, unwaveringly addressing distributors' concerns. Now, Genki needs time to verify and settle.