---
title: "Tenwow International's Fall: A Cautionary Tale for Tea Drink Brands"
description: "Tenwow International, a veteran tea drink brand once popularized by Fan Bingbing's endorsement, is about to be delisted from the Hong Kong Stock Exchange after seven years of listing. Industry analysts say its downfall signals the market's rejection of traditional beverage companies relying on a single product model. What lessons can this 'big defeat' teach the new wave of tea drink brands? How can the industry adapt to consumption upgrades and achieve a balance between supply and demand?"
author: "钱瑜 王晓"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-05-17"
language: "en"
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# Tenwow International's Fall: A Cautionary Tale for Tea Drink Brands

> Tenwow International, a veteran tea drink brand once popularized by Fan Bingbing's endorsement, is about to be delisted from the Hong Kong Stock Exchange after seven years of listing. Industry analysts say its downfall signals the market's rejection of traditional beverage companies relying on a single product model. What lessons can this 'big defeat' teach the new wave of tea drink brands? How can the industry adapt to consumption upgrades and achieve a balance between supply and demand?

**What lessons can Tenwow International's 'big defeat' teach the 'new wave' of tea drink brands? How can the tea drink industry adapt to consumption upgrades and achieve a win-win for supply and demand?**
Listed for seven years, Tenwow International, a veteran tea drink brand once famous nationwide for Fan Bingbing's slogan 'Pretty and beautiful, what to drink? Tenwow honey grapefruit tea,' is about to exit the stage of history. On the evening of May 11, Tenwow International announced it had received a decision from the Stock Exchange to cancel its listing status. Industry analysts believe that **Tenwow International's downfall signifies that the market is gradually eliminating the traditional operating model of beverage companies relying on a single product.**
Now, more and more tea drink brands and internet-famous tea shops are springing up like bamboo shoots. What lessons can Tenwow International's 'big defeat' teach these 'new wave' tea drink brands? How can the tea drink industry adapt to consumption upgrades and achieve a win-win for supply and demand?
**-01-
****Suspended for Two Years, Possibly Delisted**
On the evening of May 11, Tenwow International issued an announcement stating that it received a letter from the Stock Exchange on May 8, indicating that the Listing Committee had decided to cancel Tenwow International's listing under Rule 6.01A of the Listing Rules. **Tenwow International has been suspended since May 2018 due to the chairman's investigation, and has been suspended for nearly two years.**
The letter stated that unless Tenwow International applies for a review of the delisting decision under Chapter 2B of the Listing Rules, the last day of listing for Tenwow International shares will be May 22, and the cancellation of its listing will take effect from 9:00 a.m. on May 25.
**Tenwow International stated in the announcement that it is considering the delisting decision and will seek appropriate professional advice, and may also consider submitting a request for review of the delisting decision under Rule 2B.06(3) of the Listing Rules.**
'In fact, delisting and cancellation of listing mean the same thing. From the exchange's perspective, it cancels the company's listing qualification; from the company's perspective, it is delisted from the exchange,' said Shen Meng, director of Chanson Capital.
A Beijing Business Today reporter reviewed the content related to cancellation of listing qualifications in the Listing Rules and learned that if Tenwow International submits a request for review of the delisting decision, and the Listing (Review) Committee affirms, amends, or varies the Listing Committee's previous decision, Tenwow International has the right to submit the decision to the Listing Appeals Committee for further and final review. The Listing Appeals Committee's review decision is final and binding on Tenwow International.
**Since the suspension, Tenwow International has been trying to maintain its operations and listing status through restructuring.** On November 12, 2018, a creditor filed a winding-up petition against Tenwow International with the Grand Court of the Cayman Islands. At the same time, Tenwow International sought to appoint low-intervention joint provisional liquidators for restructuring as an alternative to compulsory winding-up. It was from that time that Tenwow International began to work on restructuring.
On the evening of February 18, Tenwow International announced that it, the joint provisional liquidators, and an investor had signed a non-binding term sheet for the proposed restructuring of Tenwow International, involving Tenwow International and its overseas subsidiaries, Shanghai subsidiaries, and businesses in Wuhan and Huzhou. The investor would subscribe for shares at a subscription price of 270 million yuan.
Regarding the current progress of Tenwow International's restructuring, a Beijing Business Today reporter interviewed Tenwow International, but had not received a reply as of press time.
**Despite Tenwow International's efforts to maintain operations in recent years, it has been swept along by the tide of the times, retreating step by step during the two-year suspension.** Data shows that in 2018, Tenwow International achieved revenue of 1.548 billion yuan, a decrease of 69.2% from 5.018 billion yuan in the same period last year; gross profit was 180 million yuan, a year-on-year decrease of 80.2%. The loss attributable to shareholders was 4.17 billion yuan, compared with a profit of 160 million yuan in the same period in 2017; according to unaudited financial information for 2019, its revenue fell again to 992 million yuan, a year-on-year decrease of 35%.
**-02-
****Success and Failure Both Due to Honey Grapefruit Tea**
'Pretty and beautiful, what to drink? Tenwow honey grapefruit tea.' With Fan Bingbing and the catchy slogan, Tenwow International became a hit in the food and beverage market. In 2013, Tenwow launched the nationally popular Tenwow Tea House honey grapefruit tea, with Fan Bingbing as spokesperson. This big single product brought Tenwow revenue of 4.726 billion yuan in one year, and successfully sent it to the capital market, listing on the Hong Kong Stock Exchange.
**Honey grapefruit tea can be considered a major contributor to Tenwow International, boosting its overall performance growth.** From 2013 to 2015, Tenwow International's revenue was around 5 billion yuan, with net profits attributable to shareholders of 286 million yuan, 345 million yuan, and 350 million yuan, respectively, up 29.41%, 20.63%, and 1.74% year-on-year.
The so-called **'success and failure are both due to the same person'—honey grapefruit tea brought Tenwow International to its peak and also led it into another abyss.** With the gradual rise of many internet-famous tea drink brands such as 1点点, Heytea, and Naixue Tea, as well as the catch-up and diversion of rising stars like Genki Forest and Chunshe, Tenwow International's performance began to show signs of decline. Although revenue remained at 5 billion yuan in 2017, it decreased by 3.84% compared with 5.219 billion yuan in 2016.
**From the explosion of honey grapefruit tea to the brand's silence, Tenwow International did not launch another 'competitive' product, nor did it make major breakthroughs in its own brands.** In terms of channels, during the crazy development of e-commerce, Tenwow International's CFO Lu Ying said, 'We have always maintained a calm attitude towards the boom in e-commerce.'
'Being half a beat slow and having no new products, the consequence is that the brand effect of Tenwow International's own brands declined, and revenue decreased,' industry insiders believe.
In addition, Tenwow International's founder and chairman of the board, Lin Jianhua, absconded, causing Tenwow International to face a greater crisis. On May 10, 2018, Tenwow International officially announced that Lin Jianhua was assisting relevant departments with an investigation, that he had been absent since May 2, and that the company could not directly contact or reach him. On August 17 of the same year, Tenwow issued an announcement disclosing that Lin Jianhua was involved in unusual transactions amounting to over 2.1 billion yuan.
Economist Song Qinghui believes that **the boost from the honey grapefruit tea single product made Tenwow's product structure lack innovation and flexibility, leading to its defeat in the battle against the newly emerging Chinese-style tea drinks. The founder's involvement in illegal transactions became the 'last straw' that crushed Tenwow International, and its defeat was thus sealed.**
**-03-
****How Can the 'New Wave' of Tea Drinks Roll Forward?**
Third-party survey data shows that by 2022, the total retail sales of China's tea beverage market is expected to reach 163.8 billion yuan, with a five-year compound growth rate of 6.75%. It can be said that this is still a market 'with development value and a large enough cake.' Some industry insiders believe: **'Tenwow International's downfall means that the market is gradually eliminating the traditional operating model of beverage companies relying on a single product.'**
In the view of Gary Hemphill, managing director of the research department at a beverage market consulting company, over the past decade, sales of bottled tea (RTD Tea) have surpassed all other tea categories, increasing by 485 million gallons over the decade, with a compound annual growth rate of 3.4%, maintaining a growth trend. In terms of market share, bottled tea beverages account for 47.3%, exceeding packaged tea's 42.9%.
Industry insiders say that **any tea beverage company cannot just stick to one product; implementing a diversified product layout strategy is the only way to effectively avoid market risks, expand potential customer groups, and respond to market changes.** Tenwow International's weakness was that it only bet on a single bottled tea product, leading to a decline in new profit growth points and a lower tolerance for operational errors. 'Past events are lessons for the future'—this lesson is enough for other traditional tea companies and emerging forces to learn from.
In addition to shortcomings in diversified product layout, failing to adapt to changing consumer preferences on the consumption side was also the Achilles' heel that led Tenwow International to its 'Waterloo.'
Data from the National Bureau of Statistics shows that since 2018, China's soft drink production has declined. Correspondingly, under the impact of the rise of new Chinese-style tea drinks, traditional bottled tea drinks have gradually declined.
Song Qinghui said that with the dual improvement in urbanization level and per capita disposable income, the consumption upgrade trend in the tea beverage industry is intensifying. Overall, the tea beverage industry is moving towards high-end, healthy, and youthful directions. Therefore, **tea beverage companies must insightfully follow these consumption trends, continuously upgrade the quality and packaging of tea drinks, enhance the health, nutrition, and green elements of products, and capture the 'attention' of young consumers by boldly trying trendy products, thereby achieving a breakthrough.**
Source: Beijing Business Today, Authors: Qian Yu, Wang Xiao
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