During the 618 shopping festival, brands showcased their unique strengths in live streams, but Coconut Palm Group's live stream undoubtedly became the most conspicuous. Unlike typical live commerce, in Coconut Palm's live room, both men and women had fit bodies, holding the group's coconut juice and mineral water, swaying to music in front of the screen, or working out in vests and shorts, showing off their muscle lines. They were even warned by the platform to pause the stream several times. Netizens passing by initially thought "the scene is too beautiful to watch," but gradually got hooked under the bombardment of clip videos. Is it "greasy and borderline" or "aesthetic awakening"? The debate in the live room put Coconut Palm Group back in the spotlight.
Image source: Official Weibo
The head of Coconut Palm's live room operations responded: "Our initial live stream style was hot dance, mainly expressing that men have a masculine flavor, women have a feminine flavor, and coconut juice has a coconut flavor, emphasizing the original taste." As early as April, 21st Century Business Herald mentioned: "(Coconut Palm Group) under the heat, live sales were not satisfactory. The live room with millions of views had sales of only 25,000-50,000 yuan." Two months later, Coconut Palm's live room stopped selling products and only did "show-style traffic attraction." The hosts like "Coconut Palm Four Beauties" and "Four Handsome Men" became internet sensations and were eagerly embraced by offline onlookers. High heat and low conversion rates seem ironic in the live commerce world, but for local affordable beverage brands like Coconut Palm, online sales may not be important. Facing the fiercely competitive beverage market, how to regain a place among young consumers might be the new proposition, and internet meme creation is the only way to break out.
The wind of new consumption involution has finally blown to domestic affordable beverages. Coconut Palm Group has broken out, and local brands like Chengde Lulu and Yinlu Group also need an opportunity.
Coconut Palm Fights a "Traffic Turnaround"
From packaging, advertising slogans, to live streams, Coconut Palm Group's popularity is always filled with "aesthetic" controversy. Compared to the exquisite packaging of current beverages, Coconut Palm's product packaging is often described as resembling street-posted "ads." This feature is also used in collaborations with Luckin Coffee and the group's recruitment ads, with high-saturation red, yellow, and blue forming the main elements of product packaging.
Image source: Official Weibo
Even the company's good news announcements use red and black fonts, bold and capitalized, without spaces, creating a simple and crude visual impact, labeling consumers with the Coconut Palm aesthetic. The advertising slogan on the packaging, "I've been drinking it since I was young," is also too straightforward for netizens to adapt. As early as 2006, Coconut Palm used "Wives like husbands drinking Coconut Palm pomegranate juice" as a marketing line, and slogans like "One cup a day, fair and tender, plump and moving" and the chest-film bottle design of Coconut Palm mineral water all tread on the line of "borderline." But Coconut Palm Group seems indifferent to external criticism, paying fines while refusing to change, and even writing traffic generation into its battle reports. On January 29, 2022, Coconut Palm Group mentioned in its opening red report: In 2019, the "I've been drinking it since I was young" Coconut Palm coconut juice ad controversy and the 2021 "Coconut Palm" training professional manager student recruitment ad controversy were handled successfully, attracting over 500 million netizens' attention, further enhancing the "Coconut Palm" brand awareness and promoting continuous counter-trend sales growth. Writing negative news into the good news report fully verifies Coconut Palm Group's desire for "traffic," and obtaining traffic may be Coconut Palm's top priority, with live commerce being just a bonus. Senior distributor Jingjing told us: "Offline, as traditional domestic beverage brands, Coconut Palm, Lulu, and Six Walnuts' market share is constantly squeezed by internet-famous drinks. They are no longer everyone's first choice and need online traffic to gain more consumer attention." On the other hand, the online live commerce price of such products won't be much cheaper than offline, otherwise it would affect offline sales. "Offline distribution is their stable source of income, like a safety net." From the results, Coconut Palm Group has achieved its goal of leveraging internet marketing to take off, carving out a broader traffic path. New Dou shows that in one month, Coconut Palm Group's Douyin account gained over 400,000 followers; another account, Coconut Palm Group Hainan Coconut Juice Beverage Co., Ltd., gained over 200,000 followers in a month.
Image source: New Dou
The personal accounts of "Coconut Palm Four Beauties" and "Four Handsome Men" also broke out, with enough followers on Douyin and Xiaohongshu. As the most popular of the Four Beauties, KK has over 600,000 followers on Douyin, and a transformation video shot by Coconut Palm can get nearly 200,000 likes. From aesthetic questioning to aesthetic recognition, netizens' fickle attitude towards Coconut Palm Group is evident from KK. Outside Douyin, Xiaohongshu users also welcome Coconut Palm's hosts. The same transformation video got 45,000 likes on Xiaohongshu for KK; among the "Four Handsome Men," Qizi has 26,000 followers on Xiaohongshu. With the hosts' cross-platform capabilities, Coconut Palm's live traffic is more precious than the previous negative 500 million topic volume. In contrast, accounts of traditional domestic affordable beverages like Lulu, Six Walnuts, and Eight Treasure Porridge appear relatively lonely. Six Walnuts and Eight Treasure Porridge do not have flagship stores on Douyin, while Lulu's flagship store has only 99,000 followers, and the only short video with over 10,000 likes is themed with the sentimental "Many Lulu babies are about to forget Lulu." Coconut Palm Group, which craves traffic, has become popular on the internet in a tried-and-true way, but this time it also brings a reversal in the reputation of the hosts. How long such traffic and reputation can last is another puzzle. This is a question Coconut Palm Group must consider, and also a pitfall for domestic affordable beverages in internet marketing.
Collective Silence Under the Internet Wave
It doesn't matter that Coconut Palm's live room doesn't sell products; in lower-tier cities, you can buy authentic Coconut Palm coconut juice at any small store, supermarket, or even restaurant. This is the result of Coconut Palm's channel distribution and the strength accumulated over thirty years. Since the brand's inception, Coconut Palm entered the stage of large-scale production and sales, building a complete distribution system. It has firmly grasped offline channels, setting up 175 general distributors and 600 secondary distributors nationwide, and establishing remote warehouses. Not selling in live rooms or opening e-commerce channels is also to protect the interests of the vast distributor network. After all, twenty years ago, Coconut Palm Group relied on these distributors to win the national beverage sales championship. According to public data, in 2013, Coconut Palm Group's annual revenue exceeded 4 billion yuan. However, the "2022 Hainan Private Enterprises Top 100" list released by the Hainan Federation of Industry and Commerce showed that Coconut Palm's revenue only reached 4.616 billion yuan. This proves that in the decade of rapid mobile internet development, Coconut Palm Group seemed to grasp the traffic code, but in reality, it not only failed to enjoy the real dividend but also saw stagnant revenue. Coconut juice is a type of plant protein beverage, a somewhat outdated category that once dominated the dining tables of the post-80s and post-90s, becoming their childhood memory. After all, compared to cola and Sprite, plant protein drinks like coconut juice, Lulu, and Yinlu peanut milk represent "natural," "healthy," and "nutritious" in the eyes of the older generation.
Supermarket shelf | Image source: Author
In fact, the treatment of these national drinks has long changed; Lulu's recent situation is exactly the same as Coconut Palm's. Last month, Chengde Lulu released its 2022 annual report, showing revenue of 2.692 billion yuan, with growth almost peaking. As early as ten years ago, Chengde Lulu's revenue reached 2.633 billion yuan. Moreover, Hedgehog Commune compared financial reports from the past few years and found that Chengde Lulu's gross sales margin was the lowest in six years, and sales of its two main products, almond milk and walnut milk, showed a declining trend year by year. For brands like Coconut Palm coconut juice and Chengde Lulu, their main products are concentrated in a very small subcategory. Once consumer preferences and tastes change, they easily fall into development bottlenecks. However, Yinlu Group, which is good at multi-line production and management, also failed to escape this fate. Yinlu once achieved 5 billion yuan in revenue with its Eight Treasure Porridge product, and later launched peanut milk that was also widely favored. Also in 2013, Yinlu reached its peak, with annual revenue exceeding 10 billion yuan, becoming the leading domestic beverage company at the time. Looking back at the history of domestic beverage giants, it's not hard to find that their marketing strategies were very simple, mainly using celebrity endorsements to gain attention, then expanding channels. Once they had national fame, rapid distribution made it easy to push sales higher. In today's context, this may not work. If the celebrity endorser remains unchanged—like Lulu's endorsement is still Xu Qing—it cannot bring new increments to the brand's continuous communication. After comprehensive comparison, Hedgehog Commune found that Coconut Palm Group, Yinlu Group, and Chengde Lulu all reached their revenue peaks in 2013, and have been hovering there ever since, never achieving such brilliant growth again. 2013 was a year of transition between old and new internet eras. The portal era enjoyed its last dividend, and then the PC era rushed towards the mobile internet era, and the landscape of e-commerce giants gradually became clear. Every era has its own hot spots and trends. Being early or late is not the right timing. National beverage brands that missed the train of the times gradually lost their former glory, and the market structure and share were disrupted. From the overall market size of the beverage industry, during the decade from 2013 to 2023, competition in the beverage track intensified, and the industry underwent many changes. National production scale expanded by 40%, and countless new categories and brands emerged, including unicorns like Genki Forest, which even attracted close attention from international beverage giants. On one hand, former national brands are stagnant; on the other hand, new consumer brands are thriving. Facing strong competitors, domestic affordable brands lack product iteration, lack traffic support, and don't know channel innovation. Despite having supply chain advantages, even lowering prices to the extreme is useless. Under the new "people, goods, and places" logic, they have no power to resist, and the industry enters a new round of reshuffling.
Guarding Young People's "Beverage Freedom"
After the industry reshuffle, the most intuitive feeling for everyone is that beverages priced at 5 yuan or below have significantly decreased. Hedgehog Commune visited several chain convenience stores in Beijing (7-11, Bianlifeng) and found that it's hard to see Coconut Palm coconut juice or Lulu almond milk. The beverage area has a full range of sparkling water, tea drinks, milk drinks, juices, etc., but most are priced above 5 yuan. Convenience store staff also confirmed that currently, beverages above 5 yuan account for the majority of the in-store beverage area, with the main customer group being nearby office workers. Young people's beverage purchase price range is basically 6-8 yuan. Although internet-famous drinks are expensive, sales for trying new things are considerable. In contrast, older customers mostly choose affordable drinks below 5 yuan.
Convenience store shelf | Image source: Author
Jingjing told Hedgehog Commune: "Drinks like coconut juice and Lulu are rarely sold individually; they are more of a ritual for visiting relatives and friends during festivals. The main consumers are middle-aged people, and young people are already unfamiliar with old domestic drinks." Consumer Wu Xin, who was buying drinks at a convenience store, told Hedgehog Commune that there are many self-service beverage coolers near his office building and gym. The price labels are not obvious. Every time he scans to open the cabinet and selects a drink, the automatic deduction makes his heart tighten, with unit prices around 10 yuan. "I have to say, I encountered another beverage assassin," Wu Xin shook his head helplessly. Recalling Coconut Palm coconut juice, Wu Xin said nostalgically: "Besides being delicious, another big advantage of coconut juice is its cheapness. A 245ml box sells for about 4.5 yuan. I've tried many coconut drinks, but in the end, I found that those better than Coconut Palm are more expensive, and those cheaper are not as good." In an era where every brand wants to tell a story, go high-end, and sell at a premium, there are ice cream assassins in the ice cream world and yogurt assassins in the yogurt world. Young people are increasingly coerced by various "assassins," but they also want to drink a 9.9 yuan coffee and buy a drink below 5 yuan. Young people who have been hurt by various assassins don't want to lose the right to choose low prices. At a time when Luckin has entered the era of 10,000 stores and Pinduoduo's market value has surpassed JD.com, young people also need consumption downgrading. This is precisely the turning point for domestic affordable beverage brands—seize the young people who are downgrading consumption, implement brand rejuvenation strategies, and lay the foundation for brand renewal. In the summer of 2022, Moutai and Mengniu jointly launched three flavors of ice cream sold on the Moutai app, and even held a special promotion conference for the ice cream, gaining enough topics and traffic. This year, Moutai ice cream stores also crossed over to sell coffee, another effort by Moutai to cater to young consumers. Coconut Palm Group has also been trying to keep up with young people. In 2022, Coconut Palm and Luckin co-branded the coconut latte, the first co-branding in Coconut Palm Group's 34-year history. The live streams from Douyin to Taobao also confirm Coconut Palm's efforts for brand rejuvenation. Not all brands that want to cater to young people find the right way. Lulu also introduced new drinking methods and product iterations in its live room, but it always lacks an opportunity to break out. The traffic code of internet meme creation is like the "0" after the "1"; only high cost-performance products and multi-channel distribution are the "1" in front. Domestic affordable beverage brands want to regain market share, so they have to fight head-on with powerful foreign brands and new consumer brands familiar with internet rules. Young people are also waiting for these old national brands to stand up and guard their "beverage freedom." If they don't choose rejuvenation, domestic affordable beverages can only become permanent "childhood memories." If they don't advance, they regress. (Jingjing and Wu Xin are pseudonyms in the article.)