In a FamilyMart convenience store in Beijing's Dongcheng District, three rows of unsweetened tea beverages are prominently displayed on the drink shelf, featuring mainstream and popular brands such as Kangshifu Ice Black Tea, Rangcha, Suntory, Guozishule, and Oriental Leaf. Guozishule occupies a prime position, easily within reach at eye level.

The store clerk said: "Oriental Leaf has always been the best seller. Suntory does well during promotional events, but without promotions, it doesn't sell as well as Guozishule. On a daily basis, Oriental Leaf and Guozishule sell the most." When asked why Guozishule sells well despite its not-so-cheap price, the clerk replied: "I don't know. It just suddenly became popular, and the price isn't cheap."

Indeed, as an emerging brand, Guozishule's unsweetened tea series is priced at 5-6 yuan, on par with leading brands, and its growth rate has attracted significant industry attention.

Guozishule: "Five-Tenths Ripe"

According to statistics from an offline FMCG retail monitoring agency, the "2024 (Summer) Unsweetened Ready-to-Drink Tea Category CR13 Group and Ranking" shows that from April to May, Uni-President ranked sixth, while Guozishule ranked third. By June to July, Uni-President moved up one spot to fifth, and Guozishule ranked fourth.

In the detailed category market share TOP15 SKU and year-on-year growth rate, from April to May, Guozishule's Zhi Zhi Oolong 500ml appeared with a year-on-year growth rate exceeding 750%, making it the only unsweetened tea product in the TOP15 not belonging to Nongfu Spring or Suntory.

Is it truly a dark horse in the industry?

When discussing with an industry insider, they defined it as: A stage-specific product with a stronger internet celebrity attribute; in the long run, it cannot sustain its popularity.

They analyzed three reasons for its current success:

1. Leveraging the convenience store channel advantage 2. Aligning with young consumer groups 3. Standing on the shoulders of giants

Leveraging the convenience store channel advantage

Currently, in Guozishule's offline channels, the convenience store channel is relatively strong. Its products are available in some supermarkets such as Century Mart, ALDI, and RT-Mart, but the most common channel is convenience stores, with FamilyMart having the highest frequency. Guozishule's lemon tea and unsweetened tea have the most extensive distribution in convenience stores.

I found a post on Zhihu recommending tea drinks from Suntory, Oriental Leaf, and Guozishule. The netizen mentioned discovering the brand in a convenience store in Zhuhai, liking its design and sweet, refreshing taste...

Clearly, convenience stores have a high tolerance for new products, and consumers naturally have a price filter for this format. That is, most consumers entering convenience stores are less price-sensitive and have a high desire to try new things, so they are willing to try interesting new products.

Guozishule's common pricing of 5-6 yuan is already higher than the mainstream 3-4 yuan range for bottled beverages, making convenience stores more suitable for its sales characteristics.

More importantly, convenience stores concentrate young consumers, which matches Guozishule's youth-oriented approach. Moreover, with many chain stores nationwide, once a breakthrough is made, nationwide distribution can be achieved smoothly through the convenience store chain system.

Aligning with young consumer groups

As mentioned earlier, the Zhihu netizen chose Guozishule because of its design and taste. Indeed, packaging has three key points: visibility, recognition, and allure. From appearance, packaging design, and packaging slogans, it can make consumers see it at a glance and pick it up to buy.

In simple terms, your packaging must be an "eye-catcher" on the shelf. Guozishule's square bottle design and packaging appeal to the aesthetics of young consumers.

Secondly, the taste also aligns with the drinking habits of young people. I conducted an internal survey: compared with Oriental Leaf, those who prefer Oriental Leaf are true tea lovers with regular tea-drinking habits, treating it as a substitute for tea, aged 28 and above. Those who prefer Guozishule tend to like a sweet taste in tea drinks, treating it as a beverage, aged below 28.

Moreover, those who truly like Oriental Leaf, after trying Guozishule, most will not choose it a second time because they have higher requirements for tea taste.

Standing on the shoulders of giants

There's a joke about Oriental Leaf: "Ten years ago, Oriental Leaf was a joke; ten years later, it's a myth."

This sentence summarizes Oriental Leaf's decade-long patience and foresight, and also points out its current industry position. In the past decade, unsweetened tea was a niche market, not on the mainstream track, but years of dormancy have led to its current explosive growth.

This is the power of demand trends. What is a demand trend? In simple terms, it's something that will happen in the future but is still in its infancy. The three-year pandemic accelerated consumer education on health attributes. When health awareness permeates daily consumption, the category dividend period follows.

Oriental Leaf has validated the unsweetened tea category on this track, proving its success and logic. Followers have flocked in. Guozishule, as one of the successful followers, can be said to have achieved twice the result with half the effort by catering to consumption trends.

The difference is that Guozishule and Oriental Leaf's consumer groups are not completely overlapping but complementary: the former targets young people under 28, while the latter targets middle-aged people over 28.

But it's undeniable that Guozishule has seized the right time, place, and people. During the category dividend period, it adopted a multi-product, multi-flavor, multi-category strategy, based on a single brand and single channel, launching a strong attack on young consumers, reaching a commanding height in the industry. Now it must consider how to shake off pursuers, how far it is from the top, and how to sustain its success.

Guozishule: "Five-Tenths Raw"

So, the industry raises a question for Guozishule, which is at the forefront: How much further can Guozishule go?

During a market visit by New Distribution, a distributor surnamed Yan from Shandong said: "I noticed Guozishule two years ago, but I haven't included it in my category management. The manufacturer has approached me, but I've been considering and observing, and I don't plan to take it on yet."

Why?

"Because it doesn't have a core big single product, and its life cycle isn't long enough. If the popularity fades after a while, problems like product stagnation and inventory backlog become tricky." This is a concern shared by some distributors, revealing Guozishule's current development status.

Despite its explosive popularity, it lacks representative products and focus. Although it uses a multi-matrix, multi-category strategy, this is also a major weakness: with many stars but no brightest one, its growth confusion is becoming clear.

1. Vague brand positioning and too-fast product launches 2. Lack of focus and absence of a core big single product 3. Industry follower without category advantage

Vague brand positioning and too-fast product launches

Shandong distributor Yan commented: "Guozishule's product launch speed is too fast; you can't see its brand positioning clearly. In the short term, profitability is fine, but the long-term risk is too high. It's more suitable for small or newly started distributors aiming to make money, but it's not a long-term strategy."

Looking at Guozishule, founded in 2019, its main products include 12 series: Qi Dan series, Dun series, Lemon Tea, Fruit Tea, Cooked Milk Tea, Unsweetened Tea, and Ready-to-Drink Juice, all in currently hot categories. From 2020 to 2021, it launched Qi Dan Sparkling Water and Cooked Milk Tea series, which were in a rapid growth period. In 2023, it pushed unsweetened tea and lemon tea with greater efforts.

Clearly, Guozishule uses rapid product launches to break into the market. Developing new products in existing strong tracks avoids the risk of new category development and eliminates the need to educate consumers, minimizing trial-and-error costs. Through a multi-product matrix, it gains a larger market share and secures a place in the industry.

This is a shortcut to quickly capture the market, but in the long run, "to forge iron, one must be strong oneself."

Lack of focus and absence of a core big single product

As we all know, China's leading companies, without exception, adhere to the product thinking model of "one brand, one core category." For example, Nongfu Spring has natural water first, then Oriental Leaf; Genki Forest has sparkling water first, then Alien Electrolyte. These companies share a common feature: they are leaders or innovators in a certain category, meaning category equals brand.

This is a path that has been long-verified and has succeeded without exception. Guozishule has already entered the top five in its category. The key now is to build on channel strength, product strength, and brand strength. Among these, brand strength is the biggest competitive barrier: turning demand into specific products, marketing around target groups, and ultimately connecting demand, groups, and scenarios to launch a product, create a long-term core big single product, and effectively occupy consumer minds, generating enough imagination and memory.

Marketing expert Liu Chunxiong, when analyzing Genki Forest, mentioned a viewpoint: "A competitive company has two hurdles to pass. The first is to create a star big single product, establish a product base, and radiate to surrounding products. The second is to broaden the width of the big single product. One big single product is not enough to compete with other companies because a single target is easy to aim at. With 2-3 or more big single products, competitors can't aim accurately, invisibly building multiple barriers and driving growth in other categories."

Industry follower without category advantage

Upon closer examination, is Guozishule really "ripe"?

Although it has seized the category dividend, it has not gained a category advantage. The category dividend comes more from external environment, era, and trend alignment, while category advantage tests the company's own innovation capability.

Even though Guozishule iterates products quickly and has strong innovation ability, it's not true innovation. It merely differentiates products within existing category dividends, becoming a long-term follower. The brand will soon be diluted. Whether to focus on volume or voice, currently Guozishule seems to choose the latter. How to increase voice is a profound question for Guozishule to consider.

When the tide goes out, you know who's swimming naked; after the dividend period, how long can Guozishule sustain?

Final Thoughts

Weimu Capital founder and CEO Lv Xiaotong shared on Xiaohongshu: "Guozishule went from 0 to 1 billion in just two years." This is a height few companies can achieve.

It can be said that Guozishule's rise has a certain "beginner's luck." Because when the wind comes, luck often outweighs ability.

But this luck is accidental. Many entrepreneurs often encounter many problems and troubles at the beginning of their ventures, which is a norm. So for those who succeed immediately at the start, they must be wary of this "beginner's luck."

Spatially, the good luck of seizing the right time, place, and people inherently has a characteristic of rapid dilution. Temporally, luck is a time concept. When a person or company falls into trouble, we say their luck is bad, meaning what works at one moment will gradually be diluted over time.

Therefore, Guozishule needs to possess a "reflexive ability" and reserve the capability to "turn adversity into opportunity" in advance, so as not to be washed away by the waves.