---
title: "Two Years Later, Will 'Aliens' Beat Red Bull?"
description: "The functional beverage market is facing potential disruption from new entrants like Genki Forest's 'Alien' brand. While some believe new forces will struggle to challenge established players within five years, others argue that with capital, product innovation, and appeal to younger consumers, they could eventually overtake the old guard."
author: "水牛蚁"
publisher: "New Distribution"
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published: "2020-09-27"
language: "en"
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# Two Years Later, Will 'Aliens' Beat Red Bull?

> The functional beverage market is facing potential disruption from new entrants like Genki Forest's 'Alien' brand. While some believe new forces will struggle to challenge established players within five years, others argue that with capital, product innovation, and appeal to younger consumers, they could eventually overtake the old guard.

**'Aliens' Are Coming: Will the Functional Beverage Market Be Disrupted?**
Recently, Luo Yonghao, known as the 'industry beacon,' was reverse-endorsed by Red Bull Anaji, and Yangyuan Drinks, which distributes Red Bull Anaji, has begun a second round of distribution in the northern market. Moreover, Red Bull Vitamin Flavored Beverage is gradually appearing in rural stores in the north.
It's clear that Thailand's TCP Group is leveraging distribution channels to launch another assault on China Red Bull, which has dominated the market for years. At the same time, emerging functional beverage players, who have long eyed this large market, are poised and ready.
Regarding the future of the functional beverage market, some industry insiders believe that **within the next five years, new forces will find it difficult to shake the brand positions of established players and can only continue to follow. Others argue that these new forces, with advantages in capital, product strength, and hit-making creativity, are targeting today's youth, and as their purchasing power grows, the old forces may face a beating.**
**-01- The Rise of New Forces**
In the first half of 2020, despite the pandemic's impact on the beverage market, the functional beverage segment remained active.
Genki Forest, a new beverage force, leveraged its sustained brand heat to launch Alien functional drinks, followed by 'Alien Electrolyte Water' sports drinks.
Another new force, Hankou No.2 Factory, announced two consecutive funding rounds: Series A led by Qingliu Capital with participation from Hillhouse Ventures and Country Garden Ventures, and Series A+ led by Shunwei Capital, with total funding exceeding 100 million yuan, and existing shareholder Qinqin Investment increasing its stake.
In addition to domestic brands, international player Monster Beverage is also intensifying its presence in China, accelerating brand localization. Monster launched a lemon-flavored energy drink called 'Long Tea,' now available across online and offline channels.
Beyond these brands, many companies have been positioning themselves in the functional beverage market in 2020. Panpan Foods released a new energy drink 'Baofali Shuite,' and Laoshan Mineral Water, under Qingdao Beverage Group, partnered with Baiyang Pharmaceutical to launch a new sports drink 'Natural Enlightenment Laoshan Mineral Water Sports Drink.'
On May 15, Houshengji's 'Qidongli' wolfberry health drink, which claims to boost immunity and relieve visual fatigue, went into production. Last week, PepsiCo introduced a new beverage called 'Difftwell,' containing ingredients that promote relaxation, stress relief, mood calming, and improved focus and sleep.
Industry insiders believe that **new brands are entering the functional beverage sector because the market is expanding rapidly, with a compound annual growth rate of 15.02% from 2014 to 2019, and is expected to exceed 60 billion yuan in 2020.**
**The pandemic has also accelerated consumer focus on immune systems and overall health, leading to faster launches of products with specific functions, such as functional beverages.** As the tide rises, some new brands gain market recognition and accelerate their rise with capital support.
**-02- Old Forces Counterattack**
While new forces are rising, old forces remain entangled in internal conflicts, with the Red Bull brand battle being particularly dramatic.
**Beyond the media war, both sides are fiercely competing for offline market share.** China Red Bull announced strong mid-year results, projecting confidence in its stable sales and market leadership, with over 50% market share, boosting distributor and consumer confidence.
Similarly, Thailand's TCP Group, with Yangyuan Drinks' support, has an opportunity to make waves in the northern market. The author noticed that Thai-imported Red Bull Vitamin Flavored Beverage and Red Bull Anaji have appeared in townships across several northern provinces, indicating that **TCP is encroaching on China Red Bull's and other traditional functional beverage markets through distribution channels.**
Beyond the Red Bull brand dispute, other brands are accelerating their plans. In 2020, Dongsheng (Dongpeng) submitted its IPO prospectus, aiming to raise 1.5 billion yuan for capacity expansion, marketing network upgrades, brand promotion, and IT upgrades, R&D center, and headquarters building. It also launched a new energy drink 'Jiaqi' to meet young consumers' demand for carbonated taste.
**-03- Who Will Win?**
With new forces aggressively advancing and old forces struggling to respond, what will the future landscape of China's functional beverage market look like?
A traditional beverage practitioner told the author, **'New forces don't play by traditional rules; they use internet thinking, leveraging capital and traffic to achieve rapid dissemination and expansion.'**
Genki Forest, after multiple funding rounds, is valued at $2 billion. With strong capital and internet data empowerment, it has conquered e-commerce platforms, surpassing Pepsi and Coca-Cola to top the charts, while rapidly expanding offline through convenience store chains.
Alien functional drinks, launched by Genki Forest in May, are another sugar-free series. On Tmall, 'Alien' sells nearly 1,900 units monthly. More importantly, to accelerate offline expansion, Genki Forest has innovated in channel development, challenging traditional offline recruitment models.
Merchants interested in selling Genki Forest products can start with a minimum purchase of 300 cases, with no restrictions on sales channels or regions. 'The low threshold allows Genki Forest to quickly stock products offline. Also, there are no monthly or annual rebates, which avoids cross-regional dumping,' an industry insider analyzed. 'But this tests the brand's market operation capability, relying entirely on brand pull to drive distribution, downplaying distributors' role. This could be a future trend.'
Skeptics of Genki Forest and other new forces point to **gaps in channels and product R&D**. 'Genki Forest's products are all existing products with a sugar-free concept, not revolutionary. Moreover, they lack the 'blue hat' health food certification, operating in a gray area. As regulators tighten oversight, some of these products may face challenges.'
Additionally, Genki Forest's development model resembles Luckin Coffee's trajectory, which carries risks.
Founded in 2016, Genki Forest, with capital support, has expanded through online and offline convenience store channels. To date, it covers over 30 provinces, with 477 convenience store systems, 53,286 convenience stores, and 131,375 traditional offline stores.
In 2020, Genki Forest announced plans to build three factories, with a valuation of 14 billion yuan. Clearly, Genki Forest is telling a 'good story' aimed at an IPO.
Industry insiders wonder whether Genki Forest's model will end like Luckin Coffee's, in a mess. But can its four years of accumulation support such a massive operation? That's an unknown and the biggest variable.
**For old forces, the rise of new forces like Genki Forest is both a threat and an opportunity. It reminds them to accelerate changes in operational thinking and models to adapt to the new environment, or 'old masters may be beaten by wild punches.'**
Source: Fast Moving Consumer Goods Elite Club (ID: FMCG-CLUB) Author: Shui Niu Yi


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