---
title: "Wanglaoji Trapped in Brand Licensing"
description: "Agents who invested heavily in Wanglaoji-branded products, expecting high returns, found themselves unable to protect their rights or get refunds. This article exposes the chaos in Wanglaoji's brand licensing, which has led to disputes and losses for many agents."
author: "陈晓京"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-01-29"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/wanglaoji-trapped-in-brand-licensing-8a40b619/"
markdown: "https://xinjignxiao.com/en/articles/wanglaoji-trapped-in-brand-licensing-8a40b619.md"
original_source: "https://mp.weixin.qq.com/s/GXI5s4AR2PtVKe1uF7P_cA"
translation: "https://xinjignxiao.com/zh/articles/%E7%8E%8B%E8%80%81%E5%90%89%E5%9B%B0%E5%9C%A8%E5%93%81%E7%89%8C%E6%8E%88%E6%9D%83%E9%87%8C-8a40b619.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/wanglaoji-trapped-in-brand-licensing-8a40b619/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Wanglaoji Trapped in Brand Licensing

> Agents who invested heavily in Wanglaoji-branded products, expecting high returns, found themselves unable to protect their rights or get refunds. This article exposes the chaos in Wanglaoji's brand licensing, which has led to disputes and losses for many agents.

Agents who invested heavily in Wanglaoji-branded products, expecting high returns, found themselves unable to protect their rights or get refunds.
A few days ago, such videos spread widely on the internet, inadvertently exposing **the chaos in Wanglaoji's brand licensing.**
Wanglaoji is the leading brand in China's herbal tea industry, with a market position comparable to Suntory's in Japanese tea drinks.
Just like Suntory vs. Kirin, Wanglaoji has a formidable rival in China's herbal tea market: JDB.
In 1997, Hong Kong Hongdao obtained the license for the Wanglaoji trademark from Guangzhou Pharmaceutical Group (GPG), allowing it to sell red-can Wanglaoji herbal tea in mainland China. However, after a few years of honeymoon, their differences intensified. Later, Hong Kong Hongdao launched its own herbal tea brand, JDB, to save itself, and its expansion was surprisingly fast.
In 2015, JDB's revenue exceeded 10 billion yuan, directly threatening Wanglaoji's market position. At that time, GPG filed a trademark infringement lawsuit against it.
This protracted lawsuit, fought from Guangdong to Beijing, has not yet concluded, becoming a recognized unresolved case in the domestic beverage industry.
The litigation tug-of-war between the two giants directly impacted the herbal tea industry, **killing a thousand enemies while losing eight hundred of your own. JDB gradually disappeared from the market, and Wanglaoji also became harder to sell.**
In the endless entanglement, Wanglaoji embarked on the path of brand licensing. What was thought to be a surefire, lucrative business turned out to be a stumbling block.
**Chaotic Brand Licensing**
The epitome of domestic brand licensing is Nanji E-commerce (002127.SZ).
In 2008, Nanji E-commerce cut off its sales and production ends, completely transforming into a brand licensing model for brands like "Nanji Ren." The licensed categories expanded from apparel to home textiles, and even to health and lifestyle segments.
In fact, in the pharmaceutical industry, Baiyunshan had already adopted a brand licensing model early on.
In 2015, Baiyunshan (600332.SH, 00874.HK) basically completed the layout of its three major industries—Great Southern Medicine, Great Commercial, and Great Health—and its internal organizational structure. That year, the controlling shareholder GPG stopped direct external licensing and switched to a sub-brand promotion model, giving birth to brands and products like Ji Dong Li and Ji You.
In 2019, GPG licensed 420 Wanglaoji trademark rights to Baiyunshan for 1.389 billion yuan. That year, Baiyunshan established a subsidiary, Guangzhou Chuangying GPG Intellectual Property Co., Ltd. (hereinafter "Chuangying GPG"), to implement brand licensing business, kicking off the brand licensing business.
However, this seemingly easy business is not as easy as outsiders imagine.
Currently, on short video platforms, there are still a large number of investment promotion ads related to Wanglaoji, such as "get exclusive agency rights for tens of thousands of yuan" and "Wanglaoji headquarters supports distribution." Under the highly suggestive sales pitches of these investment companies, agents flock to them.
The companies responsible for investment promotion, using the names of GPG and Wanglaoji to recruit agents, either delay shipments or simply run away after incidents. **Agents are left with no way to protect their rights, crying without tears.**
Take the Ji Dong Li series vitamin products involved in recent rights protection disputes as an example. Many people trusted Wanglaoji's endorsement, paid, received goods that couldn't sell, and then found it impossible to cancel contracts or get refunds.
According to preliminary estimates, more than 200 agents are involved, with payments exceeding 100 million yuan.
According to a licensing document stamped with the official seal of Chuangying GPG, the Ji Dong Li series under Guangzhou Baiyunshan and Hutchison Great Health Products Co., Ltd. has been authorized by Guangzhou Baiyunshan Pharmaceutical Group to use the 32nd class Wanglaoji trademark, with a term from January 1, 2022, to June 30, 2022.
What is little known is that both Guangzhou Baiyunshan and Hutchison Great Health and Guangzhou Baiyunshan Pharmaceutical Group are member enterprises of the GPG system.
The authorized 32nd class Wanglaoji trademarks cover not only Ji Dong Li series vitamin beverages but also Ji You series peanut milk, soy milk, lactic acid bacteria drinks, and other plant-based protein beverages.
In recent years, **Wanglaoji has licensed a wide variety of brands, including not only baijiu, yellow wine, beer, and sparkling water, but also coffee, cosmetics, and even daily necessities.** At the 2023 Spring Sugar and Wine Fair, Wanglaoji Sui Sui Niu baijiu was aggressively recruiting agents on site.
It is worth noting that some of Wanglaoji's OEM products, after layers of licensing, have been plagued by disputes. In 2021, Pi Hi Pi, 1828 Wanglaoji Herbal New Tea, Ji You, and others were investigated and penalized by relevant authorities.
**A Lucrative Business**
More than a decade ago, with the slogan "Afraid of getting heaty? Drink Wanglaoji," Wanglaoji reached the top of the herbal tea industry. However, this throne has not been stable. Besides the endless fight with JDB, a greater threat comes from the iteration of beverages. This has already affected the company's revenue and performance.
Since 2018, Baiyunshan's revenue growth rate has dropped from 101.55% to 6.16% in the first three quarters of 2023, while net profit attributable to shareholders has fallen from 66.90% to 9.12% over the same period.
As one of the company's flagship products, **Wanglaoji carries a heavy burden and faces thorny issues.**
On one hand, herbal tea is almost a business without barriers; both taste and packaging are easily imitated by competitors. While Wanglaoji was fighting with JDB, other herbal tea brands like He Qi Zheng, Want Want, and Deng Lao Jin Fang emerged. At the same time, the rise of new tea drinks and ready-to-drink tea beverages diverted a large number of consumers.
On the other hand, Wanglaoji's early marketing was too successful, limiting its consumption scenarios to barbecue, hotpot, and similar settings. Affected by the three-year special environment, the weak catering market dealt a heavy blow to herbal tea consumption.
Once, Wanglaoji responded to the sugar-reduction trend by launching a healthier black-can herbal tea, but it did not become popular as expected.
The overall herbal tea market is also seeing significantly slowing growth. According to public data, the sales scale growth rate of the herbal tea market was as high as 16.7% in 2012, but by 2019 it was only about 6.3%.
In August 2019, Baiyunshan established a wholly-owned subsidiary, Chuangying GPG, specifically to integrate all of the company's intangible brand assets, achieving brand integration, brand operations, and operations of intellectual property such as patents and copyrights.
Almost overnight, **Wanglaoji OEM products flooded the market.**
How big is this business? Baiyunshan's "other income" in the 2021 annual report was 339 million yuan, a year-on-year increase of 58%. The company explained that this mainly came from the expansion of Chuangying GPG's brand operation business and the expansion of Baiyunshan Hospital's operating scale.
From the performance betting agreement between GPG and the company, one can perhaps glimpse the quality of Wanglaoji's brand licensing business.
According to announcements, from 2019 to 2022, the net income from the Wanglaoji series trademarks was 162 million yuan, 168 million yuan, and 161 million yuan respectively. The cumulative net income from trademark licensing over the three years did not trigger performance compensation.
**A Cash Cow That Can't Grow**
Baiyunshan has two "magic weapons": one is Jinge, which can make people "restless," and once created the miracle of selling nearly 100 million tablets in 2021; the other is Wanglaoji, which can help people "reduce heat," and has always firmly held the dominant position in the domestic herbal tea field.
Jinge, with a gross margin of about 90%, has become the pillar of the Great Southern Medicine business segment; Wanglaoji, with annual revenue of over 10 billion yuan, supports the Great Health business segment.
From 2019 to 2022, Baiyunshan's Great Health segment achieved revenues of 10.479 billion yuan, 7.859 billion yuan, 10.851 billion yuan, and 10.473 billion yuan respectively, with gross margins maintained above 40%.
Taking 2022 as an example, the Great Health business achieved a total profit of 1.804 billion yuan, contributing 45.48% of Baiyunshan's profits. The most important part of this is Wanglaoji herbal tea.
As the main sales entity for the herbal tea business, Baiyunshan's wholly-owned subsidiary Wanglaoji Great Health, in the same period, achieved sales amounts of 10.297 billion yuan, 6.862 billion yuan, 9.729 billion yuan, and 9.349 billion yuan, and net profits of 1.380 billion yuan, 1.195 billion yuan, 1.288 billion yuan, and 1.488 billion yuan respectively.
Wanglaoji herbal tea is simply Baiyunshan's cash cow.
However, around 2015, **the battle between JDB and Wanglaoji began, intensifying internal industry friction and causing the market to shrink.**
To survive, in 2018, JDB had high hopes for participating in the debt restructuring of listed company Zhonghong Co., Ltd., but at that time JDB itself was like a clay Bodhisattva crossing a river—unable to save itself.
From 2015 to 2017, JDB's main business revenue was 10.04 billion yuan, 10.63 billion yuan, and 7.002 billion yuan, with net profits of -189 million yuan, 148 million yuan, and -583 million yuan.
After the cooperation with Zhonghong fell through, JDB proposed a listing plan within three years, but nothing came of it. **JDB's actual controller, Chen Hongdao, fled abroad due to a bribery case, and the mainland market was already beyond redemption.**
With such a miserable opponent, Wanglaoji did not fare well either. As the herbal tea business hit a growth bottleneck, Wanglaoji Great Health's revenue growth also slowed significantly.
Killing a thousand enemies while losing eight hundred of your own. In the endless litigation war between the two herbal tea giants, there are no winners.
**PS: From March 14-16, 2024, the 9th China FMCG Innovation Conference & the 2nd China FMCG Hard Discount Conference & the 2nd China FMCG Distributor Conference will be grandly held in Chengdu!** This conference will focus on the theme of **"Supply Chain Revolution"**. Over three days, there will be one main forum, one China FMCG Hard Discount Conference, one China FMCG Distributor Conference, more than ten sub-forums and closed-door exchange sessions, and the first-ever [Ultimate Supply Chain] Brand Factory Direct Procurement Fair. We will gather with thousands of FMCG brand owners, distributors, retail innovators, and industry service providers from across the country in Chengdu for continuous brainstorming to discuss the challenges, opportunities, changes, and solutions in the era of supply chain revolution. In this era of supply chain revolution, a new business era will be born. We hope every participant will still have a place in this wave, and we believe this will be a conference worth attending! For business cooperation, please contact:


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671