In the history of China's beverage business, and even in the Chinese business world, JDB is destined to leave a significant mark! Since its rapid growth over a decade ago, it has opened the curtain on its myth-making in the domestic beverage industry. It successfully expanded the scale of China's herbal tea beverage market by more than a hundredfold and ascended to the throne as one of China's beverage giants. To this day, despite external environmental changes and fierce competition, it still leads the industry, remains the king of Chinese herbal tea, with a leading market share, and achieved impressive results in the latest 2017 opening, leading the industry! With just one beverage, it has created a giant enterprise, opened up a major market category, and set a record of cumulative sales of 150 billion yuan over 20 years and annual performance of over 20 billion yuan—truly one of the classic business battles in China! So, what exactly has made the JDB legend? How did it step by step grow and strengthen? This article will deeply analyze the truth behind JDB's success!
A Can of Beverage, 150 Billion in 20 Years Creating the Legend of China's Largest Single Product The Seventh Trend Leader in China's Beverage Industry China's beverage market is a fiercely competitive one, with a new trend emerging every 2-3 years and a star product appearing. Since the 1980s, about ten trends have emerged—carbonated drinks, tea drinks, water drinks, fruit juice drinks, functional drinks, dairy drinks, herbal tea drinks, plant protein drinks, coarse grain drinks, and more. Each beverage trend has its star leaders, such as Coca-Cola, Pepsi, and Jianlibao in carbonated drinks; Wahaha purified water, Robust purified water, and Nongfu Spring in water drinks; Huiyuan in fruit juice; Red Bull and Mizone in functional drinks; Wahaha Nutri-Express in dairy drinks. In 1996, a canned herbal tea created by JDB burst onto the scene, charging out of the Chinese beverage world, gradually climbing to the pinnacle of the beverage industry, becoming the seventh trend leader after carbonated drinks, tea drinks, water drinks, fruit juice drinks, functional drinks, and dairy drinks, creating a new single-product myth.
From a Regional Small Brand to a National Big Brand In the Domestic Market, Single Product Defeated Coca-Cola and Pepsi 20 Years, 150 Billion Sold, Creating the Legend of China's Largest Single Product Before 2003, JDB was just a regional small brand, operating in some southern markets, content with its corner. Moreover, as a southern consumer product, herbal tea faced the challenge of breaking through the differences in consumption habits between north and south to become a national product. However, what the Chinese FMCG and beverage industries didn't expect was that starting from 2003, JDB stepped onto the big stage of beverages and quickly staged a legend of sustained high growth, moving from regional to national market, becoming a national big brand, and even surpassing Coca-Cola and Pepsi in single-product canned beverage performance and single-product performance. From 1997 to 2016, cumulative sales exceeded 150 billion yuan, and now annual performance exceeds 20 billion yuan, creating the legend of China's largest single product. Today, JDB, along with Red Bull and Wahaha Nutri-Express, is one of the few super single products in China with annual performance exceeding 20 billion yuan.
One Enterprise, Also Creating a Major Category Promoting the Expansion of China's Herbal Tea Beverage Consumption Market by 100 Times In the process of successfully creating the herbal tea single product, JDB also created a category myth—expanding the scale of China's herbal tea beverage market by more than a hundredfold. The expansion of China's herbal tea beverage market basically grew with JDB's development. When JDB first started making herbal tea, its sales were less than 100 million yuan, and the scale of China's herbal tea beverage market was less than 500 million yuan. As JDB's star herbal tea product became increasingly popular in the domestic market, the herbal tea market continued to expand. In 2006, JDB's performance reached 3.5 billion yuan, and that year the industry market scale grew to 4.6 billion yuan. By 2015, the scale of China's herbal tea market reached 50 billion yuan, expanding by more than a hundredfold in nearly 20 years. It's no exaggeration to say that JDB is the creator of China's herbal tea beverage market. Today, not only does the leading JDB have performance exceeding 20 billion yuan, but even the third-place Heqizheng has nearly 3 billion yuan in scale, more than six times the industry size when JDB first drove the herbal tea industry explosion. This shows JDB's contribution to Chinese herbal tea. With this achievement alone, JDB's accomplishments in the herbal tea field are comparable to Coca-Cola and Pepsi's achievements in carbonated drinks, Wahaha and Robust's creation of the water beverage market, and Red Bull and Mizone's creation of functional drinks. Whether it's the trend legend, product legend, or category creation legend, JDB can leave its name in Chinese business history.
The Truth Behind JDB's Success What Exactly Created the Beverage Industry Myth? Like many star leaders in China's beverage industry, JDB was not initially a big player; it grew from small to large. So, behind JDB, how did it step by step become a myth in the beverage industry? What made it stage a commercial miracle?
Four Major Turning Points in JDB's Development History Achieving Today's Herbal Tea King In fact, JDB did not become the herbal tea king that everyone sees today overnight, and its development was not smooth sailing. JDB has been established for over 20 years. During these 20-plus years, it underwent four major turning points and upgrades to become today's herbal tea leader.
First Turning Point: From Wholesale Model to Focus and Brand Building JDB was born in the 1990s, initially a relatively small enterprise, in an era when international brands dominated. Especially in 1994, China's beverage industry suffered a major impact, with Coca-Cola and Pepsi forming an overwhelming advantage. Seven of China's eight major beverage companies were acquired or merged by Pepsi and Coca-Cola (including Beijing Beibingyang, Shenyang Bawangsi, Tianjin Shanhaiguan, Qingdao Laoshan, Wuhan Daqiao, Chongqing Tianfu Cola, and Guangzhou Asian Soda), leaving only Jianlibao. This was called the "two colas flooding the seven armies," causing great shock to Chinese beverage peers and the FMCG industry. At the same time, the two colas also made Chinese local enterprises feel the sophisticated business operations of international brands, and their mature practices in product, channel, and promotion deeply touched Chinese local enterprises. Coca-Cola and Pepsi thus became learning objects for Chinese beverage companies. At that time, "to be China's Coca-Cola" almost became the dream of many enterprises in China's FMCG field. Among them was JDB, which was still weak at the time. To this end, JDB adjusted its business thinking. Previously, JDB mainly engaged in the wholesale model, but it suddenly changed to a brand operation model, making major adjustments from business awareness to thinking. JDB decisively cut some other products and began to focus on the herbal tea field. After all, Coca-Cola and Pepsi created legends and built their business empires based on carbonated drink single products. This major transformation from wholesale to brand and from multi-product to focus, with strategic upgrades, actually laid the groundwork for JDB's future development legend, allowing JDB to start distancing itself from many domestic enterprises of similar scale at the time.
Second Turning Point: Initial National Expansion Met with Setbacks, Retreating to Accumulate Strength Regionally (1996-2002) On the road to making herbal tea, JDB also encountered setbacks; it was not smooth sailing. After obtaining the brand agency, JDB wanted to make a big push and conducted an initial large-scale national expansion, but it quickly failed. After all, JDB's strength was insufficient at the time, with deficiencies in various aspects. So, JDB chose to withdraw from most markets and instead concentrate superior resources, first accumulating strength regionally, then seeking expansion. It began to deeply cultivate local areas, experimenting with pilot markets and model markets, and this deep cultivation lasted more than six years, biding its time and steadily accumulating strength for six years. To some extent, after the first and second turning points, JDB had basically laid the foundation for success; the rise and big leap were only a matter of time.
Third Turning Point: From Regional to National, Achieving the National Herbal Tea Legend (2003-2012) In 2002, after years of accumulation, JDB had achieved good results in local markets, with annual performance reaching over 200 million yuan. At this time, both regional operation experience and financial strength had accumulated to a certain level. JDB could finally make a big move to realize its dream of "being China's Coca-Cola." At the end of 2002, JDB began adjustments beyond the past, and in 2003 started major actions, conducting large-scale brand operation and national expansion. Because both economic strength and foundation were well accumulated, development went smoothly. From 2003 to 2012, in 10 years, JDB's annual performance grew from over 200 million yuan in 2002 to 20 billion yuan, a hundredfold increase, creating the scale of China's herbal tea beverage market and becoming the undisputed herbal tea hegemon and one of the big players in China's beverage industry.
Fourth Turning Point: Separation and Rebuilding, from Brand Agency to Own Brand (2012-Present) Starting in 2012, when JDB was at its peak, it faced another major turning point in enterprise development—separating from its partner and building its own brand. Losing the brand assets cultivated for over a decade, JDB faced a life-or-death test. If it succeeded in building the brand, JDB would be "reborn from the ashes"; if it failed, it meant the loss of over a decade of accumulation and even the risk of total collapse. Fortunately, in this desperate battle, thanks to long-term market campaigns, JDB's experience had greatly improved, no longer the novice of early days. Through brilliant communication battles, long-cultivated channel advantages, and a strong ground execution team, it successfully survived this ordeal, achieved own-brand building, brand rebirth, and completed the transformation from brand agency to own brand, continuing to firmly hold the throne of herbal tea king. It was these four upgrades and four major turning points that repeatedly enhanced JDB's operational capability and competitiveness, gradually ascending to the throne of herbal tea king and one of China's beverage industry giants.
Four Success Secrets of the Herbal Tea Leader Success Secret One: Product Innovation —From a Health Function Product to the Beverage Market One of JDB's successes is its bold innovation in the product, pushing it from a health function product to the beverage market. Herbal tea is a product with characteristics, with a long consumption history and culture, but it has a weakness—whether it can break through the dilemma of regional habits. In the south, due to the special geographical environment, there has always been a habit and tradition of focusing on health and reducing internal heat, with more emphasis on nourishment and health preservation. This is indeed more emphasized than in the north. Therefore, herbal tea consumption has always had a tradition in some southern regions. However, a product with regional consumption habits means that going north requires the complex work of educating habits, undoubtedly increasing difficulty; changing consumer habits is very hard. If it cannot cross this hurdle, it can only serve part of the southern market; if it crosses it, it has a larger market. Ultimately, JDB turned it into a universal product positioning—a beverage that prevents internal heat—cleverly grafting the function of herbal tea with mass consumption habits, thus moving to a broader space and quickly becoming popular nationwide.
Success Secret Two: Strong Promotion —A "Heaven and Earth Net" Style Three-Dimensional Bombardment Promotion is a necessary and sufficient condition for an enterprise to build its brand. Whether it can fight a beautiful promotion battle will be the key to whether a product can leap to become an industry-known brand, or even a leading brand.
1) Large-Scale Media Promotion In 2003, JDB originally planned to invest only over 10 million yuan in advertising, but within a few months, it spent over 40 million yuan in advertising fees. This was by no means a small number for JDB at the time, after all, in 2002, JDB's annual performance was only over 200 million yuan, with net profit of only tens of millions. This investment was a big adventure for JDB. But this bold adventure was a hit. In 2003, JDB's sales revenue soared from over 200 million yuan the previous year to 600 million yuan. So in November 2003, JDB purchased prime-time advertising on CCTV, and JDB began a leap-forward development. In 2004, sales reached 1.5 billion yuan; in 2005, sales exceeded 2.5 billion yuan. JDB entered a phase of rapid advancement. In addition, JDB also conducted multiple event marketing activities, continuously expanding awareness and boosting influence, gradually moving toward a big brand, achieving the leap from a small brand to a national big brand.
2) Powerful Ground Network If the advertising appeal of "Fear of Getting Heated Up" won over southern consumers, then what won over northern consumers was the powerful ground network. Objectively speaking, the appeal of fearing internal heat is very attractive to southern consumers, but for northern consumers, it is relatively less attractive; at most, it can be a memory point, not a selling point. However, JDB successfully opened the situation through another tactic—the powerful ground network. Basically, in people's daily lives, they are surrounded by JDB terminal communication materials every day, from toothpick boxes in restaurants, to store signs, shop signs, and posters in community convenience stores, to stickers and displays in shopping malls. It can be said to be omnipresent and visible everywhere. People see its promotional materials continuously throughout the day, making them curious about what this herbal tea is like and prompting them to try it. The powerful ground promotion combined with large-scale media advertising, this "heaven and earth net" style of powerful three-dimensional offensive, allowed JDB to break into consumers' minds and begin rapid rolling development. The entire Chinese herbal tea beverage market also continued to expand, from less than 1 billion to several billion, then to tens of billions and hundreds of billions.
3) The Communication Battle After the Separation—Absolutely Classic! Compared to the "Fear of Getting Heated Up" appeal, the series of communication battles JDB fought after the separation are even more classic. As mentioned earlier, the PK after the separation was a life-and-death PK for JDB; win and live, lose and die. After all, JDB's previous brand agency meant the brand was not its own. Building an own brand in the short term was unimaginably difficult, and there was basically no precedent in China for successfully completing such a rebuild in a short period. But in this desperate battle, the communication battles JDB fought were brilliant at every step: the name change, the leading brand value migration, the attention of "The Voice," the celebration of sales winning gold again to consolidate advantages, and a series of other moves, all of which were extremely clever and brilliant counterattacks.
A. Name Change and Leading Brand Value Migration —Seizing the Most Valuable Brand Resources The battle of name change and leading brand value migration can be ranked as a classic in Chinese business warfare. Whether it was the initial "China's leading red-can herbal tea changes its name" or "China sells 10 cans of herbal tea, 7 are JDB," both successfully migrated the most valuable brand assets from before and completed brand rebuilding. When launching a new brand and taking over the value resources of the old brand, one must consider what is most valuable. Herbal tea, formula, history, and industry status are all valuable. Advertising and marketing should shape and convey the product's unique advantages. Compared with competitors (Heqizheng also uses the herbal tea concept, and Denglao Herbal Tea has a long history), these values are not advantageous, especially since the lost original product would also claim these. Therefore, for JDB, the most valuable advantage before was undoubtedly its leading market sales position. This is the most valuable resource—market advantage—which can have an excellent impact on consumers' minds. This immediately gave JDB a unique brand selling point, combined with authentic formula, and a new herbal tea brand rose.
B. Bold Decision to Sponsor "The Voice" —Gaining Huge Awareness and Influence "When God closes a door, he opens a window." At the most critical moment of brand transition, JDB welcomed an excellent opportunity—"The Voice of China" (now temporarily changed to "Sing! China"), a show that no one expected to become incredibly popular. But initially, in the first season of "The Voice of China," which was one of the pioneers of a new era in domestic variety shows, due to many uncertainties, few companies dared to sponsor heavily. JDB boldly decided to sponsor. Unexpectedly, "The Voice of China" started in 2012 and continued to set off viewing frenzies, becoming one of the hot variety shows. As the main title sponsor, JDB quickly gained fame, achieved huge awareness and influence, successfully completed brand rebuilding, and thus "reborn from the ashes," successfully building its own brand.
C. Continuing to Occupy the Leading Image —Celebrating Sales Winning Gold Again, Launching Gold Can JDB With the successful battles in 2012 and 2013, JDB held its ground and maintained its share advantage. The position of "nationally leading herbal tea" and "herbal tea leader" was basically established. In 2014, based on market advantages, JDB conducted "Celebrating JDB Herbal Tea's 2014 Sales Winning Gold Again," which not only continued the brand advantage image well but also once again demonstrated industry status. At the same time, JDB launched the gold can, and cleverly combined it in communication with "Celebrating 2014 JDB Sales Winning Gold Again, Launching Gold Can JDB," cleverly integrating the symbolic meaning of gold can and gold color with JDB's market advantage, forming an overall effective communication and further strengthening the product's advantage. Through this series of beautiful combination punches, JDB successfully fought the defensive and counterattack battle after the separation, not only achieving a successful brand switch but also achieving own-brand rebuilding, successfully widening the gap with competitors, and smoothly entering a new development stage in the fourth major turning point.
Success Secret Three: Strong Channels —Powerful Ground Channel Network Previously, the media paid relatively more attention to JDB's media operations, but many ignored its channel operations. In fact, channel operations have always played an important role in JDB's rise. In the FMCG industry, for emotional consumer products like beverages, those who control the channels win the world. Whoever strongly occupies the channels seizes the first opportunity. Without strong promotion, JDB would not be where it is today; similarly, without excellent channel operations, JDB would not be where it is today.
1) JDB's Initial Start Relied on Channel Accumulation for Strength JDB first accumulated nearly 7 years in channels. Without these seven years of accumulation, JDB would not have had enough strength to launch the later powerful three-dimensional offensive (after all, media promotion requires funds; without sufficient financial support, it would be difficult to fight the promotion battle), and it would not have such deep channel sedimentation, one of the marketing elements. After 7 years of accumulation, JDB grew from tens of millions to over 200 million yuan, possessing the strength to explode and also accumulating certain channel resources.
2) After Having Scale, Investing Heavily to Build a Professional Channel Network In 2002, at the starting stage before JDB's performance was about to take off, it spent heavily to bring in professional talent to build a channel network, which made some peers think it was a bit "silly." In fact, JDB was preparing for its future; its goal was not just to be a regional beverage brand, but to pursue something bigger. Product, price, promotion, and channel are the classic 4P principles, showing the importance of channels. Coca-Cola and Pepsi are not only models of communication and promotion but also models of channels. JDB actively absorbed and learned from excellent industry experience in channels. The channel directors JDB hired from big FMCG players like Pepsi solidified JDB's ground channel system. This heavily invested channel system played an important role both in the ground reception during the third turning point's media three-dimensional offensive and in the fourth turning point's desperate battle after the separation.
3) Powerful Channel Network, Horizontal and Vertical Three-Dimensional Coverage JDB has built a powerful channel network system both horizontally and vertically. On one hand, it covers multiple levels from provincial capitals to townships, with extremely thorough channel terminal work from provinces and cities to townships. "First- and second-tier market channels are refined, third- and fourth-tier channels are strong, and fifth- and sixth-tier and rural channels are broad" is a vivid portrayal of JDB's channels. On the other hand, it covers different channel lines (five major channel lines: 1) KA modern: serving large supermarkets and wholesalers; 2) wholesale: targeting wholesale markets; 3) small shops: supplying grocery stores and small shops; 4) catering: supplying the catering industry channel; 5) special channels: supplying schools, internet cafes, stations, hotels, KTVs, etc.). All this constitutes a powerful channel network for JDB and also forms a strong distribution team front.
Success Secret Four: Strong Execution Team —A Ground Iron Army with Extremely Strong Execution Ground deep cultivation is a tiring and hard job that many enterprises are unwilling to do. The huge distribution network, delivery, service, customer relationship communication, and ground promotion all require an excellent ground assault team, and JDB's ground team is known as an iron army in the industry.
1) Strong Execution —Overnight, the Promotion Offensive Covers the Ground Positions JDB's team execution is definitely leading in China. The ground network when JDB launched its powerful promotion offensive, such as toothpick boxes in restaurants, store signs, shop signs, posters in small supermarkets, displays and posters in large supermarkets, was all implemented by this team. Another example is the desperate battle after the separation, maintaining the huge distribution network system, ensuring coordinated operations, and implementing ground promotion, doing a good job of conversion and connection at the consumer level. For example, the rapid advertising, displays, and posters in stores made consumers know wherever they went that "the leading herbal tea has changed its name to JDB." Also, at that time, many people had a common feeling when dining out: when ordering herbal tea drinks, they were often reminded by promoters that "the leading herbal tea has changed its name to JDB," coordinating with media communication at channel terminals. It fought a good turnaround battle. In addition, every themed activity of JDB relies on a series of channel activities, one display at a time, one small shop at a time, ultimately presented to consumers. This team, known as the ground iron army, can cover the ground positions with promotional offensives overnight and can quickly respond to channel network service requirements. Industry insiders once said: "The public sees JDB's hype ability, but what I envy is the execution of JDB's team." "JDB has about 10,000 salespeople nationwide, and they can almost overnight put up identical posters across the country, making all salespeople say the same thing to terminals."
2) High Stability —10,000-Person Sales Team, Turnover Rate Only 3% JDB's 10,000-person sales team nationwide, besides high execution, has another advantage envied by the industry—high stability. For this strong sales team, compared with other FMCG peers, JDB offers extremely generous treatment, with employee benefits ranking in the top three in the beverage industry. The turnover rate of this huge team is also surprising, only 3%, far below the industry average of 7%. This is also a team that does not admit defeat and has strong cohesion. Whether it is the huge distribution network or the powerful ground promotion, it is completed by this iron army. To some extent, JDB's channel positions were moved out box by box by terminal salespeople. The team's fighting and striving spirit is also admired by the industry. JDB employees can work until the early morning for promotional activities, and can even postpone weddings for work. The fighting spirit of this ground team is also a magic weapon for its success. It is this team with strong execution and high stability that played an important role in the early position battles and the later separation battles, becoming an important force for JDB's victory in China's herbal tea market! In 2015 and 2016, OPPO and VIVO staged dark horse legends in China's mobile phone business, and channel positions played a crucial role. The significance of channels for JDB is the same. JDB's ground channel system, from network to team, can be ranked among the first-class camp and benchmarks in the beverage industry, alongside Coca-Cola, Pepsi, Master Kong, Uni-President, and Wahaha. It is precisely the combination of advantages from product, to promotion offensive, to channels that created JDB's legend, and this is also a trait shared by many leading local industry enterprises. Thus, a legend of a local Chinese beverage was born: 150 billion sold in 20 years, with single-product performance surpassing its former idols Coca-Cola and Pepsi in China, truly achieving its dream of "becoming China's Coca-Cola"! To this day, JDB still holds a leading position in China's herbal tea field. Data released in 2016 shows that JDB still ranks first in the herbal tea industry with a 52.1% sales share.
Summary JDB's Success Is the Success of Classic Business Principles JDB's Success Is the Success of Ace Tactics The saying "Layout determines the outcome" has a vivid embodiment in business! JDB's development is actually a manifestation of layout determining the outcome. From the initial transformation from wholesale and multi-product model, to the operational thinking of building a big brand, it carried out one reform after another, one upgrade after another, ultimately achieving the legend. JDB's success is also the success of ace tactics. Doing product, promotion, and channels well, becoming the industry frontier, or even the leader, is a natural result. This is also the success path of today's leading domestic enterprises. Gree, Yili, OPPO/VIVO are all models, and JDB is one of these many models and benchmarks.
The Time Sedimentation Behind Success Should Not Be Ignored It should be emphasized here that JDB's brilliance was not achieved overnight, but an explosion after sedimentation. Without 7 years of channel sedimentation and strength accumulation, there would not have been the later explosion, and without one reform after another, there would not have been the later leap. In fact, behind today's annual performance of over 20 billion yuan, there is a long period of sedimentation.
The Whole Process Has Much for the Industry to Ponder JDB's development from a small enterprise to today's single-product legend is a vivid case of a major business reversal. In this process, whether it is the setbacks encountered, the successful experiences, or its learning, enterprising, deep cultivation, and building practices, there is much for the industry to ponder. Regardless of the future, JDB, with its existing successes—product success and category creation—is destined to leave a legendary page.
Yu Jianmin—Author of "Chinese Marketing Success Bible·Scientific Strategy Marketing" (Revised Edition), industry observer, senior marketing management expert Public account: Business Leader ID: yingxiao360-com