Low-profile version of Wahaha, aiming for 1 billion annual sales

The Yineng brand has risen rapidly with its low-price strategy and channel expansion, but product quality issues have become a hidden worry in its development. Read the article to learn more.

Some time ago, the resignation of Zong Fuli attracted widespread attention, and it was finally "ended" temporarily with Zong Fuli deciding to continue to perform relevant management responsibilities of the Wahaha Group.

However, this incident did not affect Wahaha's sales. JD Supermarket data showed that since July, "even though it was caught up in the internal power change incident, Wahaha's sales have been growing rapidly, and the growth has exceeded 5 times."

At the same time, other drinking water brands also experienced rapid growth, including Nongfu Spring, Baishuishan, Yibibao, Yineng, etc. Seeing these brand names, some netizens may wonder: "What brand is Yineng?"

Simply put, Yine is a beverage brand founded in Taiyuan, Shanxi in 2016. It is known as the "low-end version of Wahaha" and is also called the "King of Diaosi Beverages" by netizens. This is because most of its products are quite cheap.

Behind these external impressions, Yineng is actually quite capable.

At 17:00 on July 24, "New Consumption 101" noticed that on Tmall's "Natural Soda Water Best-Seller List", the "Yineng Sugar-Free Weak Alkaline Soda Water" had a best-selling index of 8.4, ranking first, and another "Yineng Weak Alkaline Soda Water" had a best-selling index of 8.3, ranking third. On Tmall's "Natural Soda Water Praise List", these two products occupied the top two positions.

Image source: Tmall

On the Douyin platform, Yine's official flagship store also won the top spot in the overall drinking water list during the Douyin 618 Good Products Festival, which means that Nongfu Spring, Wahaha and others are all ranked behind it.

It is clear that Energizer is quietly becoming the “king”, but the question is, how did it do it and what challenges does it face?

1. Low price is king

Judging from Tmall’s best-selling list, soda water is one of Yineng’s main products.

Here we need to introduce soda water. The so-called "soda water" refers to water containing sodium bicarbonate, which is divided into natural soda water and artificial soda water.

Specifically, natural soda water contains other trace elements, while artificial soda water is made from pure water and an appropriate amount of baking soda. The difference from natural soda water is that it only contains sodium bicarbonate and no other trace elements.

The point is that the distribution range of natural soda water is relatively limited. According to the Chinese version of "FOOD&WINE", there is currently only one natural soda water production area in China that has been recognized by the General Administration of Quality Supervision, Inspection and Quarantine, namely the Wudalianchi volcanic group area. However, a search on "New Consumption 101" found that natural soda water sources have also been found in Shandong and other places.

Because natural soda water is limited in distribution, most brands produce artificial soda water - the media once "declassified" and said, "almost 90% of soda water is artificially made."

Even if they are all natural sodas, the prices are very different.

Take Shihanquan, China's first company to produce natural soda water, as an example. In October 2013, media reported that a bottle of 350ml Shihanquan natural soda water was priced at 10 yuan. Now, ten years later, in Shihanquan's Tmall flagship store, 24 bottles of 350ml natural soda water cost 331 yuan, or about 13.79 yuan per bottle.

Image source: Shihanquan Tmall flagship store

The price of Shihanquan has "dissuaded" a large number of consumers. In comparison, in the field of natural soda water, Yine has been able to rise, and its price can be called the "strongest attraction".

For example, the "Yineng Sugar-Free Weak Alkaline Soda Water" mentioned at the beginning of this article clearly states in its beverage category as "natural soda water" and also emphasizes that it "contains multiple elements such as strontium, calcium, potassium, sodium, etc." However, the subsidized price of 24 bottles of 360ml is only 18.31 yuan, or about 0.76 yuan per bottle.

The promotional slogan of "Yineng Weak Alkaline Soda Water" also states that it is "natural soda water". The subsidized price of 15 bottles of 400ml is 39.9 yuan, which is only 2.66 yuan per bottle, less than a fraction of the price of a single bottle of Shihanquan.

The natural soda water product portfolio plus the low price advantage have driven the hot sales of Energetic natural soda water, but it also sells artificial soda water, electrolyte drinks and other products, also focusing on low prices.

According to the vertical self-media "Pinyinhui Observation", the terminal retail price of electrolyte beverages on the market is mostly around 5 yuan, but Yineng electrolyte beverages are as low as 2.9 yuan per bottle; the fruit honey water series, the price of a single bottle is only 1.8 yuan per bottle; in the functional beverage category, Yineng’s main selling point is "increase quantity without increasing price", and the terminal retail price of 1L is only 5 yuan.

It is precisely through low prices that many of Yineng's products are hot-selling in the market. In the current relatively sluggish consumer environment, its appeal continues to increase. Even so, Yineng is still relatively low-key, not much media attention, and low-profile, which means "making money in silence."

One netizen joked: "It's cheaper than mineral water, the only true god of 'Diaosi Drink'..."

2. Achieving 1 billion

The reason why Yili has become the only true god of "Diaosi beverage" in the eyes of netizens is not only because of its low price, which is its "strongest attraction", but also because of the support of channels.

In fact, Yineng can be called a "low-end version of Wahaha", which is related to the channel.

"Drinking Observation" analyzed that as a leading brand in the beverage industry, Wahaha's main sales channels are mainly large-scale distribution channels. Through a joint sales model that is spread across the country like capillaries and penetrates into counties, towns and villages, its revenue has remained stable at more than 50 billion yuan all year round.

According to observations by industry insiders, Yineng's offline business is also mainly concentrated in distribution channels and the national mass retail system.

How did this strategy come about? According to retail strategy consultant Lian Jie, when Yineng was first founded, it established a "four zero" policy for channels, including "0 store entry fees, 0 marketing fees, 0 account period, and 0 returns."

It is not difficult to see the difficulty of implementation from this "four zero" policy, but it also meets the actual needs of the retail industry.

In Lian Jie's opinion, many supermarkets are not satisfied with the passive state of "only holding prices but not selling" in cooperation with big brands, and hope to find some truly high-quality small and medium-sized brands to explore. In the process of exploration, "hard goods" with good quality and cost-effectiveness have become a kind of rigid demand.

Products such as soda water that Yi can provide to channels are precisely these "hard commodities" that lay a solid foundation for its accelerated channel expansion and nationwide sales.

According to Lian Jie, the "biggest highlight" of Yinengdongxiao lies in the chain KA channel. Based on the cooperation with traditional supermarkets, it completed the layout of 120 retail hard discount channels (also known as mass-market snack stores in the industry) in one year.

The expansion of channels has gradually formed a nationwide sales network for Yineng. Data shows that Yineng beverage sales network has spread across 31 provinces in China, "from Heilongjiang in the north to Guangdong and Guangxi in the south, from Jiangsu, Zhejiang and Shanghai in the east to Xinjiang, Tibet and Yunnan in the west. The market has initially achieved a nationwide development situation."

Image source: Yineng Drinks official Weibo

In addition to chain KA channels, Yine has also laid out traditional wholesale channels and e-commerce channels.

As far as e-commerce channels are concerned, not to mention e-commerce platforms such as Tmall, JD.com, and Pinduoduo, Yine has also seized opportunities in emerging e-commerce channels such as Douyin e-commerce.

As mentioned earlier, the Yine flagship store won the top spot in the overall drinking water list during the Douyin 618 Good Products Festival. Looking further, the flagship store’s total Douyin sales reached 4.42 million orders, of which 2.27 million orders were sold for “Yine Zinc-fortified Weak Alkaline Soda Water Beverage”.

From products, prices to channels, Yineng has established certain advantages. According to the above article by Lian Jie, Yineng's actual controller Zhang Kun said that the sales volume in 2024 "is expected to be 1 billion yuan without any problem."

Compared with Wahaha's 50 billion yuan, Yine's annual sales of 1 billion yuan are not eye-catching, but popular products such as soda water and fruit honey water series, especially the low-price strategy, have attracted the attention of more and more consumers.

On the other hand, in the beverage industry dominated by giants, Yineng still needs to continuously improve its competitiveness to cope with the increasingly fierce market competition.

3. Brothers vs. Brothers

From the perspective of market prospects, soda water has more potential for making money.

The "2023 Soda Water Market Report" released by Shanghai Yuhan Consulting shows that the main motivation for consumers to buy soda water is that they believe it is good for their health, such as protecting the intestines, regulating the body's acid-base balance, etc. It can be drunk daily, replenished after exercise, and used in cocktails and cooking, with many consumption scenarios.

Because of this, in 2019, the size of my country's soda water market reached about 15 billion yuan, and is expected to reach 32 billion yuan in 2025. In the next 10 years, the overall market size of the soda water category is expected to reach 40 billion to 50 billion yuan.

The domestic market is large, but it is relatively fragmented and no leading brand has yet formed. As we can see, in addition to Yineng, Watsons, Wahaha, Nongfu Spring, Yuanqi Forest, Mingren, etc. are all competing in the market.

Among them, the most noteworthy competitor for Energ is Mingren. This is primarily because Mingren soda water’s brand awareness is the same as Energ’s, focusing on high cost-performance.

At 17:00 on the afternoon of July 24, "New Consumption 101" checked Tmall's "Soda Water Best Price List" and found that Mingren Alkaline Soda Water topped the list with a price/performance index of 9.9, and "Yineng Weak Alkaline Soda Water" ranked second with a price/performance index of 9.8.

Image source: Tmall

Secondly, according to Beijing Business Daily, Yine and Mingren used to be "brothers" with the same second largest shareholder, but later parted ways.

In addition, from the perspective of channels, the two are also highly similar, even "full of gunpowder". Media investigations have previously found that in supermarkets such as Auchan and Wumart in Beijing, Yineng soda water is often placed together with Mingren soda water. In addition, the product packaging of the two brands is similar, making it difficult for consumers to distinguish them.

Taking all the above factors into consideration, the "brotherly battle" between Yineng and Mingren will continue - whoever can attract more consumers in the price-performance ratio track will be able to seize more market share.

Of course, in addition to fierce competition, product quality needs to be constantly monitored, and this aspect still needs to be improved.

In October 2023, Xinxiang Youzhen Beverage Company (Youzhen is the holder of the Yine brand) was ordered by the Xinxiang Municipal Market Supervision Administration to stop producing and selling substandard white peach flavored soda drinks that did not meet national food safety standards, and was fined 51,000 yuan.

In January 2021, Xinxiang Youzhen’s soda water failed to meet the standard in a random inspection, and the total number of colonies did not meet the standard requirements and was fined 10,000 yuan. On November 2, 2021, it was fined another 51,000 yuan for the same reason.

In 2019, Yineng brand drinking water was found to contain excessive bromate on several occasions.

On its official website, Yine’s slogan is: “Because we are young, we work harder.” Today, Yine, which has been established for 8 years, has won part of the market and gained the favor of many consumers. If it “works harder” on product quality, it will definitely be more beneficial to its long-term development, right?

Author: Xiangma; Editor: Ge Weiwei

Source: New Retail Business Review (ID: 1089053)