On the occasion of the 30th anniversary of Dongpeng Beverage, whether in terms of age or product, Dongpeng Beverage is no longer a "young man".
After several years of super marketing and channel expansion, Dongpeng Beverage finally successfully broke through the 10 billion revenue mark last year and became a giant enterprise in the beverage market. Although this achievement is commendable, it is also facing the problems of too single product line, the functional drink market gradually hitting the ceiling and the intensification of market competition.
Perhaps it is also to see that Dongpeng Beverage is no longer a "growing teenager", in recent years, with the company's stock price continues to rise, the company's shareholders have become more and more frequent. Since May 2023, 13 directors, supervisors, senior executives and major shareholders of the company have reduced their holdings of nearly 9% of the company's shares, with a total amount of nearly 6 billion yuan.
More importantly, on May 27, Dongpeng Beverage's 241 million shares were lifted, according to the current market value of more than 50 billion yuan, accounting for more than 60% of the total share capital, which could not help but cause concern in the market, and the company's stock price entered a downward channel after hitting a new high on June 13.
At present, Dongpeng Special Drink accounts for 43% of the sales volume in China's energy drink market, ranking first in the list, and the strategy of large single products has achieved remarkable results. However, whether the company can move towards the second 10 billion revenue and market value of 200 billion in the future, whether it can create a second growth curve, create new explosive products, and grow into a new beverage giant will be the main line of future enterprise development.
01 How is the performance?
According to the financial report released by Dongpeng Beverage, the company has achieved significant financial growth in 2023, with operating income reaching 11.26 billion yuan, a year-on-year increase of 32.4%; Net profit reached 2.04 billion yuan, an increase of 41.6% year-on-year. This achievement has made Dongpeng Beverage successfully ranked among the beverage companies with a revenue of 10 billion.
In China's energy drink market, Dongpeng Special Drink's sales volume increased from 36.7% to 43%, continuing to maintain its first position in the market. The proportion of sales also increased from 26.6% to 30.9%, ranking second in the market.
Looking back on the development of other 10-billion-level products in the mainland beverage market, Red Bull has experienced 17 years of sales from its listing in 1995 to exceeding 10 billion yuan in 2012. Wang Tsai Milk was launched in 1996 and took 17 years to achieve the goal of 10 billion yuan in 2013. Wahaha AD calcium milk started in 1996 and entered the 10 billion club in 2013, which also took 17 years; It took 22 years for yogurt to reach sales of 10 billion yuan in 2019 from its birth in 1997. However, since the first bottled energy drink came out in 2009, Dongpeng Special Drink has achieved the milestone of 10 billion single products in only 14 years.
Entering the first quarter of 2023, Dongpeng Beverage continues to show strong development momentum. The operating income in the quarter was 3.48 billion yuan, a year-on-year increase of 39.8%; Net profit reached 664 million yuan, a year-on-year increase of 33.5%. This significant revenue growth was mainly due to the rapid growth of the company's sales volume in the national market, which grew by 57% in the first quarter.
It is worth noting that the rapid growth in the first quarter was partly due to the significant increase in the company's selling expenses during the same period. In 2023, Dongpeng Beverage's sales expenses will increase by nearly 35% over the same period last year, accounting for about 17.4% of revenue, which is much higher than the industry average.
In order to achieve the national strategy, the company expanded its sales scale and increased sales personnel, resulting in a 26.2% increase in employee compensation expenses; At the same time, the company also increased its investment in freezers, which increased its publicity and promotion expenses by 35.7%.
In order to attract young consumer groups, Dongpeng Beverage has increased the layout of the sports marketing matrix through diversified forms with the core product Dongpeng Special Drink and new brands such as "Dongpeng Hydration", "Dongpeng Big Coffee" and "Pengyou Tea". Among the sales expenses in 2023, the publicity and promotion expenses increased by 35.69% year-on-year to 864 million yuan, nearly 1 percentage point higher than the overall increase in the company's sales expenses. This figure is almost equal to the salary level of the company's employees as a whole.
Looking back on the development history of Dongpeng Beverage in the past five years, its revenue has increased from 3 billion yuan in 2018 to 11.2 billion yuan at present, an increase of nearly four times, largely due to the company's efficient digital marketing.
So, what is the starting point of Dongpeng's digital marketing? And how to open up the channel link of manufacturers-distributors-stores-consumers?
02 Digital marketing is taking off
As of 2023, Dongpeng has established a huge distribution network, covering more than 2,000 dealers, directly connecting more than 2.8 million terminal merchants, and has 160 million deduplicated QR code scanning consumers. Dongpeng's digital transformation began with a clear goal: "We need to find a means of promotion that is both safe and effective to reach consumers more directly." ”
To achieve this, Dongpeng launched a QR code marketing campaign based on WeChat red envelopes in May 2015, which marked the beginning of its digital transformation. In that year, Dongpeng's sales were close to 800 million yuan.
In response to the problem of low code scanning rate in QR code marketing, Dongpeng has adopted the following strategies:
First of all, through a combination of online and offline, in-depth market education is carried out. In 2016, Dongpeng carried out marketing activities around the theme of "scanning QR codes to win red envelopes" throughout the year, not only interacting with consumers offline through various promotional materials, but also vigorously promoting this activity in online media advertising.
Second, make sure that the red envelope is actually cashed out. Dongpeng clearly marked "rewarded" or "no prize" on the bottle cap to ensure that consumers can truly receive red envelope rewards. By analyzing the data, Dongpeng was able to clearly identify which new consumers were attracted by the red envelope campaign.
In the current market environment, although many brands also use QR code marketing as a means of new product promotion or product promotion, they often ignore the two important roles of distributors and terminal stores.
Therefore, Dongpeng launched a box code campaign in 2018 and began to provide incentives for terminal stores. When the terminal owner receives the goods, he only needs to scan the QR code on the box to get a red envelope reward, with an amount ranging from 5 yuan to dozens of yuan.
However, this activity also faced some challenges, such as the situation that some terminal owners purchased a large number of goods in order to obtain more red envelopes but sales were slow, and Dongpeng was facing pressure on how to promote sales speed.
In boosting the rate of merchandise, the "$1 Enjoyment" and "Merchant Write-off" strategies play a crucial role. That is, the consumer pays one yuan to the store to get a bottle of drink, and the store then writes off the operation to the manufacturer.
In 2019, Dongpeng Special Drink launched the "One Yuan Enjoyment" and "Cap Recycling Version" for the first time, that is, stores need to collect bottle caps and send them back to factories for destruction through distributors and distributors.
In 2020, the "Merchant Verification Version" was launched, realizing the innovation of "cover not recycling". The consumer pays one yuan to the store and provides the bottle cap, and the store obtains the verification coupon by scanning the code, and then the upstream conducts the verification. In order to achieve this change, Dongpeng Special Drink launched a new "merchant membership system" and comprehensively updated the existing B-end red envelope merchant registration information.
The reason why store owners are willing to join the merchant membership system is mainly based on the following three reasons: first, after registering the new system, they can scan the box code to get the red envelope; Secondly, through the "One Yuan Enjoyment" activity, they not only get one yuan paid by consumers, but also get an additional red envelope for verification; Finally, they need to rely on this system to write off upstream. Merchants can obtain red envelopes and verification coupons respectively by scanning the box code and cover code, which realizes the association management of the box code and the cover code.
The "one-yuan enjoyment" strategy not only improves efficiency and solves the problem of counterfeiting, but also realizes the "bottle box association", effectively promotes the linkage of the BC side, and thus opens up the complete link from the C end to the B end.
This is also an important reason why nearly 20% of Dongpeng Beverage's annual sales expenses go to achieve tens of billions of single products in five years through digital marketing.
03 Calling for the next big item
At present, Dongpeng Beverage has accounted for more than 40% of the sales volume in the functional drink market, however, this is also accompanied by fierce competition in the industry.
In the current functional drink market, in addition to Red Bull and Dongpeng, brands such as Lehu, Rijiaman, Jianlibao and Zhongwo also occupy a certain market share. Through continuous innovation, the use of marketing strategies, and breakthroughs in high-end segmented products, these brands have successfully created a positive brand image in the minds of consumers.
In the face of the intensification of competition in the functional beverage market in the future and the trend of gradual saturation of the market, Dongpeng has begun to explore new growth points a few years ago. In 2021, Dongpeng launched a number of new products, such as "Dongpeng Big Coffee", "Dongpeng Hydration", etc., but the growth of market share has not yet been significant.
In 2023, Dongpeng officially determined the development strategy of taking energy drinks as the core development line, supplemented by coffee drinks and electrolyte drinks as the second development line, and tea drinks, room temperature citrus juice and other products as tactical and incubation products, aiming to transform into a comprehensive beverage consumption enterprise.
In order to achieve this goal, Lin Muqin has actively expanded its product line in recent years, and its main strategies include imitation and innovation. For example, after Yuanqi Forest Sparkling Water was welcomed by the market, Dongpeng launched Dongpeng Sparkling Special Drink; After the sales scale of Alien Electrolyte Drink doubled, Dongpeng launched Hydrating Electrolyte Drink; After the oriental leaves of Nongfu Spring became popular, Dongpeng launched oolong tea. In addition, the VIVI cocktail mimics the RIO cocktail, and the Dongpeng coffee is the benchmark for Nescafe bottled coffee.
Lin Muqin hopes to create a successor to Dongpeng Special Drink through imitation. In his opinion, there are two types of large items: one is innovative and distinctive, and the other is mature. He believes that if the supply chain costs are low and a well-established terminal network is established, then imitation can work wonders.
However, as of now, Dongpeng's imitation effect has not met expectations. In 2023, the company's other beverage business revenue will be 915 million yuan, accounting for only 8.12% of the total revenue, and there will be no improvement in the first quarter of this year. The following strategy did not achieve the desired market response, and consumers may recognize Dongpeng's specialty drinks, but are not enthusiastic about other products.
At present, Dongpeng Beverage is facing fierce competition in industries such as new coffee drinks and electrolyte water, which is no less than the energy drink market. Dongpeng undoubtedly faces great challenges in seeking breakthroughs in these fields. Products such as coffee drinks and electrolyzed water have more market segments and larger price ranges, and if Dongpeng directly replicates the digital marketing strategy of Dongpeng Special Drink, it may face certain market adaptation problems.
Compared with attacking from all sides, Dongpeng Beverage might as well create a targeted second product for Dongpeng Special Drink's traditional driver groups, manual laborers, etc., and concentrate the main marketing forces on one point, so as to make great use of traditional channels, and no longer need to expand channels for white-collar groups such as coffee drinks, so as to achieve the purpose of quickly forming a second growth curve.