Yuanqi Senlin – a sugar-free sparkling drink brand – has caused a splash amongst the young people around me. I know a few people who can consume at least half a dozen bottles a day.
Recently, the 4-year old company is raising a round that will value it at US$2 billion, a rapid ascent for founder Tang Binsen. Especially if you consider that building a drink brand in the past would require A LOT OF work on marketing and (especially) distribution.
(Editor’s note: Tang Binsen is no stranger to creating successful companies, his previous gaming venture built popular games such as Clash of Kings – we also wrote about his “seven pitfalls for startup founders” in two parts).
The market is massive: if a million people drinks a bottle every day, that makes 365 million bottles a year. And that might just be the consumption level of a single major city in China.
Aside from creative marketing that addresses the young audience, Yuanqi Senlin is also willing to spend massively to break into the offline channels. I think the founder once said “If I have 2 billion cash, I would spend 1.8 billion on channel and marketing”.
That aggressiveness has something to do with the founder’s gaming background.
Traditional beverage companies are of course responding – however, many of them are not getting the point. They tend to focus on the ‘health’ aspects (or Yangsheng in Chinese) of the soda water.
As a result, even with the best channels, their ‘healthy’ fizzy drinks do not sell.
What do young people really want
Young people in China are drinking Yuanqi Senlin NOT to replace water, but to replace sugary sparkling drinks such as Coke.
They want to enjoy the sweet taste and fizzy texture – but they are so scared of getting fat. For many of them, the lifestyle is not healthy – burning mid-night oil constantly, sitting long hours and eating hotpot (and crayfish).
However, in a society where many now go for plastic surgery, appearance is very important. So Yuanqi Senlin’s “no sugar, no fat” message really appeals.
Yangsheng is a luxury (and remote) subject for the young people – mid-aged people who really care about Yangsheng drink tea brewed with goji berries: