China Consumer

Tea, anyone?

Top seller Sprite in new China makeover

Chou: he’s gaga about Sprite

Coca-Cola is no stranger to China. The world’s largest soft drink maker first landed on the mainland in 1927, then retreated in 1949. The company returned 30 years later, about the time Deng Xiaoping launched his economic reforms. Since then Coca-Cola brands have dominated the domestic fizzy soft drink market.

So perhaps it should come as a no-brainer that the consumer giant has introduced a new soft drink that combines two of China’s most loved beverages – green tea and Sprite, the lemonade beverage owned by the US multinational.

Spritea, which was launched in Shanghai last month, was developed more than a year ago, says Ella Liu, a Shanghai-based Sprite brand director. “We have spent a lot of time and resources through massive consumer tasting to fine-tune the taste of Spritea, including having the right amount of sweetness and percentage of bubbles.”

In China, Sprite outsells both Coke and Pepsi in the country’s sparkling beverage sector, with a 26.9% share of the market. Last year sales for the soda went up 18%, says research firm Nielsen.

With the introduction of Spritea, Coca-Cola is hoping to capitalise on China’s growing taste for ready-to-drink tea. Consumption has increased over 30% annually in recent years, says Kantar World Panel, which measures consumer purchasing and usage insights. But there is a lot of catching up for Coke to do – Taiwan’s Tingyi controls about half the market.

It is not the first time Coca-Cola has launched new flavours specially tailored for the world’s most populous nation. In 2003 it introduced Sprite Icy Mint, and two years later Sprite on Fire, a ginger-flavoured carbonated drink. Sales for both drinks never caught on, and Sprite on Fire was quickly phased out.

So how does Spritea taste? Pretty much like the label says it should, by the sound of it: “It is refreshing, tastes like drinking Sprite with tea poured in and the tea flavour is very strong,“ says Yao Li, a white-collar in Shanghai.

The tea-flavoured Sprite is the first product developed by the Coca-Cola Global Innovation and Technology Centre, a $90 million research and development facility based in Shanghai. The institution, which was opened in March last year, is part of the company’s three-year $2 billion investment plan in the country.

Since the launch of the new drink in March, Coke’s massive marketing machine has been working overtime.

According to CBN Weekly, 15 million free samples of the new drink have been handed out to local consumers. The company has also formed a partnership with the 7-11 chain so that customers who buy meals at the convenience store need spend only Rmb1 more (about 15 American cents) on a bottle of Spritea (the regular price is Rmb3). Spritea is pushing product at counters everywhere from the country’s Walmart stores to mom-and-pop outlets.

“So far the orders have exceeded our expectations,” asserts Jia Jongrong, who leads the marketing efforts for Spritea at Coca-Cola.

The launch of Spritea is also a timely distraction. Sprite was recently involved in two high-profile mercury-poisoning cases, and although investigators concluded that the manufacturer had nothing to do with the contamination, the brand’s sales were hit. At the height of the mercury scare, an online survey on popular internet portal Sina.com reported 49.5% of 127,883 respondents as claiming that they would not be buying any more Coca-Cola beverage brands.

Eager to move on from a scandal not of its own making, Sprite invited its spokesperson Jay Chou, a popular Taiwanese singer, to perform at Spritea’s launch party in Shanghai.

Chou – dressed in “strange hedgehog costume,” says CBN Weekly – gave an Avatar-like 3D performance on screen and stage. It was so over the top that the magazine compared it to something that you might expect from Lady Gaga. Coca-Cola will be hoping for an equally show-stopping performance for its newest China-focused brand.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.