“You can rank 10th and 20th or even 100th if you are in a promising industry. That’s far better than being first in a rotten industry,” was the advice from Tang Binsen to a group of aspiring entrepreneurs.
Tang knows a few things about entrepreneurial success. Before founding Genki Forest, a calorie-free drinks maker, he started gaming company Elex Technology. It was the developer of the hugely popular smartphone game Happy Farm, which boasted 500 million users at its peak (see WiC28).
In 2014, Tang sold Elex to the Chinese Universe Publishing and Media for Rmb2.7 billion ($394.5 million). He stayed on as chief executive and the following year Elex launched Clash of Kings, which went on to do well in the US and Europe.
While Tang was still chief executive at Elex, he came up with the idea for Genki Forest. In just three years, its valuation is said to have reached $2 billion. According to 36Kr, a tech news portal, the company is about to complete a new round of financing, with backing from firms including Sequoia China and Genesis Capital.
Part of the reason for the seltzer’s popularity is that Chinese consumers are getting more health-conscious and shunning sugary drinks. However, most of the calorie-free drinks in the market are tea-based. Critics say there is space for a wider range of options. “In the past, the sugar-free beverage market has been tepid. Some people complain that the drinks leave a lot to be desired and only cater to niche markets. After all, it is human nature to gravitate towards sugar,” reckons Social One, a news portal.
Genki Forest offers sparkling water that is everything-free: i.e. of sugar, calories and fat. Using erythritol, an expensive sugar substitute, the fizzy beverage also tries to strike a balance between healthiness and taste. The mix of bubbles and a slightly sweet flavour has won over consumers.
The marketing has been clever too. The company chose a name that sounds Japanese, engendering a more premium image (in Japanese genki means ‘lively and healthy’). Its bottle design also features the Japanese character 気 (denoting ‘gas’ or ‘bubbles’ and strikingly similar to the Chinese letter 气).
Around-the-clock marketing on short video platforms Douyin (the Chinese version of TikTok) and Xiaohongshu have made the brand much better known. To boost sales it markets its products through e-commerce livestreams, making frequent appearances on channels hosted by leading livestreamers. It has also tapped actress Zhang Yuqi, who appeared in the hit reality series Sisters Who Make Waves, as its brand ambassador. “This is a very typical strategy for new consumer brands: establish reliable quality control to earn consumer trust and use large-scale, high-frequency bombardment of ads to establish brand recognition,” said TMT Post.
More recently, the brand became the title sponsor of Hunan Satellite TV’s celebrity variety show The Irresistible (its Chinese name is Brothers Full of Genki), which pits two generations of male stars against each other. The show ranked as the second most popular unscripted TV series on satellite TV based on factors such as viewership, media coverage, and fan engagement on social media, helping to turn the brand into a household name.
Tang has also made data analysis a core component of his strategy. While a desire to collect information on customers is nothing new, Genki Forest looks closely and repeatedly at customer behaviour and sales activity in different channels to tailor new strategies on a rapidly changing basis. For instance, it doubled down on one distribution strategy in Beijing after discovering significant sales through outlets like 7-Eleven and Bianlifeng, a cashier-free convenience store. That makes sense as its core demographic falls between the ages 20 to 40. A new product – bottled milk-tea (with dairy and calories) – was first launched in Beijing’s 7-Eleven outlets. “As Genki Forest collects and analyses consumer data more frequently, it is often one step ahead in identifying explosive products,” comments Food Daily.
Still, the company has competitors. Dairy giant Yili has launched a yogurt-based sparkling mineral water; the brewer Tsingtao released a range of fruit-flavoured soda waters, and Coca-Cola released AHA, sparkling water brand, last year.
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