This is an English adaptation of a FoodBud historical article originally published on August 13, 2022.
This adapted article is based on a livestream transcript originally credited to Consumer Forward (ID: schc66888). The discussion featured Jiang Nanchun, chairman of Focus Media; Lin Muqin, chairman of Dongpeng Beverage Group; and Song Xiangqian, chairman of Jiahua Capital.
The speakers framed 2022 as a harder year for Chinese consumer companies: demographic and traffic dividends were fading, retail growth had hit an inflection point, production capacity was still rising, COVID-19 disruptions continued, and the international environment weakened confidence.
Song Xiangqian said Jiahua Capital had invested in Chinese consumer goods for 16 years and viewed the market through both supply and demand:
On demand, Song argued that the key question was how to create effective demand. In his view, improving incomes for lower- and middle-income groups was essential if China was to shift from a production-led economy to a consumption-led one.
He also said the market had moved from a manufacturer-led era, represented by traditional deep-distribution brands such as Wahaha, to a consumer-sovereignty era. Internet infrastructure, electronic payments, cold-chain logistics, supply-chain reform, social commerce, and mobile internet had created tools for better consumer connection and better terminal empowerment.
Jiang Nanchun said his perspective was more micro. During Shanghai’s second-quarter lockdown in 2022, he held four or five video meetings a day, and after reopening he met many entrepreneurs. Their main concerns were repeated COVID-19 outbreaks, sharply higher logistics costs, a difficult employment environment, weaker consumer confidence, and a steep drop in willingness to invest or start companies.
He summarized three pressures:
Jiang argued that the pandemic amplified existing weaknesses: product homogeneity, overreliance on traffic, and weak brand pull. He contrasted fragmented short-video selling points with Dongpeng’s clear slogan: “tired and sleepy, drink Dongpeng Special Drink.”
His proposed areas of focus were product innovation, internal digital efficiency, and consumer mindshare. He cited Peter Drucker’s view that a company has two core functions: innovation and marketing that makes the brand the customer’s first choice.
Jiang said companies should learn three things from Dongpeng:
He argued that in downturns, consumers spend more carefully and favor brands with greater certainty and trust. In his view, every crisis tends to increase brand concentration among leading brands.
Lin Muqin said industry growth comes from two sources: incremental markets and share gains in existing markets. Dongpeng had treated growth as its largest strategy since its founding, even in 2022, when the Russia-Ukraine war and COVID-19 raised raw-material prices and slowed the market.
He identified four drivers: product strength, brand strength, channel strength, and cultural strength.
For product strength, Lin said Dongpeng benefited from entering the energy-drink category. He described the product as high-frequency and functional, with a clear use case when consumers are tired or sleepy. He highlighted Dongpeng’s mainstream 500ml “large gold bottle” at the RMB 5 price point and said it had the potential to become a RMB 10 billion single product.
Lin emphasized quality, ingredient improvement, raw-material upgrades, production-process improvement, and cost control. He criticized heavily outsourced online-celebrity products as easy to copy and therefore weak in product defensibility.
For brand strength, he said Dongpeng continued to invest in advertising and benefited from rising cultural confidence and the rise of national brands in China.
For channel strength, he pointed to more outlets and higher output per store.
For culture, he described a stable core team with a long-term, focused, and hardworking operating style. He said that since the start of COVID-19 in 2020, Dongpeng had focused on faster production resumption, faster market penetration, timely delivery to retail terminals, closed-channel development, and finding local growth points.
Song Xiangqian said he had known Lin for nearly 10 years and was Dongpeng’s second-largest shareholder. He cited Dongpeng’s five-year annualized revenue growth of 20% compound and five-year annualized net profit growth of 50%.
He described Lin and Dongpeng as pragmatic. He said the functional-drink category was first invented by Thailand’s Xu Shubiao family, while Dongpeng Special Drink became China’s first national functional-drink brand in that category.
Song said that when Dongpeng Beverage listed, it did two notable things: it paid tribute to competitors that opened China’s functional-drink market, and it entered a four-year strategic cooperation with the Han Hong Foundation, with a total planned donation of RMB 20 million.
He also said that in the first quarter of 2022, Dongpeng’s sales-volume market share had surpassed Red Bull, making it the volume leader in China’s functional-drink category.
Song highlighted Dongpeng’s 500ml value-pack decision as a case of consumer insight: instead of cutting price, the company increased volume to create perceived value. During COVID-related logistics disruption, he said Dongpeng donated 300,000 cases of beverages to truck drivers.
He also praised Dongpeng’s digitalization, saying it broke through B-side barriers, reached C-side consumers, built data assets, and fed data back to B-side partners and manufacturing in a C2M model.
Lin said product, brand, and channel form a mutually dependent triangle, with product strength first. A product must solve consumer pain points and hold advantages in quality, cost, raw-material supply, or other fundamentals.
For beverage channels, he summarized the model as:
Lin said Dongpeng began trying to understand consumers in 2016 through consumer red packets. By the time of the discussion, it had accumulated more than 140 million non-duplicate QR-code scans.
He also described Dongpeng’s “five-code integration” technology: inner and outer codes on bottle caps, inner and outer codes on outer cartons, plus production-batch codes. Through consumer and retail-terminal scans, Dongpeng built consumer and terminal systems.
The work began in 2019. By the third year, Dongpeng had more than 2.5 million terminals generating large volumes of data. It built two systems: a merchant-member system and Pengxuntong, a salesperson and basic-operations management system.
Lin said these systems helped Dongpeng:
Dongpeng also had more than 200 suppliers that had worked with the company for 10 or even 15 years.
On branding, Lin said a consumer brand needs a main line, a symbol, and a slogan that are repeated over the long term. Based on Dongpeng’s own experience, he said brand communication needs more than eight years to truly build consumer mindshare.
He said advertising should support sales, not only look premium. The slogan should tell consumers what the product is and when to use it. He linked “tired and sleepy, drink Dongpeng Special Drink” to a state of fatigue and the need to keep working.
Lin also emphasized brand spirit through the message “young people should stay awake and strive,” long-term consistency in positioning, and media innovation across CCTV, long-form video platforms, Amap, Focus Media elevator ads, and other touchpoints.
Jiang identified five brand-communication trends.
First, centralization versus fragmentation. He cited Kantar research saying China’s highest-reach media were internet advertising, elevator advertising, and television advertising. Jiang argued that internet advertising has reach but is fragmented, while finite offline spaces such as office buildings, residential communities, and hypermarkets are easier places to create concentration.
Second, repetition versus forgetting. Citing Daniel Kahneman’s Thinking, Fast and Slow, Jiang argued that consumers often rely on intuitive recall rather than rational analysis. In his view, advertising creates conditioned reflexes, making the purchase decision simpler.
Third, certainty versus uncertainty. Jiang compared advertising to investing and said brands should favor repeatable, cumulative, higher-certainty actions rather than gambling on isolated events or hit variety shows. He mentioned examples including China Li-Ning at New York Fashion Week, ERKE donating RMB 50 million during the Zhengzhou floods, Jiaduobao with The Voice of China, Yili with Dad, Where Are We Going?, Ambrosial with Running Man, and Mengniu with Super Girl.
Fourth, brand-effect coordination. Jiang said brand advertising should connect with sales through use-case scenes, digitalization, and offline traffic guidance. He cited office, apartment, sports-viewing, gaming, and commuting scenes for Dongpeng; Florasis Valentine’s Day and May 20 campaigns; Safeguard elevator-button hygiene advertising; Rejoice mirror ads; and Vatti’s 2018 World Cup campaign, “if France wins, Vatti refunds the full amount,” which he said created more than RMB 1 billion in sales after RMB 20 million to RMB 30 million in Focus Media advertising.
Fifth, data linkage. Jiang said Focus Media could connect offline exposure with online data, including Tmall Data Bank, to compare conversion between audiences who saw Focus ads and those who did not. He said online conversion after Focus exposure could rise by more than 50%, active search by 30% to 40%, and retargeting could further improve conversion.
Lin said Dongpeng wanted to become a national brand respected and loved by Chinese consumers, moving from awareness to reputation.
He described the company vision as giving strivers the energy to work hard, and the mission as providing healthy functional beverages. He said Dongpeng wanted to provide material energy through products and spiritual energy through brand resonance.
He also said the company should build a career platform for employees, create reasonable returns for shareholders, and become a sustainable listed company.
On philanthropy, Lin said Dongpeng had worked with the Han Hong Love Charity Foundation on medical poverty alleviation for years and had begun cooperation with the Yao Foundation in 2022 to support rural children with sports facilities, basketball courts, and physical-education teacher training.
He also described Dongpeng’s care for delivery workers over the previous five years. For truck drivers in 2022, Dongpeng set up care energy stations in Anhui, Henan, Jiangsu, Zhejiang, and Shandong, donating 300,000 cases of beverages worth RMB 24 million.
Lin added that decisions with hard-to-calculate ROI can sometimes carry the real upside, because by the time everyone can calculate the return, the excess return is often gone. He said long-termism matters when balancing immediate and long-term interests.
Song said macroeconomic changes were reshaping consumer competition and that some changes might not reverse. He expected the top 10% of companies to live well, while small and medium-sized companies would face heavy pressure.
His advice was to understand compounding, growth, and long-term value. Without growth, companies struggle to digest rising structural costs.
He argued that operators need integrity, category planning, quality selection, quality control, taste, and brand-building. He said the product reflects the entrepreneur behind it.
Song also said consumer companies must move from selling goods and managing channels toward respecting people and operating around consumer lifetime value. He argued that China, with 1.4 billion people, could build its own Nestlé, Red Bull, Coca-Cola, KFC, and Starbucks.
He said the next 20 to 30 years of Chinese consumer-goods competition would be brand competition. In his view, the two ways to offset economic pressure were technology empowerment and brand empowerment.
Jiang said consumer preferences were diverging. Some products were driving trade-up, while others were moving into lower-tier markets with stronger value for money. He suggested that higher-tier cities rely more on brand, while lower-tier cities still rely more on channel.
He also challenged narrow ROI thinking, arguing that measurable ROI often means the platform has already captured most of the value. In his view, brand is the essence of business growth, and the real algorithm is consumer mindshare.
Lin said he saw future incremental opportunity in coffee and Chinese tea beverages. He said coffee consumption in China remained low across instant coffee, coffee-shop coffee, and packaged coffee, leaving room for growth as consumption habits develop. He also saw long-term opportunity in tea drinks, especially as consumers favor simpler ingredient lists.
Lin closed by saying Chinese national brands were entering a development era, supported by younger consumers’ national confidence, stronger preference for domestic products, and Chinese companies’ focus on quality and brand-building.
Note: IPO, shareholding, market-share, donation, sales, ROI, and forward-looking figures are historical references from the 2022 source discussion.