In the “Red Bull” war, Tiansi Group comprehensively counterattacks

Wen| Zebra Consumption Chen Xiaojing

The war between the two Red Bulls has entered its ninth year and there is still no sign of stopping.

On the last day of February, Tiansi Group went all out of its firepower and released the second statement in the original Qingyuan series through its official Weibo account, refuting the 50-year agreements thrown out by Warabin Group one by one, and the flames of smoke rose again for a while.

The war between the two sides was ignited in 2016. After a cruel tug of war, the ownership of the Red Bull trademark has been confirmed by the Supreme Court. Reignin Group is using the 50-year agreement to continue making trouble, and Tiansi Group must tit-for-tat.

Losing its trademark, Reignin Group has been cut off. If the legitimacy of the 50-year agreement is not recognized by the judiciary, it will lose its trump card. This will be another long-term tug-of-war between you and me.

Today’s energy drink market is no longer dominated by China Red Bull operated by Reignin Group. Four Red Bull products under Tiansi Group have been deployed in the China market. Dongpeng Special Drink has taken advantage of the trend and competing products such as Lehu and Zhongwo are attacking crazily. A competitive pattern of one super and multiple strong has been formed.

Outside the main battlefield, what both Red Bulls should consider is market issues.

The tug-of-war has no end

On February 28, Tiansi Group issued the second statement in its original Qingyuan series through its official Weibo account, which was tit for tat with the 50-year agreement offered by Reiabin Group. The statement laid out relevant evidence and logic, revealing the inside story layer by layer like peeling bamboo shoots. This will be the focus of the next phase of the Tensi Group’s attack on the Reignin Group after the dust has settled on the ownership of the Red Bull trademark.

For Tiansi Group, the war with the Reignin Group must continue no matter how long and unpredictable it is. Because this is related to the Red Bull brand and the China market.

In its early years, Tiansi Group explored the China market through the joint venture Red Bull Vitamin Beverage Co., Ltd., Red Bull founder Xu Shubiao authorized Yan Bin to take charge of specific matters. Red Bull, a functional beverage, took root in China.

In 2012, Xu Shubiao passed away, and the relationship between Reignin Group and Thailand’s Tiansi quickly cooled down. That year, the sales volume of China Red Bull exceeded 10 billion for the first time, and its share in the energy drink market reached 82%.

One family dominates the world, relying on strong channels and brand influence, the classic image of a golden short can and two bulls wrestling has become deeply rooted in the consumer market. In 2015, the sales volume of China Red Bull reached 23 billion yuan, reaching its peak.

After the second generation of the Xu family took over Tiansi Group, they immediately began to take back the ownership of the Red Bull trademark. In 2016, Tiansi Group initiated a Red Bull trademark infringement lawsuit. After four years of sawing and final review by the Supreme Court, the ownership of the Red Bull trademark belonged to Tiansi Group.

As the actual operator of China Red Bull, Reignin Group’s focus is on exclusive management rights, which is also the core of Reignin Group’s 50-year agreement. Article 1 of the agreement stipulates that the joint venture company has the exclusive right to operate Red Bull beverages.

This agreement was signed on November 10, 1995. The four signatories were China Food Industry Corporation, Shenzhen Zhonghao (Group) Co., Ltd., Thailand Tiansi Pharmaceutical and Health Care Co., Ltd. and Zhongtai Red Bull Vitamin Beverage Co., Ltd.

Tiansi Group pointed out that the party C Zhongtai Red Bull Vitamin Co., Ltd. in this agreement did not exist from the beginning, and none of the four parties signed the agreement was stamped with the official seal of the company. Only the person in charge of the company signed it, which is doubtful about its authenticity. In addition, the operating period of the joint venture company expires as early as September 29, 2018. After the expiration of the company’s operating period, Warabin produced a copy of the 50-year agreement.

The market war continues

Red Bull was not Yan Bin’s invention, but through the introduction of product formulas, brand localization, and long-term marketing promotion, it finally became the top energy drink in China.

In the early 1990s, Xu Shubiao returned to his hometown of Hainan to invest in and build a beverage factory to launch an energy drink product, preparing to name the bottle of beverage Ruidu (Chinese homophonic for Red Bull). His friend Yan Bin insisted on using the word “Red Bull”and the gold product decoration made people’s eyes shine.

Objectively speaking, China Red Bull is a child raised by Chinese and Thai companies together. Before China-Thailand cooperation, there were no products or concepts for energy drinks in China. The two sides worked together to achieve two major things: legalize Red Bull, a functional drink, in China, and the production approval was facilitated by the joint venture shareholder China Food Industry Corporation; Red Bull Trademark Registering was obtained by Shenzhen Zhonghao Group, a joint venture shareholder, to acquire the Jinhua Bulldog trademark, clearing the way.

In the 50-year agreement signed by the four parties in 1995, the first article clarified the exclusive management rights of the joint venture company. Tiansi Group did not invest or bear risks, only fixed returns and raw material costs.

Over the past 20 years, the cooperation between Tiansi Group and Reignin Group has been limited to providing spices and brand licensing, etc., and the channels and production terminals have gradually evolved from a joint venture company to the actual control of Reignin Group.

When the ownership of the Red Bull trademark is settled, it is necessary for Tiansi Group to increase the relevant rights and interests. Therefore, everyone sees more and more Red Bulls on the market.

In 2019, Tiansi Group authorized Red Bull Annaiji, which was manufactured in China, to launch on the market. At the same time, it imported original Red Bull vitamin-flavored drinks from Thailand, and Swiss Red Bull also entered the China market.

In order to strengthen the China market, Tiansi Group recruited former executives from Reignin Group and Red Bull Joint Venture to join forces. At the same time, Red Bull Anniji took advantage of the sales systems of six walnut parent companies Yangyuan Beverage and Budweiser China to confront the Reignin Group on the channel side.

A scuffle has taken shape

To this day, the China-Thailand Red Bull has been engaged in a tug-of-war for many years, but neither has it been possible to decide the winner or the winner. During this period, China’s energy drink market has grown from Red Bull alone to a market competition pattern with one superpower and multiple strengths.

Energy drink products emerge one after another, and are no longer limited to adding taurine, caffeine, vitamins, minerals and other pan-energy drinks are everywhere, and extend to various sub-fields such as hydration, energy and anti-fatigue.

The melee also activates the market to some extent. According to Mintel data, in 2022, domestic retail sales of energy drinks will reach 81.3 billion yuan, growing at a compound average annual growth rate of 5.5%. It is expected that the overall retail sales will reach 106.1 billion yuan in 2027.

China and Thailand Red Bulls have been fighting for several years, and the one with the greatest impact is naturally China Red Bulls. After reaching its peak in 2015, it went downhill, achieving sales of approximately 21.09 billion yuan in 2024.

The market pressure on China Red Bull, in addition to the all-round containment of Tiansi Group, also comes from Dongpeng Special Drink. In 2023, Dongpeng’s special drinks revenue will be 10.336 billion yuan, accounting for 30.94% of market sales, ranking second in the industry. In the same period, China Red Bull’s market share was 53.2%, which is no longer the same as the proportion of over 80% during the peak period.

Dongpeng Beverage started as a Red Bull OEM in China. At the end of 2012, it broke a bloody path, taking advantage of its large capacity and high cost performance to open up the market through card friends, construction workers and mental workers. Guotai Junan predicts that its revenue in 2026 will exceed 20 billion yuan, becoming another 20 billion product in the energy drink market.

Dongpeng successfully picked up the leak, and other local energy drink brands also took the opportunity to seize the market. China Resources Ipoh launched Magic Sports, Dali Group’s Lehu, Nongfu Spring’s Scream, Henan Zhongwo’s Physical Energy, and Guangzhou black cards 6 hours, daily replenishment, etc. have all appeared on the shelves.

Now, China Red Bull has become very low-key. In the past few years, when it was tired, it was borrowed and imitated by Dongpeng Special Drink. Later, your energy exceeded your imagination and was just remembered, and it was transferred to the promotion of your son ‘s Warhorse Energy Drink.

There is no possibility of a handshake with Tiansi Group for the time being. China Red Bull must have alternatives.