Page 300 - 2020 White Paper on the Business Environment in China
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time classic. Er Chang, which means second factory, business of Coca-Cola products in southern areas
was an original, state-run soda brand from Hankou such as Yunnan province, Guangzhou and Shanghai.
in Wuhan, Hubei Province. It was very popular three This company sells about 65 percent of all sparkling
decades ago — the colorful soft drinks packaged in soft drinks in China and is the market leader in juice
glass bottles was a Wuhan calling card and icon of products. According to managing director Patrick
the city’s lifestyle. But regrettably, the factory closed Healy, bottled water and sports drinks register
in 2000. double digit value growth but carbonated drinks
have been essentially flat. China’s soft drink market is
In 2018, a new brand called Hankow Er Chang highly fragmented with major and domestic players
emerged in the market with eye-catching designs all manufacturing bottled water. Premium mineral
and aggressive marketing campaigns to revive the waters that fetch up to 10 yuan per bottle have also
soda legend. It wasn’t a reopening of the original built a loyal consumer base over the years. This
factory, but an ambitious new brand that looks to field has become the key battleground for brands
launch a future for Chinese soda. Just like the Er not only for Pepsi and Coca-Cola, but also Nestle
Chang name represents the soda history of Hubei and Red Bull. Zhu Danpeng, an associate with the
Province, different places across China have unique China Branding Research Institute claims low sugar
soda products as well. Many of them are still in or sugar free, low calorie will become the dominant
production, and they have become local cultural trend in the near future (Li, It’s Fewer).
symbols. Jianlibao reached its peak in the 1990s after
it was featured as the sports beverage for the Chinese Textile and Apparel
delegation at the 1984 Los Angeles Olympic Games.
In 1997, the annual revenue of the company was Over the past two decades, the cooperation
5.5 billion yuan. Though, you can still find Jianlibao between China and the United States in the textile
orange sodas online and in some supermarkets. industry has reached unprecedented depth and
Unlike most sweet sodas that are fruit-flavored, the breadth. The value of textiles and apparel trade
gold classic sarsaparilla drink produced by the Asia between China and the US increased from US$9.95
brand in Guangdong has a unique taste that many billion in 2003 to US$49.7 billion in 2018. From 2010
people describe as fengyoujing, a medicated oil with to 2018, the average annual growth of US textile
a strong herbal and minty fragrance. Zhenzhen is and apparel imports from China was 0.7 percent.
another soft drink brand from Guangdong, which In 2018, China’s overall outbound investment in the
is known for fruit-flavored sodas like strawberry, textile industry slowed, but outbound investment
lychee, peach and pineapple malt. For many people, in the US increased 20.7 percent over 2017. From
chilled sodas are the best summer elixir. Because 2015 to 2018, China’s cumulative direct investment
different regions have diverse varieties of soda in the US reached US$214 million. China’s textile
brands, carbonated soft drinks in China feature a industry now is the world’s largest in scale and
wide range of flavors that are not limited to lemon, most comprehensive in capacity, covering the
orange and strawberry (Li, China Soda). whole value chain, from raw materials, R&D, textile
processing, apparel manufacturing and operations,
Soft drinks products with lighter colors and and retail. 2018 saw China process 54.6 million tons
tastes are also gaining popularity as these products of fiber, half the world’s total, and export US$276.73
convey an image of health and wellness. Bottled billion in textiles and apparel, 36 percent of the
water has become some consumers’ priority over world total (Hong).
other soft drinks for its excellent hydration and light
appearance. Consumers’ awareness of freshness However, American textile and apparel
is growing, with many consumers, especially those companies are taking a wait-and-see approach
in high-tier cities, considering short shelf life a key to business with their Chinese partners amid the
sign of freshness. On the one hand, soft drinks US-China trade dispute. The uncertain outlook on
manufacturers’ technological developments in food trade has made manufacturers too afraid to take
processing, storage and transportation are making orders. Some companies stopped production for
the launch of chilled products possible (Euromonitor, a month in June 2019 due to the running costs
Soft Drinks). Swire Beverages runs the bottling
300
time classic. Er Chang, which means second factory, business of Coca-Cola products in southern areas
was an original, state-run soda brand from Hankou such as Yunnan province, Guangzhou and Shanghai.
in Wuhan, Hubei Province. It was very popular three This company sells about 65 percent of all sparkling
decades ago — the colorful soft drinks packaged in soft drinks in China and is the market leader in juice
glass bottles was a Wuhan calling card and icon of products. According to managing director Patrick
the city’s lifestyle. But regrettably, the factory closed Healy, bottled water and sports drinks register
in 2000. double digit value growth but carbonated drinks
have been essentially flat. China’s soft drink market is
In 2018, a new brand called Hankow Er Chang highly fragmented with major and domestic players
emerged in the market with eye-catching designs all manufacturing bottled water. Premium mineral
and aggressive marketing campaigns to revive the waters that fetch up to 10 yuan per bottle have also
soda legend. It wasn’t a reopening of the original built a loyal consumer base over the years. This
factory, but an ambitious new brand that looks to field has become the key battleground for brands
launch a future for Chinese soda. Just like the Er not only for Pepsi and Coca-Cola, but also Nestle
Chang name represents the soda history of Hubei and Red Bull. Zhu Danpeng, an associate with the
Province, different places across China have unique China Branding Research Institute claims low sugar
soda products as well. Many of them are still in or sugar free, low calorie will become the dominant
production, and they have become local cultural trend in the near future (Li, It’s Fewer).
symbols. Jianlibao reached its peak in the 1990s after
it was featured as the sports beverage for the Chinese Textile and Apparel
delegation at the 1984 Los Angeles Olympic Games.
In 1997, the annual revenue of the company was Over the past two decades, the cooperation
5.5 billion yuan. Though, you can still find Jianlibao between China and the United States in the textile
orange sodas online and in some supermarkets. industry has reached unprecedented depth and
Unlike most sweet sodas that are fruit-flavored, the breadth. The value of textiles and apparel trade
gold classic sarsaparilla drink produced by the Asia between China and the US increased from US$9.95
brand in Guangdong has a unique taste that many billion in 2003 to US$49.7 billion in 2018. From 2010
people describe as fengyoujing, a medicated oil with to 2018, the average annual growth of US textile
a strong herbal and minty fragrance. Zhenzhen is and apparel imports from China was 0.7 percent.
another soft drink brand from Guangdong, which In 2018, China’s overall outbound investment in the
is known for fruit-flavored sodas like strawberry, textile industry slowed, but outbound investment
lychee, peach and pineapple malt. For many people, in the US increased 20.7 percent over 2017. From
chilled sodas are the best summer elixir. Because 2015 to 2018, China’s cumulative direct investment
different regions have diverse varieties of soda in the US reached US$214 million. China’s textile
brands, carbonated soft drinks in China feature a industry now is the world’s largest in scale and
wide range of flavors that are not limited to lemon, most comprehensive in capacity, covering the
orange and strawberry (Li, China Soda). whole value chain, from raw materials, R&D, textile
processing, apparel manufacturing and operations,
Soft drinks products with lighter colors and and retail. 2018 saw China process 54.6 million tons
tastes are also gaining popularity as these products of fiber, half the world’s total, and export US$276.73
convey an image of health and wellness. Bottled billion in textiles and apparel, 36 percent of the
water has become some consumers’ priority over world total (Hong).
other soft drinks for its excellent hydration and light
appearance. Consumers’ awareness of freshness However, American textile and apparel
is growing, with many consumers, especially those companies are taking a wait-and-see approach
in high-tier cities, considering short shelf life a key to business with their Chinese partners amid the
sign of freshness. On the one hand, soft drinks US-China trade dispute. The uncertain outlook on
manufacturers’ technological developments in food trade has made manufacturers too afraid to take
processing, storage and transportation are making orders. Some companies stopped production for
the launch of chilled products possible (Euromonitor, a month in June 2019 due to the running costs
Soft Drinks). Swire Beverages runs the bottling
300
