Coming from an investment background, Uki Zhang, Genki Forest’s partner and head of functional brands and products, is now selling sparkling water and tea, as well as building a new energy drink sub-brand – she shares the disruptor brand’s plans to go global.
This article is part of a Spotlight series on what marketers can learn from DTC disruptors in China. Read more
- One of Genki Forest’s goals is to restart from a brand-focused point of view, rather than a more product-oriented one.
- Genki Forest doesn’t want to be just a Chinese company going abroad but to be a truly international company.
- Managing a brand and building a team are about the quality of relationships, caring for team members and having a vision.
Genki Forest is a small disruptor but with big ambitions – you’ve set your sights to become the next Coca-Cola. What advantages do you have compared to international brands?
First, the decision-making process is much simpler because I would assume that at international companies, the power to make decisions is ultimately in the hands of the headquarters.
Secondly, the way we incentivise people is simple, as we have hundreds of employees as our shareholders in the company. But as far as I know, most international firms don't do that.
Thirdly, we are rather agile, both actively and passively. Sometimes we are pushed to the point that it becomes a do-or-die situation. But we always have this consensus within the company that we have to be problem-oriented. Everyone can make the decision to change. So that is why we make fast and hard decisions.
I think these are several advantages that we have as a local brand. However, I think international firms, especially in consumer goods, have a very strong ability to build long-term brand assets. They have great patience to protect their brand rather than consume the brand. And that's why we see a lot of very respected international brands like Apple and Nike. They exist almost as a religion to some people. That’s one of my goals this year with this Genki Forest brand; we want to restart from a brand-focused point of view, rather than a more product-oriented one. Obviously, we have to make the products great; that is a given.
The greatest international brands have the ability to separate the brand from the product – you won't be mistaken for an employee if you wear a Coca-Cola shirt, for example. That is how value is built into a brand and how a brand is perceived – as icon rather than a company. What is your vision for Genki Forest?
I have two goals for the company.
We want to make the company global because a lot of companies – whether Chinese or American – are still companies originating from somewhere. We want to build a company that is technically and actually international. That's why we are expanding in the States, Africa, Southeast Asia, etc. We are forming partnerships all around the world.
We want to build the company, not as a closed system, but more as an open platform. We would like to attract people to work with us to create something great together. But at the same time, we don't like restraining people from leaving the company to follow their own dreams.
I am the head of new brands, such as Alienergy (a new energy drink sub-brand). As I mentioned earlier, we want to build a respected brand over a long period of time. I believe that enterprises have social responsibilities, to help or guide young people in this value-oriented society, especially now that information – good or bad – is widely available. That's what intrigued me, when my CEO wanted me to lead this new BU. When I took on the job, there was nothing. Now we have over 100 people. It's leaning towards branching off in the future as an independent company because we want the brand image to be independent.
But the thing is, as of now, Genki Forest is gaining a little attention. Many companies want to work with us now, which is good. But at the same time, I think that's also a test for Alienergy and for myself, to stay focused, to be able to resist temptations, to be consistently working towards a long-term goal of building positive energy in the younger generation.
So this energy drink is viewed from a very different perspective than our sparkling water, which is more focused on delivering a very healthy beverage.
Resisting the temptation to be off-task is one of the challenges in your current role. Do you see any other challenges with this new Alienergy sub-brand?
I think one of the main challenges is that energy drinks are misunderstood. People think that energy drinks overload your body and that they're full of sugar and chemicals.
But I see energy drinks as a substitute for caffeine. It’s an alternative way to inject caffeine into the system. We all need caffeine to boost our energy and also maintain our performance from time to time.
Uki Zhang, Partner and Head of Functional Brands and Products, Genki Forest
I remember a story when I was still working at Coca-Cola. One day, government officials came to the food safety department to inspect one of the plants. And they asked us to show them the caffeine that we put into the Coca-Cola beverages. We showed them the caffeine powder, which is completely white. The government officials didn’t believe us because their perception of caffeine is something brown or dark in colour.
This is a misconception.
Why do you think Genki Forest is becoming so popular now?
I think it’s good old customer-centricity. I joked with my colleagues that we need to make a documentary for people to see how we build the company. Actually, you can just place a hidden camera in our office. Our customers would be touched and amazed at how frequently we say “customer-first” in our daily conversations. That's how we think.
For example, I told our colleagues, if you don't dare to let your kids or your parents drink this, then don't make it. If I don't give you a single salesperson, and you're still confident that this product can attract customers, then you launch it. Those are just two simple examples of how customer-centric we are.
That's also why we don't have a limit for the R&D department. I know a lot of companies in the beverage industry have a very rigid cost structure and range for R&D. But for us, we build the perfect version of the product first, then we come up with ideas to reduce costs by scaling or by managing suppliers.
Your perspective is very refreshing and interesting.
An obsession to really be consumer-oriented is probably the key to success because human beings would, in the end, reciprocate if companies are good to them. That's the simple belief we hold. Everything starts with that.
As a disruptor brand in energy drinks, what are the major consumer trends in this sub-category, in general and among the younger generation?
I think the existing market is now maintaining steady double-digit growth globally but in China, the energy-drink sub-category is being narrowed by competition. Most brands take what I call the “Red Bull path”. Everyone is either a Red Bull copycat or a cheaper version of Red Bull. So they don’t stand out like we do because they don't dare to use different flavours or healthier ingredients.
That's why I think the market is being eaten up by coffee or milk tea. But the demand for refreshing and energising drinks has always been there. It's a fundamental demand for humans, right? It’s an alternative choice to taking caffeine. It's like gastronomy. The fundamentals are the same, just that you can separate the form of the food from the taste of the food. If you see it this way, then energy drinks are just another form of caffeine.
So it's really a choice of whether you want to take in artificial caffeine, or natural caffeine that is fizzy with different flavors.
This sub-category is where I see opportunities because firstly, it has a very high barrier to entry due to the customer’s mental block – if you want to stay up all night, then you drink Red Bull to keep you awake. But this doesn’t mean that energy drinks are solely meant for this purpose. That’s why the energy drinks market is seen as niche.
And secondly, all the other competitors are going down the Red Bull path, which I don't think is necessarily effective, right? But I don’t know for sure because our way is not very good yet. It's just a daring attempt.
I do think there should be a different way of driving this category that is much healthier. The spirit we want to promote is to be more energised at work and play. It should not be like “I'm one step closer to death, that’s why I need a kick”. We don't want to be that. We want to be a pleasurable supplement that helps in situations when creative work is done or when a companion is sought.
From the beverage formulation point-of-view, do you have any insights in terms of what ingredients have done well or not?
In general, we're looking for healthier ingredients. We’re always trying to improve the ingredients we are using right now. Say, the sweetener called erythritol we're using is good because it doesn't interfere with human metabolism. That's why people with diabetes can take it. The thing is, the supply of erythritol in China is very limited. And that's why we're looking for more alternatives. There are functional ingredients available all over the world that are not imported into China yet.
How do you feel about the performance of Alienergy since its Tmall rollout in May 2020?
It's good. We just passed RMB100 million in revenue.
I think e-commerce probably changed the beverage industry for the better. Because before the e-commerce age, we couldn't track customer behaviour. In the old days, all we had was inventory turnover and past store sales. This data is very boring.
Now we not only track shopper behaviour but also timing and frequency. There are huge benefits for us and that's why I value follow-up calls to e-commerce customers. I ask all the new employees in our company, regardless of their titles or levels, to make 200 calls as their first task.
Firstly, we created a channel for our consumers to express their opinions directly to us.
Second, it's a good way for new employees to get a feel of where the brand is, from honest customer feedback. I think it's the most powerful evidence. I gradually found out that this is also a good way to filter out those who are diligent at their jobs and those who might cause issues in the future. I sometimes secretly go through their notes to check what they are taking down from the calls and from the details you can tell whether its’s a fake questionnaire or not. Like, if they jot down something specific like customers hearing about Genki Forest from a friend or seeing it in the gym. For the fake ones, it's just numbers or good reviews. That's always suspicious to me. And I fired a couple of people because they submitted fake feedback because that's much more damaging than not having replies from customers. It also sends a very clear signal to the whole company that consumer-orientation is the most important thing.
In terms of sales channels, would you suggest the “e-commerce first” approach for a new brand?
For us, the split is about 15 online to 85 offline. But I'd say e-commerce is definitely a good entry point for new brands because you can get so much more data online. We tested, for example, five to six flavours for our new product online and we are only rolling out the most popular ones offline.
Even for the Alienergy logo, we decided on that with 70% data and 30% subjective opinions. Basically, it’s after lots of beta testing online.
Following rules for design as well, we want the alien head to be fashionable and relatable. And when you see the head, you’re not stretching your imagination to think of an alien character. But at the same time, it can't be similar to Alienware (Dell’s gaming product). It also can't be too complicated. Because a complicated logo can be eye-catching at first but it cant get cornier and gaudier the more you look at it.
Is the Chinese domestic market still your priority? How long will it take you to reach the level of an international beverage brand?
We've been selling sparkling water and tea globally since 2019. Recently we are building two factories in Southeast Asia and Africa. I would say we would like to be the sponsor of the World Cup in 12 years (laughs).
Regarding the future globalisation of the firm, if you look at Fortune 500’s food and beverage sector, there's no Chinese brand. But that shouldn't be the case, in my opinion, with China’s infrastructure, manufacturing efficiency and the Chinese food culture. There's no reason why a Chinese brand cannot make it to the top. That's why we are determined to show our strengths globally.
But we don't want to just be a Chinese company going abroad. We want to be a truly international company. We don't have this huge ego issue that we have to be seen as a successful Chinese company with everything under the name Genki Forest.
Regarding marketing effectiveness, how do you view the Western markets’ brand-centric focus and the Chinese preoccupation with sales?
People in general want to push products into sales channels as fast as possible, whether they are Chinese or foreign brands. People just have different time frames. To be frank, the Chinese market is more rapid and the competition is more intense. In this way, I deeply understand those Chinese companies that want to push their products into sales channels as fast as possible because they have a very narrow window of opportunity.
But for us, we are building the second brand (Alienergy) slowly. We need to resist temptation, to be self-disciplined and accumulate a lot of brand assets rather than just sell products and do livestreaming all the time.
It's back to the topic of whether you want to sell or you want to build a brand.
If you want to build a brand, it's more challenging because your products have to be perfect first. That's just the entry ticket to brand-building. Then, you have to build your image. You have to have a voice. If you don't have an opinion, you can't express anything. You have to constantly be active expressing your brand voice, stick with your brand values and remain on-track. So I think it's in a way more challenging than selling and using the push model.
Resource-wise, it’s also a tricky balance between the short and long term. Because for short-term performance, a company has to sell and, at the same time, it's great to build the brand for the long term. You have to survive to get to the top.
The leadership skills needed to manage a brand and sell a product are very different. You have an investment background; what skills enabled you to quickly shift into a new industry?
On a skillset level, there's definitely a huge difference. But I don't see it as a technical issue. I see it as a shift in mindset. I see myself growing with the company, literally.
Managing a brand and building a team are about the quality of relationships, the importance of caring for team members and the significance of having a vision. I did engineering science for about six years and thought all that was too airy and hollow. Now, I start to see what real brand leadership is. I don't see it as a skill, I see it as something oozing out of your heart. For a leader of a company, if you're a person with only a heart and no brain, that's dangerous too. You must have both and maintain equilibrium.
For an emerging brand with a small operating team, how do you incentivise your people? Especially when you started the business from scratch, how do you engage your team members?
Because I took a huge pay cut to join the company, and I also invested my own money, I argued for lower salaries at first, out of investor instinct.
I was thinking, if new hires don't want to take pay cuts, that means they don't have any commitment at all. Why would I trust them to build a startup with us? But then I realised I’m actually wrong. That didn't turn out well because people don't tell you you're paying them too little but everything about them is screaming that.
Everyone has their own needs and everyone has to provide for their families. So now, I don't do pay cuts and I issue options internally. Team members can buy company shares based on an investment schedule, and they can sell the next year or down the line.
But during the process, I've always been very honest with my workers and they can see that I put 100% of myself into this game. That can be influential.
In conclusion, I think money, options and passion are incentives.