Rebirth of the Wild Age

Entering the brand-new 2001, if there is any good news, it is that Pepsi has fought itself.

PepsiCo (China) declared Lu Province as its sphere of influence, but PepsiCo (a joint venture company in Lu Province) disagreed. Therefore, PepsiCo (China) and PepsiCo (a joint venture company in Lu Province) launched a price war around the Lantau market. The cola produced by the two companies competed fiercely with each other, and everyone inside and outside the industry looked confused.

At the same time, PepsiCo (China) forced Chinese investors in PepsiCo (Xikang joint venture) to withdraw their shares. When the negotiations between the two parties broke down, PepsiCo (China) significantly increased the price of Coke concentrate and did not allow PepsiCo (Xikang joint venture) to produce other Pepsi beverages except Coke.

As a result, Pepsi's business in China was fragmented and in a mess, and agents at all levels were even more confused, and they didn't even know which factory to get the goods from.

In another time and space, after years of channel construction, Pepsi has the potential to surpass Coca-Cola in China. Just because of this series of blind comparison operations, he directly collapsed himself, and was quickly thrown out by Coca-Cola for a few blocks.

And now even with Xifeng disrupting the situation, PepsiCo is still doing this, because its US headquarters wants to eat alone and is unwilling to distribute a large amount of profits to the Chinese joint venture every year.

The source of all this is that China is about to join the wto and gradually relax investment restrictions in various fields. In the past, foreign cola was not allowed to be sold domestically, and then it was allowed to be sold domestically but with a quota. After the quota was abolished, the number of joint venture factories was increased. Now foreign cola can finally build a wholly-owned factory in China.

The people at the PepsiCo headquarters thought, since I can build a wholly-owned factory in China, why should I continue to engage in joint ventures?

This situation does not only happen in the beverage industry. For example, Dongcom mobile phone is a joint venture brand, and all technologies are provided by Motorola. Now Motorola directly issued an ultimatum, either the Chinese side would sell its shares, or Motorola would withdraw its capital and liquidate its shares. The Chinese side chose the second option, so Eastcom's mobile phone became a real domestic product.

In a few months, Japan's Panasonic even confirmed to the media that all 50 joint ventures of Panasonic in China will be independent.

Multinational companies from all walks of life are using various methods to force Chinese investors back. Because they used to be restricted by policies when engaging in joint ventures, but now the policies are suddenly relaxed, and their greedy faces are exposed all at once.

And why faced with the continuous pressure of Xifeng Company, Coca-Cola did not choose to act rashly, but Pepsi-Cola desperately sought a sole proprietorship?

Because Pepsi's business in China is too chaotic!

In the early 1990s, Pepsi adopted a very extensive development model in order to expand rapidly in China. This hidden danger will continue until more than ten years later.

There are three types of cooperation atmospheres between PepsiCo and the Chinese side, namely joint venture, cooperation, and licensed filling. Among these joint ventures, some are controlled by the Chinese party, some are controlled by PepsiCo, and some even have no shares in PepsiCo (only provide Coke concentrate to make profits). There are also various management methods. Some factories are operated by the Chinese side, some factories are managed by PepsiCo, some factories are contracted by PepsiCo, and some PepsiCo and the Chinese side each send a general manager.

It can be said that management, marketing and channels are in chaos.

In principle, PepsiCo's factories in China are divided into zones, and products from one zone cannot be sold to another. However, in order to make money, Chinese investors may not care about so much. For example, the Xikang joint venture is the largest Pepsi bottling plant in China, and the Coke produced by Xikang is actually sold to the Northeast. But the shareholders and regional distributors in the Northeast are not happy, so various promotions are disguised as price wars, and they often fight against their own people.

Moreover, in order to expand channels, joint venture manufacturers across the country united to increase Pepsi's channel rebates to a high level. Coupled with the chaos in marketing management, one-third of Pepsi's joint ventures in China have suffered losses one after another.

Authorized bottling factories are even more ridiculous. This kind of bottling factory is responsible for its own profits and losses, operates independently, and only purchases Pepsi-Cola concentrate for production. So they began to do crooked ways, buying local non-branded cola concentrates, filling them with Pepsi labels and selling them.

Faced with such a chaotic situation, China suddenly loosened its policy and said that it can build a wholly-owned factory in China. How can Pepsi still hold back?

At least the joint venture company in Xikang Province must be controlled, because that is PepsiCo's largest production base in China, contributing more than 30% of PepsiCo's profits in China.

Before long, PepsiCo will sue the Xikang joint venture company in court, and the Arbitration Court of the Stockholm Chamber of Commerce in Sweden will make a verdict. This lawsuit is called "China's accession to the WTO's first arbitration case." In fact, China's accusation is not a breach of contract. PepsiCo took advantage of China's legal loopholes at that time.

Five years later, the official of the China International Trade Arbitration Commission was arrested, and it was this person who proposed to submit the case to the Swedish court for arbitration!

In any case, Pepsi's sole ownership process has made Pepsi even more chaotic.

The lips are dead and the teeth are cold, the rabbit is dead and the fox is sad.

The tragic experience of the Xikang joint venture company made Shenghai joint venture company feel cold. This is the second largest production base of PepsiCo in China. The Chinese investors of Shenghai directly cooperated with 15 Pepsi filling plants and held a press conference to meet with PepsiCo.

The two sides beat out the dog's brains, making chicken feathers all over the floor, and Pepsi's market share plummeted.

In the following years, PepsiCo's joint ventures in China did not make much money, and more than half of them fell into continuous losses. Chinese investors chose to withdraw one after another, and PepsiCo took advantage of the trend to pay for the acquisition. In this way, it gradually became a sole proprietorship in a way that hurt both sides. Since then, PepsiCo's Chinese business has gradually improved.

Coca-Cola is much more stable. There are only four major partners in China, namely COFCO, Swire, Kerry and China International Trust. Among them, the joint venture between Coca-Cola and China International Trust specializes in the production of Sprite and Fanta, and does not involve in the production and sales of Coke.

Kerry will be dumped by Coca-Cola in a few years, and COFCO will also sell factories to Coca-Cola one after another. If it weren’t for the rapid shrinkage of China’s carbonated beverage market, it is estimated that Coca-Cola will completely get rid of COFCO and Swire, and finally realize its wholly-owned business plan in China.

"I'm going to have a nationwide Coke promotion." Yang Xin said with a smile.

Song Weiyang said: "It's absolutely possible. Even if you can't kill Pepsi with one punch, you should beat Pepsi so hard that you can't take care of yourself."

This is called, take advantage of his illness and kill him!

Xifeng Company responded the fastest, and then Coca-Cola also stepped in. Both parties took advantage of Pepsi's internal turmoil to erode market share with crazy promotions, and made Pepsi want to die in a few months.

However, Pepsi headquarters still refuses to repent, and would rather seek a sole proprietorship after huge losses and a sharp drop in sales—because the business in China is too chaotic, Pepsi cannot do without a sole proprietorship. Come on.

Until this autumn, some organizations counted the market share of carbonated drinks in China: Coca-Cola was 38.6%, Xifeng was 33.1%, Pepsi plummeted to 13.8%, Jianlibao was only 4.5%, and 10% of the market was occupied by various brands. Divide up.

Totally changed!

According to another trajectory of time and space, only after PepsiCo's joint venture company suffers serious losses and PepsiCo China takes the opportunity to take over the sole proprietorship, and frantically invite celebrities to advertise can it regain its foothold.

But will Xifeng bring Pepsi China back to life?