Read More《一年爆卖32亿，中国最“土”饮料，被“华尔街收购之王”盯上》
Positive Reviews: Dayao’s “Underdog Success” Provides a Classic Model for Domestic Beverage Breakthrough
From being hawked on tricycles on the streets of Hohhot to becoming the “King of Night Market Sodas” with an annual revenue of 3.2 billion yuan, Dayao’s rise is a textbook example of an “underdog success” in the Chinese beverage market. Its success lies not only in accurately grasping the consumption pain points in the sinking market but also in breaking a path through the gap between beverage giants like Coca – Cola and PepsiCo by using a combination of “differentiated positioning + strong channel push + emotional marketing,” providing a replicable classic model for the nationalization of regional brands.
First of all, precise scenario – based positioning is the core weapon for Dayao’s breakthrough. While most domestic sodas were still competing with international giants for supermarket shelves, Dayao chose “dislocation competition” – focusing on catering scenarios such as barbecue stalls, food stalls, and hot pot restaurants. The brilliance of this strategy lies in that it avoids the channel advantages of the giants (supermarkets are the core battlefields of Coca – Cola and Pepsi), and at the same time, it precisely matches the consumption needs of the catering scenario: diners need drinks that can “relieve greasiness quickly and are refreshing” when eating heavy – flavored food. The 520 – ml large – bottle of Dayao can not only meet the practical need of “large quantity and fullness” but also form a strong bond with the social attribute of the catering scenario through the sense of ceremony of “opening the bottle like opening a beer.” Data shows that more than 85% of Dayao’s sales come from the catering channel. By deeply cultivating this vertical scenario, its penetration rate in the sinking market far exceeds that of its regional peers (such as Bingfeng in Shaanxi and Arctic Ocean).
Secondly, the product strategy of “large packaging + high cost – performance” hits the consumption psychology of the sinking market. Dayao designed its bottle shape to be similar to a green glass beer bottle (with a capacity of 520 ml) and priced it at 5 – 8 yuan. In contrast, the 248 – ml Arctic Ocean is sold for more than 5 yuan, and the 275 – ml Hankou No.2 Factory is even sold for 9.8 yuan. This contrast of “large quantity and low price” directly hits the sensitive nerve of consumers in the sinking market regarding “cost – performance.” More importantly, Dayao strengthened the mental perception of “big = affordable” through the super – symbol of “Drink Dayao, the big soda” (designed by Hua & Hua). The thick – font on the bottle and the 3 – cm taller design than regular sodas make it recognizable even when lying in the freezer. This extreme emphasis on “big” essentially provides consumers with a “reason for choice without thinking” – similar to how PepsiCo uses large – bottles to compete with Coca – Cola and how Dongpeng Special Drink uses 500 – ml bottles to target drivers. Dayao’s “big – bottle strategy” has successfully occupied the first position in the category of “big soda” in consumers’ minds.
Thirdly, strong channel profit distribution builds an efficient terminal push. Dayao’s channel strategy can be described as “interest – driven”: the purchase price of the 520 – ml bottled soda for dealers is less than 2.5 yuan, the recommended retail price at the terminal is 5 yuan, and the actual selling price in restaurants can reach 6 – 15 yuan, far exceeding the industry’s average gross profit level. This “high – profit margin” model greatly stimulates the promotion enthusiasm of dealers and terminals – barbecue stall owners are more willing to actively recommend Dayao because the profit per bottle is higher than that of promoting Coca – Cola or Pepsi; dealers are also more willing to prioritize stocking because the turnover rate and profit margin are more considerable. In contrast, the channel strategies of international giants rely more on brand power, and the terminal profit margin is limited. Dayao has built a powerful on – the – ground promotion network by “benefiting the channels,” which is the key support for its rapid expansion from Inner Mongolia to the whole country.
Finally, emotional marketing binds the core consumer group. Dayao chose Wu Jing as its brand ambassador, precisely reaching middle – aged male consumers – the main customer group of barbecue stalls. Wu Jing’s “tough – guy image” is highly consistent with Dayao’s brand tone of “big – bottle, rough, and down – to – earth,” elevating the product from a simple “thirst – quenching drink” to an “emotional symbol for middle – aged men’s table socializing,” and even giving rise to the joke of “big cars, big houses, and Dayao” as the “three beloved treasures.” This emotional connection not only improves user stickiness but also creates a unique brand memory point for Dayao among competitors.
Negative Reviews: The “Growing Pains” of Dayao Behind Its Rapid Expansion Cannot Be Ignored
Although Dayao has made great progress in the sinking market, the “hidden worries” in its development model also deserve attention: product disputes in the context of the health – conscious trend, lack of new product development, doubts about the sustainability of the low – price strategy, and possible strategic deviations due to capital intervention may all become obstacles to its further breakthrough.
Firstly, the contradiction between the health – conscious consumption trend and the product ingredients restricts its expansion in first – and second – tier markets. Currently, consumers’ health requirements for beverages have upgraded from “low – sugar” to “no additives,” but the ingredient list of Dayao’s core products (such as Dayao Jabin) still contains artificial colors (tartrazine, sunset yellow) and acesulfame (sweetener). This “high – additive” formula goes against the health concepts of young consumers in first – and second – tier cities. On social media, some consumers have clearly stated that “there are too many additives, and they prefer sparkling water”; some restaurant owners have also reported that when recommending Dayao to young customers, the acceptance rate is significantly lower than that of products like Yuanqi Forest with “0 sugar and 0 calories.” This results in Dayao’s penetration rate in first – and second – tier cities being much lower than that in the sinking market, making it difficult to break through the brand ceiling.
Secondly, the lack of new product development intensifies the risk of relying on a single hit product. Although Dayao has launched five major categories of products including carbonated drinks, fruit and vegetable juices, and plant – based protein drinks, and has introduced sub – brands such as Chengnuo, Li’ai, and Bingchang, the market response to the new products has been mediocre, failing to replicate the success of the main product. For example, new products such as fruit juice bubble tea and energy drinks have neither formed clear differentiated selling points (such as Yuanqi Forest’s “0 sugar” label) nor continued the core advantage of “large packaging + high cost – performance” of the main product, resulting in consumers lacking the motivation to try. Data shows that Dayao’s revenue still highly depends on glass – bottled sodas (accounting for more than 70%). This “one – legged” model poses a high risk in the increasingly competitive beverage market – once the main product is affected by policies, consumption trends, or competitors, the overall performance of the brand will face significant fluctuations.
Thirdly, the sustainability of the low – price strategy faces challenges. Dayao’s success largely depends on the cost – performance advantage of “low price + large packaging.” However, as more regional brands (such as Hongbaolai and Bawangsi) imitate its model and even enter the market at a lower price (such as 4 yuan for 500 ml), Dayao may be forced into a “price war.” If it chooses to stick to the price bottom line, it may lose some price – sensitive consumers; if it sacrifices profit to maintain market share, it will compress the channel profit margin and weaken the promotion enthusiasm of dealers. In addition, the rising costs of raw materials (such as glass and sugar) will further squeeze the profit. Whether Dayao’s current “low – price model” can remain profitable in the face of cost fluctuations remains unknown.
Fourthly, capital intervention may change the original gene of the brand. If KKR successfully acquires 85% of Dayao’s equity and the founding team only retains a small amount of shares, it may lead to a deviation in the brand’s strategic direction. As a financial investor, KKR is more concerned about short – term returns and large – scale expansion and may push Dayao to accelerate nationalization (such as increasing advertising investment and expanding supermarket channels), which may not be compatible with Dayao’s original strategy of “deeply cultivating the catering scenario.” For example, consumers in supermarket channels are more price – sensitive, and international giants have an absolute advantage in this area. If Dayao blindly enters the supermarket channel, it may face the dilemma of “high investment, low return.” In addition, rapid expansion under capital control may increase the pressure on quality control (such as the management of contract manufacturers). If quality problems occur, it will directly damage the brand’s reputation.
Advice for Entrepreneurs: Insights into the “Offensive and Defensive Strategies” for Regional Brands to Break Through from Dayao’s Experience
Dayao’s rise and challenges provide multi – dimensional inspiration for entrepreneurs. Based on its successful experience and potential risks, the following suggestions are provided for reference:
1. Positioning First: Find the “Unmet Demand Scenarios” Instead of Confronting the Giants Head – on
Dayao’s core success lies in “dislocation competition” – avoiding supermarkets and focusing on the catering scenario. Entrepreneurs need to be clear that in a market monopolized by giants, instead of competing for “general needs” (such as thirst – quenching), it is better to explore “scenario – based needs” (such as relieving greasiness at a barbecue or replenishing energy after exercise). The key is to answer: “Which unmet needs in a specific scenario can my product solve?” For example, Dongpeng Special Drink targeted the “anti – fatigue” needs of “drivers and blue – collar workers,” and Dayao targeted the “large – quantity and affordable” needs of “catering socializing.” Both achieved breakthroughs through scenario segmentation.
2. Product Design: Use “Super – Symbols” to Strengthen Core Selling Points and Reduce the Cost of Choice
Dayao used the super – symbol of “big bottle + Wu Jing endorsement” to make consumers “recognize at a glance and choose without thinking.” Entrepreneurs need to transform core selling points (such as “big,” “healthy,” “convenient”) into perceptible symbols: bottle design (such as Dayao’s 3 – cm taller bottle), slogans (such as “Drink Dayao, the big soda”), and brand ambassadors (such as Wu Jing’s tough – guy image) are all key carriers. The simpler and more repetitive the symbol, the lower the memory cost for consumers, and the more effectively the brand can occupy consumers’ minds.
3. Channel Strategy: Build Terminal Push with “Interest Binding” Instead of Relying on Brand Power
Dayao’s success in the channel lies in “benefiting the channels” and stimulating the promotion enthusiasm of dealers and terminals through high gross profit. For new brands, the brand power is weak in the initial stage, and “channel profit” needs to be used to make up for the lack of brand power. It is recommended that entrepreneurs ensure that the terminal gross profit is 10% – 20% higher than that of competitors when designing channel profit distribution, and enhance channel stickiness through “rebates and promotional support.” At the same time, focus on the “core channel” (such as Dayao’s catering scenario) instead of spreading resources thinly to avoid resource dispersion.
4. Product Iteration: Balance “Classic Models” and “Innovative Models” and Be Wary of Relying on a Single Hit Product
Dayao’s lack of new product development is due to the failure to continue the logic of “core selling points + scenario adaptation.” Entrepreneurs need to note that classic models are the “basic market” and need to be continuously optimized (for example, Dayao can upgrade the ingredient list and launch a “low – sugar version” of the classic model); innovative models should be based on the new needs of the target customer group (such as the health needs of young consumers) and form a “complementary” rather than “competitive” relationship with the classic models. For example, Yuanqi Forest launched “0 – sugar tea” and “Alien electrolyte water” based on its “0 – sugar sparkling water,” successfully replicating the logic of creating hit products by extending around the core need of “health.”
5. Capital Cooperation: Clarify “Capital Needs” and “Brand Bottom Line” to Avoid Strategic Deviation
The controversy over Dayao’s introduction of KKR essentially reflects the conflict between “capital – driven expansion” and the “original brand gene.” Entrepreneurs need to be clear that before introducing capital, they need to evaluate the “resource matching degree” of the capital provider (such as KKR’s operational experience in the consumer goods field) and “strategic consistency” (whether it agrees with the long – term brand positioning). If the capital requires short – term large – scale expansion while the brand’s core advantage lies in “regional in – depth cultivation,” careful consideration is needed. It is recommended to retain a certain degree of equity control (such as the founding team holding a controlling stake) to ensure that the strategic direction does not deviate; at the same time, use the capital to “make up for weaknesses” (such as upgrading the supply chain and increasing R & D investment) instead of blind expansion.
Conclusion
The story of Dayao is not only an “inspiring example” for regional brands to break through but also a microcosm of “local innovation” in the Chinese beverage market. It proves that in a market monopolized by giants, domestic brands have every opportunity to break through through precise positioning, strong channel push, and emotional marketing. However, it also warns that the success of a single model is not sustainable. Challenges such as the health – conscious trend, consumption upgrading, and capital intervention require brands to form a “combination punch” in product power, brand power, and supply chain capabilities. For entrepreneurs, Dayao’s experience and lessons are the best textbooks on “how to find a blue ocean in a red – ocean market.”
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