Harvest Capital chairperson Alan Song on successful entrepreneurs: being prepared for challenges while respecting one's rivals requires broad-mindedness and foresight
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SHANGHAI, June 14, 2021 /PRNewswire/ -- A workman must sharpen his tools if he is to do his work well. Eastroc Beverage (Group) Co., Ltd., a China-based company principally engaged in the R&D, production and sales of beverages, recently marked a major milestone and entered a new and exciting chapter with its successful initial public offering.
The IPO serves as a starting point for the company to turn the unknown into the known, by using what is already known as a basis for uncovering new growth opportunities, by raising the bar for entry into the sector as a way of dealing with competition, and by providing consumers with a better experience. As one moves beyond the IPO, the Harvest Capital chairperson reminds everyone that we must never lose sight of the original goal, forge ahead with determination, honor every creation, and remain practical in one's approach with each step that is taken.
In the mid-19th century, Charles Darwin, the famous biologist, explained his theory of evolution by natural selection in his On the Origin of Species, opening a new era in the history of the discipline. The theory soon impacted every aspect of human society.
The same theory also finds application in today's world of business. On May 27, 2021, Eastroc Beverage, the parent company of the Chinese functional drink brand Eastroc Super Drink, began trading on the Shanghai Stock Exchange. It is the first Chinese energy drink producer to go public.
Eastroc Beverage's stock has performed strongly since. As of June 11, Eastroc Beverage had surged to 190.09 yuan per share after rising by the exchange's permitted daily limit during 12 consecutive trading sessions, consolidating the firm's leadership position with a market valuation exceeding 76 billion yuan.
In view of the ongoing momentum, Eastroc Beverage's market valuation is on its way to soon brushing past the 100 billion yuan mark. By creating the first Chinese drink brand with a potential valuation exceeding 100 billion yuan, Eastroc Beverage continues to cement its reputation as a leading Chinese drink brand and reward hundreds of millions of Chinese consumers for their loyalty, while reaffirming their rising purchasing power amid changes in the consumption culture.
The success is driven by Eastroc Beverage's decades of effort in creating the best imaginable products. During the event organized in celebration of the milestone, Eastroc Beverage chairperson Lin Muqin expressed his gratitude to six stakeholders led by partners, shareholders and employees.
Mr. Li said, in all sincerity, "I'm particularly grateful to Dr. Chanchai Ruayrungruang (also known as by his Chinese name Yan Bin) from Reignwood Group as it was he who introduced Red Bull to China, opening the path to the raising of awareness of energy drinks among early adopters of the product category and boosting the development of the category throughout the country."
Many firms were chomping at the bit to seize the business opportunities brought about by the launch of energy drinks in China, including Eastroc Beverage, a company founded in 1987 and known for its functional drink brand Eastroc Super Drink, and Dali Foods, which had expanded its presence with the rollout of the Hi-Tiger brand. Another major player, Henan Zhongwo Industry, focused on growing the sales of its drink Ti Zhi Neng Liang.
According to data from Euromonitor International, among China's top 6 functional drink brands each boasting a market share over 1% in 2019, Eastroc Beverage represented 15% of the total energy drink sales in the country's domestic market, consolidating its leadership position in the sector and among Chinese brands.
The modest bamboo has bowed leaves, but the proud plum has no upward flowers. This line from a well-known Chinese poem is indicative: although having led Eastroc Beverage to achieve strong performance, Mr. Lin remains a modest man. He continues to improve his leadership skills with the aim of taking the company to the next level.
The quality of humility was also reflected in Mr. Lin's entrepreneurial journey. In the 1990s, Eastroc Beverage faced bankruptcy. In 2003, Mr. Lin, who, at the time, was general manager of sales, took over the management of the firm's brands and production, and launched the pioneering Eastroc Super Drink brand. He revitalized the firm and transformed it into a leader in the energy drink market.
When commenting on Mr. Lin's respect for Mr. Chanchai, Eastroc Beverage investor and partner and Harvest Capital founder and chairperson Alan Song (also known by his Chinese name Song Xiangqian) commented, "I'm impressed with Mr. Lin's vision." Mr. Song said that in an era that requires a company to stay prepared for potential challenges, show respect for rivals and do business with integrity, success depends on an entrepreneur's broad-mindedness and foresight."
On several occasions, Mr. Song repeated his belief that China has entered the era where honesty defines success. He indicated that an entrepreneur who adopts a code of ethics will be treated graciously and respected in the world of business. Achieving success by conducting business with integrity will help generate everlasting assets rather than only short-term profit gains.
According to Mr. Song, a successful business is all about product, while a successful entrepreneur is all about moral quality. It is also reflected in his attitude towards life. In 2019, Mr. Song stated in an article that he had penned, "Common sense tells us that we have to adapt to the changing times. Today, a new trend in the world of business has emerged: those who do business honestly are being recognized in the market."
Mr. Song indicated that an approach with a focus on the business model, channel structure and brand management can be constantly upgraded as the business evolves, however, not all founders who create a profitable business deserve being recognized as an entrepreneur. An entrepreneur should know what defines real success and how to choose a successful business strategy. Entrepreneurs seem to be born with an ability that impacts strategic decision making.
This ability refers to "helping create a better world." In November 2019, Tencent chairperson and chief executive Pony Ma and president Martin Lau determined the firm's new mission with the words "Value for Users, Tech for Good" in an internal letter.
Industry analysts pointed out that Tencent's new concept aligned with Mr. Lin's and Eastroc Beverage's beliefs. As an early adopter of new retail solutions, Eastroc Beverage is committed to taking a user-oriented approach to building a world-class beverage business by addressing consumer expectations for consistent quality in healthy and functional drinks.
Mr. Lin said previously that over the last 32 years, he had devoted himself to the beverage sector with the goal of better serving Chinese consumers with the best products. He commented, "It is not easy to expand our presence in the market segment dominated by one single product category. We usually have to put 8 years, 10 years or even longer into it before succeeding."
Under Mr. Lin's stewardship, Eastroc Beverage has accumulated years of experience and expertise in the beverage market, which, in turn, helped to give birth to the Chinese energy drink brand Eastroc Super Drink. In 2009, the company took the lead in introducing bottled energy drinks, and continued to increase the popularity of the product with the brand proposition that young people need to wake up and fight. Today, Eastroc Super Drink is the No. 1 brand in the Chinese energy drink market in terms of sales.
In 2017, Harvest Capital invested 357 million yuan in Eastroc Beverage as an expression of its confidence in the drinks producer's growth potential and in Mr. Lin's entrepreneurial spirit. It is the only external financing that Eastroc Beverage has to date received.
When looking back on the investment in Eastroc Beverage, Mr. Song said during a media interview that he had met Mr. Lin in 2012. Following numerous on-site visits and exchanges over a five-year period, Eastroc Beverage and Harvest Capital, which share the same mission and vision, finally reached an agreement in 2017.
In addition to the direct investment, Harvest Capital also facilitated the Eastroc Beverage's partnership with Chinese snack food companies Lyfen and Qiaqia Food in a move to create more value by building an industry-wide ecosystem. In the beverage sector, Eastroc Beverage works to make a difference from strategy development to efficient implementation.
Mr. Song believes that a well-respected company should focus on addressing consumer expectations and treating employees, consumers and the wider community with honesty and integrity. In the world of business, the concept of doing everything for the betterment of society is described as part and parcel of the entrepreneurial spirit and it deserves being recognized.
Chinese business culture is largely influenced by Confucianism, which helps define the code of ethics designed to help companies conduct business with integrity and earn a profit that contributes to the betterment of mankind.
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SOURCE Harvest Capital
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