Huiyuan Generated 32 Million Yuan Loss in First Half Year

By CnAgri2012-10-23 14:29:03 Print

After the rumor that Huiyuan would enter the wine field, the case concerning the selling of Huiyuan trademark was eye catching. According to its semi-annual report, Huiyuan generated a deficit in the first half of 2012, the turnover was 1.69 billion yuan, down 7% year on year or a net loss at 32.17 million yuan.

In 2008 Coca Cola failed in purchasing Huiyuan with 2.4 billion US dollars and the latter has been deeply affected ever since. In the past four years, the market value of Huiyuan evaporated by 80%. According to insiders, owing to the strong family control, the company has limited choice of products, has failed repeatedly in innovation of products, has no clear strategy and has weak marketing. The intended acquisition by Coca Cola was merely a blow to Huiyuan and exposed the problems. And the problems have become more and more noticeable alongside the intensification of competition.

According to BOABC, family management is not rare in China. The repeated failure in introducing new products of Huiyuan reflects its weak strategy and weak marketing team, and can be traced to lacking of professional management. Since financing at the capital market, although it explored upstream products and introduced new products, yet the market feedback was not ideal. Its prospect is yet to be clarified while there is limited growing margin for medium/high-concentration fruit juice, which is its traditional competitive field.

From “China Soft Drink Market Monthly Report”