Thailand's TCP Group, which owns the popular energy drink brand Red Bull, will invest more than one billion yuan ($141 million) in the Chinese market over the next three years despite challenges from the Covid-19 pandemic.
Its CEO Saravoot Yoovidhya said TCP will build a new manufacturing plant in Beijing’s Huairou district, which is set to be opened next year.
“China is our top foreign investment destination because we can clearly see the way the country continues moving forward under any circumstances,” he said, adding that he is “still confident about making additional investments.
“China’s efforts in combating and overcoming the Covid-19 outbreak are impressive. Not all countries were able to overcome such adversity in such an efficient way. That is why we are confident in the direction of the government and are even more excited to come back to the country,” he said.
Red Bull, as one of the world’s largest energy drink brands, has expanded its business to over 160 countries and regions globally. It entered China in 1993.
Saravoot said: “Over the past decade, one of the most impressive changes is that Chinese authorities as well as businesses and local communities have made big efforts in strengthening intellectual property protection.”
He said that such a business environment means a lot to foreign companies as they will feel safe and confident that their brands and technologies are protected and secure, which he believes is “the heart of any innovation society”.
To further localise their business in the country, Saravoot said TCP also plans to set up a new company with local employees to further meet the appetite of the increasingly diversified demand from local consumers.
The past years have witnessed the rapid development of China’s energy drink market. Last year, total sales of energy drinks were about 54 billion yuan, up 10.3 per cent on a yearly basis.
Independent food and beverage analyst Zhu Danpeng said: “The country’s energy drink market has boomed in recent years mainly because more people are pursuing a healthy, high-quality life.”
Zhu said the trend has become more obvious since the epidemic as more consumers are aware of the importance of improving the immune system and strengthening their health.
Saravoot said: “By setting up the new base, TCP hopes to better enhance its marketing and research and development capabilities by better understanding the needs, habits, and preferences of Chinese consumers and to develop products to better meet their particular needs.”
He added that he was hopeful of creating something in China and then introducing it to the world.
In China, TCP has partnered with two local companies – Guangzhou Yao Energy Co Ltd and Pusheng Food Sales Co Ltd to launch two new Red Bull products.
Saravoot said: “Our investment will further strengthen this strategic partnership and we will work closely with our local partners to ensure that our business continues to play a small but important role in supporting the development of the entire Chinese beverage industry.”