Pepsi China’s sole proprietorship accelerates without exception

On January 10, a news about the sale of PepsiCo shares was announced. Beijing Yiguang Holding Co., Ltd. plans to transfer a 15% stake in Beijing Pepsi Cola Beverage Co., Ltd., which is owned by the company. The reason for its transfer is that it is at a loss year-round. The listed sale price is 73 million yuan. The industry agrees that the transferee is PepsiCo China. The possibility is greater.

The "Investment Analysis and Forecast Report of China's Beverage Industry 2010-2015" released by China Investment Advisors shows that in recent years, PepsiCo has recovered several equity joint ventures in Fujian, Sichuan and Shenzhen. In December 2006, PepsiCo China transferred 10% of Shenzhen PepsiCo held by Shenshenbao. In November 2008, PepsiCo China took back 64.1% of the shares of Fuzhou Pepsi Cola Beverage Co., Ltd. held by Huasheng Group. PepsiCo is also wholly acquired by PepsiCo China.

In the 1980s, PepsiCo entered China. After more than 20 years of rapid development, Pepsi has now established a high brand image in the hearts of Chinese consumers. Zhang Yanlin, research director of China Investment Consulting, pointed out that in the carbonated beverage market, Pepsi is ranked second in the industry with a market share of about 45%, second only to Coca-Cola; in the fruit juice beverage market, PepsiCo is also the industry leader with a market share of around 8%. The fourth position, that is, Pepsi has already established a foothold in China.

Zhou Sianran, a food industry researcher at China Investment Advisors, pointed out that China’s growing consumer market and potential consumer groups have provided enormous potential for the future development of PepsiCo. At this stage, PepsiCo’s performance in the Chinese beverage market is also regarded as remarkable. Why did Chinese shareholders lose money and transfer shares? In fact, the reason why PepsiCo China's bottling plant joint ventures have low margins is because they do not have the right to speak about the price of concentrates. The joint venture is completely unaware of the formula and process of the concentrate and can only passively accept the concentrate provided by PepsiCo. This also means that the price of the concentrate has a very large impact on its profitability.

PepsiCo China is the final transferee in several equity transfers. This phenomenon also allows industry insiders to determine that PepsiCo China will also be the transferee for a 15% stake in Beijing PepsiCo. Initially, foreign brands entered China through joint ventures, using modern management techniques that they excelled at, supplemented by China’s perception of the local market, and quickly opened the Chinese market. With the lifting of the ban on China’s policies, foreign investors gradually withdrew their shareholdings to become monopolized. The phenomenon is already very common. In fact, due to the large differences in business concepts and business models between China and foreign companies, there are often many kinds of conflicts that cannot be reconciled during the process of joint ventures. It is difficult to maintain joint ventures, and it is understandable that foreign capital is going to be solely funded. .