China's 'Minjok Brand' Tianfu Cola Bankrupt... Overshadowed by Coca-Cola and Pepsi

[Asia Economy Beijing=Special Correspondent Kim Hyunjung] Tianfu (天府) Cola, the first domestically produced cola manufacturer in China, has gone bankrupt. Despite the recent surge of 'national brand' enthusiasm in China, it could not survive and lost market share to famous brands such as Coca-Cola and Pepsi.

According to local media including Guangming Daily (光明日?) on the 4th, China's beverage giant Tianfu Cola was declared bankrupt by the Chongqing court on December 29 last year. Tianfu Cola was a carbonated beverage company mainly distributing products in the southwestern region of China and was one of the national enterprises that first produced cola domestically in 1986 using traditional Chinese medicine ingredients such as the root of white peony.

Various carbonated beverage products of Tianfu Cola. (Photo source= Weibo)

In 1988, the number of manufacturing plants surged to 108, and Tianfu Cola's market share in the Chinese cola market soared to 75%. The company rapidly grew, even establishing a branch in the World Trade Center building in the United States. At that time, annual sales reached 70 million yuan (approximately 12.9248 billion KRW), operating profit was 10 million yuan, and corporate assets amounted to 100 million yuan. However, after establishing a joint venture with Pepsi in 1994 (Chongqing Pepsi Tianfu) and developing business, sales of the 'Tianfu Cola' brand products began to sharply decline. According to Chinese local media, Pepsi failed to fulfill the initial contract to maintain Tianfu brand production at about 50% of total production and instead gradually reduced it, causing it to plummet to 1% by 2005.

However, in 2008, Tianfu Cola took legal action demanding that Pepsi return ownership of manufacturing methods, and won the court ruling in 2010, regaining the trademark. The brand seemed to revive in 2016, but it was no match for the offensives of global brands like Coca-Cola and Pepsi. Due to lack of demand, Tianfu Cola products are hardly handled even in restaurants within China. Ultimately, with declining recognition and plummeting sales leading to accumulated deficits, the 'first domestic cola' brand disappeared into history.

Guangming Daily explained, "Tianfu Cola faced difficulties due to pressure from famous foreign brands in China's carbonated beverage market," adding, "Although it attracted consumers' attention with nostalgia when the brand returned in the past, after a brief trend ended, it became difficult to compete in the market."