By ZHAO Xiaojuan
On Wednesday, State-owned agricultural company Sanyuan Group said it has acquired the remaining 5 percent of Beijing Allied Faxi, owner of ice cream brand, Baxi. Faxi is now a wholly-owned subsidiary of Sanyuan.
In 2016, Sanyuan Group purchased 90 percent of Allied Faxi for 1.3 billion yuan (US$180 million), to expand ice cream sales. Other dairies Yili and Mengniu were already doing well in the ice cream trade.
Sanyuan had high hopes for Baxi and even issued a forecast for Baxi's performance over the next eight years in 2020. However, between 2020 and 2022, Baxi revenues were about 20 percent short of Sanyuan's sunny projections.
The primary reason is brand positioning. A so-called “premium” brand, Baxi was unable to make new inroads in a busy market.
To avoid souring and melting in the market glare, Baxi has to transform. Sanyuan is committed to Baxi and on September 19, launched an alcoholic product with Gujinggong Liquor, a copycat of the Mengniu and Moutai partnership. But the Baxi collaboration caused barely a store in the market.
Looking ahead, Baxi must diversify its sales channels and expand its product categories to remain competitive.
