By Liu Yu
The memory of "rich soy milk with a long-lasting aftertaste" has yet to fade, but Vitasoy's market presence continues to shrink. Its recently released interim report for 2025 shows a 9% year-on-year decline in the mainland revenue to HK$1.778 billion, with gross profit margin dropping to 51.1%. This marks the third consecutive performance downturn for this legacy beverage company since the 2021 public relations crisis. From being a "national brand in the plant-based milk race" to a "regular on promotions," Vitasoy's struggles reflect not only the long-tail effects of a crisis of trust but also the broader phenomenon of traditional retail being reshaped by e-commerce and legacy brands falling behind.
The Trust Fracture: A Four-Year-Old Wound Undermining the Foundation
The public incident in July 2021 was a "cliff-like turning point" for Vitasoy's mainland business. The brand's controversial stance during a sensitive event triggered criticism from state media, large-scale product removals from shelves, and a fundamental rupture in consumer trust—a rift that evolved from short-term sentiment into a prolonged "consumption boycott."
The data impact was stark: 2022 mainland revenue plummeted 22.77% from its peak of nearly HK$4 billion, resulting in an annual loss of HK$340 million, its first interim loss since listing. Although 2023-2024 saw a meager 0.8% growth, it was more about "stemming the bleeding" than "recovery." The 9% drop in interim revenue for 2025 indicates the brief rebound has been broken.
Changes at the retail level are even more glaring. In Hong Kong supermarkets, Vitasoy beverage products are often sold with "buy-one-get-one-free" or discount bundles. Visits to convenience stores and malls in Guangzhou and Shenzhen reveal that Vitasoy's shelf placement has been moved from prime refrigerated sections to corner shelves, with some community supermarkets removing its displays entirely. This further erodes the brand's premium pricing power, trapping it in a vicious cycle of "the more it promotes, the less premium it becomes."
Sales Channel Collapse: E-commerce Reshapes Retail, Legacy Brands Lose Pace
While the trust wound remains unhealed, the impact of mainland e-commerce on Hong Kong's local retail sector has delivered a "fatal blow" to Vitasoy, striking precisely at its core survival ground. Management acknowledged in the financial report that "the slowdown in traditional retail channels could not be offset by e-commerce channels."
Vitasoy's foundation was its offline "local retail network." However, since early this year, initiatives like Taobao's HK$99 free shipping to Hong Kong and, more recently, its "single-item free shipping," coupled with JD's market entry—acquiring local supermarkets and offering heavy discounts with free doorstep delivery—are fundamentally restructuring local retail logic. Consumers are less reliant on buying drinks from convenience stores or supermarket selections, instead opting to purchase larger quantities through online platforms. Traditional offline channel traffic is being consistently diverted.
More critically, the "price transparency" brought by e-commerce has thrown Vitasoy's distributor system into chaos: online low-priced products undermine offline distributors' profits, leading some regional agents to abandon the brand, further accelerating offline channel contraction. Visits to several pharmacies in Central and Sheung Wan (which often sell low-priced daily goods and snacks) revealed that owners say they source many snacks and drinks from JD due to lower prices than local distributors. While the legality is uncertain, the shadow of cutthroat competition is evident.
#Industry Squeeze: New Players Carve the Pie, Legacy Brands Lack Innovation
Amid the channel collapse, intensifying industry competition is further compressing Vitasoy's breathing room. In the plant-based milk segment, the former "pioneer" has been overtaken: OATLY captures mainland first- and second-tier city markets with its "premium healthy" positioning; giants like Yili and Mengniu leverage nationwide distributor networks to launch affordable oat milk products, directly siphoning Vitasoy's core customer base; even emerging brands like "Daily Fresh" attract quality-conscious consumers with differentiated "cold-pressed fresh" selling points.
In the ready-to-drink tea segment, competition is "hand-to-hand combat": sugar-free tea brands like Master Kong's "Oriental Leaf" and Suntory dominate core fridge spaces in convenience stores; freshly made tea chains like Mixue and Heytea expanding into communities impact sales of Vitasoy's lemon tea with their "freshly made" experience; even traditional carbonated drink brands have launched "low-sugar" versions, further fragmenting the beverage market share.
Vitasoy's product innovation pace has clearly failed to keep up: core products still rely on classic soy milk and lemon tea launched two decades ago. New categories like coconut milk or vanilla soy milk have long development cycles and tepid market response, failing to form new growth curves.
Self-Rescue Quandary: 84-Year-Old Founder "Fights Fires," Transition Efforts Slow and Weak
Facing multiple crises, Vitasoy has attempted self-rescue, but its actions appear "slow and lack focus."
Management turbulence is a primary obstacle: the mainland business head changed twice within four years, culminating in 84-year-old founder Lo Yau-lai personally taking charge. The veteran who once led the brand's expansion from Hong Kong to mainland, growing revenue from HK$800 million to HK$5 billion, now seems unfamiliar with the new consumer market playbook. For instance, attempts to boost sales via "10%-15% price cuts + promotional offers" not only squeeze profit margins but also trap the brand in a "poor value for money" perception. Efforts to expand into membership stores and community group-buying channels also failed to scale due to late entry and insufficient resources.
Cost pressures make self-rescue more passive: in the first half of 2025, sales expenses increased year-on-year while revenue declined, worsening the "revenue without profit growth" contradiction. Meanwhile, rising raw material and logistics costs further squeezed profit margins. The report shows that operating profit growth from "cost-cutting" came more from reduced administrative expenses rather than business recovery signals.
A Warning for Legacy Brands: Hold Hearts, But Also Keep Pace
Vitasoy's predicament reflects the "collective anxiety" of traditional brands in the new era. With declining tolerance for public missteps, accelerating channel evolution, and increasingly diverse consumer demands, relying on "classic products to milk the past" can no longer sustain long-term brand survival.
For Vitasoy to truly break free, a two-step approach may be necessary: First, "rebuild trust"—through clear stance articulation and long-term public welfare actions to regain consumer emotional identification. Second, "adapt to the new market"—accelerate channel digital transformation to keep pace with e-commerce and instant retail, while launching new products aligned with health and functional trends, rather than clinging to "classic flavors."
For all traditional brands, Vitasoy's case serves as a stark warning: in this fast-changing era, "national recognition" is not a talisman. Upholding ethical bottom lines and keeping pace with market evolution are the prerequisites for longevity. After all, even the most established enterprise cannot win in a market that turns against public sentiment and trends.
The views do not necessarily reflect those of DotDotNews.
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