Recently, major brands' financial reports for the first half of 2025 have been released one after another, and the domestic dairy industry has both good and bad luck.
Two of the leading companies, Yili achieved revenue of 61.933 billion, a year-on-year increase of 3.37%, while Mengniu's revenue in the same period was 41.567 billion, a year-on-year decrease of 6.9%.
It seems that Yili is better, but compared to Mengniu, Li Ziyuan, who is known as the "first sweet milk stock", may be in a more dangerous situation.
Data shows that in the first half of 2025, Li Ziyuan achieved revenue of 621 million yuan, a year-on-year decrease of 8.5%, and net profit of about 96.12 million yuan, a slight increase of 1% year-on-year, of which the revenue of milk-containing beverages accounted for more than 93%.
Looking back at Li Ziyuan's annual report data from 2021 to 2024, its annual revenue has remained at around 1.4 billion, with slow growth.
This year, the situation in the first half of the year is no longer optimistic.
With the public's health awareness increasing and competition is becoming increasingly fierce, Li Ziyuan, which focuses on "spicy sweet milk" as its main product, is falling into a growth bottleneck.
In the future, it will not be easy for Li Ziyuan to make a fortune.
Li Ziyuan was founded in 1994 and its founder is Li Guoping, who is in his thirties.
When talking about the name "Li Ziyuan", when Li Guoping was on a business trip in Shanghai, he was attracted by a street sign with the words "Li Ziyuan".
The three words contain his surname and seem to be a guide in the dark, so he used these three words to name the company he founded.
In 1994, Yili had just been established for a year, and Mengniu's predecessor was not founded five years later in 1999.
Li Ziyuan, in its early days, made every effort to create sweet milk drinks. Why can only be called "drinks", because in the ingredients list of this sweet milk, the ones in front are drinking water, milk powder and white sugar, that is, sugar water and milk powder.
Sweet milk drinks, both at that time and now, are cheaper than pure milk, especially at that time, and are more likely to enter ordinary people.
More importantly, sweet milk products were new in those days. The emergence of sweet milk in Liziyuan made consumers feel very fresh.
Of course, choosing to make sweet milk products back then was also closely related to the development trend of the entire industry at that time.
Li Guoping, who had been deeply engaged in the dairy industry for many years before founding Li Ziyuan, knew very well that the entire industry was restricted by the lack of raw milk supply and the lack of fresh preservation technology at that time.
It is precisely because Li Guoping chose sweet milk products that these two bottlenecks had no impact on him at all.
Li Guoping is also unambiguous in marketing.
He knew the importance of brand promotion, so he invited stars such as Fan Bingbing and Ruby Lin to endorse Li Ziyuan as early as 2002.
Li Ziyuan's fame quickly became popular, and its sales soared to 430 million in 2003.
Not only that, Li Ziyuan takes a unique approach and seizes the breakfast shop channel.
Especially in Jiangsu, Zhejiang and Shanghai areas, some netizens recalled: "In my childhood memory, at the breakfast stall in Wenzhou, Zhejiang, one pot cooks tea eggs, and the other pot warms the plum garden."
In this way, with a trump card product, star effect, and unique sales channels, Li Ziyuan quickly occupied the market that year.
Li Ziyuan was satisfied with this, and by 2007, its sales had exceeded 500 million.
However, in 2008, the melamine incident suffered a heavy blow to the entire industry.
Even if only milk powder was present in the ingredient list of Li Ziyuan, it was not spared, and Li Ziyuan's sales fell from more than 500 million to 200 million.
In order to pay the salary, Li Guoping sold the villa without hesitation. By 2011, the market finally improved, and Li Ziyuan fought a turnaround.
In the channel, Li Ziyuan continues to deepen its efforts in terminal places such as breakfast stalls, convenience stores, and canteens.
In the region, in addition to Jiangsu, Zhejiang and Shanghai, he also sold his products to central and southwest China, and built his production base in Jiangxi, Yunnan and other places.
At the same time, Li Ziyuan invested in research and development and launched new products. In 2018 alone, 18 new products were launched, with revenue increasing by 30.73%.
In this way, Li Ziyuan gradually got out of the trough.
Subsequently, in 2018, Li Ziyuan received 73 million yuan of capital injection from Moutai, which was called "Dairy Moutai". Moutai also became Li Ziyuan's second largest shareholder.
Immediately afterwards, Li Ziyuan reached the peak of its development history.
In February 2021, Li Ziyuan was successfully listed on the Shanghai Stock Exchange.
This is also the origin of the "first sweet milk stock". After its listing, its total market value exceeded 14.7 billion in June 2021.
However, judging from revenue data, Li Ziyuan has never seen a significant increase again after it went public at 1.47 billion in 2021.
After all the time, when it comes to plum gardens, consumers seem to only know sweet milk. The data also confirms this, and 95% of Li Ziyuan's revenue comes from the sweet milk series products.
According to Li Ziyuan's statement, this is their big single product strategy, and the founder Li Guoping is practicing his original intention: to do only one thing in his life and make this bottle of milk well.
But, success is sweet milk, failure is sweet milk.
As a veteran enterprise with a history of more than 30 years, Li Ziyuan seemed to have smelled something wrong and took a series of measures.
First is personnel changes.
"Crown Prince" Li Bosheng joined Li Ziyuan in 2021, responsible for e-commerce and supply chain business.
E-commerce was in full swing in the domestic market at that time, but Li Ziyuan did not seize this wave of dividends at the beginning.
This situation has improved with the addition of Li Bosheng.
The 2024 annual report shows that Liziyuan's e-commerce revenue was 76 million yuan, a year-on-year increase of 90.46%, with a strong growth. Among them, live streaming platforms have undoubtedly become a new growth point.
At the end of 2024, Li Bosheng officially took over the position of general manager of the group.
Since then, he has made drastic efforts to implement the "younger + healthier" strategy, including continuing to plan e-commerce and changing Cheng Yi as the spokesperson.
However, for Li Ziyuan, products are always the key.
After all, the market is changing, and consumers are changing. It is difficult for the market to respond enthusiastically, which is always single.
Learn deeper the reason behind it, the first thing is that there are more competitors in the sweet milk field on the market.
More importantly, consumers' awareness of healthy diet is getting stronger and stronger, especially the rise of the "anti-sugar" trend, which puts "sweet" in an embarrassing situation.
Under this background, Li Ziyuan has also frequently launched new products.
In 2022, the zero-fat lactic acid bacteria beverage was launched; in 2023, the sucrose-free sweet milk and oat milk were developed; in 2024, the bubble milk flavored beverage was launched, and the plant-based protein beverage was launched; in 2025, the AD calcium milk and vitamin water were launched, and even the milk powder was targeted.
However, none of these new products have established a foothold in the market, but instead give people a feeling of "following the crowd".
It is not difficult to see that Li Ziyuan is trying to change the current situation of over-reliance on a single product.
But blind obedience cannot win the market. If Li Ziyuan cannot grasp the market demand and just follow the trend, it will inevitably be difficult to gain market recognition.
Of course, Li Ziyuan is also trying to take the pulse of the market and explore new ways out.
Public information shows that Li Ziyuan has invested a deep processing project for raw milk processing per day in Ningxia, covering almost most types of dairy products, and is expected to be completed and put into production by the end of 2025.
Investing in the construction of such a new project in Ningxia milk source can not only reduce costs but also lay out diversified products.
Actively reduce costs and increase efficiency, and enrich product types, which is also the response made by Li Ziyuan to cope with market competition.
Whether it is in the dairy industry or the beverage industry, the intensity of competition is self-evident.
Li Ziyuan's new leader invests in new projects and opens up new channels. It is obvious that he is no longer satisfied with "staying his business". After all, the strategy of "eat everything with one trick" has long been impossible.
But Li Ziyuan still needs to do a lot to go further and better and recreate the glory of that year.
-END-
Reference:
1. Company research notes: "Li Ziyuan (605337) Fundamental analysis: Finding a balance between tradition and innovation"
2.36Kr: "7 Zhejiang people, supporting half of the sky in Chinese drinks"
3. Dairy Times: "Sweet milk can't be sold anymore, and the diversified transformation of Li Ziyuan is questioned again"
Author: Wutong
Editor: Liu Ye Taotao
