Digital consumer goods group Dongfang Honghu announced the completion of a tens of millions of dollars Series A funding round, with Source Code Capital as the sole investor.

源码资本·February 23, 2022·0·0

Digital consumer goods group Dongfang Honghu announced today that it has completed a Series A funding round of tens of millions of US dollars. The round was led exclusively by Source Code Capital, with LightSource Capital serving as the exclusive financial advisor.

Digital consumer goods group Eastern Swan announced today that it has completed a Series A financing round of tens of millions of dollars, with Source Code Capital as the sole investor and LightSource Capital serving as the exclusive financial advisor.

This marks Eastern Swan's latest funding round following its announcement in January this year that it had completed a hundred-million-yuan angel round from ByteDance. The company has now secured investments from both ByteDance and Source Code Capital in rapid succession, as it works to reshape the soft drink market through digital capabilities.

Following this round, Eastern Swan will accelerate product R&D, brand building, channel expansion, and the development of its digital infrastructure to further penetrate the market, advance user operations, and strengthen its team. As a digital consumer goods group, Eastern Swan's portfolio includes Wanglaoji Black Herbal Tea — a hit product co-developed with Wanglaoji — as well as Nezha Sparkling Water, a new brand launched last September that marked the company's formal entry into the sparkling water category.

Eastern Swan's two flagship brands: Wanglaoji Black Herbal Tea and Nezha Sparkling Water

"The convergence of internet and beverage industries will spark something new," said Tang Xiaotong, founder and CEO of Eastern Swan. "We aim to use digital technology to achieve comprehensive upgrades across production, distribution, brand marketing, and organizational efficiency — raising the bar for the entire industry."

As a board member of Eastern Swan, Li Lulin of Source Code Capital commented: "Our team was immediately struck by the innovative 'dare to be first' spirit burning within Mr. Tang Xiaotong when we first met him. Subsequent conversations only deepened our admiration for his resilience — that 'there will be a time to ride the wind and cleave the waves' determination — which resonates with the entrepreneurial spirit we champion at Source Code. Eastern Swan currently operates two beverage brands: Wanglaoji Black Herbal Tea and Nezha Sparkling Water. Behind their strong product competitiveness lies an end-to-end digital solution, building digital infrastructure as its foundation and efficiency as its core, committed to enhancing value for all participants across the entire industry chain. We look forward to technological innovation driving the emergence of more and better digital brands in China."

Wanglaoji Black Herbal Tea + Nezha Sparkling Water

Accelerating the Health-Conscious Beverage Trend

In recent years, consumer demand for beverages has grown increasingly diverse. According to a report from CICC, "multi-dimensional taste, health upgrades, and emotional resonance" have emerged as three major new trends. Sparkling water, one of the hottest segments in the beverage market, is expected to maintain high growth of nearly 30% annually. As the core demographic driving beverage consumption, young consumers — particularly Gen Z — pursue "zero sugar, zero calories, zero fat" healthy drinks without sacrificing the fizzy satisfaction of carbonated beverages.

Following the rapid success of Wanglaoji Black Herbal Tea, co-developed with Wanglaoji, Eastern Swan launched its new brand Nezha Sparkling Water in September 2021, achieving fast growth by co-creating products with consumers that deliver an exceptional experience. Tang Xiaotong believes that as consumer demand for healthier products increases, Nezha Sparkling Water will further tap into the deeper needs underlying category-wide trends.

Based on consumer feedback, Nezha's product development team conducted extensive testing to continuously optimize carbonation levels, enhancing both the immediate mouthfeel and the product's superior bubble retention. The brand also redesigned its bottle shape and increased bottle weight to better seal in the carbonation.

Nezha Sparkling Water's user profile concentrates among young consumers aged 18 to 30. While delivering exceptional products, Nezha's distinctive brand personality has also forged stronger connections with consumers. Tang Xiaotong noted that refusing to concede defeat, fearing no challenge, and going all-in for one's passions are traits young people aspire to — and exactly the spirit Nezha Sparkling Water aims to convey. The inherently powerful image of Nezha represents the brand's confidence in facing both domestic and international competition.

End-to-End Digital Transformation Raising Industry Efficiency Standards

As a serial entrepreneur from the internet industry, Tang Xiaotong believes the convergence of internet and beverage industries will spark something new. For instance, Eastern Swan has developed a "multi-code integration" technology that creates unique QR codes for every case and bottle, enabling end-to-end digital visibility across production, distribution, branding, and organizational efficiency through backend code-to-code associations.

Leveraging this technology, Eastern Swan has built a direct communication channel to consumers, enabling interactive engagement and precision digital marketing. At the distribution level, consumer scanning enables logistics visibility, allowing every product to be tracked and managed throughout circulation — significantly improving channel operations and management efficiency while solving the longstanding pain point of product flow management in traditional FMCG.

Additionally, the "multi-code integration" technology facilitates efficient capture of terminal sales data feedback, enabling precise user profiling that supports product R&D and upgrades, brand services, and improved customer satisfaction.

Tang Xiaotong indicated that Eastern Swan will continue accelerating the implementation of its end-to-end digital model, iterating solutions continuously to deliver better products responsive to consumer needs.

Starting from digitally transforming traditional industries, combined with a team committed to identifying and meeting deep consumer needs while continuously refining and upgrading products, Eastern Swan has become one of the rare emerging companies in the soft drink space to simultaneously win backing from traditional beverage enterprises, internet giants, and top-tier investment institutions — even as competition in sparkling water intensifies.

Going forward, Eastern Swan aims to build a next-generation "healthy beverages x consumer tech" group, continuously meeting consumer health needs while becoming foundational infrastructure that supports the development of beverages and the broader FMCG industry.