Vitasoy's mainland business slows down, 85-year-old Law Yau-lai is still fighting

Zebra Consumer, Chen Xiaojing

Why has Vitasoy lost its appeal in the mainland China market? Behind this are both external factors such as intensifying industry competition and internal choices made by the company to proactively scale back and adopt a more conservative operational approach.

According to the recently disclosed FY2026 report, the company will no longer increase production capacity and marketing efforts in mainland China, prioritizing cost management instead, and has voluntarily given up on challenging the peak of HKD 5 billion in the mainland market.

This is not because Vitasoy underestimates the mainland market, but rather, in the face of market pressure from competing products like plant-based beverages and fresh milk, it has been forced into a defensive consolidation phase.

For Lo Yau-lai, who has been at the helm for 31 years, the current series of conservative operational adjustments may precisely be aimed at securing a smooth transition window for the family's power handover.

Revenue Shrinks by Nearly 40% in 5 Years

Who is still drinking Vitasoy? If this topic is raised, few might notice that this blue-and-white Tetra Pak soy milk is rarely seen on supermarket and convenience store shelves anymore. With coffee and new-style tea drinks dominating mainstream consumption scenarios, Vitasoy's original audience continues to dwindle.

Recently, 85-year-old Chairman Lo Yau-lai emphasized at the FY2026 (ending March 31, 2026) results briefing that the market competition is fierce, especially in mainland China.

Since he spearheaded the mainland market expansion strategy in 1995, over 31 years, he has witnessed the brand's complete journey from a niche product to the company's growth engine, and then, due to public opinion crises and industry involution, become a drag on performance.

In July 2021, Vitasoy was deeply embroiled in a major public incident, severely damaging its brand reputation. Products were widely removed from shelves nationwide, and the mainland expansion process was put on hold.

This event had a lasting impact. In FY2022 (ending March 31, 2022), the company's mainland China revenue was HKD 3.838 billion, a significant year-on-year decrease of 23.36%, with mainland operating profit at -HKD 340 million. For the full year, profit attributable to equity holders was -HKD 159 million, marking the first loss in 26 years since listing.

At the time, industry insiders predicted that Vitasoy's mainland business could recover within three years, but the market trend has been far weaker than expected.

In FY2026, the company's mainland China market revenue reached HKD 3.189 billion, a year-on-year decrease of 5.17%, accounting for 52.62% of the company's total revenue.

Compared to the peak data in FY2021, mainland market revenue has cumulatively shrunk by 36.32% over five full fiscal years.

Three Rounds of Mainland Team Changes

The continued deceleration of Vitasoy's mainland market is the core practical factor preventing Lo Yau-lai from fully handing over the reins. Over the years, he has repeatedly stated that the mainland is the company's most important strategic market and the core pillar supporting corporate valuation and market capitalization.

In the second half of 2021, when Vitasoy faced a public opinion crisis, the mainland market team led by Zhong Tingyi was inadequate in its response, failing to effectively resolve the brand crisis and stabilize the channel foundation, leading to his early resignation as Mainland CEO.

At the end of 2021, Su Qiang, with a background at Hsu Fu Chi and Mars Wrigley, took over as Mainland CEO, focusing on repairing the operational fluctuations caused by brand damage and channel loss. Since then, Vitasoy's strategy has shifted from scale expansion to loss control.

As a "firefighter," Su Qiang reallocated resources to deepen traditional wholesale and distribution channels. In his first interim period after taking office (March to September 2022), mainland operating profit recorded HKD 139 million, successfully reversing the loss.

However, with intensifying industry competition, Vitasoy's operational pressure has not been substantially alleviated, with the company's overall revenue growing only slightly by 1% during the same period.

Although Su Qiang made partial optimizations in branding, channels, and products, he could not eradicate the long-term negative impact left by the public opinion crisis. Coupled with a continuously weakening consumption environment, long-term recovery seemed hopeless.

In April 2023, Su Qiang voluntarily resigned. In FY2023 (ending March 2023), mainland market revenue reached HKD 3.647 billion, a year-on-year decrease of 6.80%.

After Su Qiang's departure, Vitasoy International did not immediately appoint a new Mainland CEO. Instead, company CEO Lu Bo-tao acted as interim head of mainland operations for nearly a year, observing market trends. It wasn't until April 2024 that Wang Dong, a former senior executive at PepsiCo Greater China, was brought in to lead the mainland segment.

After taking office, Wang Dong continued Su Qiang's strategy of cost reduction and channel optimization, simultaneously launching several new products. However, this still failed to reverse the market's downward trend.

Mainland market revenue for FY2025 and FY2026 was HKD 3.363 billion and HKD 3.189 billion, representing year-on-year growth of 0.12% and -5.17%, respectively.

Creating a Smooth Window of Opportunity

In November 2023, Lo Yau-lai elevated his daughter, Lo Ki-mei, to the position of Vice Chairman, marking a key stage in the power transition. However, over the past three years, the complete power transfer has remained on hold.

Lo Yau-lai continues to steer the company, with the mainland operational strategy fully shifting towards cost reduction, loss control, and revitalizing existing assets. Given the absence of sustained recovery signals in the mainland's fundamental operations, the company is fully implementing a contraction strategy, prioritizing cost control while simultaneously revitalizing fixed assets and reducing various operational expenses.

In December 2025, the company sold land and building assets held by Vitasoy (Shanghai), recognizing a one-time disposal gain of HKD 151 million; in FY2026, the company reduced marketing, sales, and distribution expenses by 3% year-on-year and administrative expenses by 6%, achieving paper profits through cost control and asset monetization.

However, if the gains from asset disposals are excluded, the mainland's regular operating profit remains under pressure, with relatively weak endogenous growth momentum.

Lo Yau-lai personally initiated the mainland market expansion 31 years ago, witnessing Vitasoy International's complete cycle in the mainland from starting from scratch, reaching its peak, and then declining from prosperity.

In the first 20 years, Vitasoy leveraged the 红利 of the differentiated ready-to-drink soy milk 赛道 to achieve leapfrog expansion, making the mainland market the ballast for the company's performance.

The public opinion storm in 2021 severely damaged Vitasoy's brand foundation. Coupled with continuous 跨界 and 挤压 from industry leaders like Yili and Dali, mainland revenue has shrunk year after year.

The long-term 疲软 of the mainland market has significantly increased the difficulty of a smooth family transition. The conservative contraction and asset-lightening strategy Lo Yau-lai is implementing at this stage may be aimed at reducing the operational burden, thereby creating a 平稳 time window for the subsequent handover.