Written by Grace Mou, Senior Client Consultant @ The Silk Initiative
This week at The Silk Initiative (TSI), we share some insights that reveal how brands can stay ahead of the curve in the face of stiff competition to be the “latest and greatest” product on Chinese supermarket shelves.
In some of our focus groups, when speaking to the same category consumers again a year later, we have found that products which they rated as their top choices previously, today they consider only average. This shows how Chinese consumers’ standards have become much higher when it comes to what they like to buy and why, and brands that don’t move fast enough may suddenly find themselves yesterday’s choice.
We saw this happen in Shanghai with Bright Dairy, a Chinese company, who launched their Momchilovtsi yoghurt drink in China in 2010, and gained success by addressing consumers’ quality concerns by highlighting the healthy bacterial ingredients they had imported from Bulgaria. Momchilovtsi took the market by storm, with boxes flying off the shelves so fast that stores could hardly keep up.
Momchilovtsi yoghurt product displays in China around the time of their launch in 2010 [L], and today [R]
But after the luster of the launch wore off, and Bright neglected to innovate, consumers no longer flocked to buy their product and sales fell. Today in an attempt to regain some of the market share, Bright is relaunching Momchilovtsi with a new product containing fruits and vegetables.
So what makes a product appealing enough?
In our recent work for a dairy client, we were engaged to help them find out how best to go about introducing a new product into a category that is growing fast and already full of competition. We found that making new claims about the product’s benefits is not enough anymore. With an abundance of choice and previous exposure to this type of product, Chinese consumers are already well-educated and aware of the range of health and functional benefits and hence, claims of this nature no longer register on the “what makes me want to try it” scale.
However, one way of registering on this scale is by being creative with the design of packaging. General Mills, for example, invested heavily in the Shanghai launch of Yoplait, and their new take on packaging design has proven extremely popular in the premium yoghurt space. Yoplait did so well after the Shanghai launch, that General Mills has already launched Yoplait ahead of schedule in Beijing this year.
In our work with a breakfast product company, it became clear that you can’t rewrite the occasion and change consumers’ existing behaviors. However, entering the market with the launch of new flavors, or unique ingredients can capture consumers’ attention and drive purchase.
Similarly, in another recent project, we tested different beverage flavors on consumers and found that they were drawn most to the flavor that took its name from an ingredient that was unique – a fruit not native to China. Despite the fact that the flavor didn’t have a pre-existing Chinese translation, and the English name for it was one that Chinese speakers find really difficult to pronounce, it came out on top as the more appealing flavor choice. Moreover, the flavor in question triumphed with consumers because it combined a totally new and innovative flavor with functional benefit.
3 ways products can stay ahead of the curve
We are seeing that Chinese consumers are more demanding and no longer easily impressed. Their tastes, preferences and behaviors today are more sophisticated and more educated than ever before. Unless you are launching a totally new category of product, with benefits new to science, you’re better off investing in innovation in other areas.
Consider instead, how a new name, a new flavor or new packaging might make your product appeal more and cut through the noise. Particularly for brands whose products have already been in the market for some time, this kind of strategy could be a way to keep things fresh in the minds of the consumer and regenerate product appeal once the “flavor of the month” excitement of the launch has waned.
Brands that can launch with a product that combines new flavor and new functional benefit will surely have a winning formula on their hands. Take, for example, the boom in light flavor beverages over the past two years in China. These light and fresh tasting beverages offer the healthier benefits of post-exercise rehydration and less caffeine with innovative flavors such as coconut, mango and berry concoctions.
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