Within business strategy, innovation is always considered as a way to change a company’s fortunes as if it were so easy!
In truth, from the list compiled by Nielsen, only 15 out of 24,654 fast-moving consumer goods product launches were marked as “breakthrough” in China.
To be considered breakthrough, three rules were applied.
The product had to:
- Deliver a new proposition rather than a refinement
- Generate significant first year sales
- Sales in months 13-18> sales in months 7-12 > sales in months 1-6
This post examines the full list of 15 items with analysis into what made the innovations successful.
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City Memory Yogurt
After merging with several local companies, the group had a strong but aging consumer base in cities.
The company wanted to target a younger consumer thus discovered what were the important factors to this demographic.
Consumers were very conscious of food safety thus City Memory Yoghurt became the first product in its category to contain zero additives.
With branding, the yoghurt was named to piggyback on a current trend of nostalgia. The bottles were designed to have emotive links to the past and localised for individual cities.
Taste was also adjusted across the country to best match what local people wanted.
City Memory Yoghurt successfully used the company’s strength in value and quality perception with innovative branding to open up huge new areas of demand.
Darlie All Shiny White Charcoal Clean Toothpaste
Parent Company: Colgate-Palmolive
Darlie already had 4 successful whitening products, especially it’s charcoal spiral toothbrush.
It was tapping into growing demand amongst 20-35 women for white teeth for beauty reasons.
They believed there was space for a toothpaste product for teeth whitening. Their main ingredient was charcoal however. Black toothpaste visually is not attractive.
Darlie decided to make the toothpaste two-toned. Part white and part charcoal but innovated to be lighter.
To spread awareness quickly, Darlie bundled the product with their charcoal spiral toothbrush.
Darlie found that 60% of the product users were new. This was great news as the product hadn’t greatly cannibalised existing products.
Colgate 360 Charcoal Toothbrush
Parent Company: Colgate-Palmolive
Darlie is a joint venture between Hawley & Hazel and Colgate-Palmolive. The 360 Charcoal Toothbrush is an example of Colgate mimicking a joint venture in their flagship brand.
For Colgate, this meant keeping all of the revenues. Revenues for the Darlie Spiral Toothbrush would have been shared.
In essence, it is very similar to the Darlie toothbrush. The advantage of the 360 range is that the brush head is engineered to reach all parts of the mouth.
Colgate correctly predicted there was space for multiple charcoal toothbrush options in the growing teeth whitening market.
Goo.N Ve nappies
Goo.n is a Japanese diaper brand who wanted to tap into the Chinese market.
They first thought Chinese mothers were more concerned with cost than diaper quality. They initially thought they would enter at mid-market level.
However, their consumer research paid dividends. They visited surveyed 100 mothers in depth.
Generally, quality was important! Chinese mothers trusted Japanese imports more than Chinese brands.
Goo.n were simply repackaged diapers from the Japanese market.
Public awareness of the benefits of diapers was low. Only 40% babies wore diapers. Concerns about breathability and sensitive skin were often cited.
Goo.n highlighted that their diapers did not suffer from these issues.
They earned great public goodwill and awareness by cooperating with local governments to teach baby care techniques to mothers.
Haizhiyan Sea Salt Lemon Water
Parent Company: Ningbo Haizhiyan International Trading Co.
Haizhiyan believed they had spotted a gap in the market between juice and water.
When designing the product, two factors came into play:
- Beverages that were too sweet were being rejected by health conscious first-tier city consumers.
- Japanese salty drinks were becoming very popular
The product idea was to create a carbonated salty drink. An exclusive deal with a Mediterranean supplier meant they could use real sea salt.
The branding was simple and used ocean themes to imply naturalness. They invested in a new labelling machine to ensure the bottle turned out exactly how they wanted it.
One critical part of their success was charging 5 RMB per bottle which meant retailers could make good margins. This aligned the retailers’ sales priorities with Haizhiyan Sea Salt Lemon Water.
Even without advertising the bottle sold out at first. Production was ramped up to meet demand. By August 2014, there had been 1 bn RMB sales!
Suntory Lemon Water
This product filled a gap very similar to Haizhiyan Sea Salt Lemon Water.
Like Haizhiyan, Suntory is a Japanese brand. This meant it was perceived as higher quality by Chinese consumers.
The drink was designed to be strong on health credentials. Chinese consumers wanted a refreshing drink that didn’t rely on chemicals and artificial flavourings.
Parent Company: Jiangzhong Pharmaceutical Co
The biscuit market in China is now worth $27bn.
Jiangzhong had an interesting concept to compete a new sub category.
Nearly 30% of Chinese people suffer from some form of gastritis. Hericiumerinaceus is a traditional herb that is used to soothe the stomach.
Hougu biscuits contain Hericiumerinaceus and are marketed as stomach nourishment.
The claim is seen as reliable as it comes from a pharmaceutical company.
This innovation is very clever. It taps into a real health issue and an unexplored area of the booming biscuit market.
Kinder Joy Girl and Boy
Parent Company: Ferrero
Kinder Joy is a product that was rolled out by Ferrero across the world.
It’s a unique concept of fun in a child’s snack.
The egg shape container has two halves. One side has milky cream and cocoa cream with two crispy wafer balls. The second side has a toy.
Ferrero created two sub products. One for boys and one for girls.
In some parts of the west, this created controversy. Some parents complained that toys should not be gender exclusive.
In China, this was a major success. The innovation of the toy and creamy snack made it a favourite with children. Many parents here were less concerned by stereotypes.
Liby Delicate Care Laundry Detergent Liquid
Parent company: Guangzhou Liby Enterprise Group Co
Guangzhou Liby were the first movers in the Chinese detergent market.
Liby Delicate Care Laundry Detergent Liquid was the first major liquid detergent in China. Liquid detergents were
The product cleansed but also took care of the fabric. The detergent was easy to rinse and made from coconut oil. This met customer demands and convinced them to switch.
Liby solely sponsored the TV show “I am singer”. This gave the product nationwide exposure rapidly.
Nivea Men Hydrating Water Burst System
Parent Company: Beiersdorf AG
Nivea were doing well in China but they weren’t satisfied with their Men’s range.
From experience in Europe, they looked for opportunities. Chinese men were much less attentive in aftershave care than European men.
Only 50% men moisturise daily. 40% thought it was needless. 30% men didn’t use lotion because it left their face feeling sticky.
This final group was an opening. Nivea’s challenge was to create lotion that could convert them.
Nivea invested in R&D. Their innovation created a lotion that had a water-like texture but hydrated skin.
Nivea imported the bottle design from a niche product in their German line. It satisfied all their needs and saved time and effort.
The name of the product is a handful so it was nicknamed “The Little Blue Bottle”.
A little known actor played a big part in their success. Nivea chose Ryan Zhang to represent the brand who was due to appear in a reality show. The show took off and Nivea now had one of the most popular male television stars backing them!
Mr Muscle All Purpose Gel Cleaner
Parent Company: SC Johnson
This product thrived mainly due to consumer perception that it is a reliable solution. In part this is due to being an international, well-known brand.
The focus is on the degreasing effect. This means it stays on services and stops grease sticking.
As Chinese food can often make use of oil, this was an issue facing many households.
Parent Company: Mondalez
Mondalez wanted to expand its consumer base in China. In the USA, a heavier version of the biscuit called “Double Stuff” was very popular.
Consumer research in China showed the opposite would be popular. Chinese consumers preferred lighter snacks.
Traditional Oreo is a warm brand aimed at children and their parents. The lighter snack was aimed at young women.
Innovation with the product itself was initially easy. The cream from the middle was reduced making small biscuits.
However, to stand out in their target market, Mondalez tested many flavours. They settled on Lemon Cheesecake, Tiramisu and Vanilla Mouse. These were all exotic to China and gave the products sophistication.
Once the product was launched, it was a hit with young women. Pleasantly, it was popular across a much broader base.
Whisked Milk Tea
Parent Company: Nongfu Spring
Nongfu Spring had a very strong reputation for bottled water in China. Consumers viewed them as environmentally friendly and believed they had traditional values.
To expand, they spotted a gap in the tea market. Most teas were sold without milk and people ad to add milk themselves afterwards.
Nongfu Spring took time to research consumer preferences. They found the product was best suited to young, modern consumers who wanted a quick but healthy hot drink.
Part of the innovation was the packaging. The bottle design stands out and is based on a special bamboo tool that is used to give superior taste.
Nongfu Spring plugged the gap in the market and clever packaging drew consumers in.
Schwarzkopf Fresh Light Waterlily Moisture Shampoo
Parent Company: Henkel
In this case, the product itself was not particularly innovative.
The reason behind the success was because of the marketing.
Schwarzkopf, after consumer research, used the principle of consumers being young at heart.
They secured a tie up with the popular Blythe doll collection. This gave them instant recognition on the shelf.
The dolls were also used heavily in advertising. Pop up cafes were set up were customers could take selfies with the dolls and learn about the shampoo.
There were 3 main sub products. Each was linked to a Blythe doll. This meant consumers could connect at a more personal level with the product.
Parent Company: Unicharm
This product was created with real consumer needs driving the innovation.
Sofy Shorts are functional shorts with a slim sanitary pad. Unicharm listened to women and specialised the product to meet their specific needs. For example, a super absorbent pad for overnight loads.
There was nothing like it on the market.
Unicharm is a Japanese company. As such Sofy shorts benefitted from Chinese perceptions of quality.
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