---
title: "A Nearly Vanished Domestic Skincare Brand Achieved 15.9 Billion Yuan in Sales in 17 Years!"
description: "An 80-year-old domestic skincare brand, once on the verge of disappearing, has successfully revived by first targeting middle-aged consumers through supermarket channels, then expanding to younger demographics with innovative marketing. By 2017, its annual sales reached 15.9 billion yuan, making it a leader among domestic brands."
author: "KTzhou"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-03-12"
language: "en"
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# A Nearly Vanished Domestic Skincare Brand Achieved 15.9 Billion Yuan in Sales in 17 Years!

> An 80-year-old domestic skincare brand, once on the verge of disappearing, has successfully revived by first targeting middle-aged consumers through supermarket channels, then expanding to younger demographics with innovative marketing. By 2017, its annual sales reached 15.9 billion yuan, making it a leader among domestic brands.

> **Can an old domestic brand successfully revive, and even break with tradition by expanding from middle-aged to younger consumers? Wouldn't you find that interesting?**

Yesterday, I happened to notice that Local Climate had created another one-shot long image for Pechoin, but this time it didn't go viral on social media or get actively covered by marketing media. That said, every time I see a Pechoin ad, it sparks my curiosity.

**How did this brand become so popular?**

An 80-year-old brand, once nearly extinct in the domestic skincare market, saw its annual sales multiply sixfold in three years. By 2015, annual sales reached 10.8 billion yuan, and it even became the champion in the beauty and skincare category on Tmall's Double 11 that year. By 2017, it surged to 17.7 billion yuan, firmly leading domestic brands.

Moreover, its brand expansion path defied tradition. Before 2015, it focused on winning over mothers, then later targeted younger consumers. This upward rather than downward approach carries significant risk, as it could easily make the brand seem outdated to younger audiences, especially given its already vintage image.

> I've tried to sort out the entire brand revival process from overall brand positioning to communication strategy, and from the perspective of how actual audiences perceive it. Let me throw out some conclusions first:
>
> * First, focus on building brand awareness while creating ample room for the brand to be inclusive. Don't let the brand be directly associated with user groups that are easily labeled as aging;
> * Create independent product lines and awareness-to-purchase paths for different user groups, thereby distinguishing users and mitigating negative influences between them;
> * Finally, find emotional connection points that resonate with consumers, enhance brand reputation, and build long-term brand barriers.

Let's start from the beginning.

Pechoin's brand rebuilding strictly began in 2008. Before that, its situation was quite tough: it had just been restructured into a private enterprise but was still constrained by the previous state-owned system. It was besieged by countless foreign brands and domestic skincare brands established around 2000, with no competitiveness in product, brand, or channel.

**Around 2008, Pechoin first discovered a huge channel opportunity.**

Supermarket entry fees had always been high, and the supermarket channel tended to give brands a cheap and negative impression. So at that time, apart from Sasyun, local skincare brands generally avoided supermarkets, using specialty stores as their main sales channel. Despite seeming fierce competition, supermarkets were basically a blank space. Pechoin chose to seize this opportunity and quickly covered it.

In 2008, Pechoin's sales in Wuhan alone increased tenfold, from 700,000 yuan annually to over 7 million. By 2013, Pechoin had nearly 400 distributors nationwide and entered about 3,000 supermarket outlets.

The supermarket opportunity determined the characteristics of the consumer group that needed to be won over first and that could contribute sales first.

They were neither the young group heavily reliant on the internet nor middle-class consumers who are brand-sensitive but price-insensitive. Instead, they were users willing to choose skincare brands while shopping in supermarkets. They were generally older and more price-sensitive than brand-loyal.

> Should one first clearly describe the target audience and then decide on channels and brand strategy, or, like Pechoin, first decide which channel to focus on and then determine the consumer type to acquire first?
>
> Personally, I think it should be determined by team strengths. Internet companies often choose the former because they are better at building brand and product differentiation. But traditional enterprises face more homogeneous product competition, making channels particularly important and often their first accumulated capability.

**So, facing such a group of consumers, the challenges for brand positioning and communication were:**

* How to quickly improve purchase conversion in supermarket channels and restore Pechoin's market share as soon as possible;
* At the same time, ensure the brand is not only associated with mothers in supermarkets, but has the opportunity to attract younger students, white-collar workers, and even middle-class consumers with stronger economic power in the future.

First, build a weak impression on mothers to generate consumption.

In 2008, Pechoin launched a new herbal essence series as product support, and in 2010 officially established its new positioning—herbal skincare, natural and non-irritating. This positioning ran through almost all subsequent product lines, becoming Pechoin's brand positioning rather than a single product line positioning.

The benefits of this positioning are clear:

* Herbal Chinese medicine is a unique functional point of China, easily differentiating from foreign brands;
* "Herbal safe skincare" is a purely functional positioning. It is inclusive, suitable for all age groups, and can cover all skincare functions: moisturizing, acne treatment, anti-aging...

But it also has a very obvious disadvantage: **homogeneous competition with all domestic skincare brands at the time.** Just glance at the packaging of Pechoin, Sasyun, and Herborist as shown below.

After that, Pechoin did two things.

In 2010, Pechoin invited Karen Mok as brand spokesperson, shot several very conventional TVCs, and placed them on CCTV and top provincial channels' prime-time variety shows, including "The Voice of China," "Super Girl," "Happy Camp," "If You Are the One," etc.

The biggest move was securing the special sponsorship for four consecutive seasons of "The Voice of China" starting in 2012. In 2011, Pechoin's annual marketing expenses were 150 million yuan, rising to 600 million by 2015.

The second thing was in March 2013, when Pechoin was given as one of the national gifts to the Tanzania Women and Development Foundation.

This sparked huge discussion and basically boosted goodwill nationwide. It further labeled Pechoin as the first domestic brand in perception. Even if sales weren't the highest, people were more likely to think of Pechoin first when thinking of domestic skincare.

Baidu Index changes for several brands from 2013 to 2017

At this point, we can separate the cognitive paths of supermarket shoppers (mainly mothers) and younger non-supermarket shoppers:

* Karen Mok, "The Voice of China," and the national gift event all seemed consistent with mothers, though they created a weak impression of "Pechoin herbal skincare, safe and non-irritating," but the volume exceeded other domestic competitors. Combined with good supermarket coverage, when they saw Pechoin while shopping, it reawakened brand impression, effectively boosting offline purchase conversion;
* Non-supermarket users also had a weak impression, gaining presence without strong likes or dislikes.

This strategy also had a big problem: it was really expensive. As mentioned, Pechoin's marketing expenses were 150 million in 2011 and 600 million in 2015. Because the impression was weak, all communications were hard to spread secondarily at the consumer level.

But from the final sales data, Pechoin's annual sales were 1.8 billion in 2012 and 10.8 billion in 2015, with marketing expenses as a percentage actually decreasing year by year. Overall, for achieving business goals, it was absolutely well thought out.

This part of communication has continued to this day. In 2016, Pechoin found Jay Chou and Li Bingbing as brand spokespersons, and the ads were even more... eye-searing...

In 2015, the year it first won the Tmall Double 11 beauty category sales championship and the last year it sponsored "The Voice of China," Pechoin did three other things: launched the Sansenghua series targeting young consumers and pushed the specialty store channel; entered the WeChat business channel; and conducted nationwide university ground promotions.

Pechoin began to improve its purchase channels for young groups.

**Then build a strong impression on young people and generate word-of-mouth**

Entering 2016, Pechoin grabbed the attention of the entire marketing world with a series of very "un-Pechoin" communications. Let's quickly look at a few representative campaigns and the core messages they intended to convey.

First were the viral videos shot for Tmall Double 11 discount promotions for two consecutive years. They make you laugh every time. Compared to the more familiar "Four Beauties Not Happy," I prefer the 2017 one: as the saying goes, if grandma runs fast, there must be something strange... hahaha...

2017: As the saying goes | Tencent Video views 900,000

In May 2017, the most famous one-shot long image. Although it focused on anti-aging, it chose Mother's Day, still an ad made for young people:

And various viral videos for different product lines mainly explaining core functions, all of excellent quality compared to similar product ads. Including Pechoin Elastic Beauty, Pechoin Beauty Moments... you can search for them yourself.

All these communications did not deviate from the original "herbal skincare" positioning, but they strongly catered to young people in terms of communication channels and content. Marketing budgets also tilted significantly toward producing materials. By shaping a brand tone that young people like, they acquired customers—creative, absurd humor, contrasting with the stereotype of an 80-year-old brand.

At the same time, combined with the sales channels for young groups that had been developed a year earlier, they ensured easy purchase: opened up specialty stores and WeChat business channels; won the Tmall Double 11 beauty category sales championship for three consecutive years, giving the Tmall store ample momentum.

> If five years ago Pechoin started from a channel opportunity and acquired middle-aged and elderly users by building nationwide brand awareness, then in the last two years, it established a very vivid and distinctive brand tone as its weapon to acquire young groups. At the same time, it established two distinct product lines, cognitive and purchase paths, to differentiate the two user segments.

From product brand to value-based brand, building long-term barriers

The story isn't over. In 2017, Pechoin began to try some brand building that departed from product function positioning, purely focusing on brand image.

Not every attempt was a huge success, but it's clear that Pechoin is step by step trying to find something it has insisted on for many years, and that all domestic skincare brands have talked about for years—the essence of Eastern beauty and its relationship with people.

I particularly want to mention "You Should Be Proud," with 3.39 million views on Tencent Video. Although it has many flaws, with details that feel unrealistic, and after 3 minutes 29 seconds it becomes too politically correct... but the three stories in the first half essentially express the very reserved and unconfident side of Eastern culture, which I think is on par with the insight of SKII's "Marriage Market Takeover" ad from a few years ago.

Don't watch after 3:29! Don't watch! Don't watch!

In the original brand positioning that focused more on product function, they integrated a concept, spirit, and values, trying to establish deeper resonance with consumers and win longer-term affection. In homogeneous product competition, sustained word-of-mouth comes from here. Unlike Pechoin's one-off communications in earlier years, which had no brand barrier at all. Once communication stopped, consumers would quickly migrate.

In 2017, Pechoin's annual sales reached 15.9 billion yuan, still maintaining high growth.

**Brand rebuilding naturally has no end, but from positioning to communication, Pechoin has taken every step just right and firmly. It also perfectly fits the FMCG industry's shift from competition for awareness to competition for tone and even brand spirit under homogeneous product competition.**

> **Finally, let me summarize Pechoin's brand revival path:**
>
> * First, focus on building brand awareness while creating ample room for the brand to be inclusive. Don't let the brand be directly associated with user groups that are easily labeled as aging;
> * Create independent product lines and awareness-to-purchase paths for different user groups, thereby distinguishing users and mitigating negative influences between them;
> * Finally, find emotional connection points that resonate with consumers, enhance brand reputation, and build long-term brand barriers.

Due to limited space and ability, I haven't elaborated on the supporting product strategy and supply chain, etc., but rather focused more on the brand and communication that I love and am curious about. If there are any factual errors, please tell me. If you have different ideas, welcome to discuss.

Source: Curiosity Kills the Dog (ID: TheCuriousGhost)

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