Click the image for details. Li Ning once said that Chinese stories are easy to tell, but Chinese brands are hard to build. Indeed, brand depth requires an overall improvement in society. Arctic Ocean, Robust, Tingjiayi, Nanfu, and Minicare were once household names for the post-80s and post-90s generations, but they did not escape the fate of being acquired by foreign capital and shelved. The more glorious they were in the past, the more desolate they are now. However, with industrial restructuring and the need to revitalize national brands, more and more national brands have been bought back by local enterprises in recent years. At the same time, brands like Huawei and Li Ning have risen rapidly. Yu Minhong once said: "I use Huawei for my phone and Lenovo for my computer; they are not necessarily worse than Apple."
Washed Away, Reborn After 2004, China actively fulfilled its WTO commitments and accelerated state-owned enterprise reforms, while foreign capital, driven by the fifth wave of international investment mergers and acquisitions, accelerated the acquisition of Chinese enterprises. Some national brands, due to rigid management systems and outdated production technology, often introduced foreign capital to expand sales channels. Their own decline accelerated the pace of foreign acquisitions, leading to their demise or shelving.
Nanfu: Backdoor Listing on NEEQ, Focusing on Power Banks Nanfu's predecessor was the Fuzhou Nanping Battery Factory, established in 1958, a collectively-owned enterprise. In 1988, it joined forces with Hong Kong China Resources Group's Baifu Co., Ltd., China Export Commodity Base Construction Fujian Branch, and Fujian Industrial Bank (now Industrial Bank) to form Fujian Nanping Nanfu Battery Co., Ltd. After introducing the first domestic alkaline high-energy zinc-manganese battery equipment in 1993, Nanfu entered a period of rapid development. In 1999, under the policy guidance of Nanping Municipal Government to introduce foreign capital, the aforementioned shareholders contributed 69% of Nanfu's shares to form China Battery Co., Ltd. with Morgan Stanley, Netherlands Investment Bank, and Singapore Government Investment Corporation. In 2003, Nanfu was acquired by its competitor, the American company Gillette. In 2005, Nanfu became a subsidiary of Procter & Gamble. In November 2014, CDH Investments bought back Nanfu from P&G. After more than a year of silence, in early 2016, news that Nanfu had successfully backdoor-listed on the NEEQ via Yajia Technology flooded social media. Nanfu had previously had the opportunity to go public, but the foreign party's refusal to compromise ultimately shelved the listing. Thus, Nanfu's "selling history" came to an end. After listing, Nanfu finally made its move. In January 2017, Nanfu, a giant in the domestic power industry, released the world's first small power bank capable of fast-charging the iPhone 7 on its Tmall flagship store. The device is as small as a Snickers bar and charges twice as fast as Apple's original charger. It is hoped that Nanfu, which boasts "8 out of every 10 batteries sold in China are Nanfu," will once again reach the top.
Robust: Back in Chinese Hands In the childhood memories of many post-80s, Robust and AD Calcium Milk certainly hold an irreplaceable position. However, today, only Robust purified water is commonly seen. In 1989, He Boquan and partners founded "Zhongshan Robust Health Products Co., Ltd.," launching products such as yogurt drinks, purified water, mineral water, and lemon tea. In 1998, Robust's performance began to decline. In 2000, Danone acquired 92% of Robust's equity for $2.38 billion. In November 2001, He Boquan and the original founders collectively resigned, and Robust completely changed hands. Sixteen years ago, Robust was acquired by Danone; sixteen years later, Robust returned to Chinese hands. In November 2016, Danone announced the overall sale of Robust. Public information shows that Robust's legal shareholders changed to Yingkong Holdings Co., Ltd., Shenzhen Jianian Industrial Co., Ltd., and Shenzhen Qianhai Furong Asset Management Co., Ltd. Now, when discussing Robust again, He Boquan summarized the problems encountered during the entrepreneurial process as three issues: inappropriate timing of product launches, unreasonable distribution structure, and missing the rural market. According to media reports, Yingkong Holdings was established in December 2004 with a registered capital of 200 million yuan. Its investor is Guo Min, the helmsman of the capital tycoon Ruifude Group. In an online recruitment advertisement, Yingkong Holdings claimed to have total assets of nearly 4.5 billion yuan, hold equity in three listed companies, and own the national well-known trademark for water purifiers, "Angel," as well as the "Jianian Printing" brand. Currently, Angel water purifiers perform well in the South China market. Resource integration and channel synergy with Robust could enhance the Robust brand. However, this may be limited to the barreled water segment, as Robust's bottled water business has been halted. Therefore, the overall elevation of the Robust brand will take several years.
Arctic Ocean Soda: Fifteen Years in Hiding Arctic Ocean soda is currently the "king" of bottled sodas in Beijing. This soda, a must-drink for visitors to Beijing, also experienced the fate of being shelved. In the 1980s, "Arctic Ocean Soda," which dominated the Beijing beverage market, formed a joint venture with PepsiCo in 1994, establishing Pepsi-Arctic Ocean Beverage Co., Ltd. According to data, Pepsi gradually introduced its various carbonated drinks to the Chinese market, but "Arctic Ocean White Bear," which had been popular for over half a century, was shelved until production ceased. In 1998, the Pepsi-Arctic Ocean company was deregistered due to long-term losses. In 2007, the Chinese side negotiated with PepsiCo to reclaim "Arctic Ocean." Ultimately, the negotiation concluded with the condition that "no carbonated beverage products would be produced under the Arctic Ocean brand for four years," returning the brand's operating rights to Chinese hands. This condition is the real reason Arctic Ocean has only recently regained popularity. In November 2011, when Arctic Ocean officially made its comeback, it was already late autumn. To ensure the best taste, it still insisted on the most traditional glass bottles. Currently, 95% of Arctic Ocean soda sales are in Beijing, and it is beginning to expand to markets outside Beijing.
Self-Reliance: They Never Fell In fact, many national brands never fell, and in the past decade, we have been pleased to see the rapid growth of national brands represented by Huawei and Li Ning.
Huawei: An "Atypical" Chinese Company Attracting Global Attention Many people do not know that more than 2 billion people worldwide use Huawei equipment for communication every day. Even in Europe, where 4G technology is advanced, Huawei has over half of the market share. It has more than 500 customers in over 150 countries, with revenue of 520 billion yuan, of which 70% comes from overseas. What does an annual income of 520 billion yuan mean? It is equivalent to five Alibabas or seven Xiaomis. Of this, 60% of revenue comes from overseas. This is the atypical Chinese company, Huawei. As the founder of Huawei, 72-year-old Ren Zhengfei remains as low-key as ever. In 2016, he was most known for photos circulating online of him taking taxis, riding the subway, and eating in cafeterias. It is still the same Ren Zhengfei, but Huawei is no longer the Huawei of the past. Today, Huawei has over 80,000 R&D personnel globally, with R&D investment exceeding $9 billion in 2016. In January 2017, Huawei entered the US market with the official release of the Mate 9 flagship phone. Today, Huawei has become a representative of Chinese companies going global, with its presence visible in Southeast Asia, Europe, and North America. Huawei's persistent commitment to technological innovation over the years continues to refresh the world's perception of Chinese enterprises.
Li Ning: Leading and Surpassing Li Ning can be considered an idol for countless sports stars. Fellow Olympic champion Li Xiaopeng once publicly stated that he learned both sports and business from Li Ning, seemingly accustomed to "depending" on his idol, and said: "I think he has had a huge influence on my life; he should be responsible for me!" In 1990, Li Ning secured the hosting rights for the Asian Games torch relay, and in such a high-profile way, Li Ning began his business story. In 2010, "Li Ning" trapped itself in a cage due to incorrect market positioning and user positioning. In 2012, "Li Ning" suffered annual losses of nearly 2 billion yuan. In early 2015, founder Li Ning returned to "Li Ning" and turned the company around within less than a year. Li Ning once admitted, "Reconstructing a business model is very difficult." Even O2O involves settlement, costs, information exchange, and many other aspects, which cannot be achieved overnight. In 2016, Li Ning continued to be profitable, and experience became a keyword that Li Ning Company constantly emphasized. Li Ning himself repeatedly stressed that "the value Li Ning wants to create is to create Li Ning's experiential value around products, channels, operations, and sports," and said: "Realizing the experiential value of Li Ning through digitalization is the pursuit of the Li Ning team in 2016." Professional products + smart hardware + mobile internet + big data analysis, Li Ning has not lagged behind in digital consumer experience.
Focus and Innovation: The Necessary Practice for National Brands For many enterprises, it is difficult to make breakthroughs once the brand develops to a certain extent. Many national brands are in traditional industries, having come from past eras, and generally rely on the number of stores for rapid expansion, rather than truly understanding consumer needs, establishing efficient promotion platforms and retail operating models, or building unique, powerful brand genes. Whether the old foundation can stimulate new vitality and transform well-known names into sales volume is a question every enterprise should deeply consider. No matter how good the brand image is, it must withstand the real test of market environment and changes in mass consumer psychology. In the process of continuous self-exploration and adjustment, focus and innovation are the main themes of enterprise development.
So, what should national brands pay attention to during transformation?
1. Amplify consumer pain points and stimulate consumers' need to solve them For traditional enterprises, various seemingly redundant details in product usage improvements are often seen as superfluous. In fact, innovation is not overwhelming; it is about truly entering the consumer's life scenario, relying on micro-innovations in details to truly solve consumer pain points, turning pain points that consumers might ignore into points of concern.
2. Make consumer opinions community-based and capture consumer needs in real time Traditional enterprises often have a "lag effect" in understanding consumer needs. For example, after a product is launched, they may seek consumer satisfaction feedback, but the response is slow. In recent years, many traditional enterprises have tried to establish online consumer communities to capture consumer needs and various product evaluations at any time.
3. Create stories that consumers can talk about and enter public communication topics Many traditional manufacturers' products have never had any stories. Brands are meant to be talked about by consumers; this is consumer sovereignty. If a product is not even worth talking about, it will become increasingly difficult to achieve a leading position in the internet age. If a product cannot be drawn into the mass communication agenda, consumers will only "make do" with buying and using it, and it will soon be forgotten. "Popularity" is a keyword that traditional enterprises need to consider.
4. Capture groups, create fan effects, and expand the fan economy Today, many enterprises still use very traditional methods to segment consumers, such as gender and generation. In fact, consumer psychology, value propositions, and interests are the real keys. As a consumer brand, it is crucial to capture the "precision crowd" within consumer groups, because it is the precision crowd that leads mass fashion and constructs mass culture.
5. Focus on a boutique strategy and create a scarcity effect The more personalized the consumer segmentation, the more focus is needed. Although traditional manufacturing has segmentation, it is often crude, attempting to satisfy all consumers with multiple products. In the end, it fails to correspond with consumers. Cutting unnecessary duplicate products and focusing on boutiques can win fans.
6. The internet is an experience economy and a service economy The internet economy is an experience economy and a service economy. The era of relying solely on functionality to impress consumers is over. Building service chains, information chains, and content chains around products is the core business model, which is the business ecosystem of the internet age.
Source: Bode Huixin