Click on the image for details Text / Hu Erhuo The logic of race-style competition is that defeating one opponent leads to a new opponent appearing, and eventually defeating opponents becomes the goal itself. Those who defeat others will ultimately be defeated by others. Yakult's founder, Minoru Shirota, understood this market rule. He pioneered the probiotic market but did not engage in direct confrontation with competitors. While others developed new products, pursued speed, and expanded channels without limits, he stuck to his production method: one bottle, one sales team, and a limited market. Yet, Yakult has not been defeated in Japan, Korea, Taiwan, or Hong Kong. Even in China, it sells over 5 million bottles daily, operating in 33 countries and regions worldwide. This seemingly "clumsy" approach embodies a simple business spirit. It has not only kept Yakult alive for 82 years but also made this 100-milliliter red bottle one of the most successful products globally. Yakult Ladies: Solving the Last-Mile Problem How to solve the last mile has long been a headache for many FMCG companies. Yakult, however, has cleverly avoided this issue. In 1963, Yakult pioneered the "home delivery" service model in Japan. The delivery personnel were a group of friendly housewives, respectfully called "Yakult Ladies." "Yakult Ladies" are a crucial sales force for Yakult. Apart from traditional channels like supermarkets, convenience stores, and retail outlets, Yakult Ladies account for nearly two-thirds of the 28 million bottles sold worldwide each day. To increase the income of Yakult Ladies, Yakult stipulates that only one Yakult Lady manages a specific area. In addition to a base salary, Yakult rewards them with about 50% of the profits. This people-centric delivery method has many advantages. First, no matter how many customers they handle, Yakult Ladies remember details clearly: "Mrs. Tsuga always orders one pack of Yakult; the elderly Mrs. Ashida loves cats and plants; the Kanno family of six needs four packs..." Although the distribution center provides each Yakult Lady with electronic devices to record customer information, they rarely need to open them because they already know everything by heart. Second, Yakult Ladies, coming from the grassroots, are more familiar with how to communicate with consumers. By face-to-face interaction, they effectively convey the concept of gut health. A normal person can complete only 70 bottles a day, but a friendly Yakult Lady can secure over 150 subscribers. Mengniu, Yili, and Bright are Yakult's local competitors in China. These competitors share a common channel characteristic: heavy reliance on traditional supermarket channels, which in turn depend on distributors. In China's FMCG market, distributors can sometimes be seen as money-making machines. Because they control numerous brands, they follow the strategy of "endless distribution," making it difficult for a single brand to interact directly with consumers. Yakult, however, skillfully avoids this constraint. Yakult Ladies take on the roles of both city manager and sales representative, serving as the bridge from factory to consumer. In the channel line formed by Yakult Ladies, there are no middlemen, no complex promotions, distribution tasks, or product category assignments. This sales model has paid off. Yakult has recruited over 80,000 Yakult Ladies globally, including more than 1,500 in 33 distribution centers across 28 Chinese cities. If you watch TV, you'll see the classic image of a Yakult Lady at the end of every Yakult commercial. Single Product Strategy: One Bottle of Yakult for Only 2.2 Yuan In the face of China's market logic of multiple flavors, product lines, and full-scale expansion, Yakult appears quite unconventional in the dairy market. Yakult China started in Guangdong, offering only a 100-milliliter red bottle of low-temperature lactic acid bacteria beverage, competing against Taizinai, which created a 150 million miracle, and various room-temperature lactic acid bacteria products in over 10 specifications. In 2011, with its single-product strategy, Yakult achieved sales exceeding 2 billion yuan in just 28 cities, with coverage less than one percent of its competitors, firmly establishing itself as the leader in the low-temperature lactic acid bacteria market. To curb Yakult's rapid growth, Mengniu and Yili simultaneously targeted Yakult's Achilles' heel: single product, single specification, and single appeal. Also in 2011, Mengniu launched its low-temperature lactic acid bacteria drink UCC, followed by Yili's Every Day. Chinese dairy brands adopted fast-fashion marketing tactics, creating market freshness through rapid product updates and positioning themselves as market leaders. To create competitive differentiation, Mengniu and Yili added Bulgarian bacillus, Lactobacillus acidophilus, and Bifidobacterium to their products, surrounding Yakult's single Lactobacillus casei Shirota with a multi-strain strategy. At the same time, they deliberately labeled their packaging with "300 billion live bacteria" to counter Yakult's 70-year-old claim of "10 billion live bacteria per bottle." Over the years, Yakult has not adjusted its price: a pack of five sells for 11 yuan, equivalent to 2.2 yuan per bottle. Mengniu and Yili targeted this, closely matching Yakult's 2.2 yuan price by setting theirs at 2 yuan or lower, engaging in price wars. The entry of Mengniu and Yili invigorated the neglected lactic acid bacteria beverage market. Starting in 2014, companies like Wahaha, Melodo, and Haocaitou launched 100-milliliter room-temperature lactic acid bacteria products, joining the battle for this market. Yakult remained unmoved. It did not add new products, and the 2.2 yuan retail price was set in stone. As for the multi-strain encirclement strategy, Yakult's response was simply to let competitors do their worst. Anyone who has visited Yakult's headquarters in Japan knows that its product range includes dozens of items such as room-temperature milk, low-temperature yogurt, low-temperature probiotics, milk powder, and even butter. However, none of these are available in Korea or Taiwan. In Japan, Yakult lacks Snow Brand's strong technical resources; in Korea, it lacks Namyang Dairy's strong product portfolio; in Taiwan, it lacks Wei Chuan's strong financial resources; and in mainland China, it lacks the grassland culture of Mengniu and Yili. Yet Yakult still succeeded. It stubbornly adheres to one principle: in this impetuous industrial and information age, focus on one thing, polish one product, and become a leader in your industry. Striking Later: An 82-Year Survival Secret If you ask a lactic acid bacteria distributor about Yakult, the answer would be: Yakult is a long-term product, while mainland lactic acid bacteria drinks are more like short-term products. In this era of speed, running faster means winning attention, coverage, and sales. Mengniu took only ten years to distribute its products to every village in China, and Yili took only five years to occupy all supermarket terminals in China. Compared to its competitors, Yakult is the slowest, having only 28 markets today, less than one percent of its competitors, and it is unknown outside cities. But it has not been defeated in Japan, Korea, or Taiwan, and has held its ground in Hong Kong for over 50 years. Yakult's strategy is not to eliminate competitors. While others are busy launching new products and expanding channels, it sticks to one bottle, a special team, and a limited market. For Yakult, building a solid sales foundation in the Chinese market remains the most important thing. "Yakult has only 0.5% market share, but China has 1.3 billion people." Chinese companies, however, do not think this way. Despite being latecomers in the lactic acid bacteria industry, they are busy defeating consumers, engaging in cutthroat competition, and fighting for market share. To achieve greater sales, price wars become the ultimate weapon against competitors. Since 2014, Yili's Every Day has engaged in promotions like "buy one get one free," "buy two get one free," and "50% off the second item," while Mengniu's UCC followed suit with "buy one get one free" campaigns. The relentless competitive pressure forced many dairy brands onto a path of one-sided price competition, and China's lactic acid bacteria market inevitably fell into the fate typical of domestic brands. Behind the price war is price suppression extending to upstream resources. The dairy crisis in 2008 and the melamine incident in 2010 were both caused by such unprincipled chaos. While Chinese lactic acid bacteria drinks were hurting themselves, Yakult swam against the current, with profit growth rates exceeding 30%, securing its position as the top lactic acid bacteria drink. Many researchers believe that if Yakult wanted to surpass the scale of any domestic dairy company in mainland China, it would not be difficult. If Yakult were willing, it could expand channels overnight, diversify its products, and have the capacity to exceed 50 billion yuan in sales. In 1935, Dr. Shirota established the Shirota Research Institute in Fukuoka City and began selling Yakult. The product has survived for 82 years, despite a temporary suspension during World War II due to rising raw material costs, but the company has never gone bankrupt. Yakult's longevity, like many Japanese century-old companies, is rooted in the belief in late-mover advantage and steady accumulation. This is a wisdom of giving and taking, embodying the dialectics of knowing when to advance and retreat, and knowing when to stop. This is something most Chinese companies, which "grab a profit and die," lack. A product that moves slowly does not necessarily fail to go far. Postscript Of course, there are many other interesting stories about Yakult. For example, each bottle of Yakult has a capacity of 100 milliliters because a typical sip is about 30 milliliters, so people can finish a bottle in about three sips. For example, Yakult has become a new flavor profile, with dozens of foods using Yakult as an ingredient, such as lemon Yakult and Yakult avocado milkshake, which have even been served on Michelin-starred tables. Another example: due to different transliterations of "Yakult" in Mandarin and Cantonese, it is trademarked as "Yili Duo" in the Pearl River Delta region and "Yang Le Duo" in Shanghai and the Yangtze River Delta region. With its unchanged 100-milliliter red bottle for decades, its unique Yakult Lady delivery team, and the Japanese craftsmanship spirit of going its own way and not rushing, the 82-year-old Yakult has created a miracle, and its dream of becoming a century-old company is within reach. Success takes three years, but collapse takes three days. In today's China, brands that last ten or twenty years are everywhere, but those with a century of heritage are rare. Building a century-old company is beautiful, but people prefer to do "realistic" things, like speculating on P2P and Bitcoin online, or overextending decades to speculate in real estate, playing hot potato, whether in the property market or the stock market. Everyone wants to make quick money, cash out on credit, and live in the moment. This is China's business environment. Click on the image for details The Third (CFIC) China FMCG + Internet Conference will be held in Chongqing in October 2017. At this conference, New Distribution has invited 1,000+ distributors, 500+ brand owners, founders of 200+ B2B platforms, and 100+ investment and financing institutions to participate. The theme of this conference is New Forces, New Ecosystem. We will invite well-known domestic B2B industry experts, mentors, and B2B platform founders to discuss the following topics: Core Topics of the Conference:
How can the FMCG industry achieve new growth opportunities through B2B?
How should the new supply chain behind new retail be built?
How can intra-city logistics help B2B achieve leapfrog development? Highlights of the Conference:
The industry's first "2017 China FMCG B2B Industry Competitiveness White Paper"
Case studies of excellent distributors in transformation and upgrading
Upgraded conference + exhibition, with Hall 6 Internet Technology Exhibition strengthening connections
Leaders from various fields, including Alibaba Retail Link, ProLogis Finance, Eternal Asia Supply Chain, Best Store Plus, Yijiupi, Unilever, Haiding Technology, and Yunmei Media, will deliver speeches and share pioneering insights.
October 17-18, 2017 Chongqing International Expo Center Registration is now open. Scan the QR code below or click "Read Original" to register. Early bird tickets before September 15 enjoy a 30% discount! Add friend with note "Conference Registration" Click the links below to review the highlights of the first and second FMCG + Internet conferences: 2016 "FMCG + Internet" Summit Forum 2017 (Second) China FMCG + Internet Conference Click the links below to review the highlights of the first and second FMCG + Internet conferences: 2016 "FMCG + Internet" Summit Forum -END-