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The Decade of Blue Moon's Rise In 2003, during the SARS epidemic, the public's demand for personal antibacterial products exploded, and Blue Moon's hand sanitizer market surged overnight. Following Blue Moon were brands like Liby, Nice, and Walch. Having grown, Blue Moon was no longer satisfied with the 2 billion yuan hand sanitizer market and pushed full force into the laundry detergent market, where even international giants P&G and Unilever were reluctant to lead. This gamble paid off with seven years of bumper harvests, making Blue Moon the number one laundry detergent brand, with a peak market share of 53.8%. Blue Moon's success came from precise strategic judgment and effective investment in big-box retailers. Strategically, Blue Moon accurately judged and seized two product trends: hand sanitizer and laundry detergent. Tactically, Blue Moon relied on big-box stores, with tens of thousands of in-store promoters, pushing Blue Moon to 10 billion yuan in seven years. Blue Moon grew in offline big-box stores, but its 'honeymoon' with them hit an insurmountable 'calamity' in 2015.
Breaking with Big-Box Stores: Blue Moon Had No Retreat Entering 2015, Blue Moon, which had been thriving for seven years, gradually found itself surrounded by threats. First, competitors had turned the laundry detergent market into a red ocean. Unilever's OMO was the first to follow into the laundry detergent market, priced 30% lower than Blue Moon. Following closely were Walch's Weixin, Liby's Qubba, Nice's Diao and Chando, Meiri's Bafei, P&G's Tide and Ariel, Kao's Attack, Amway's Home, and nearly 50 other brands, along with various miscellaneous brands, all scrambling to erode Blue Moon's market share. According to statistics released by the China Association of Surfactant and Detergent Industry at the time, from January to September 2015, accounts receivable of 379 detergent companies increased by 14.23% year-on-year, while overall profits fell by 15.18%. Second, traditional detergent sales channels were primarily KA-focused, and under competition, the battle for store space turned into a contest of 'bloody spending.' As the number one brand, Blue Moon was no exception, having to continuously increase spending on displays, end caps, promotions, and sales staff. Blue Moon's three-pronged terminal interception strategy—'discounts, buy-one-get-one, and hawking'—had become a heavy burden. According to an internal employee responsible for KA negotiations, Blue Moon assigned a promoter to stores with terminal sales reaching 20,000 yuan. Blue Moon had approximately 12,000 partner terminals, with up to 16,000 promoters stationed at its peak. A typical model store—Carrefour Shanghai Gubei store—had 24 Blue Moon sales associates working in three shifts. But laundry detergent prices kept falling, from 15 yuan per jin to less than 5 yuan per jin on special, with profit margins of only 10%-15%, yet KA channels still took nearly 30% of the profits as before. With the human-wave tactic and channel costs, Blue Moon's profits kept declining, and even a salary cut and layoffs in June 2014 did not help. Blue Moon's salary adjustment notice for the second half of 2014 Cost-cutting reforms had little effect, so Blue Moon hoped to make progress on revenue generation and proposed the 'Moon House' plan. Blue Moon wanted to open 'Moon Houses' within stores, independent of the traditional store system. Besides paying rent to the store, Blue Moon wanted full autonomy over brand image, product pricing, and promotional activities. On one hand, Blue Moon hoped to continue strengthening its leadership position in consumers' minds through an independent brand image; on the other hand, by fixing costs in the form of 'rent' and setting prices independently, it could avoid various 'exorbitant fees' from stores. KA stores, accustomed to their dominant role, could not accept Blue Moon's change to the 'rules of the game.' In negotiations with stores, both sides refused to budge, and talks eventually broke down. But Blue Moon still enjoyed the 'special treatment' of a leading brand. A store insider recalled the incident: 'Even after negotiations broke down, RT-Mart only temporarily removed Blue Moon products from shelves. If a lesser brand had made such a demand, it would have been removed by RT-Mart long ago.' It is said that RT-Mart's boss, Huang Mingduan, tried to contact Blue Moon's boss, Luo Qiuping, directly, but Luo was unmoved. Instead, he took more radical action: if you won't let me open Moon Houses inside stores, I'll open them outside!
2015-2017: Blue Moon's Self-Destructive Channel Revolution Blue Moon had reason to be proud: advanced product R&D capabilities and a market share far ahead of competitors. And it had its most proud new product—'Supreme' concentrated laundry detergent. Luo Qiuping judged that the laundry detergent market was about to enter the concentrated era, and he believed he could win the next victory with the ultra-high-end product 'Supreme.' To this end, Blue Moon launched a 'Moon House + O2O' new model, using offline 'Moon Houses' plus online flagship stores to conquer the market. This transformation surprised peers, as offline channels had an absolute advantage in detergent sales. Blue Moon simultaneously launched three routes, completely overturning its past operations. It was a do-or-die move, and some in the industry called it 'self-destructive.' Route One: Blue Moon encouraged its sales staff to terminate their labor contracts and re-sign as consultant-style 'Moon Angels,' becoming partners rather than employees. Each Moon Angel had to pay a 12,800 yuan deposit to the company and be able to issue tax invoices at 3 points. After meeting sales targets, they received an 8% rebate, and for delivery orders, a 16% rebate. Moon Houses were responsible for educating on scientific laundry, product sales and top-ups, connecting loyal consumers, and offering free laundry services. Blue Moon borrowed direct sales models for sales training Many employees loyal to Blue Moon responded to the company's 'major strategic decision,' advancing money to stock up on goods and mobilizing relatives and friends to become Blue Moon 'angels.' Route Two: Blue Moon signed an exclusive online sales agreement with JD.com. Sales on June 18 alone could match the sales of 2-3 stores, a figure that made Luo Chunping look favorably on online channels. Route Three was less known: Blue Moon entered the campus market. Blue Moon calculated shrewdly: behind every student is a family, and China has about 30 million college students. This is a vast market, and they will quickly grow into the main consumer force. Under mounting profit pressure, with high hopes, Blue Moon quickly implemented various reforms, and the three routes went full throttle. Moon Houses appeared frequently in Guangzhou, Shanghai, Beijing, Wuhan, and Chongqing. Most Moon Houses were about 20-30 square meters, with a membership recharge activity sign at the entrance, products and experiment tables on both sides inside, and a reception desk in the middle with a prominent recharge activity table card. Moon House display stand Moon Angels and other sales staff had to undergo professional assessment and training from HR, learning direct sales methods. Not only did they have to post product information on their WeChat Moments daily, but they also had to mobilize everyone around them to buy Moon Vouchers and become their downline, sharing in all downline sales profits. To boost Moon Voucher sales, the company adjusted the face value from 500 yuan and 1,000 yuan to 300 yuan and 600 yuan, but each employee had a minimum task of selling 15 vouchers at 300 yuan. Blue Moon President Luo Qiuping personally oversaw the campus business unit, appointing high-paid talents with backgrounds from JD.com, Gome, Baidu, and New Oriental as campus committee members, who were dispatched to negotiate with major universities. During the back-to-school season, they gave free gifts to teachers. Campus specialists first educated each teacher on the products, had them fill out questionnaires, and after passing, they received gifts. After winning over teachers, they organized campus marketing competitions where college students competed to sell Blue Moon products. Initial results were promising; it is said that one school's marketing competition achieved sales of 100,000 yuan.
The Heroic and Tragic Results of the Revolution Front One: From Moon Angels to All-Staff Direct Selling The first route of the 'Moon House + O2O' model caused the most damage. Laundry detergent is a heavy product, and to solve delivery issues, Moon Angels and other sales staff often guided customers to order on the WeChat official account, using JD.com or water delivery stations for delivery. Distributors who had cooperated for years said Blue Moon's logistics costs had always been high because it had only one headquarters production base, while Liby and Chando had 4-5 production bases nationwide. Inside Moon Houses, there was no full, eye-catching display area; instead, large blank spaces were left for 'teaching' and 'activities.' Laundry services were handled by headquarters, and it took three to five days to deliver to customers. From a business perspective, Moon Houses had extremely low sales per square meter and did not create enough consumer stickiness. Moreover, unilaterally turning employees with traditional channel sales experience into direct sellers was too arbitrary. Even if the 'angels' received enough training, adapting to and persisting in this direct sales model was not easy. Blue Moon employees who found it hard to adapt to the drastic changes reluctantly joined competitors. These people began creating profits for rivals under their largely unchanged sales models. To make matters worse, Blue Moon then required all-staff marketing, putting sales pressure on HR, finance, and R&D, causing chaos throughout the company. Front Two: Online Battles Were Fierce, Not a Safe Haven According to the latest data from Eurodata International Consulting, Blue Moon's sales in the first half of 2018 were 1.126 billion yuan. Compared to second-place Walch's 646 million yuan and Tide's 334 million yuan, Blue Moon still had its prestige, but this figure was less than 30% of Blue Moon's total sales. What caught Luo Chunping off guard was that online channels could not escape channel hegemony either: having left the overbearing KA channels, platforms rose and began to explicitly or implicitly ask brands to 'choose one.' More seriously, the price difference between online and offline severely damaged Blue Moon's offline market ecosystem nationwide. Alibaba's Ling Shou Tong wholesale price was 34.5 yuan, while distributors' purchase price for the same product was 35.68 yuan—how could this product be sold? Online revenue did grow, but offline, Blue Moon's customer coverage and business became increasingly smaller. The 'Supreme' product, originally priced at 139 yuan for 660g, had its JD.com promotional price reduced to around 60 yuan, far from the high-end product image Blue Moon had initially planned. Overall, Route Two achieved some sales success. But in the era of channel fragmentation, over-reliance on any single channel, online or offline, will inevitably sow the seeds of disaster. Front Three: Campus Market Was Short-Sighted and Faded into Silence After seeing initial results, Blue Moon immediately increased attention to the campus business unit, partnering with over 100 colleges within six months. Luo Qiuping called on other sales departments to fully invest in campus negotiations, to liberate college students' sales capabilities, and to turn marketing competitions into remote order pushing. But the problem was: did every salesperson have campus resources? How much did these colleges give away in free benefits to teachers (even if it was near-expiry products)? How many Chinese college students are the hope of their families? What would their parents think if they found out their child was constantly selling 'laundry detergent' to relatives and friends at school? At the same time, Blue Moon's short-sightedness destroyed the campus market. Initially, by building close relationships with teachers and students, they generated good sales, but later, ignoring costs, they partnered with over 100 colleges in six months, ending up with too much to chew. How could high giveaway costs and students who did not treat work as their main job cooperate well in Blue Moon's brutal commercial war?
Review of Blue Moon's Channel Revolution Blue Moon Quietly Returns to Offline In 2017, Blue Moon quietly returned to the big-box stores it had left two years earlier. Big-box stores, Blue Moon, and its competitors were no longer the same as two years ago in this rapidly changing world. Whether it was Nice, which might have 'overpraised' Blue Moon, or Liby, which always opposed Blue Moon, the big-box store resources Blue Moon had impulsively abandoned were quickly picked up by both and turned into their own advantages. Even after returning offline, Blue Moon was no longer as valued by offline channels as before; all-staff marketing made life miserable for most grassroots employees; and heavy online promotions hurt distributor interests. But Blue Moon still tenaciously held onto its number one position in washing and care products. Few local companies could withstand such turmoil. Superior products were Blue Moon's final trump card. Whether it was the previous regular laundry detergent or the current concentrated version, Blue Moon's products genuinely cleaned well. Distributors for Liby and Chando also told this author: The products are good, but the sales are too chaotic. What a pity. Blue Moon's exploration is of great significance. Among brands of similar scale, few have reformed as 'recklessly' as Blue Moon, making this channel revolution a case study rarely seen in the FMCG industry. In fact, all detergent brands are seeking change, just on a much smaller scale than Blue Moon. Nice's 'internal contracting system' is very similar to Blue Moon's 'all-staff marketing'; Liby's new retail division is reportedly also trying Blue Moon's O2O direct sales model. After a vigorous revolution, reviewing this case can at least provide the following insights. (1) Consumer promotion should not be obsessed with 'love of knowledge and truth.' How meaningful is it to repeatedly promote technical concepts of concentrated laundry detergent like 'low foam, low viscosity,' 'anti-soil redeposition,' 'bio-targeted stain removal,' 'prevents yellowing, graying, and aging,' and 'fiber micro-finishing technology'? How many consumers are impatient with this? Most consumers just 'want to simply wash clothes clean.' (2) To encourage employee innovation, encouragement is better than coercion. To quickly establish 'Moon Houses,' Blue Moon unilaterally required employees to terminate their labor contracts, which made many employees lose their sense of security. But what if they had encouraged confident and capable employees to voluntarily become part of the direct sales model? What if the company promised that if you failed, you could return to the original sales team? How would the team have responded? Blue Moon's one-size-fits-all approach cut off employees' choices and also cut off its own retreat from reform. (3) Unless it is a new category, a new product cannot bear the burden of transformation. Blue Moon's hand sanitizer success replaced bar soap, a shift from solid to liquid, behind which was the upgrade in demand from 'shared use to individual use.' Blue Moon's laundry detergent success replaced powdered detergent, also from solid to liquid, behind which was the satisfaction of the demand for 'from heavy residue to easier rinsing with less residue.' Both hand sanitizer and laundry detergent successes were successes of new categories. But 'Supreme' laundry detergent, whether in name, product form, or usage method, is just a better laundry detergent. Was it worth betting on this single product? Heroes are not judged by success or failure; their boldness moves hearts. Blue Moon's stirring channel revolution has seen a phased outcome, but the arduous transformation of countless brands and distributors is just beginning. Note: Channel transformation has become something many companies must face and choose. How should it be solved? Welcome friends to the 2019 China FMCG Conference, where we will meet in Shanghai, the commercial capital, to find the right prescription for channel transformation in the digital age.