Online voting has officially started; click 'read original' to view. It's a trend for pharmaceutical companies to enter FMCG, but can we find a pattern of success in these reviews?

Wanglaoji Herbal Tea The pioneer of pharmaceutical companies entering FMCG. Chen Hongdao was the agent for Wanglaoji Herbal Tea in Hong Kong. In an era without brand awareness, he simply thought he could sell Wanglaoji Herbal Tea in mainland China. But upon arriving, he discovered that the Wanglaoji brand belonged to Guangzhou Pharmaceutical Group. In 1996, the two parties signed an agreement to lease the rights to use the red-can Wanglaoji herbal tea.

However, for a considerable period, Wanglaoji Herbal Tea failed to find a suitable development model. Around 2000, Tao Yingze, responsible for markets outside Guang, created the first model market in Wenzhou, establishing the first sales method in the beverage industry of having in-store salesgirls. That year, Wanglaoji Herbal Tea sales exceeded 100 million yuan.

But at that time, Wanglaoji's positioning was still vague, hovering between beverage and medicine. The success of the Wenzhou model market led JDB Group to make a great leap forward, aiming to build a national market and replicate the Wenzhou model nationwide.

However, the Wenzhou market had its own peculiarities; more precisely, its consumption habits could not be replicated in other markets, making it more of a "fake model."

After JDB retreated from the national market, they found Chengmei and created the famous positioning: "Afraid of getting heaty? Drink Wanglaoji." From then on, pharmaceutical companies intended to enter the FMCG field to get a share.

Until 2012, Wanglaoji and JDB split. Trout & Partners did a "head-swap" positioning for JDB, with slogans like "Still the familiar taste, still the familiar recipe," "Seven out of ten cans of herbal tea are JDB," "Authentic herbal tea," etc., which failed to differentiate Wanglaoji and JDB, leading to price wars.

Now the entire herbal tea market has declined significantly. Will it reunite and reposition in the future? Let's wait and see.

Yunnan Baiyao Toothpaste While countless pharmaceutical companies were trying to enter the beverage industry, Yunnan Baiyao chose to enter the toothpaste sector. Leveraging its hemostatic endorsement, Yunnan Baiyao toothpaste occupied a natural high ground upon launch. When herbal toothpastes were priced at 3-5 yuan and suppressed by P&G, Unilever, etc., Yunnan Baiyao chose a high price point above 20 yuan, which P&G and others couldn't reach, distancing itself from other herbal toothpastes and avoiding price wars.

With its good hemostatic effect, Yunnan Baiyao toothpaste became the undisputed leader in hemostasis. Among consumer needs, whitening is the top priority, followed by fresh breath and anti-sensitivity. Although hemostasis ranks fourth, accounting for only about 1.7% of demand.

But it was this small demand, due to its quick effect, that quickly pushed Yunnan Baiyao's sales above 3.5 billion yuan. Subsequently, Yunnan Baiyao launched Yangyuanqing shampoo, but its effect was not as obvious as the hemostatic effect, lacked a unique selling point, and did not perform prominently. Later, Yunnan Baiyao focused more on toothpaste, launching higher-end whitening toothpaste and children's toothpaste.

Seeing Yunnan Baiyao's success, Xiuzheng Pharmaceutical and Sanjing Pharmaceutical also launched their own toothpastes, but due to unclear positioning (because these two pharmaceutical companies couldn't create direct associations for consumers), they could only serve as foils.

Jiangzhong Hogo Biscuits In 2018, Jiangzhong Pharmaceutical was acquired by China Resources Pharmaceutical. But Jiangzhong Shiliao established its own company and transformed into a private enterprise. In fact, Jiangzhong Hogo biscuits were never a product of Jiangzhong Pharmaceutical from the start.

Similar to Yunnan Baiyao's endorsement, Jiangzhong Hogo biscuits quickly captured the market with the unique positioning of "nourishing the stomach." Since "猴菇" (monkey mushroom) could not be trademarked, Jiangzhong named it "猴姑" (Hogo). This also led many small companies to launch "猴菇" biscuits, which Jiangzhong sued in court.

Jiangzhong Hogo biscuits were initially positioned as a stomach-nourishing breakfast for white-collar workers. The target consumers were mainly white-collar workers who didn't have time for breakfast in the morning and would eat a biscuit during work breaks to nourish their stomachs. During promotion, Jiangzhong Hogo biscuits cleverly chose some of its own pharmacies, especially those near hospitals and small shops. This made Jiangzhong Hogo biscuits the first choice for visiting patients. Later, Jiangzhong began to enter wholesale markets, etc. Hogo biscuits were not just FMCG products but became health products similar to Naobaijin. This caused sales to soar but also made it a castle in the air.

There is a saying in the beverage industry: "If it's not for immediate consumption, it won't last long as a gift." Similarly, Jiangzhong did not become a breakfast for white-collar workers but instead became a gift product. Without "ready-to-eat" nature, the gift market won't last long either. Additionally, many small brands launched counterfeit "猴菇" biscuits, similar in packaging and price to Jiangzhong's, which ruined the entire Hogo biscuit market.

And Jiangzhong Shiliao blindly entered the beverage industry, launching Blueberry Eye Care and Hogo beverages, but the results were greatly diminished. After failing in the beverage industry, Jiangzhong Shiliao focused more on the stomach-nourishing niche.

Zhongjing Mushroom Sauce Zhang Zhongjing is a brand under Wanxi Pharmaceutical, a famous chain pharmacy in Nanyang, Henan Province. Its influence in Henan is akin to that of Beijing Tongrentang.

Zhongjing Mushroom Sauce is a brand under Zhongjing Grand Kitchen. Initially, Zhongjing Grand Kitchen mainly provided seasoning ingredients to Master Kong, Uni-President, and KFC. Later, combining its own characteristics, it produced Zhongjing Mushroom Sauce.

At that time, Laoganma chili sauce was already the representative of Chinese sauces, and it was not easy to find a survival space under Laoganma's shadow. But Zhongjing Mushroom Sauce still opened a path with differentiated products.

At launch, Zhongjing Mushroom Sauce chose its strong channel—pharmacies—which increased distribution coverage but left a poor impression on consumers. Moreover, the strong medicinal smell in pharmacies affected the sauce's aroma, causing Zhongjing Mushroom Sauce to struggle to open the market.

Later, a professional FMCG team adjusted the channel strategy for Zhongjing Mushroom Sauce, shifting to KA supermarkets and community convenience stores, and through extensive tasting activities, Zhongjing Mushroom Sauce developed.

However, compared to Laoganma, Zhongjing Mushroom Sauce still has significant limitations. Currently, it is only a regional brand with annual sales of around 300 million yuan.

Mingren Pharmaceutical Soda Water Among all pharmaceutical companies, Jiaozuo Mingren Pharmaceutical should be the least known. Mentioning Mingren soda water, few know it. In 2009, soda water companies sprang up like mushrooms, and Mingren also launched its Mingren brand soda water at that time. While those small companies fell one by one due to high investment and low returns, Mingren persisted.

No advertising, no endorsers, and even the entire sales team was quite unprofessional. But it was about focus. In various cities, Mingren was the undisputed number one brand in distribution in convenience stores and mom-and-pop shops. With good taste and unique shape, it made low-end consumers perceive that soda water comes in square bottles.

Compared to Watsons soda water, Jianfa, etc., Mingren indeed lacks fame. But what's rare is the taste and persistence. In the era of the second child, many people say that drinking soda water can adjust the body's pH balance and help give birth to sons. Such rumors are very popular in third- and fourth-tier cities, which are exactly the markets that Watsons, Jianfa, and Perrier cannot reach. And Mingren's years of persistence have built a good reputation in small shops.

Since the end of 2016, Mingren soda water has seen explosive growth, with annual growth rates no less than 200%. Since Mingren is not a listed company, sales cannot be verified. In the first quarter of 2018 alone, it collected 400 million yuan, and the full year is expected to reach 1 billion yuan.

It is the only company among all FMCG companies that is hard to understand, and I hope some expert can help interpret it.

Summary These successful pharmaceutical companies share several characteristics:

Focus Focus on one project and make a single product. Any diversified development leads to poor results. Not to mention Wanglaoji's bad brands, Jiangzhong's beverages, and Yunnan Baiyao's shampoo are all negative projects.

Endorsement Successful pharmaceutical companies themselves add value to the product; the pharmaceutical company itself has positioning. For example, Wanglaoji's herbal tea, Yunnan Baiyao's hemostasis, and Jiangzhong's stomach nourishment. But look at Tai Chi, Xiuzheng, Yiling, Renhe, Tongrentang, etc. They give consumers the impression of being pharmaceutical companies, but they have all kinds of medicines without associative links, so their beverages all flopped.

Segmentation Segment the market. Don't get red-eye disease. The FMCG food industry has many categories. Don't see others doing well in herbal tea and then do herbal tea; see others making money from toothpaste and then do toothpaste; see others selling biscuits and then sell biscuits. Others have already captured the mind. Can you seize their mind resources? Can your team be delegated authority? Can you match their combat effectiveness? If you only rely on having money, it's basically useless. Evergrande Spring Water is the best example.

Other reasons are welcome in the comments.

Source: FMCG -END-