In 2017, Pechoin's sales exceeded 17.7 billion yuan, making it the top domestic beauty brand; Feihe's 2017 sales surpassed 7 billion yuan, with a 2018 target of 10 billion, becoming the leading domestic milk powder brand. Why did they succeed? Through their success, can we deduce who the next era's product will be?

Pechoin: A National Gift

Pechoin, now a representative of Chinese beauty products, has been given as a national gift to the Netherlands and African countries. Its one-shot advertising has been either praised or criticized by the industry, but it naturally attracts attention.

But who would have thought that this company, founded in 1931, had sales of only 200 million yuan in 2009? At that time, the well-known blue series, called Pechoin Classic, had a retail price of around 10 yuan and annual sales of 150 million yuan; while the newly developed Pechoin Herbal series—the green-packaged Pechoin series now familiar to consumers—had a higher unit price but annual sales of only about 50 million yuan.

It's worth noting that, also in the herbal category, Inoherb was launched in 2002 and by 2009 had sales exceeding 600 million yuan. According to current industry views, no one would have been optimistic about Pechoin's herbal series.

First, because the industry already had a leader, and the second player was just following and imitating, with a low position in consumers' minds. Pechoin's success seemed like a pipe dream.

Second, Pechoin was founded in 1931, so in consumers' minds it was an old, unfashionable brand. Similar to when P&G declined, consumers didn't want to use cosmetics like their mothers'. There was simply no future.

When Pechoin approached Guangzhou Chengmei Consulting, known as the Whampoa Military Academy of Chinese positioning theory, after a month and a half of research, Chengmei came to a different conclusion:

First, although Inoherb had sales of over 600 million yuan, it had not seriously occupied consumers' minds. Many consumers even regarded herbal cosmetics as just a trend; after six years, Inoherb had only a certain mindshare in China's coastal cities. None of this posed a threat to Pechoin's positioning.

As long as Pechoin's positioning was good enough, it could easily take over Inoherb's market.

Second, Pechoin was founded in 1931. If it were just an ordinary cosmetic, consumers would definitely think the brand was too old and outdated. But for Pechoin's herbal series, which used the concept of traditional Chinese medicine and natural herbs, the longer the history, the more consumers believed in the quality.

So Chengmei positioned Pechoin as: natural, non-irritating cosmetics; the positioning slogan was: "Pechoin herbal skincare, natural and non-irritating."

According to the general theory of positioning, one could say, "Pechoin surpassed Olay and L'Oréal Paris to become China's number one beauty brand because of good positioning; it's all thanks to positioning theory. "

But Geng Yicheng, when discussing this case, honestly said, "I think many people now treat positioning as a religion. They believe positioning can cure all ills. Why do so many companies position themselves but fail to achieve sales of over 10 billion? Why do some even fail? It's not just about finding a positioning, packaging it, and investing hundreds of millions in advertising. To become a company of that scale, you also need to research the market momentum; only by going with the flow can you truly succeed."

During its research for Pechoin, Chengmei found that in 2009, large supermarkets in China were also undergoing reform, hoping to attract more foot traffic. They needed a high-end beauty product to enhance their image and bring in more customers. And large supermarkets, through long-term development, had become synonymous with genuine products in consumers' minds, so consumers were willing to buy high-end beauty products there.

So Pechoin's herbal series invested heavily in supermarkets, and by the time competitors reacted, Pechoin had already established a foothold in the market.

Feihe: The National Milk Powder

The rise of supermarkets made Pechoin successful, and the decline of supermarkets made Feihe successful. Before meeting Xie Weishan, Feihe's slogan had always been "Always Good Milk Powder," emphasizing product safety. However, in recent years, it was difficult for domestic milk powder brands to prove their safety under the pressure of foreign brands.

Xie Weishan, borrowing from the ancient Chinese saying "Oranges grown south of the Huai River are sweet oranges, but north of it they become bitter oranges," proposed for Feihe: "Milk powder more suitable for Chinese babies' constitutions." After all, Chinese consumers have always believed that "one side of the water and soil nurtures one side of the people," and globally standardized foreign brands may not necessarily suit Chinese babies.

If it were just a simple slogan, Feihe would be the next Biostime, after all, Biostime's slogan "Babies get sick less, mothers worry less" still occupies consumers' minds. Why did Feihe rise so suddenly, achieving results that Yili, Mengniu, Beingmate, Biostime, and other domestic milk powder brands envy?

It's still about going with the flow.

In recent years, hypermarkets and supermarkets have been declining. High surcharges and unreasonable shelf arrangements have made consumers deeply resentful, especially mothers. If the milk powder and pacifiers are placed far apart, how can they enjoy shopping in the supermarket?

In contrast, mother-and-baby stores have different pricing and layouts. Typically, mothers or expectant mothers spend 4-5 minutes in supermarkets for infant products, but in mother-and-baby stores, they can stay for more than half an hour.

Seizing this trend, Feihe invested heavily in promotional expenses in mother-and-baby stores. Meanwhile, other companies still treated the mother-and-baby channel as a simple supplementary channel. By the time giants like Yili reacted, Feihe had already completed its national layout in mother-and-baby stores. Although Biostime had strong relationships in hospital and commercial complex mother-and-baby stores, they also didn't pay enough attention to this channel.

The Next Trend: The IP Era

The cases of Pechoin and Feihe tell us that for a company to succeed, besides positioning and promotion, the most important thing is to go with the flow. And every time the "trend" changes, some traditional first-tier brands fail to grasp it. This is mainly related to the reaction mechanisms of first-tier brands, or perhaps their arrogance. They think, "You run ahead; when the time comes, I'll use my money to crush your market." But when they finally decide to spend, they find that the mindshare and market are no longer under their control.

Based on over a decade of industry experience and market research, China's FMCG industry is entering the IP era. Yili and Mengniu seem to have been slow again this time. Both Yili's QQ Star and Mengniu's Future Star are initial forms of IP, using cartoon characters to promote children's milk drinks.

However, they didn't choose the right IPs. Yili's QQ Star uses Tigger and Doraemon packaging, while Mengniu's Future Star uses Donald Duck and Hello Kitty. These are not the cartoons modern children like. They can generate sales only because of their strong channel and market presence; mothers have no choice but to buy them. But it's obvious that Yili and Mengniu's IP images are outdated by centuries. I don't know if they realize it, but at least they haven't taken action.

Currently, the number one IP in the children's market is undoubtedly "Peppa Pig." According to Lao Na's knowledge, a first-tier team had contacted Peppa Pig earlier, but because Peppa wasn't so popular at the time, our first-tier brand team treated them coldly; as a result, the British team sold the IP to a non-first-tier company.

One biscuit company that obtained Peppa Pig has already become the number one brand in China's children's food, and it's only a matter of time before its sales approach Oreo's.

The companies that obtained the Peppa Pig license for children's beverages are Hao+1 and Youxiaojun. In addition to Peppa Pig, Hao+1 and Youxiaojun also secured three other IPs: "Octonauts," "PAW Patrol," and "Chuggington," with total online views exceeding 160 billion.

Well, such IPs need no introduction; products with these IPs basically sell themselves. This is also the best way for companies to survive under the pressure of giants.

In the IP era, when your product has IP attributes, you are going with the flow; and if your product can leverage the existing popularity of an IP, you are combining flow with borrowing momentum. Opening the market is just a matter of whether you want to do it.

Currently, China's children's dairy product sales are close to 20 billion yuan, a vast market; IPs also bring their own traffic. Hao+1 and Youxiaojun are known in the industry as craftsmanship enterprises with guaranteed product quality. As long as distributors follow the company's operations, under the Peppa Pig momentum, sales exceeding 100 million in 2019 and 1 billion in 2020 are just small goals.

The IP era has arrived, and such hot IPs are definitely worth having. Now, Hao+1 and Youxiaojun have opened their national distributor recruitment. Welcome to join the IP matrix marketing family.

Scan the QR code to learn more about anime IP products (Peppa Pig, PAW Patrol, Octonauts)

Central China Region (Hubei, Hunan, Henan, Jiangxi) Liu Huibo

North China Region (Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia) Ji Qian

Northeast and South China Regions (Guangdong, Guangxi, Hainan, Liaoning, Jilin, Heilongjiang) Bai Yongwang

East China Region (Shandong, Jiangsu, Anhui, Zhejiang, Fujian, Shanghai) Yin Lili

Southwest Region (Sichuan, Yunnan, Guizhou, Tibet, Chongqing) Sun Lili

Northwest Region and Others (Ningxia, Xinjiang, Qinghai, Shaanxi, Gansu) Wen Yang, Head of Distributor Service Center

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