Click to read the original article for details Source: Bohu Finance (ID: bohuFN) Have you had your Yakult today? Yakult, a Japanese brand that has long relied on precise marketing to open up the Chinese market, has recently stumbled in its marketing efforts. Recently, due to last year's promotion that "probiotics play an important role in the prevention and treatment of COVID-19," Yakult's affiliated company, Shanghai Yiliduo Dairy Products Co., Ltd., was fined 450,000 yuan by the Shanghai Pudong New Area Market Supervision Administration. For a company that sells well in 39 countries worldwide and has annual sales of 27 billion, 450,000 yuan is a drop in the bucket. However, Yakult probably never expected that this marketing misstep would not only anger netizens but also prompt everyone to re-examine this super single product in the lactic acid bacteria beverage industry. Behind the marketing failure, is this 86-year-old established company "taking a risk" or "relapsing into old habits"? Where does its confidence in "one red bottle conquering the world" come from?
"Big Health" Marketing "A beautiful intestine makes a beautiful person." "One hundred billion live Yakult bacteria help your intestines exercise." At that time, when the domestic low-temperature yogurt category was still a blue ocean, Yakult entered the Chinese market in 2002 and, with its precise marketing focusing on intestinal health, was elevated to the status of a "healthy product." Today, whether in Walmart, Carrefour, 7-Eleven, C-Store, or the freezer of the small shop downstairs, you can find Yakult.
(Image source: Internet)
Hirano Susumu, Chairman and General Manager of Yakult (China) Investment Co., Ltd., said in an interview that when Yakult first entered the Chinese mainland market in 2002, it sold about 60,000 bottles per day, which had increased to 7.5 million bottles by 2018. That means more than 5,200 bottles of Yakult are bought every minute, and this is only the sales situation in the Chinese mainland market. According to official data released by Yakult, in March 2019, the average daily sales in 39 countries worldwide reached 40.67 million bottles, with annual sales of 27 billion. However, the story behind Yakult's high sales goes back to the 1930s.
In 1930, Japanese Dr. Minoru Shirota successfully isolated lactic acid bacteria from the human intestine and used this probiotic to make a lactic acid bacteria beverage—Yakult. According to the authoritative definition of the United Nations, probiotics are live microorganisms that, when consumed in adequate amounts, confer a health benefit on the host. The probiotics produced by yogurt fermentation were the first probiotics consumed by humans. The lactic acid bacteria extracted by Shirota from the human intestine are a type of probiotic, named "Lactobacillus casei Shirota strain."
In fact, Shirota was not the first to extract probiotics; many scientists before him had discovered and extracted various probiotics. But Shirota's cleverness lay in the fact that he did not use the lactic acid bacteria he discovered to make medicine, but instead made a lactic acid bacteria beverage and gave it the label of "beneficial for intestinal health." Obviously, compared to medicine, consumer products have a much larger audience. In 1940, Yakult established the "Shirota Probiotics Popularization Association" in various parts of Japan, aiming to educate consumers and build awareness of bacterial flora.
With the infusion of this "advanced" concept, Yakult became synonymous with promoting intestinal digestion and quickly gained a large loyal user base. From children to the elderly, Yakult covered all age groups and became a sales myth in the industry. However, under China's current food standards, lactic acid bacteria beverages and yogurt are not the same thing. Simply put, the main ingredient of yogurt is milk, while the main ingredient of lactic acid bacteria beverages is water. For example, in Yakult's red bottle, the top two ingredients listed are water and white sugar, followed by skim milk powder and edible glucose.
In 2018, Bilibili UP master "Dad's Evaluation" conducted a simulation experiment on Yakult. The experiment found that a small bottle of original flavor lactic acid bacteria beverage contains 15.3 grams of sugar per 100 milliliters, which is 50% higher than Coca-Cola. (Image source: Dad's Evaluation)
The effect of promoting "10 billion active lactic acid bacteria" was tested in a simulated "digestion" experiment, and only 0.02% of the total could survive into the intestine, leaving the effect on the intestine questionable. However, this does not affect Yakult's packaging of the "health" concept. In 2021, Yakult's latest advertisements have landed on major TV stations. In the ads, a child just steps onto the school bus and is handed a bottle of Yakult; two elderly people at the dinner table are also arranged to have two bottles. To cultivate this consumption habit, the ad ends with a simple and blunt emphasis: "Drink it every day!"
To date, Yakult has released six versions of advertisements. In Guangdong, Yakult (i.e., Yiliduo) often holds health lectures for students or the elderly offline, distributing its products to the audience. The Yiliduo factory in Guangzhou also occasionally opens its doors to the public for visits. It must be said that in the concept marketing of big health, Yakult is undoubtedly successful.
The Innovative Model Behind the Success of the Single Product Besides being good at marketing, the sales model is also an important reason for Yakult's global popularity. In 1963, Yakult pioneered the "home delivery" service model in Japan. These delivery personnel are uniformly dressed and equipped. Since they are a group of amiable housewives, they are respectfully called "Yakult Ladies" (in some areas, "Yakult Misses").
"Yakult Ladies" are a crucial sales force for Yakult. Apart from traditional channels such as supermarkets, convenience stores, and retail shops, among the 28 million bottles of Yakult sold worldwide every day, "Yakult Ladies" account for nearly two-thirds of sales. 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 also rewards "Yakult Ladies" with about 50% of the profits.
This delivery method, which uses people as connection points, has many advantages. First, no matter how many customers they have, "Yakult Ladies" remember clearly: "Mrs. Tsuga always orders a pack of Yakult for each delivery; the old lady in the Ashida family likes cats and plants; the Kanno family has six people and needs four packs..."
(Image source: Internet)
Although the delivery center equips "Yakult Ladies" with unified electronic devices to record customer information, they hardly need to open the devices because they already know it by heart. Secondly, "Yakult Ladies" from the grassroots are more familiar with how to communicate with consumers and can easily instill the concept of intestinal dietary health face-to-face.
The most impressive thing is that on the channel line formed by "Yakult Ladies," a normal person can only complete 70 bottles a day, but the amiable "Yakult Ladies" can develop more than 150 subscribers. "Yakult Ladies" not only solve the company's "last mile" problem but also bring impressive sales.
Therefore, Yakult, having tasted the sweetness of this sales model, has recruited more than 80,000 "Yakult Ladies" worldwide.
Is "One Red Bottle Conquering the World" No Longer Working? With the combination of big health marketing and "Yakult Ladies," Yakult has survived 86 years with "one red bottle." Now, behind the marketing using COVID-19 prevention is the heavy anxiety of declining sales. According to data from Kantar Worldpanel, from August last year to August this year, Yakult's sales in the Chinese market fell by 16.2%, penetration rate fell by 3.4%, average price fell by 0.7%, and annual purchase volume fell by 14.9%.
Not only is the Chinese market showing weakness, according to Yakult's financial report, in fiscal year 2021, Yakult's daily sales volume in overseas markets was 30.564 million bottles per day, a decrease of 3.35% compared to fiscal year 2020. The decline in sales, in the view of industry insiders, is due to both Yakult's own reasons and external environmental changes.
"The continuous increase of local probiotic products has turned the market into a stock competition, and they have taken away Yakult's market share. In terms of promotion efforts, Yakult is also not as strong as giants like Yili and Mengniu," said Song Liang, a dairy industry analyst. In recent years, with the popularization of the probiotic concept, domestic dairy giants such as Yili, Mengniu, and Guangming have increased their efforts in probiotic beverages. They not only have similar packaging and ingredients to Yakult but also lower prices; for the same capacity, Yili and Mengniu products are only about 80% of Yakult's price.
(Image source: Internet)
In addition, in terms of sales channels, Yakult lacks new strategies. The previously popular direct sales method of "Yakult Ladies" has been severely impacted by the rise of domestic food delivery, express delivery services, and convenience stores. Compared with internet-famous brands that have developed rapidly through new channels in recent years, Yakult has neither introduced new sales strategies nor been willing to lower its profile and make price concessions.
It has been reported that while other dairy beverage products carry out promotional activities during holidays, Yakult has always adopted a unified national price, without any form of discount, and even uses the method of stopping supply to control price reductions in supermarkets. A supermarket practitioner revealed that Yakult does not allow merchants to offer special prices, even if the merchant subsidizes the cost or sacrifices gross profit. Once discovered, supply will be stopped. Treating the offline supermarkets on which it relies for survival in this way is undoubtedly self-destructive.
Moreover, when other brands are innovating and developing for emerging consumer groups, Yakult, apart from launching the "low-sugar blue bottle," has always limited its production to the inherent product of the "100ml red bottle." From this perspective, the single hit product that has supported Yakult to this day seems to have transformed from a magic weapon into a shackle. With competitors encircling, a single product, and a lack of innovative marketing strategies, Yakult's position as the leader in lactic acid bacteria beverages can be said to be precarious.
It is not difficult to understand why, in the face of such a serious event as the COVID-19 pandemic, a bottle of lactic acid bacteria beverage would dare to take the risk of riding on the trend. Perhaps for Yakult, the 450,000 yuan fine is less frightening than losing its position in the hearts of consumers.
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