China
Online scandal lends a hand to domestic brands
By Lu Yan  ·  2023-09-22  ·   Source: NO.39 SEPTEMBER 28, 2023
A livestreaming host prepares for work at a livestreaming center in Beijing in March 2022 (XINHUA)
Li Jiaqi, a beauty influencer and top livestreaming host met his Waterloo on September 11. During one of his livestreams on that day, his inappropriate response to a potential customer triggered heated discussion and a boycott of his channel. While Li was promoting a domestic brand of eyebrow pencil priced at 79 yuan ($10.79) that evening, one netizen left a message saying that the product was becoming increasingly expensive. Li responded that the product's price had stayed the same for a number of years, and commented on the difficult market situation for domestic makeup companies. Controversially, he went on to question the netizen, "Sometimes you should look to yourself for explanations. After all these years, has your salary increased? Have you been working hard enough?"

The questions immediately sparked an online buzz, with many netizens complaining they were hurt by his words, and that Li had become arrogant and indifferent to ordinary customers' needs. Within a day, he lost 1 million of his more than 30 million followers. The incident also gave rise to more discussion of Florasis, the up-and-coming cosmetics brand that produced the 79-yuan eyebrow pencil.

Some homegrown brands took Li's gaffe as an opportunity and came up with promotional strategies related to the incident to try to attract public attention. For example, Bee & Flower, a longstanding Shanghai-based company that produces toiletries, launched a 79-yuan bulk shampoo and conditioner set in its livestreaming sales immediately after Li's blunder occurred. Some other timed-honored but lesser-known brands followed suit and have enjoyed a dramatic increase in popularity, especially among the young.

On the rise 

Established in 1984, Bee & Flower is a name that remains in the memory of many. The plain packaging, customer-friendly price and the reasonable quality of its products have earned it a good reputation and some trending discussions online every now and then. Many customers feel sorry for the brand as it cannot outshine the marketing tactics of younger brands in today's competitive market.

"Bee & Flower is a brand that my parents use. I have been using it since childhood as well and its price hasn't changed much," Wu Sisi, a 31-year-old Hubei professional who bought a couple of products from the online store of Bee & Flower to show her support during the campaign, told Beijing Review. "For me, the brand represents trustworthiness."

The recent online controversy is a turning point for the usually unexciting brand. On the night that Li made the controversial remark, Bee & Flower launched its 79-yuan set, and gained more than 2.7 million new followers on the short video platform Douyin, China's TikTok. Although it has sold products on the platform via livestreaming in the past, its livestreams typically attracted fewer than 1,000 viewers, but the number hit 1 million on September 11 and 10 million in the days that followed. The estimated sales revenue from the promotion following Li's mishap was some 25 million yuan ($3.42 million). 

This was not the first time consumers rallied behind the brand. In November 2021, when the company was widely rumored to be on the verge of bankruptcy, its sales volume increased to seven times that of the previous month, mostly because people were nostalgic about and attached to the brand, and wanted to save it from bankruptcy.

Erke, a Chinese brand established in 2000 that focuses on sportswear, also piggybacked on the "79-yuan" marketing event, and promoted its products at a reduced price during its livestreaming sales in the following days. Its sales hosts not only promoted the Erke brand, but also other domestic brands. They used Bee & Flower shampoo to wash their hair live online during the sales event; and drank beverages produced by Huiyuan, a fruit juice brand, along with other acts that caught the attention of the public. The campaigns have undoubtedly earned these low-profile brands unprecedented attention, as evidenced by the increased support and sales. Several of Bee & Flower's 79-yuan product sets had been sold out on its Douyin account by the time of writing.

However, some have described the tactics as gimmicks, saying piggybacking on other brands' ill fortune is mean spirited.

"It is understandable for brands to seize social media marketing opportunities and make good use of them," said Ling Yan, Deputy Director of the Shanghai Brand Development Research Center at the Shanghai Academy of Social Sciences. She added that although Bee & Flower is an old brand, it is new to most young consumers. In this situation, using popular or trending events as marketing opportunities can help brands quickly come to consumers' attention, which "is a very correct step," Ling told China Newsweek magazine.

"Taking advantage of opportune moments online can promote the sales temporarily. But the growth of homegrown brands requires them to follow consumer needs and put more effort into the basics such as product quality, design and brand culture. It's a long-term process that demands lasting patience," Cheng Yingqi, founder of oral care product brand Blispring, told news portal Jimu News.

A visitor browses the products of a Chinese medical beauty brand at an exhibition in Haikou, Hainan Province, in July 2022 (XINHUA)

Trying harder 

In mid-September, the hashtag "Yu Mei Jing finally got online" was among the hottest on Weibo. With a history of 44 years, the skincare brand launched a skin cream product in the 1980s, which was the first to be made specifically for children, and it is still sold on the market today.

The company hadn't registered on popular social media platforms like Douyin and lifestyle app Xiaohongshu (Little Red Book) until mid-September. After its registration, in six days, its Douyin account has attracted nearly 1.5 million followers.

In recent years, Yu Mei Jing has been increasing investment in research and development to cater to the needs of Chinese children. "How can we keep consumers and make them loyal to domestic products? The key is product quality and brand strength," Shi Bin, Chairperson and General Manager of Yu Mei Jing, told Xinhua News Agency.

"Moreover, we have been upgrading our product packaging to make it more appealing to young consumers," Shi said, adding that developing an innovative market strategy is another focus of the company, and that opening accounts on social media and livestreaming e-commerce platforms is one of the steps.

As the younger generation becomes the main consumption force, many Chinese brands, like Yu Mei Jing, are trying harder to grab their attention. Kweichow Moutai is a leading maker of Chinese liquor, which is favored by older generations and mainly consumed at high-end banquets. The top liquor brand has recently joined hands with Chinese coffee chain Luckin Coffee and U.S. chocolate brand Dove, producing a Moutai-flavored coffee with the former and liquor-filled chocolate with the latter, targeting young customers.

Ding Xiongjun, Chairperson of Kweichow Moutai, said at a meeting last December that young people are the main consumers of the future and how to meet their demand with the company's products and services is the biggest challenge the company faces.

(Print Edition Title: Old But Gold) 

Copyedited by G.P. Wilson 

Comments to luyan@cicgamericas.com 

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