8 May 2018
China’s Social Media Marketing (3): Targeted Marketing of a Health Food Brand
Interview with Wu Shangye, Deputy Executive General Manager of Guangzhou Qingyechang Trading Co Ltd
As mainland Chinese consumers become increasingly health-conscious, the demand for health food products free of preservatives and artificial colouring is rising. Small and medium-sized enterprises (SMEs) that want to tap into this lucrative market should carry out targeted marketing activities to whet the appetite of specific consumer groups. In this interview, Wu Shangye, Deputy Executive General Manager of Guangzhou Qingyechang Trading Co Ltd, talks about how his company developed from a small food processing business to a successful brand (Fruits in Love), and how it conducts its publicity and sales activities through WeChat commerce teams.
From Food Processing to Brand Building
Wu, who’s from Taiwan, had worked in the local semiconductor industry for more than 10 years. Prolonged pressure of work had caused his health to deteriorate, but after taking Taiwan hirami lemon products for some time, he found that both his blood pressure and immune system improved. The experience made him realise that many high-earning business people, who were putting their health at risk by working too hard, might be prepared to spend more on health food products designed to restore their wellbeing. Deciding on a career change, he took over his father’s food processing business on the Chinese mainland, determined to enter the health food industry and bring Taiwan’s health food products to mainland consumers.
The main business of the three factories run by Wu’s father in Shantou, Xiamen and Huizhou was the processing of jelly products for major food brands. After taking over, Wu and his elder brother co-founded Guangzhou Qingyechang Trading Co Ltd, turned it into the sole dealer of Taiwan hirami lemon products in China, and created their own jelly pudding brand Fruits in Love. The brand has now expanded to cover a diverse range of health products, including Taiwan hirami lemon juice, jelly puddings, biscuits and drinks.
Brand Differentiation: Exclusivity and Superiority
Because of the intense competition in the health foods market on the mainland, successful products must have special features that set them apart from their competitors, making them look exclusive and superior. The special features that help Taiwan hirami lemon products stand out, for example, are the natural properties of the fruit they are derived from.
Wu explained: “The Taiwan hirami lemon, or citrus depressa to give it its scientific name, is native to Taiwan. Its vitamin C content is 30 times greater than an ordinary lemon. And it has a special aroma that drives away mosquitoes and other insects, so it can be grown without pesticides.
“We pick them fresh off the trees, and then with their peels and pulps, squeeze the juice from them and can them. This means they keep all their nutrients, which are effective in boosting immunity, whitening skin and preventing cardiovascular disease and gout.”
The general benefits of lemon are well known among the general public, so there is no need for the company to conduct extensive market education about the products. But it is able to market Taiwan hirami lemons as being superior to ordinary lemons, with a high nutrition value and excellent price-performance ratio.
The hirami lemon juice, too, can be sold as a convenient instant drink, free from the problems associated with homemade lemon juice such as easy oxidisation, difficult preservation and possible pesticide residue contamination. And the fact that Fruits in Love has become the pioneer brand for Taiwan hirami lemon products in the Chinese mainland market, with 10 years of sole dealership rights, certainly allows it to claim a position of exclusivity. All these features have strengthened the position of Fruits in Love as a healthy and quality brand.
While the mainland market offers a rich variety of jelly products, Fruits in Love stands out among them as superior because of the raw materials it uses. For example, its fruit vinegar jelly products are made of fruit vinegar imported from Taiwan that is free from colouring and preservatives, and its pudding products are made with milk from New Zealand. Explaining the success of this approach, Wu said: “Although the retail price of our jelly puddings is higher than similar products of other brands by more than 30%, they have successfully attracted a group of medium- to high-end customers who attach great importance to product quality and are willing to pay more for food products that are safe and healthy with low-calorie and high-fibre contents.”
The brand also devotes attention to the research and development of new products as well as the transformation and upgrading of its operation. Its newly-developed brown sugar/black tea jelly, for example, not only helps to enrich its product mix, it also stands out prominently among similar jelly products.
Channels for Identifying Distributors
As Wu admits, one of the main difficulties that the brand faced initially was finding and setting up sales outlets for its products. He regards exhibitions as one of the most effective ways for new SME brands to identify suitable distributors, saying: “We participate in different types of exhibitions, such as organic food, confectionery and liquor and Taiwanese food fairs, which are often attended by distributors looking for new products. If our brand meets their requirements, it becomes easier to enter into partnership. We also set up stores in wholesale food markets to make it easier for small- to medium-sized distributors to buy our products with cash.”
Online Retail Channels
Wu says that when a brand is selecting suitable retail channels for its products, it should base its selection on the characteristics of the products and on which consumer groups it is targeting. Fruits in Love originally sold its Taiwan hirami lemon products via bricks-and-mortar stores, but the results were discouraging because the unit price of the products was too high. A 300ml bottle of pure Taiwan hirami lemon juice costs RMB168, and although one bottle is enough for one month’s consumption, it is hardly likely to attract general consumers at that price.
With the product being targeted at the sort of medium- to high-end consumers who favour quality products and who may have certain expectations about the quality of merchandise available from most bricks-and-mortar retailers, it made sense for the brand to begin to use online retail channels instead. Salespeople are used, too, to provide on-site presentations, thus emphasising the product’s uniqueness.
Wu explained: “The turnover rate of Taiwan hirami lemon products at bricks-and-mortar stores was undesirably low, so the only offline channel we use today – at Sam’s Store – is just used for publicity purposes. Actual sales are now largely conducted online.”
He points out that this shift brings another benefit with it, saying: “In contrast to offline retailers, which are restricted by their operating hours and locations, online sales channels offer the advantage of round-the-clock interaction with consumers under all-weather conditions.”
Taiwan hirami lemon products are now mainly sold through three sales channels:
Membership platforms targeting clients from the financial sector. They have a large membership base and draw in many customers looking for product quality.
Open e-commerce platforms such as JD.com, Yihaodian, Taobao and WeChat Mall. Wu told us that so far the company has monitored the operation of these platforms itself, and has not yet brought in assistance from any professional team because of the additional resources and high cost involved.
WeChat commerce teams. These operate like offline distributors, buying the products through cash purchases. To avoid competition among different teams, Wu’s company has to demarcate sales areas and assign a team to each area with a specified scope of operation and uniform retail pricing. While WeChat commerce teams do not account for a large share of the overall sales, the speed with which they can disseminate publicity messages and their extensive coverage have made them one of the major promotional channels for the brand.
According to Wu, the core supporters of Fruits in Love health food products are health-conscious consumers aged between 25 and 50. They are rational rather than impulsive buyers, and base their purchases on the desirability of maintaining a healthy diet. Although they are very loyal to the products they approve of and often make repetitive purchases, they are not a specific group of consumers that is easy to make contact with. With this in mind, Wu’s company has collaborated with several health- and wellness-related associations and platforms to try to identify potential customers.
Fruits in Love also conducts promotions through WeChat groups. It encourages existing members and followers to bring in new customers so as to expand its clientele. Wu reckons that each WeChat group should be limited to 300 followers, to make it easier for the group members to communicate with each other effectively.
Each WeChat group is monitored by a designated person who can identify the interests and preferences of the end consumers in the group for subsequent interaction. This might include sharing health knowledge, presenting information on product ingredients and functions, or organising offline activities. They exchange resources with other allied brands and organise group buying offers for their products. The groups also help to organise “referral” activities, with old users being encouraged to conduct word-of-mouth publicity for the brand and attract new users.
New Online Media
A number of new publicity channels have emerged along with the development of the internet, such as key opinion leaders (KOL) , we-media, internet celebrity live broadcast and internet radios. Wu says brand owners need to consider which are the right channels for them, depending on the characteristics of their products and the availability of resources. He explained: “KOL, we-media and internet celebrity live broadcast are channels that require more resources. A single KOL direct message or internet celebrity live broadcast may charge several hundred thousand RMB which represents a substantial cost to SMEs. The cost-effectiveness of these publicity channels therefore needs to be considered seriously.”
In Wu’s opinion, we-media and internet celebrity live broadcast are more suitable for fast fashion products with lower price thresholds. He said: “The pure Taiwan hirami lemon juice is selling at RMB168 per bottle, which represents a relatively high unit price among instant drink products and is therefore less attractive to general consumers. If we introduce a new instant drink package at a more popular price of RMB5-10 per can, it would be suitable for promotion through an internet celebrity live broadcast.”
In some cases, the brand founder has enough influence to set up his or her own we-medium, and create a personal and brand IP  image. This is true for example for Wu himself, who says: “I am a minor internet celebrity, hosting a health information sharing programme for the Lychee FM internet radio.”
Identification of Target Consumer Group
According to Wu, operators from both Taiwan and Hong Kong need to avoid applying their operating experience in Taiwan or Hong Kong directly to the mainland Chinese market. Instead, they should adopt a “localisation” strategy when venturing into the mainland, first setting up a base there in order to fully understand the actual market conditions. Given the massive population and market size of the mainland, it would, Wu says, be a waste of effort to input resources recklessly without first identifying the core customer groups. To achieve the best result, SMEs should clearly define their brand positioning and identify their target consumer groups beforehand, so that they can optimise their use of resources when conducting a customised marketing strategy.
 KOL in general refers to opinion leaders with 100,000 or more followers, and the size of some follower groups may go up to a few millions.
 According to its traditional definition, IP is the short form of “intellectual property”. Yet the term “IP” frequently brought up on the Chinese mainland today refers to the film and TV, literature, video game and anime resources that are suitable for second or multiple adaptations and development.