Crossovers aim to attract, retain young buyers

Time-honored brands employ innovative marketing boost

A baijiu-flavored latte jointly launched by Chinese liquor maker Kweichow Moutai and domestic coffee chain Luckin Coffee has become a national sensation, underscoring how China's time-honored brands stay competitive and become attractive to younger generations through collaboration and innovation, said experts.

Crossover, or building cooperation among themselves to explore new products, has become very trendy among Chinese brands from different sectors in recent years. In Kweichow Moutai's case, the coffee drink is advertised to contain no more than 0.5 percent alcohol volume. It went viral among consumers on the first day of release, with sales of 5.42 million cups generating more than 100 million yuan ($14 million) in revenue.

The innovative flavored drink has received great attention from two significant consumer bases, although they are differentiated target customers, said Li Yijun, a senior trends analyst at Mintel. "Through the collaboration, Kweichow Moutai could reach new consumers, mostly young people who have the potential to become liquor consumers, and Luckin succeeded in turning public curiosity for the flavor of Moutai into an impressive sales performance," Li said.

Li sees the crossover products launched in recent years as bolder and more refreshing than ever because age-old trademarks are entering into sectors different from their conventional business. She said White Rabbit creamy candy has been another role model in how prestigious brands come up with fun and attractive crossovers by teaming up with partners from varied sectors. In the past few years, White Rabbit has launched crossover products ranging from perfume and personal care products to clothes, drinks and more.

"Time-honored brands in the past used to give people an impression that they are usually classic enough but a bit too conservative. However, starting a couple of years ago, we noticed a majority of Shanghai's old and well-known brands becoming more and more stylish after continuous innovation in operation and products," said Ma Jun, vice-president of the Shanghai Time-honored Brand Association and general manager of Shanghai Lifengfood Co Ltd.

"In fact, being a time-honored brand means always being creative and innovative and aware of the changing preferences of consumer products, and remaining attractive to consumers throughout all the market ups and downs," Ma said.

Leiyunshang, a Chinese pharmacy brand set up in 1662, which was the second year of the reign of Emperor Kangxi in the Qing Dynasty (1644-1911), offers an example of breaking with its traditional Chinese medicine domain by transitioning into the pharmaceutical and health industry chain that includes medicine circulation, product development, medical service, and healthcare service, said Liu Jichuan, vice-general manager of Shanghai Leiyunshang Pharmaceutical West Area Co Ltd.

According to Liu, a souvenir gift set jointly developed by Leiyunshang and Shanghai's landmark Oriental Pearl Tower was launched ahead of the Mid-Autumn Festival and the National Day holiday that fell between Sept 29 and Oct 6 this year.

Containing a scented bead in the shape of the Oriental Pearl Tower and a Chinese-style fan, it proved to be a very popular tourist memento. "Shanghai's local culture, which is a mixture of exquisite, stylish, open and diverse, provides us huge room for being creative and great possibilities for crossover collaborations," Liu added.

Guo Jianchen, director of the media center with Hengyuanxiang Group, said: "The rejuvenation of a brand is not only rooted in its cultural origin, but also driven by the development of the times. Classic brands usually have the strength of being in the minds of consumers for long, and consumers usually have a general portrait of the brands. Therefore, once such a brand comes along with a new image, it will bring consumers a sense of wonder."

Guo said Hengyuanxiang was launched in Shanghai in 1927, when a shop selling wool fabrics was opened on the current Jinling East Road. Ever since, it has been actively involved in different sectors, including arts, the Beijing 2008 Summer Olympics, the Beijing 2022 Winter Olympics, and the launch of crossover products. "Shanghai is a very special city that integrates Eastern and Western cultures. In our future brand building, Hengyuanxiang will integrate the cultural elements to create products that are both international and representative of China," he said.

Meanwhile, Ma said that as the times and consumer preferences keep changing, long-established brands must adapt to meet the changing needs of consumers. "When we talk about time-honored brands, the focus should not only be placed on their history, but also their vitality. In fact, many of the world's most valuable brands have a history of more than a hundred years, and they are capable of continuously taking the lead in trends," he added.

Shanghai Soap Co Ltd, producer of the Bee & Flower sandalwood soap, has been an active participant in crossovers in the past few years, according to Ouyang Yiling, vice-general manager of Shanghai Soap.

Three years ago, Bee & Flower sandalwood soap, which was invented around 1928, launched a series of scented liquid soaps, including sandalwood, agarwood and amber, in collaboration with The Palace Museum. The packaging bears images of Northern Song Emperor Huizong's paintings of birds and flowers, which are in the collection of the Forbidden City. Also known as Zhao Ji, Huizong ruled from 1100-1126 and was one of China's most famous artists for his achievements in painting and calligraphy.

"This product has reached accumulative sales revenue of up to 10 million yuan to date," Ouyang said, adding that the company is keen on launching new products, including crossovers, to tap into differentiated target consumers' needs.

Ma said Chinese consumers' growing interest in domestic products is igniting opportunities for time-honored brands, adding: "We are at the best time in the past century. The nation's economic growth has led to people being more and more confident in China-made products, which offers numerous opportunities for time-honored brands to explore."

According to Ma, Shanghai is home to the greatest number of Chinese time-honored brands, with 180 of 1,128 that are national-level ranked. Another 104 local-level brands are also based in the city. "They cover a wide range of sectors — including retail, catering, medicine, food, clothing — all aspects of people's eating, wearing, living and traveling," Ma said.

Li said most of the crossovers made so far are in product marketing. In order to retain consumers' attention and enthusiasm, brands need to continue making efforts to offer creative customer experiences — particularly when it comes to young consumers.

"For example, in a bid to avoid the high homogeneity of product design, time-honored brands may pay more attention to the diversified regional culture, and in the meantime, tap into young people's needs for personalized products," said Li.

"The younger generations have completely different concepts of consumption, affordability, living habits and preferences in value. Therefore, we expect our brands with a long history to make breakthroughs in their stereotyped image, and make more creative and innovative transformations that meet various market demands."

Ma expressed full confidence in the future of China's time-honored brands, saying:"The age-old trademarks may be a bit slower in coping with market changes, but they never lack courage in the face of difficulties, never lose confidence in front of changes and are never short of determination in dealing with challenges and being creative."