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The Innovation of Time-Honoured Brands: Profiting from China’s Love Affair with Nostalgia

At the time of writing, Bright Dairy has received orders for 100,000 cases (3.2 million pieces) of White Rabbit ice cream. As of May 31, 2019, 32% of China’s 1128 domestic time-honored brands have opened a Tmall store.

Crossover Cooperation

On Mar. 20, Bright Dairy (光明乳业) announced that it and Guan Sheng Yuan (冠生园) would jointly launch white rabbit ice cream [1], which will initially be sold in Shanghai and Wuhan. Once Covid-19 supply chain issues are resolved, the ice cream will go on sale in other cities at 5 yuan per piece (approx. $0.7) [2]. The new product will be sold primarily on e-commerce, and will be pushed through both a Tmall flagship store and a JD flagship store. Offline distribution channels will include Hema (盒马) and Family Mart (全家).

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Bright Dairy is one of China's head dairy brands, and also a time-honored domestic brand. Consumers that live in the free mail area (Jiangsu, Zhejiang, and Shanghai) will be most familiar with home delivery of milk in glass bottles adorned with the Bright Dairy logo.

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White Rabbit milk candy, a product of Guan Sheng Yuan Company, differs from other candy in that its creamy candy is coated with a thin layer of edible glutinous rice paper. The candy evokes strong memories of childhood for those that grew up in the 80s and 90s in China.

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A Walk Down Memory Lane

Bright Dairy is banking on the selling power of nostalgia. Chinese 80s and 90s generations have fond memories of White Rabbit. The price point is also attractive (unit price is less than a dollar). Bright Dairy has received orders for 100,000 cases (3.2 million pieces) of White Rabbit ice cream [2].

It is not the first time for the two brands to cooperate, in July last year, Bright Dairy and White Rabbit developed White Rabbit milk (大白兔牛奶). The product has maintained steady sales of over 15k units per month on TMall (calculated as boxes) [3].

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From Retro to Riches

In the past two years, we have seen many Chinese brands embark on crossover collaborations. White Rabbit has become one of China's most sought after brands for this type of collaboration. Last year, White Rabbit teamed up with the Scent Library (气味图书馆) to launch the White Rabbit milky sweet perfume, body wash, and hand cream. In only five days, the sales volume of perfume and body lotion exceeded 20,000 units, and the sales volume of the body and hand cream both exceeded 10,000 units [4].

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White Rabbit also opened a milk tea shop with Happy Lemon (a chain beverage brand, 快乐柠檬), selling co-branded products such as White Rabbit Loves Lemon, White Rabbit with Tiramisu, etc. Due to the shortage of supply, the unit price of a cup even soared from 20 yuan to 70 yuan (from around $3 to $10) [2].

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White Rabbit, founded in 1959, is now 61 years old and is one of China's oldest time-honored brands. Despite this longevity, time-honored brands like this are facing the pinch. Cobranding and cross-sectoral collaboration have arisen as one way to adapt to China's increasingly competitive market. Here are some good examples of successful co-branding and cross-sector collaborations:

  • Wufangzhai (a Chinese chain restaurant brand, 五芳斋) cooperated with TMall using advertisements which reproduce old videos from the 1980s [5].

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  • Bright Dairy sells a popular ice cream product called square brick. Last year it launched milk and yogurt products with the same flavor, bringing a familiar flavour to a more diverse range of products.

  • Weilong (卫龙) added its spicy slices in Chinese Zongzi (a type of Chinese sticky rice delicacy wrapped and steam in the leaf of tree)

  • Liushen (六神) flora water cooperated with RIO to create a new cocktail flavor.

  • Godiva cooperated with White Rabbit to launch an ice cream, which gained a lot of recognition among consumers [6].

Implications for International Stakeholders

  1. Not all time-honoured brands are good partners. 

    There are many old brands unfamiliar to Gen Z. In a survey of 160 old brands [2],Gen Z knew only 19 of them. Furthermore, 43.5% of Gen Z said that they would avoid trying brands if they did not know it [2].

  2. Legal issues need to be addressed.

    In Feb. 2019, Wanderlust Creamery, a famous ice cream dealer in Los Angeles, USA, launched White Rabbit milk ice cream [7]. Although this new product launched in winter, there were long lines in front of the store. From Feb. 1 to 20, the total sales reached 50 gallons, far exceeding sales of its other flavors.

    However, the Guan Sheng Yuan company announced it had not authorized the American business to use its IP [7]. The US ice cream store was forced to stop all related operations and remove all posters with the logo of White Rabbit from social media and is still the subject of ongoing legal proceedings.

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  3. Online channel layout

    E-commerce and new retail channels help brands to connect with young consumers. As of May 31, 2019, 32% of all the 1128 domestic time-honored brands have opened stores or have some presence on TMall [8]. From July 2018 to June 2019, the overall transaction value attributable to sales from products made by time-honored domestic brands on Taobao and TMall exceeded 37 billion yuan, with a year-on-year growth rate of 23.6% [8].

  4. Eastern aesthetics and traditional Chinese culture

    Chinese Gen Z consumers have a strong sense of national identity [2]. Gen Zs have been shaped by several crises such as the SARS outbreak, the Wenchuan earthquake, and the COVID-19 pandemic. Gen Z tends to gravitate towards designs and product positioning, which simultaneously address their strong sense of national pride and their need for innovative and engaging experiences.

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