Wangbaobao is a recently established Chinese cereal brand that started selling cereal-based food products on Tmall at the beginning of 2018. By June 2019, it had already become the top-selling cereal brands on Tmall (assessed by single-store sales volume) [1]. The company reached new heights during this year's 11/11 shopping festival when it clinched the No.1 place with sales topping 10 million yuan by the 69th minute of the 24-hour shopping festival[2]. The brand achieved all this despite it being its first time selling on Tmall during 11/11 and despite going head to head with more established brands already familiar to Chinese consumers, such as Quaker and Calbee. The strategy behind Wangbaobao's meteoric rise is a product development and marketing strategy which focuses on consumer demands, product innovation, and leverages the most relevant retail and marketing channels.
Correct product positioning
Wangbaobao's success is no mistake, but how exactly did this brand "go viral"? The cereal products it sells have several distinct features, they are healthy (non-puffed, no-sugar, and high-fiber), tasty (various adjunct ingredients), contain less fat (oats as the main ingredient), and are visually appealing (adding large pieces of dried fruit and yogurt). These features align well with the trends shaping China's food sector.
According to McKinsey's China Consumer Survey Report 2020, the concept of healthy living continues to gain momentum, manifesting in increased spending in relevant segments. In the food sector, healthy living manifests as a move by both consumers and manufacturers away from high fat, high sugar foods associated with the development of chronic disease, towards products that are developed using healthier ingredients.
The meal replacement market has also developed rapidly in China. CBNData and Tmall jointly released "Insight into China's Online Meal Replacement Consumption Trend Report" in August of 2019, revealing that online meal replacement sales are growing rapidly, with consumption up 60% in the cereal and powder category.
Innovative product portfolio
Wangbaobao's products are relatively innovative for the Chinese market and are very well differentiated from their rivals. The products do not use naked oats, which are relatively unpalatable, and do not use over-processed puffed cereals.
Wangbaobao uses low temperature baked oats as its main ingredient, fully conforming to the product's health-oriented position. Also, assorted large pieces of dried fruit and yogurt, together with nuts, have been added to enrich the complexity and improve the product's sensory characteristics. The brand's use of large pieces of dried fruit is also a first in China's cereal space.
The brand also stayed current on trendy flavors and launched a series of sought-after flavor mixes such as strawberry cheese, peach oolong, meat floss, and corn, which helps it gain traction with young consumers.
Except for cereal, it also launched instant meal replacement products like matcha flavored konjac soup and milk tea flavored oatmeal, and snacks such as dried yogurt cubes, thus enriching its product portfolios and helping it tap into China's emerging meal replacement sector.
Marketing channel selection and brand development
Wangbaobao has invested heavily in content marketing. For example, in Red, the brand offers lots of engaging "clickbait-style" content to attract consumers such as "101 ways to eat cereal", "easy breakfast techniques," etc. It helps educate consumers and positions the product across multiple domains and help foster its perception as a healthy and tasty product that matches the lifestyles of Chinese consumers.
It also cooperates with KOLs and celebrities to attract more traffic. Public data shows that since its founding, Wangbaobao has cooperated with more than 200 web celebrities and KOLs, covering more than 40 million fans [3]. Its cooperation with teen star Ouyang Nana has proven extremely beneficial. The girl, born in 2000, has millions of followers on social media platforms, and her daily outfits, makeup, and diet choices garner huge attention from Chinese netizens. As a result, her recommendations to consume Wangbaobao has channeled huge traffic towards the brand and translated to a healthy boost in sales. In addition to famous stars, Wangbaobao also invites KOLs or bloggers with fewer followers to do sharing and recommendations harnessing the power of China's increasingly important social eCommerce.
Wangbaobao is also leveraging hugely popular video platforms like Tiktok (Douyin), and Taobao live streaming. Li jiaqi, one of China's hottest online celebrity, has recommended Wangbaobao during his live streaming by labeling it as tasty snacks with less fat. Shortly after his recommendation, the product sold out.
Modeling Wangbaobao: What elements of Wangbaobao’s strategy can international stakeholders use?
Savvy product development that aligns with the latest trends, use of big data to guide product development and address consumer demand, strategic cooperation with influencers, and omnichannel marketing/retail with dedicated strategies for each platform are the cornerstones on which Wangbaobao's success has been built. At Chemlinked, we caution brands trying to align with health trends to stay cognizant of the importance of the sensory qualities of their products during development. Chinese consumers demand healthy foods but are unwilling to compromise on taste, mouthfeel, smell, and appearance. If brands are considering partnering with influencers, there are other important considerations. KOL recommendation or video advertising must be strategic. The selection of a KOLs should align well with a brand positioning and core message. The brand or its products should also be expected to resonate with the KOLs fans and followers. Video content must also be carefully planned in terms of the length of the video, the placement of the most important information at the start, and the platforms used to disseminate the videos.
Disclaimer: All images used in this article are from the internet.
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