This interview is part of WARC's Marketer's Toolkit 2022, launching soon. Click here to register your interest.
- FMCG products are not like airlines or banks that can make use of the offline store service model, so something different is required to provide better service for users.
- The best marketing is the product itself and wherever the product is placed, it becomes a living advertisement and gives consumers a stronger impression of what they are buying.
- Gaming is a strong growth area for FMCGs, with Gen Z – soon to become the main consumer group in society – attracted to esports and virtual characters in anime and Chinese animations.
Wong Lo Kat has always heavily stressed marketing, especially on social media, and over the years, as new platforms have emerged, the brand has expanded the platforms it uses from Weibo to bilibili. What changes do you see in your audience profile and how has the marketing approach on different platforms evolved?
First of all, I think the shift from Weibo to bilibili is merely a change in channel. We cooperate with the platform, and the focus changes slightly each year, with a shift in focus at each different stage. For Wong Lo Kat, there are three core priorities for us in the future.
- Rejuvenation of the brand.
This should be something that all aspiring brands are doing all the time because young people are the future.
- Creation of our own "Ji culture".
We have always been committed to promoting the Chinese culture surrounding the character “Ji” or “Kat”, which means “good fortune”. Examples would be the launch during the Spring Festival in 2021 of different "Surname Cans" based on surnames such as "Huang Lao Ji" and "Jia Lao Ji", as well as "Lucky Cans" which we launched during the summer season, with titles such as "Newlywed Lucky" and "Starting a New Job Lucky”. We want people to drink Wong Lo Kat and associate it with anything that happens to them that is good.
- Commitment to new product positioning.
We started working with bilibili in 2016 but at that time, we were relatively unsure of the right way to work together and it was only in 2019 that we did a co-production with bilibili, giving the creative initiative to users by allowing them to create an image of Wong Lo Kat in their own minds. This is all about communicating with young people. We have all been children ourselves and now many of us have children of our own, so we should treat children not as children but more as adults, as ourselves, respecting and treating them as equals. In that way, our brand won’t feel like it is out of reach and young people will like the brand and make it part of their lives. Only then is it interesting and that's what we're after in terms of branding.
The “surname can” idea was not original, Coca-Cola has done it before, so what makes Wong Lo Kat's version different?
With Coca-Cola or any other brand, it's the product that is at the heart of the brand and brands should play around their product.
Coca-Cola came up with ideas like "Nickname Bottles" and "Lyrics Bottles" but although there are changes in the form, the consistent elements are still the basic container and the Coca-Cola product, and that is the same for us too. But with everything that Wong Lo Kat does, we relate it to our “Ji” culture. For example, every year we strongly promote the idea that you can drink red cans of Wong Lo Kat to mark the “auspicious” New Year and red cans of Wong Lo Kat for the reunion at the Mid-Autumn Festival. Everything we do has a clear link to our own products.
What we’re doing is different from Coca-Cola because we base everything on our product’s roots. Wong Lo Kat is a very special part of Chinese culture, which is herbal tea, and the brand itself dates from 1828.
Despite its nearly 200-year history, Wong Lo Kat has only in recent years really invested heavily in marketing, especially to young people. Which aspects does Wong Lo Kat emphasise in marketing? Does it position itself as an old or new brand?
Personally, I think 99% of people would think of it as a new brand. Deep in your heart, you know you’re an old brand but in terms of presentation, communication and channel choice, you have to position yourself as a new brand. If you keep thinking of yourself as an old brand, then you will likely become an old, outdated brand. In this era of increasingly decentralised media, this has become the norm. We no longer live in a “one script for all” world. That is why we have to present ourselves in a new light and with a new look. I would summarise it by saying that we use our own soul and culture but use other people's forms to project ourselves. In this day and age, there are times when content may be better expressed through form.
What do you think are the important aspects to focus on in terms of content marketing? Are brands more focused on the long tail effect in their content marketing aspirations?
In terms of content, we start from the perspective of user needs and we either create the kind of content that users want to see or we let users create content for us. For example, in the content co-creation with bilibili, we received 888 submissions and the quality of the work was quite high, in some cases even better than what some professional advertising companies have given us. And it’s also more popular with users. In the end, we selected the top 10 images from the submissions and made them into Wong Lo Kat custom cans, and then gave them to these users. One of the reasons why the "Surname Can" has been so well received is that we have made it and users can go and buy it because they feel it’s fun.
Also, in the past, the general understanding of content marketing was to hire a celebrity or even a big-name director to make a great TV commercial and then put it on every single platform available. But that's not what we're doing now. The biggest things we've done are things like the co-creation competition we pioneered with Jitterbug, which has led to us co-hosting a music festival. For the festival, we have collected about 20,000 different musical compositions written by user creators and based around Wong Lo Kat's core brand concept. These songs can now all be found on Jitterbug. At the end of the festival, awards for the best music were presented by Li Weisong and Li Sisong, well known music producers who have made many singers, including Stefanie Sun Yanzhi, famous. They recognise the value of this kind of branding activity and see it as a way to create a three-way resonance between business, art and the music industry, which also results in some good music. Not all commercial music is bad.
Brands are now faced with so many platforms, each of which has its own features, from content to e-commerce. How is Wong Lo Kat using these emerging platforms to attract customers? Also, data privacy is becoming more and more important to everyone, how are new data policies challenging the effectiveness of advertising? Will Wong Lo Kat make any adjustments to its data utilisation policies?
We take the privacy of our users very seriously and comply with China’s laws and regulations. Wong Lo Kat, as an FMCG product, still gets a lot of its sales offline which means that we don't have access to a lot of user information but basically stimulate the brand image through annual promotions such as summer sales campaigns and "one can, one code." For example, we have just partnered with three NetEase games – Fantasy Westward Journey, Identity V and Revelation – to create 500 million customised cans. Gamers buy a can of Wong Lo Kat, pull back the ring tab and scan the code to get the game items provided by the game. A total of 500 million items have been prepared so the winning rate is 100%. Wong Lo Kat also provides game peripherals such as mechanical keyboards and the Logitech mouse, and has a weekly draw every Friday at 8pm where there are eight iPad Pros to be won.
For us, it’s all about providing a better experience and better service. FMCG products are not like airlines, banks and other institutions that can make use of the offline store service model, so we have to come up with something different to provide better service for users. For us, that means letting users customise their cans. For example, if a couple gets married, we can create a can with their picture on it and a quote saying “100 years of good fortune”. I don’t think there are many brands that can do this but we can, especially because our product prices are not very high. So our customised cans are still very popular. Of course, the prerequisite for customised cans is that the elements provided by the user must be legal and comply with regulations, and we do have a secondary audit to ensure that.
This kind of interaction, giving users a unique and fresh experience, requires high-speed innovation and an efficient supply chain. How does Wong Lo Kat enhance these aspects to better cater to consumer needs?
At the moment, Wong Lo Kat's entire supply chain system is basically in good shape. The machines used for can customisation are in Shanghai and imported from Germany. When it comes to customised can technology, Wong Lo Kat has a couple dozen internal departments working together. As for what sales volume can be generated with the customised cans, so far, the percentage of overall sales is actually quite small. That’s mostly because Wong Lo Kat has been in business for so many years and our sales volume is huge. But I think that anything new has to go through the process of growing from small to big, so we are pushing forward with the concept.
So right now, Wong Lo Kat’s supply chain arrangements in this area are relatively good, with some room for optimisation here and there. Just like how the internet is constantly iterating, we can also evolve and slowly upgrade and optimise our internal processes, production cycles and craftsmanship. After all, we belong in the food and beverage category, so the main driving force behind this is ensuring that hygiene and safety standards are maintained.
In response to current health trends, many brands are expanding their SKUs and Wong Lo Kat has also launched sugar-free herbal tea. What is your view on this explosion in health consciousness? Also, in terms of product innovation, consumers are not only concerned about the properties of a product but also its value and flavour. How is Wong Lo Kat approaching the development of new products?
The Wong Lo Kat company was established in 2012 when Guangzhou WangLaoJi Health Industry Ltd took over the management rights of the Wong Lo Kat Red Can and Red Bottle. We’ve always understood the importance of health consciousness and we think that it’s not something that is going to go away any time soon. With the improvement in people's living standards and economic development, we expect this trend to be increasingly popular in the future. Look at other developed countries, for example, they have all ended up as massively health-conscious markets.
Many of the products we produce, including Wong Lo Kat itself, do not have any additives. There is no caffeine, nor do they have added flavours such as the cherry blossom flavouring that many brands have. In addition, the sugar-free products we have launched are also sold in separate online and offline versions. I think there is increasing awareness and producers themselves are asking more questions when making their products. In our case, we belong to Guangzhou Pharmaceutical Group Ltd which makes medicines, for which product standards are very high. We are using the supply and testing methods developed for medicines for our products, an example of this being the Wong Lo Kat herbal tea.
With all these different SKUs, how does Wong Lo Kat balance the relationship between its core products and other products?
Our core product is obviously the red can. Every red can product has its own lifecycle and room for growth, so after we took over the brand management again in 2012, we made a new bottled Wong Lo Kat, which is a distinct SKU. In terms of realistic customer scenarios, when consumers open a can of Wong Lo Kat, they have to finish it because it’s inconvenient to carry around an open can. But a bottled product can be drunk whenever. So we can sell more bottles when it is hot outside, while in scenarios such as barbecues and indoor dining, people are likely to buy more canned products.
We are also developing new SKUs, such as the sugar-free product we just mentioned. The core formula won’t change but we will make some adjustments to it, alongside changes to the packaging. Wong Lo Kat's overall strategy is to diversify standalone products, that is, to diversify the range of herbal teas and give consumers more segmented choices, such as low-sugar herbal tea, sugar-free herbal tea, jasmine herbal tea, shaved ice herbal tea and black herbal tea. We are also diversifying and not only making herbal teas. We launched Ci Jing Ji (a vitamin C-rich beverage made from roxburgh rose and lemon) in 2019, which is positioned as "Natural, high Vitamin C, tasty Prickly Lemonji". The core selling points are "natural" and "high vitamin C" with roxburgh rose containing about 100 times more vitamin C than a lemon.
What channels and insights does Wong Lo Kat use to tap into user needs for product innovation?
In terms of product diversification, Prickly Lemonji is just one of our products in the Vitamin C category; we also make Dazhai Walnut Milk and Soft Coconut Juice. When Wong Lo Kat enters a market, the two core assets are channel power and brand power. For all FMCG products, if you have strong channel power and strong brand power when you enter a category, either in a brand-new market segment or a mature market, you can use your brand and channel advantages to take a share of the pie. For example, when you order herbal tea in a restaurant, you will say: "Please give me a can of Wang Laoji." So basically there is no hope for other brands to enter the herbal tea market because the brand Wong Lo Kat already represents the entire category.
However, when you order coconut milk in a restaurant, no one ever says: "Please get me a can of X brand coconut milk", which indicates there is an opportunity in that market segment. So when you enter a market, you need to not only develop and create new products but also need to have channel power and brand power. For example, Prickly Lemonji is a new category product we have created and in fact, the Vitamin C segment is not particularly strong judging from past performance but that also means there is a great opportunity for us. From a business perspective, our entry into that market is relatively quick and not as costly.
Do you see any changes in consumer scenarios for the herbal tea category or the larger beverage category especially in the wake of the pandemic? For example, we have a dining scenario, a family scenario, a hotpot scenario, a gaming scenario, etc? How does Wong Lo Kat create a shift in consumer scenarios?
Scenarios and business are related. At the start, we had the red cans, and the scenarios referenced the most were related to eating hotpot, eating barbecue and staying up late. Gaming to a large extent belongs to the staying up late scenario because people involved in gaming often do stay up late, with three or five friends playing together for a longer time. This connects to the consumption mode. Also, for example, the outdoors context, where people are hiking and travelling, may be more relevant to bottled product scenarios.
We may enter some channels just for the sales volume alone, or from the perspective of the channel, to consider the rate of stock placement. But for some consumer scenarios, it is not necessarily just about selling goods but also the effectiveness of the brand. The best marketing is the product itself and wherever the product is placed, it becomes a living advertisement and gives consumers a stronger impression of what they are drinking. Just like with our “surname can”, consumers can obtain it, see it and show it off to their friends. That is the most important thing.
We get into some restaurant scenarios that don't necessarily generate a lot of sales but are very helpful in revitalising the brand. So some measures are considered from the brand power perspective, some for sales power and some for a combination of brand and sales power. Take, for example, the crayfish restaurants that young people like nowadays. People look at some which are so hot online and are surprised that Wong Lo Kat got in first, which is actually useful in terms of both brand and sales. That is one aspect of F&B that we’re seeing now and F&B is the foundation of Wong Lo Kat's survival.
Another area that is important is the gift market. Something we have worked hard to create over the past few years is the Chinese “Ji Culture”. This is not a slogan but something we are really implementing, both at the brand and sales levels.
What are the benefits you have seen since the creation of "Ji Culture" in terms of building brand awareness and culture IP?
An obvious advantage is that marketing can be done all year round because events like "Birthday Lucky", "College Entrance Exam Lucky” and “Newlywed Lucky” are occasions that everyone experiences. There are also other consumer scenarios, for instance, where film and TV drama production crews naturally go and buy Wong Lo Kat for their "start of shooting” and "wrap" parties. In 2017, we sponsored the variety show "The Son of Tomorrow" and the team all bought Wong Lo Kat themselves, as if it was a way of expressing good intentions. Chinese people really stress such things. Good intentions can be seen as the internet equivalent of “Koi culture” in Japan – a symbol of luck and good fortune. People may think that young people nowadays don't believe in this but in fact, it is in an aspiration for a better life or a wish for good fortune. Just like people give gifts that may not be expensive but which definitely convey a good intention.
Gaming is a very strong growth area. What unique entry points and ways of association does Wong Lo Kat have when linking up with gaming?
All the gaming companies are actually very happy to work with FMCGs and one of their biggest wants is to get onto the can. I once attended a BilibiliWorld exhibition and it was an eye-opener for me. Here you will see all kinds of people from virtual worlds in strange costumes appearing in the real world. Games can only be manifested in virtual scenarios, such as building your own kingdom in a virtual world where you are the king and can give orders to other people, which is not the case in the real world. So when doing gaming cooperation, you must understand their requirements and their biggest requirement is to appear on the can, followed by joint promotion.
The whole gaming industry chain is pretty long and the placement of props, in-game scene implantation and prop distribution are the biggest advantages of gaming. For the hottest of the esports, we can view them as sports, so just as there is cooperation with basketball and football, for esports there are specific games to cooperate with. As a standalone industry, esports is very big, involving all sorts of teams, livestreaming platforms and anchors, all of which can be understood as a complete ecology, linked finally to offline activities, forming a whole industry chain. Cooperation with esports requires strong resource integration and execution, which is relatively difficult to do. Wong Lo Kat has been working with SEASUN’s “Legend of the Swordsman” since 2016, as well as Tencent's “Game for Peace”, Blizzard China's “Hearthstone” and “Heroes of the Storm”, and this year's three games with NetEase.
As the post-95 and Gen Z enter the workforce and become the main consumer group in society, they represent the future of the brand for us. They like esports, virtual characters in anime and Chinese animations, and they gather in large numbers on bilibili. The number of users on bilibili is about 200 million, which is basically the same as China's Gen Z population. So for this group, the biggest volume is in fanzines and Chinese animations, with esports coming in second.
Can you share some of the results of the data obtained through Wong Lo Kat's collaboration with the NetEase games?
The volume of "The Fifth Personality" blind box products sold in just 10 days was equivalent to the volume of custom-made models sold over six months in collaboration with some celebrities. The product ranked top in Tmall's positive feedback list and third in the repurchase list.
Will game marketing work better than using celebrity influencers?
You can't simply say that. The audience for celebrities is somewhat broader, while the audience for gaming has specific boundaries. For example, some people don't play "The Fifth Personality" but mention a celebrity and they will know about it.
At the moment, FMCG is still predominantly offline, so the impact of celebrities is bigger. But if you look at the Gen Z demographic, that's not necessarily the case. Of course, some celebrities have the same driving effect as gaming, so it depends on how you evaluate it. When we do marketing, there may be some bias and my personal opinion is that it is necessary to analyse each problem independently. Even if we weren’t working with games and celebrities, Wong Lo Kat would still be selling products because the product is strong, the channel is strong and the brand is strong. However, these collaborations lead to many other things, such as the long-term development of the brand, brand power building, rejuvenation and establishing a presence, all of which are a long-term process.