Category: fmcg | 雜貨業務 | 소비재 | 食料品事業

FMCG or fast moving consumer goods sprang out of the mass industrialisation. Brands sprang up originally as a guarantee of quality. Later on as these brands needed to be promoted, we saw the foundation of the what we think of as modern marketing and advertising.

Today media and entertainment takes up an increasing amount of the household spend, as does housing, but FMCGs are a crucial part of their essential and disposable income spend.

They have nostalgia wrapped up in them, distinctive aromas, taste and packaging designs. From the smell of my Granny using so much Pledge on the TV that I was surprised it didn’t burst into flame to the taste of Cidona and texture of Boland’s Fig Roll biscuits in my mouth.

The sound of their advertising jingles was the soundtrack of my childhood. Digital advertising is largely rationale, it lacks the fluent devices that provide the centre to advertising and made FMCG advertising iconic. Fluent devices like the Peperami ‘Animal’, the M&M characters or the Cadbury Smash robots were embedded in deep marketing research. FMCG brands still sponsor the best research in marketing science.

I had the good fortune to work inhouse at Unilever and agency-side for their brands. I also managed to work on Coca-Cola and Colgate during my time in Hong Kong.

  • Female voices impact + more news

    Pinay female voices power

    The Philippines’ secret weapon against Chinese incursions | The Economist – having women radio operators seem to be more successful and less likely to rise tensions, seems to be down to training and the nature of female voices. It reminded me of how early HCI experiments by DARPA found that jet fighter pilots responded best to ‘mature’ female voices on warning alerts. An interesting aside is that the radio altimeter on Airbus aircraft actually use an English mature male voice instead.

    Academic research gives us an idea of what kind of female voices are likely to be more effective. Maybe this authority is conveyed by the female radio operator training and the female voices selected by the Coastguard?

    Women with masculine voice are perceived to be more rational and persuasive than those with feminine voice. In addition, masculine voice is rated as more competent than feminine voice, regardless of the actual gender 

    It’s not What It Speaks, but It’s How It Speaks: A Study into Smartphone Voice-User Interfaces (VUI) by Jaeyeol Jeong & Dong-Hee Shin of Department of Interaction ScienceSungkyunkwan University, Seoul,Korea (2015)

    Other research suggested that a preference for female voices occurred over time, this might be due to technological change in voices. The heavily synthesised ‘Speak n Spell’ type voices were male, better technology allowed for great choices and detail in female voices to be conveyed.

    …the survey found that people preferred human-like, happy, empathetic voices with higher pitches. However, these preferences were not static; for instance, user preference for voice gender changed over time from masculine voices to more feminine ones. Based on these findings, the researchers were able to formulate a high-level framework to classify different types of interactions across various computer-based technologies

    The role of computer voice in the future of speech-based human-computer interaction – Tokyo Institute of Technology

    Other research that it is attitude rather than a female voice that matters. Which begs the question is it compliance to the radio operator training rather than a female voice that is more important in this context? Filipino culture has a certain amount of machismo and having female voices delivering the radio instructions might be a way around this dilemma.

    introvert participants rated the introvert computer voice as more attractive, credible, and informative, while the extrovert participants rated the extrovert voice more highly. Expanding on these findings, it was found that the personality conveyed by the voice was the dominant percept

    Voice as a design material : sociophonetic inspired design strategies in Human-Computer Interaction by Selina Sutton, Paul Foulkes and David Kirk of the University of York presented at CHI Conference on Human Factors in Computing Systems Proceedings (CHI 2019). (PDF)

    The use of female voices in this way could be accused of playing to sexist tropes

    China

    Another day, another reminder of how Brand China has deteriorated – Fawning and complacent, the West has eased China’s path to power | The Sunday Times – while the statement is true, it also shows how much the tone has changed towards China amongst UK political elites

    China goes on the defensive as Covid vaccine diplomacy backfires | The Times – Beijing’s hopes of winning favour by helping the world’s poorer nations out of the pandemic have been hamstrung by questions over the efficacy of the jabs on offer

    Alleged assault on scientists overshadows China’s space race success | Financial Times – Police detained Zhang Tao, chair and party secretary at China Aerospace Investment Holdings, for his alleged attacks on Wu Meirong and Wang Jinnian last month, the state-run Xinhua news agency reported on Tuesday. Wang and Wu had refused to recommend Zhang for membership of the International Academy of Astronautics, a Stockholm-based group that recognises distinguished scientists

    For China’s Business Elites, Staying Out of Politics Is No Longer an Option – The New York TimesThe Chinese internet immediately savaged Didi and Ms. Liu — and then Mr. Liu. A hashtag, #Didiapppulledfromappstores, which was started by the official People’s Daily, was viewed more than one billion times over a 24-hour period on the Chinese social media platform Weibo. Weibo users called Didi a “traitor” and a “walking dog of the United States.” They urged the government to also punish Mr. Liu for selling out national interests

    Underground front: the Chinese Communist Party in Hong KongContinuing to operate secretly in Hong Kong can only cause unnecessary discomfort. Hong Kong people already accept the CCP’s undoubted authority in leading the affairs of state. While the party appreciates that Hong Kong needs to function differently from the mainland, its basic instincts, which are Leninist in nature, make it difficult for the party apparatus not to over- extend its reach into the city’s public affairs. The sharpest point of departure between the party’s way and Hong Kong’s way arises from their different governing experience. (PDF)

    Consumer behaviour

    Japanese fax fans rally to defence of much-maligned machine | Japan | The GuardianMembers of the resistance said there were concerns over the security of sensitive information and “anxiety over the communication environment” if, as the government had requested, they switched exclusively to email. Japanese ministries and agencies use faxes when handling highly confidential information, including court procedures and police work, and the Hokkaido Shimbun said there were fears that exclusively online communication would result in security lapses

    Patriotism Abroad: Overseas Chinese Students’ Encounters With Criticisms of China – Henry Chiu Hail, 2015research on international education suggests that host country students’ lack of interest in talking to international students is a major cause of international student segregation. Some Chinese international students, however, complain that although host students want to talk with them about China, they often exhibit misinformed, prejudiced and offensive views of Chinese current events. This has occasionally led to tensions between Chinese international students and host communities. Drawing on interviews and open-ended surveys of Chinese students at an American university, this study shows a variety of positive and negative cross-national interactions and uses social identity theory to explain why tensions may arise. Negative reactions to hearing criticism of one’s home country are often motivated by concerns for status, loyalty, harmony, or utilitarian politics. However, fostering a common group identity and the perception of mutual benevolence among students from different countries can promote positive cross-national interaction. Furthermore, international students may learn more about democracy and human rights through observing the host society rather than directly discussing these topics with host country members – basically the delta between western perceptions of China, versus domestic Chinese propaganda is going to drive that wedge deeper. Universities have Chinese students purely for the money as there is minimal wider benefit to their domestic student body. Which begs wider questions about the purpose and morality of many western third level education institutions

    Culture

    Trese: the true crime and folklore behind Netflix’s… – The Face – it reminded me of the animated Blade series and Ghost in The Shell. The Philippines could be an anime powerhouse

    Finance

    China’s Big Tech Crackdown Puts Dozens of U.S. IPOs at Risk – Bloomberg“The Chinese government could have stopped the IPOs from happening, like how they did with Ant,” said Sharif Farha, a Dubai-based portfolio manager at Safehouse Global Consumer Fund. “Instead, they allowed global investors to take pain, and consequently have broken trust with a lot of foreign investors. While we did not participate in any of these listings, we would imagine that several funds would consider exiting.” – it makes the Goldman Sachs ICBC deal look even more sketchy

    China Mulls Closing Loophole Tech Giants Use for U.S. IPOs – Bloomberg – on one hand I get it. Mainland Chinese are creating bubbles in areas like property and have poor returns because they don’t have stocks or ETFs that they can invest in. On the other hand this burns early stage foreign investors to the ground as they can no longer exit their money from China.

    Tell me lies, tell me sweet little VIEs | Financial Times – not terribly surprising. VIEs are the vehicle that Chinese companies use to go public abroad

    Chinese companies listing in the U.S. like DiDi face audit concerns – Protocol – basically you don’t know what you’re buying

    UK advertising watchdog to crack down on misleading crypto marketing | Financial Times

    Hong Kong

    Vitasoy faces boycott in mainland China following stabbing in HK | PR | Campaign AsiaFollowing the incident, an undated internal memo was circulated among Vitasoy employees expressing condolences to Leung’s family. A translated version of the memo, which leaked onto Chinese social media, mentions that “human resources has contacted [Leung’s] family and will follow up and provide assistance when needed.” The internal memo proved controversial, as Chinese social media users accused the brand of condoning violence and defending anti-China sentiments. – the red guard are already here. This wasn’t an endorsement of his act, but sympathy with the loss and grief that his parents must be feeling as they try and make sense of his actions.

    Crypto Keepers’ NFT-Backed Drama Series Hatched by AMM Global – Variety – the production company spun out of Hong Kong’s Asia Television – a former free to air TV station. Meanwhile in the UK, I heard that a production company is looking for people how have lost the password to their cryptocurrency wallet.

    Ideas

    If you hate the culture wars, blame liberals – Kevin Drum ….Over the last four years, white liberals have become a larger and larger share of the Democratic Party….And since white voters are sorting on ideology more than nonwhite voters, we’ve ended up in a situation where white liberals are more left wing than Black and Hispanic Democrats on pretty much every issue: taxes, health care, policing, and even on racial issues or various measures of “racial resentment.” So as white liberals increasingly define the party’s image and messaging, that’s going to turn off nonwhite conservative Democrats and push them against us. 

    ….If Democrats elevate issues or theories that a large minority of nonwhite voters reject, it’s going to be hard to keep those margins….Black conservatives and Hispanic conservatives don’t actually buy into a lot of these intellectual theories of racism. They often have a very different conception of how to help the Black or Hispanic community than liberals do – well worth a more in-depth read

    Culture Wars are Long Wars – The Scholar’s StageDemocrats under 40 take socialism very seriously. The Great Recession was their formative event; the old orthodoxy did not seem equal to the fear and heartache it caused. Thus, gradually, the younger cohorts have been won over to the socialist cause.5 All that keeps the socialists at bay is the power of their elders. That power cannot last. At some point in the next decade the transition point will arrive. Gradually will become suddenly, and America’s most popular party will be openly run by socialists – I don’t agree with a lot of the post, but it provides an interesting prespective

    Bristol Unpacked on whether white working class people are shut out of the equality debate, with Hartcliffe’s award winning filmmaker Paul Holbrook – The Bristol Cable – far too short a discussion session as podcast, it felt like they were just scratching the surface with this recording

    Erik Prince Had Pitched $10 Billion Private Army in Ukraine: Time – everything he does seems like it’s taken from the plot from William Gibson’s sprawl trilogy

    Innovation

    Institute for New Economic Thinking | How Intel finkncialised and lost its leadership in semiconductor technologyThe root of Intel’s failure in organizational integration lies in the financialized character of a third social condition of innovative enterprise, strategic control. Accepting stock yield as the measure of enterprise performance, in recent years Intel’s senior executives who exercise strategic control have lacked both the incentive and, increasingly we would argue, the ability, to implement innovative investment strategies through organizational integration. 

    Executive stock-based pay, in the form of stock options and stock awards, has created incentives for Intel’s CEOs to do large-scale buybacks to give manipulative boosts to the company’s stock price. Table 3 documents the total compensation, including realized gains from stock options and stock awards, of Intel’s CEOs over the past three decades

    Ireland

    Irish Times under fire for page of China propaganda | Ireland | The Sunday TimesThe newspaper, whose rate card sets a full-page colour ad at €34,000, ran the paid-for-content on page five of its news section under an “advertisement” heading last Thursday. The accompanying article by He Xiangdong, the Chinese ambassador, claimed the CCP enjoyed “solid” support from its people, and highlighted China’s vastly improved standards of living in recent decades – propaganda from draconian empires doesn’t go down that well in Ireland

    Luxury

    Supreme Italia Founders Sentences to Jail in Court | High Snobriety – this has been running for a long time. The key challenge was that they were headquartered in the UK. They could have got around this by being headquartered in a market that allows first registration as legitimacy for brands. More related content here.

    Philippines

    Duterte’s Pivot to China Yet to Deliver Promised Billions in Infrastructure – Bloomberg – from a Chinese communist perspective, why should they? They aren’t that good at being good to their word. Secondly, they are likely to view the Duterte regime as a vassal state and are getting everything they want out of the Philippines anyway

    Security

    Update Regarding VSA Security Incident | Kaseya – over 1,500 companies affected

    Code in huge ransomware attack written to avoid computers that use Russian, says new report – which begs the following questions / hypotheses? Are they in cahoots with Russian government? Was it that they didn’t want their own lives disrupted? Or are they petrified of the Russian security services coming after them, but relatively sanguine about foreign security services and law enforcement

    Technology

    The AI Wolf that Refuses to Play the Game Goes Viral – Google Docs – surely an issue of game design in terms of the way behaviours were rewarded and penalised rather than machine learning?

    The Tech Cold War’s ‘Most Complicated Machine’ That’s Out of China’s Reach – The New York Times – a great profile of ASML

    Musk has ‘mesmerised’ UK over electric power, says JCB chair | Financial Times – there’s a lot not to like about Lord Anthony Bamford, but I agree with him on this. Companies like BMW managed to extend this to cars. Bamford should be pitching this where there are hydrogen power plans like ireland

  • Life Bread & other things this week

    Life Bread homage by craft beer brand

    Life Bread is a brand icon. For Hong Kongers the blue or red checked wrappers mean western style bread. Life Bread is as Hong Kong as the Lion Rock – a granite peak that overlooks the city. Life Bread became an emotive icon used in the 2019 Hong Kong protests as an celebration of Hong Kong identity. It has even been celebrated in art. So when a local craft brewer FoamBeerBrewery was launching a bread based IPA it made sense that it would go with packaging that linked back to the Hong Konger lingua franca for bread.

    Foam Brewery Bread IPA
    FoamBeerBrewery Bread IPA packaging evoking the wrappers of Garden Bakery Life Bread – a local hero brand for Hong Kong

    FoamBeerBrewery Bread IPA is available from local high-end supermarket citysuper.

    Everybody’s business

    I came across this cold war era animated film that explains capitalism and extols its virtues. Nowadays there isn’t the same efforts to promote capitalism in the face of millennial socialism. As these things go, it’s not a bad explainer for economics neophytes.

    Immersive billboards

    A number of Asian cities have fitted high definition digital billboards that go around the corner of a building. The latest one overlooks Tokyo’s Shibuya crossing.

    The content has varied by market, including a golden bull to celebrate lunar new year in Kuala Lumpur. The Tokyo board taps into the Japanese love of cats. Here’s what the animation looks like. It appears sporadically to encourage bystanders to keep watching the adverts that stream on the billboard.

    There is a live stream of the billboard available.

    https://youtu.be/HX9pROOvTzA

    Brand China

    The communist party of China had its 100 year anniversary celebration to focus on past accomplishments and project its current strength. TL;DR China wants to smash your head into a wall of steel that has been made by 1.4 billion or so Chinese people.

    Meanwhile Pew Research was looking at ‘Brand China’

    While Xi Jingping might not care, it makes trade harder to do with more developed economy.

    The one segment where China does seem to have unwavering support is from the progressive left, particularly in American politics. This advocacy seems to be based more on their wishful thinking than any messages delivered by China as Noah Smith discusses in their newsletter.

  • George Gilderism + more things

    George Gilderism

    An interesting debate on what I would term “George Gilderism” of the techno-utopia is just around the corner versus the concern that innovation is slowing. George Gilder is the author of Telecosm; which encapsulated techno-utopian optimism at its peak in the mid-1990s; just as the web was coming into its own. ‘George Gilderism’ has since been brought to issues such photo and video imaging through to a blockchain based web.

    I’ve been making my way slowly through The Rise and Fall of American Growth which makes a convincing argument against ‘George Gilderism’. Stewart Brand in his work The Whole Earth Discipline makes a tepid case for ‘George Gilderism’. Kevin Kelly’s What Technology Wants suggests that technological progress almost has a will to happen. And that will or technium as he puts it is running at increasing cadence which seems to counter the idea of slowing innovation. Kelly doesn’t make a compelling case for ‘George Gilderism’ either, technological progress brings its own problems. Innovation runs at different speeds at different times, in different fields.

    Here’s Intel executive Stacy Smith on what would have happened to the car industry if it had been able to reap the benefits of innovation in the same what the semiconductor field had:

    If you apply the same metric to something like gas mileage, it says you could drive to the sun from Earth on a single gallon of gas.’

    If there were a Moore’s Law in the car industry, you could drive to the sun on a gallon of gas – MarketWatch (April 1, 2017)

    Noah Smith makes the case for optimism here: Answering the Techno-Pessimists (complete) – Noahpinion and the Applied Divinity Studies blog makes the case for the great stagnation – Isolated Demands for Rigour in New Optimism | Applied Divinity Studies

    Finance

    The rise of crypto laundries: how criminals cash out of bitcoin | Financial Times – so it’s a threat to offshore financial industry? There are so many things wrong with cryptocurrencies, but this seems like an odd flaw to pick on.

    Share price ‘pop’ in US IPOs falls by half | Financial Times – this could be a good thing, as it shows that IPOs are closer to being optimally priced rather than management teams leaving a large amount of money on the table

    FMCG

    Nestlé document says majority of its food portfolio is unhealthy | Financial Times – they’re ok in moderation, but this will bring in a lot of shareholder pressure

    Ideas

    We Need More Public Space for Teen Girls – Bloomberg – “We had nothing to do and there was nowhere to go. So we’d go and hang out on the swings in the early evening and chat as the light slowly faded into dusk. It was better than sitting around at home.” – but why are spaces failing now where they didn’t in the past? I talked this through with a few friends of both genders who thought it odd. It sounded more like a law enforcement issue around public safety than a space issue. I could see an argument for a safe online space, for girls, boys and everyone in between – but that comes with its own complexity. I thought that the problem was that kids are the PlayStation generation or have their lives stuffed with activities by middle class parents.

    BUSINESS: Warren Buffett sinks climate measure, says world will adapt – www.eenews.net – completely missed this when it originally came out. On a related note I was listening to a podcast interview with Niall Ferguson promoting his book Doom and he mentioned that we have seen remarkably little volcanic activity over the past 200 years. When that picked up again, we could be dealing with global cooling. (This also explains why when I was a kid; the concern wasn’t global warming, but a new ice age). But even at that time, although the media missed it; the general consensus that carbon dioxide causing global warming was a bigger effect than short lived particles in the air reducing sun and causing global cooling. Even Richard Turco’s A Path Where No Man Thought which posited the idea of a nuclear winter has been proven wrong in subsequent analysis. There may be some cooling effect but not the kind of effect envisaged by massive nuclear conflicts.

    Xi Jinping on external propaganda and discursive power – China Neican 内参 – aka more and better Wolf Warrior. It was interested that this was misinterpreted by many people as a softening in tone by China. The reality is that the CPC views everything in terms of struggle, which is means their strategic approach is like a ratchet. It was interesting to read alongside the below article in The Spectator

    China is not as strong as it appears | The SpectatorThe truth is that China is not as strong as it appears. As the Stanford scholar Elizabeth Economy points out, the country spent $216 billion on domestic security in 2019 — three times its expenditure of a decade before, and even more than what it spends on the People’s Liberation Army. Yet if Beijing’s internal problems continue to get worse, it will fall back on nationalism as a source of legitimacy. This will not be a comfortable experience for the West. ‘Communist China is bad, Han nationalist China will be worse,’ – the party is already validated by Han nationalism and has been a good while, so this worst case scenario is already here.

    Intellectual property

    Maine man sues his company, claiming it allowed Chinese access to US trade secrets | War Is Boring

    Luxury

    Busan’s Rich Have Only Malls to Spend Money on – The Chosun Ilbo

    Marketing

    Miller Lite, New Balance team up on ‘dad shoe’ beer koozie | Marketing DiveThrough the Shoezie, Miller Lite is hoping to appeal to the middle-aged men who represent an important cohort of beer drinkers and those who embrace dad fashion, which has become a trend as consumers retro looks. New Balance’s 624 Trainer — the model on which the koozie is based — is referred to as the classic “Dad Shoe” in the announcement. DDB San Francisco organized a modeling session for the Shoezie in which dads were placed in typical dad scenarios, such as cleaning the garage and searing a steak. By combining these elements of dad culture, Miller Lite is taking a lighthearted, relatable approach to Father’s Day

    Modern brands have forgotten that good ad slogans work (rest and play) | Business | The TimesLloyds Banking Group, Pepsi and the food division of Marks & Spencer have brought some or all of their marketing in-house, partly as a cost-saving exercise. But partly, as Richard Warren, Lloyds’ head of marketing, claims: “No one can write in ad agencies any more.” Ouch. – So much here in factors causing this move. Relentless cost cutting has reduced agency talent bench, if you’re 40 you’re done. Agency focus on disruption and innovation over craft because of the media buying profits offered from online.

    Retailing

    How the Depop generation thinks | Vogue Business – so a lot of similarities with earlier generations at their age then. the Etsy acquisition of Depop is more about consolidating crafting and thrifting rather than a generational play per se.

    Tymbals – The edge @ ROI – The latest wonder to be rolled out of Nigel Scott’s RoboVC investment model. The DTC Dropship Arbitrage for evaluating the relative efficiency of eCommerce biz models

    Security

    Polish trial begins in Huawei-linked China espionage case | Reuters – Huawei, which fired Wang after his arrest but has helped finance his legal fees, told Reuters in a statement last month that its activities are “in accordance with the highest standards of transparency and adherence to laws and regulation.” – some interesting bits in the article. First of all, Huawei picking up a good deal of the legal fees for an employee that they ‘fired’. Secondly, Wang was interested in tapping of military optical fibres in Poland, which hints at technology theft and the depth of military and intelligence alliance between Russia and China

    Technology

    Huawei’s HarmonyOS: “Fake it till you make it” meets OS development | Ars Technica – All the evidence points to HarmonyOS being built on top of Android; but with Android mentions removed. Knowing Huawei they are probably violating GPL as well

    RISC vs. CISC Is the Wrong Lens for Comparing Modern x86, ARM CPUs – ExtremeTech

    Telecoms

    Bandwidth Boosts Could Help Unclog Space Communications | EE Times 

    Web of no web

    Killer drone ‘hunted down a human target’ without being told toThe March 2020 attack was in Libya and perpetrated by a Kargu-2 quadcopter drone produced by Turkish military tech company STM “during a conflict between Libyan government forces and a breakaway military faction led by Khalifa Haftar, commander of the Libyan National Army,” the Star reports, adding: “The Kargu-2 is fitted with an explosive charge and the drone can be directed at a target in a kamikaze attack, detonating on impact.” – At the start of my agency career, autonomous software agents would aid the consumer. I had a German dot com client called DealTime who had a Windows-only app for consumers. It would go out and find the best price on the web for items that they where interested in and keep an eye on those prices over time. Now we have Amazon and suicide drones.

  • Hydrogen & more stuff

    Max Fujita, head of European hydrogen fuel cells at Panasonic, discusses the importance of hydrogen technology. Hydrogen is the most widespread chemical element in the universe and could play a significant role in achieving zero net emission and other goals such as wind and geothermal power. Hydrogen is important for more environmentally friendly steel mills and foundries. It even offers a solution for the range anxiety caused by lithium ion battery cars.

    The Asia Society have a video on the story behind the Japan traditional craft revitalisation competition. If you read Monocle you will be well aware of Japan’s strength in traditional crafts, often within centuries old businesses. More Japan related content here.

    Interesting observations on culture and remote working. Interesting where they are talking about a culture crisis. For the past five years before the pandemic I saw company cultures changed as noise cancelling headphones went on and desks turned into long benches. This ironically damaged company culture. The pandemic shook up office space again, with the home office. I was quite fortunate as I had pretty much everything I needed after freelancing. But I did a lot of Zoom calls with people punched on the end of their bed. The range of views in this series of interviews shows that there will be wide mix of responses.

    Finally as a curry cup noodle fan, this next story appealed to me. Nissin (who make the iconic Cup Noodle) has a new strategy in the sustainability game by eliminating the “lid closing seal,” a thin strip of sellotape type material that holds your noodle cup closed while the ramen is cooking in boiling water. This very small change will save an estimated 33 tons of plastic waste per year produced by Nissin. Instead the lid will be held shut by two ‘ears’ on the lid film.

  • Guo chao

    2008 and guo chao

    2008 was the best and worst of times for Chinese brands. The Beijing olympics was supposed to spur national pride. Included in this national pride was pride for Chinese brands – guo chao. Chinese athletics brand Li Ning took centre stage in the opening ceremony, screwing over Olympic official partner Adidas. For other olympics ambush marketing is severely restricted, but this was a national champion in China. Chinese pride usually means someone else’s humiliation, in this case Adidas.

    Right after the Olympics in September that year, a major food adulteration scandal became public. Over 300,000 babies were harmed when melamine was added by baby formula. The reason why this was done was to boost its ‘protein content’ in tests. The main brand in focus was Sanlu – a local milk powder brand. Subsequent tests found that adulterated powder had been sold around the world, by multiple Chinese brands.

    Chinese consumers hoovered up milk powder all over the world. Several countries and Hong Kong had to limit milk powder purchases, due to Chinese tourists and intermediaries cashing in on the demand for safe milk powder. During 2013, I was working behind the scenes at an agency for FrieslandCampina to try and combat the shortages in Hong Kong. The ban has been put in place indefinitely.

    Move forward a decade and guo chao is mainstream

    Everything is political, this is even more so in China. With the rise of Xi Jingping he sought to stop Chinese ‘irrational worship of the West‘. There are well loved domestic legacy brands in China, a prime example would be White Rabbit candy.

    white rabbit
    Guo chao brand ‘White Rabbit’ candy

    Along with this inflated Han nationalism has gone a pride in domestic brands. Huawei handsets are as expensive, if not more so than Samsung and Apple – which equated to a perception of similar quality. The fact that Chinese live most of their online lives inside WeChat dulls the difference in software. The operating system is no longer important. This is similar to the vision that Jim Clark had for the Netscape browser. If apps were on the web and ran through the browser, that would negate the stranglehold Microsoft Windows had on corporate and personal computing.

    Young adults in China now favour products with Chinese cultural designs and products made in China – guo chao. In one survey 75% of Chinese consumers surveyed state they like products that incorporate Guochao design elements. Design and colour choice is particularly important: doesn’t just mean “made in China” but embracing traditional Chinese elements and inciting national pride. Foreign brands have struggled to maintain market share. Guochao brands have built a good consumer reputation and market share by relying on the advantages of lower price, practical and competitive levels of quality. They have also suffered from the perception of being a copy or imitation of more expensive brands. Domestic brands have managed to use e-tailing to get over established foreign brand advantages in market penetration. More consumer behaviour related content here.