Brand, Oh I Love You
Detergent is a household staple everywhere. In Europe and the United States, concentrated detergents account for around 99% of the market; in China the share is less than 6%. If the Chinese detergent industry moved to European and U.S. standards, "annual CO2 emissions would drop by at least 6 million tons, industrial wastewater by 5 million tons, and plastic use by 1 million tons."
Huang Ping, founder of Guangdong Youkai Technology Co., Ltd., has 24 years of experience in the detergent industry. In 2016 he founded Youkai, focused on the R&D and manufacturing of concentrated laundry pods. Today Youkai is an important contract manufacturer for well-known brands such as Unilever and Japan's Lion.
Huang named Youkai's laundry-pod brand "Oh I Love You" (偶爱你). Almost everyone objected — they thought the name was too country — but he kept it. For him, a brand comes from love: love of life and love of the product. A brand is the soul of the product.
Loving you is not as easy as it sounds
Love, Huang says, is trust and care. Youkai guarantees that its products perform at four times the level of ordinary liquid detergents, with active-ingredient content above 60%. "That's printed on the packaging. We're liable at law for it."
But one core problem is information asymmetry. Even with excellent product quality, if consumers cannot learn anything about a brand, they will still default to well-known foreign brands. Chinese manufacturing can make most of the world's products, but it still sits at the low end of the value chain. The top end is R&D, design, marketing, and brand — manufacturing is the bottom.
Building a brand involves positioning, image, reputation, and values. It takes a story worth listening to, the careful building of a positive reputation, and the smart use of social media to expand reach. Many small European brands owe their success to distinctive cultural stories and emotional resonance.
Where does a new brand come from?
The rise of Chinese brands should rest on disruptive innovation, new business models, and new civilizational values. Traditional brand-building depends on a supporting social system; new brands can be built through the commerce reshaped by the digital economy — new channels, new technologies, new ways of designing.
Guangdong Deerma Technology Co., Ltd. shows what this looks like. Founder Cai Tieqiang recombined "e-commerce, brand, and manufacturing" — rebuilding manufacturing through an e-commerce mindset and creating an in-house brand. Deerma's end-to-end use of e-commerce platforms, social media, and livestream influencers points to a new direction for manufacturing.
The biggest problem with Chinese manufacturing is that it is driven by production rather than by the business. Through internet and e-commerce, new inputs — traffic, data, algorithms — can link directly to manufacturing. This is a chance for Chinese manufacturing to overtake on the curve. It is also a chance for brands to emerge.
But brands must grow out of discoveries in actual consumption settings and from descriptions of real life. Chinese stories, Chinese values, and new ways of delivering them — new channels, new ideas about consumption — are what can carry China's new brands. "Oh I Love You" represents one such possibility: the passing on of love, fresh over time. That is an opening for Chinese brands.
Originally published: Economic Observer · Microscope · 2023-08-19 · Read original →
Originally published in the "Economic Observer · The Walker’s View" column. The author is Executive President of the Guangdong SME Development Promotion Association. For reprints or citations, please contact the author or the Association Secretariat.