Two years later, Shanghai Jiahua launched Liushen Shower Gel, targeting the Chinese summer personal wash and care products market.
After the product was launched, it quickly won over the majority of Liushen Flower Water users. By 1998, in the gradually established shower gel market in China, Liushen Shower Gel occupied the largest market share and became the leading brand for summer personal wash and care products in China.
Liushen or Six Gods are traditionally used in Chinese medicine to treat heat rash and other summer diseases, with main ingredients being pearl powder and musk. Based on this prescription, in 1993, Shanghai Jiahua launched Liushen Flower Water for summer use. With its clear product positioning as a remedy for heat rash and itching, and also for refreshing and invigorating, the brand quickly captured 60% of the flower water market share.
Facing fierce competition from well-funded domestic competitors, Liushen seized upon the unique taste of Chinese consumers and their trust in traditional Chinese medicine culture. This led to the distinct product positioning of shower gel with Chinese herbal ingredients, which further established a strong market differentiation. Under the strong offensive of multinational companies like Procter & Gamble and Unilever, the strategy of Liushen Shower Gel provided an excellent example of how local companies can leverage local advantages.
Multinational companies may possess impressive strength and prominent global brands, but they lack understanding of local consumer tastes and needs. Moreover, to maintain the standardization of global operations, their product designs mainly consider the needs of developed markets and cannot provide products that satisfy the preferences of local consumers in emerging markets according to localized needs. Their primary target customer groups are urban residents who pursue fashion. Taking young people in mainland China as an example, they often show great enthusiasm for all things Western. Shanghai Jiahua did not compete with foreign manufacturers for this market segment but instead focused sales on a larger scope: loyal customers who firmly believe in the efficacy of certain traditional ingredients, offering relatively lower prices.
The launch of Liushen Shower Gel was, on one hand, due to the already strong brand effect of the Liushen brand, aiming to maximize the value of the Liushen brand; on the other hand, facing challenges from multinational companies, Shanghai Jiahua grasped the special tastes of Chinese consumers who trust traditional Chinese medicine in some areas more. After analyzing the consumer demographic, Shanghai Jiahua launched Liushen Shower Gel, targeting users of Liushen Flower Water and long-term consumers who favor traditional Chinese medicine products.
The successful interception of international brands by local brand culture
Daily chemical products are a category of products with relatively high emotional added value, meaning that consumer demands have diverse and personalized characteristics. Through branding, both the functional benefits and emotional benefits that consumers care about are reflected, showcasing the value, culture, and personality of the product.
Company profile: Shanghai Jiahua Company is the longest-standing cosmetics enterprise in China, with annual main business revenue exceeding 3 billion yuan, and its profitability consistently ranks first among peers. In the past three years, Shanghai Jiahua has maintained an annual sales revenue growth rate of over 30%, making it one of the largest cosmetic enterprises in China. The first two-in-one shampoo bottle, the first can of hair styling mousse, the first mixed-type perfume bottle, the first hand cream... these series of daily chemical products with modern significance all originated from Shanghai Jiahua. The company owns two famous trademarks in the domestic cosmetics industry, Merck and Liushen, as well as other renowned brands such as Qingfei, Lumai, Gaofu, Baicaoji, Shuxin, Piaoshuai, etc.
Since the end of the 20th century, internationally renowned daily chemical groups began to regard the Chinese market as one of the new profit sources. With mature product systems, advanced marketing promotion methods, and substantial financial guarantees, they dominated the Chinese market. For a time, the shelves of stores were filled with products from P&G, UNILEVER, KAO, etc., and consumers took pride in using these imported brands; under the immense competitive pressure, some national brands gradually disappeared, others became acquisition targets for foreign groups, and most of the remaining ones struggled to survive. In the shower gel market, P&G's Safeguard and Unilever's Lux became eye-catching stars.
However, Liushen established a powerful national brand image through its distinct local brand cultural connotation.