A tea drink pitched at the "post-95s": what a big company is guessing about young people

So far this looks less like a product success than a marketing one

Last March, Uni-President launched a bottled tea drink called Xiaoming Tongxue — "Classmate Xiao Ming." It tastes faintly of tea: not memorable, but not unpleasant either. Then, in the 2015 annual report Uni-President published a few weeks ago, it turned up as a "hero product."

Uni-President's sales and net profit both jumped last year, with net profit up 192.26% year on year to 830 million yuan. The company said Xiaoming Tongxue and Haizhiyan, launched in the summer of 2014, had contributed a good deal — 2.5 billion yuan in revenue between them, nearly 20% of total beverage sales.

Food companies are extremely cautious about new products, because the odds of success are low and the risk is usually seen as far larger than the opportunity. According to Zhu Danpeng, a Chinese brand researcher, "From R&D through production to promotion, launching a new beverage costs 60 to 80 million yuan, and it has to sell well for two years to show even a slim surplus." Uni-President in fact launched more than 10 drinks last year, and Xiaoming Tongxue may be the only one that counts as a success so far.

Zhihu threads sprang up asking "What explains Xiaoming Tongxue's hot sales?" and "What do you make of Xiaoming Tongxue's packaging design?". The drink won a gold award at the 2015 Pentawards, the world's first and only design competition devoted entirely to product packaging, often called the Oscars of the field. The other Chinese winner that year was Nongfu Spring, whose much-discussed high-end water in a glass bottle took the 2015 platinum award.

Broad fields of orange, brick red, apple green and blue cover the bottle so completely that nothing shows through, and the exaggerated face of Xiaoming Tongxue takes up close to two-thirds of it — the opposite of what most beverage makers do, which is show off the clear tea inside. The name gives away little about tea, either. But eye-catching packaging and a name built to pull you in are both standard tactics for food and drink companies.

"We think Xiaoming Tongxue's biggest difference is that it dropped a different kind of bomb into the tea drink category," Uni-President told QDaily. The bomb is a tea drink that claims to be aimed at the post-95s. Until then, no drink had carried an explicit age target — or at least no company had said so in public.

Why the post-95s? The youngest of them are 16, the oldest barely past 20; they are about as young as a consumer group gets. And young consumers are always the hardest to read. Most brand marketers can produce insights that sound unobjectionable — they like trying new things, they want to express themselves, they have minds of their own — but on this subject almost nobody is sure of anything. Thinking about future markets and future revenue, big companies stay enthusiastic about young consumers anyway.

More to the point, consumers trading up is now an obvious trend in China. Think of Uni-President's best-known tea drinks, iced black tea and green tea — plenty of people still cannot say how they differ from Master Kong's, and they date from 1995 and 1998. With so much on the shelf today, one product can no longer win the mass market. You have to be different.

Uni-President faced a more immediate problem: in 2014 its beverage revenue fell for the first time since 2009. Its annual report put tea drink sales at 5.526 billion yuan and juice revenue at 3.939 billion yuan, down from 6.143 billion and 4.259 billion in 2013.

The latest figures from the market research firm AC Nielsen show tea drink sales shrinking 3.6% in 2014. A cool summer was part of it; so was consumption shifting from one category to another. The juice market also shrank in 2014, down 1.6% by value and 4.7% by volume, and milk tea slowed to growth of just 1.1% over 2013.

The post-95s, then, are less a product position than a form of words. What Uni-President wanted was a product young people liked.

But the industry generally agrees that tea is not young people's drink of choice. Uni-President's problem was to get the young people it called the post-95s to notice this one, and then to buy it and try it.

"Healthier than soda, better tasting than water — tea drinks are just right for young people," says Wang Kaiyi, general manager of Leo Burnett Shanghai. Young consumers have always wanted tea drinks, in this view; what was missing was a product that spoke to them. Leo Burnett was the creative agency on Xiaoming Tongxue, involved in the communications strategy from the start, responsible for the brand's tone and for making the TV commercials.

Besides Leo Burnett, Uni-President brought in BRAVIS, a well-known Japanese packaging design firm, and brand marketing consultancies and market research firms including Nielsen and SOWHAT for the early market and consumer research. "We work with a lot of research firms, international and local, and we rotate them and combine them depending on the purpose of the research and what each one is good at," the company said. From the first internal glimmer of the idea to the launch took nearly a year, and close to half of that went into marketing research.

What interests us in that process is not that a big company developed a product for young consumers — that is no news at all. It is that, judged by results, Xiaoming Tongxue did what Uni-President set out to do, and the way it got there may be of some use to every company that studies young people without being young.

Not one of the people sitting in that meeting room making decisions was a post-95. In the earliest stage, Uni-President had to settle some things for itself. That stage leaned on the company's in-house panel — a consumer group of employees and their family members — for first impressions of the product. Uni-President also set up a youth community called Xinyike at universities around the country, in effect an outside panel of post-90s reviewers, a way of letting consumer opinion in as early as possible.

By the end of last year, Uni-President had partnerships with 150 universities and Communist Youth League committees, testing new concepts and new brands through samples, questionnaires and face-to-face sessions. Unlike the in-house panel, this testing was mainly about setting thresholds: a concept worth trusting should win approval from at least 75% of them, and so on.

Along with its standing university partners, Uni-President picks other colleges to work with as it goes. Students come from everywhere in the country, which the company considers ideal for a drink sold nationwide. As the project moved into its next phase, Uni-President brought in professional third-party research firms.

That is when SOWHAT came in. Cold-brew tea and a post-95s target audience were both settled before SOWHAT took over the project, but whether to explain cold-brew tea to post-95s consumers caused the sharpest argument of all.

"We tried to describe what cold-brew tea actually is, explaining the process technically in several different ways, and found that young consumers simply don't care," says SOWHAT founder Ma Qingtian. Their indifference to cold-brew tea was one of the biggest surprises of the whole research phase.

Uni-President, at the beginning, badly wanted to tell consumers what cold-brew tea was. Ma Qingtian says that happens constantly in food and drink research: the client always has something it is sure matters.

"Young people don't ask many follow-up questions. For a young consumer, knowing that cold-brew tea is a new thing — 'I tried something new' — is enough. Anything past that they won't remember and don't care about."

Which raises a question: can you live with selling consumers something without telling them what it is? For young buyers, stirring up curiosity may work better.

The other argument during the research was about being cheeky — bratty, a little obnoxious. SOWHAT's findings were that Crayon Shin-chan's brand of cheeky cuteness went over well with college-age consumers but drew negative reactions from younger ones. Xiaoming Tongxue's core audience skewed younger, toward middle and high school students, so cheekiness was a concept to drop.

But as communication goes, cheeky is a sharp idea, easy to remember and very cheap to spread. Cheeky cuteness is also a popular strain of humor among the young. The answer was to blur it: in the finished work, small details such as the WeChat stickers could be a little cheeky, but as an overall direction, cheekiness was to be handled with care.

There were many more arguments and compromises like it. What Xiaoming Tongxue should look like took a long time to work out, too. Leo Burnett drew up dozens of possible tones for the brand, and after studying the feedback SOWHAT had gathered, presented more than ten of them to the client: humorous, funny, goofy, cutesy, and so on.

The differences between them were fine ones. Cutesy, for instance, reads as older than goofy; humorous carries more wit than funny. "If you give the post-95s Ge You's lines, they won't laugh, because they won't chew over what's in them," Ma Qingtian says. "How much clever humor should Xiaoming Tongxue pack into a 30-second ad? We decided it needed none. They can't digest it."

The direction finally chosen was "seriously funny." Once that was fixed, Leo Burnett would supply several versions of the commercial, because funny comes in types too — Stephen Chow funny, Guo Degang funny, Crayon Shin-chan funny. SOWHAT's job was to show the versions to target consumers and feed Leo Burnett the suggestions and data for its next revision. The two worked in alternating rounds of defining and checking.

A kichiku-style remix video ad; creative by Leo Burnett

That much-praised packaging was a compromise as well. Uni-President spent five or six months grinding through it, trying everything already on the market — glass bottles, frosted finishes, cork-style stoppers. Some ideas had to go because the in-house supply chain could not make them. For a mass-produced product, the packaging had to balance distinctiveness against manufacturing efficiency.

The most distinctive feature, the double cap — the outer one comes off to play with or keep — started as an idea to glue two caps together, but the process kept failing and the big cap kept falling off. When Uni-President's field staff visited universities and high schools, they found kids pulling the caps off for crafts and drawing, writing their moods on them, or playing "cap kung fu," a game of flicking caps at each other; some stacked caps of different colors, or capped someone else's bottle. All of that was an unplanned discovery from the visits.

Which is to say: luck had a lot to do with it.

For all the communications research, Uni-President was still unsure of itself when Xiaoming Tongxue reached the shelves. A year after the first four flavors — Feileng green tea, jasmine brewed tea, lime black tea and iced tangerine green tea — the brand added Liuliuda tea, replacing Feileng green tea, which sold only moderately. The best seller is the lime black tea, "Huang Xiaoming."

The problem ahead for Xiaoming Tongxue is this: after becoming a hit as a tea drink with an entirely new face, what does it do next? On taste, after all, it changes nothing fundamental.

In the Zhihu thread about why it sells, the factors people raised most often were the name, the packaging, the marketing and the distribution. Almost nobody mentioned how it tastes.

One anonymous comment: "Doesn't taste good. The packaging tricked me." That is probably the last piece of consumer feedback Uni-President wants to read.

Cover image source: Visual China Group