Wahaha Children's Wear Causes "Brand Extension"

Wahaha wants to achieve a decisive victory in the children's wear market, and has a long way to go to become "the first brand of domestic children's clothing" (the main target has already been delineated and the big counterattack will start immediately!)

"Not long ago, Wahaha invited us to visit their children's clothing production base. In the Xiaoshan Economic Development Zone, 100 acres of land have been planned. The children's wear building and production workshop have been built. It seems that Wahaha is going to fight a prolonged battle in the children's clothing market." A reporter from Hangzhou recently told the Financial Times reporter.

Last May, beverage giant Wahaha announced its entry into the children's clothing market. More than a year later, according to the data provided by Wahaha, in 2003 Wahaha Summer bound more than 80 million yuan, autumn and winter binding 120 million yuan, has entered the top ten national children's wear, more than 80% of the stores are satisfied with the sales situation Before and after the June 1st this year, the highest single store daily sales reached 19,000 yuan.

On the other hand, we must also see that the launch of Wahaha's winter clothes last year lags behind other brands for a month. The price is not in line with market reality. The target set for 2000 chain stores opened during the year was not reached, and this year's goal has also been adjusted to 400 new additions; and 300,000 yuan prepayments for deposits are also reduced to 150,000 yuan. (Dissecting the real purpose of mainstream funds and discovering the best opportunities for profit!)

Perhaps it is still too early to say whether the children's wear of Wahaha is successful, and the resulting reflection on brand extension is not without value.

From "drinking" to "wearing" from chaos?

After fifteen years of battle, Wahaha has grown from a school-run enterprise to a beverage industry champion for several consecutive years. According to Chairman Zong Qinghou, "Wahaha must be aggressively expanded. The five-year goal is to triple business growth, but the growth in beverage demand is limited, so we must enter other industries to seek growth." The reason for choosing the children's wear industry is that " Wahaha started with the production of children's health foods. It is called China's children's brand and children's wear can take advantage of our brand."

The founder of "Vulnerable Marketing" theory, Li Zheng, told the "Financial Times" that brand extension usually takes several forms:

One is the extension of the same product category. For example, Wahaha used to focus on the beverage industry, from children's nutrition solution to fruit milk, to pure water and very cola, and the second is to extend the same industry category. For example, Wahaha produces instant noodles and sunflower seeds. The former is more risky than the former, but it can make use of past experience and channels. Third, it is the most difficult to achieve the same level of extension of products and industries. It needs to be unified under the core value of the brand, and in consumer behavior and values. Continuity. For example, this Wahaha entered the children's wear market.

But for this brand extension of Wahaha, the market is not without opposition.

Yu Lei, a marketing network columnist from China, pointed out that although he started from children's nutrition solution, after many years, Wahaha has basically escaped from the original category of children. Consumers' brand associations are inexpensive and “I have a good mood at the sight of you.” “Singer Li Wei and Wang Lee Hom... Wahaha has already begun to relocate adult brands based on successful brand extensions (from children's nutrient solution to dairy products to beverages), and “the launch of children's clothing is a chaotic step.”

Wahaha even stated that it may produce adult clothing in the future, which makes the danger of brand conflict more obvious. If children's clothing is successful, will a company employee choose "Wahaha" casual wear? At that time children will be confused, "Is this brand for us?"

However, Li believes that Wahaha can produce children's clothes, such as Marlboro, both a cigarette brand and a casual clothing brand. However, there must be a key step here - transitional brand awareness, allowing consumers to transition from "drinking" to "wearing", to avoid their unexpected feelings, and to reintegrate the image of the brand. In this step, Wahaha is still not doing well enough.

Different channels for selling water and selling clothing

One of the benefits of brand extension is that it is easier to use the internal and external resources that the company already has. Wahaha’s channels have always been one of its core competencies. After the production of children's clothing, Wahaha launched the national franchise affiliate program, free of initial fee, but need to pay 300,000 yuan in advance deposit guarantee. Wahaha counts well: If you reach the goal of 2,000, you can earn 600 million yuan for turnover.

In order to encourage distributors to join, they also put forward the slogan of "100% return", that is, the first batch of franchisees has no risk for the first time, and the future risks are borne by the franchisee themselves. Many drink distributors have recognized Wahaha's brand and strength due to years of cooperation and become an important part of the children's wear franchisors. About half of the first 800 franchise stores are Wahaha beverage channel distributors. One of the dealers in Zhejiang opened five children's clothing stores, which is what Wahaha expected.

But then the problem was revealed: the requirements for distribution of beverages and children's clothing are very different. Children's clothing, due to its seasonality, variety of styles, and high backlog cost, demands a high degree of rhythm and control of channel management. In the past, distributors of water and children's milk did not have experience in clothing, and they did not adapt when they "sold one-handed drinks and sold children's clothes."

After Wahaha became aware of the problem, she strengthened her experience and qualification requirements for franchisees, gave priority to franchisees in the apparel industry, and began to diversify channels. Wahaha Children’s Wear Beijing Mr. Feng told the “Financial Times” reporter that they attached great importance to the channels. The Beijing market began to operate this year. Currently there are some stores in the suburban counties. Due to fierce competition in the urban market, the rent for the venue is also high. It is the cooperation with the mall to open counters.

Product positioning is not obvious

Another reason why Wahaha chooses children's clothing is the high growth of the market, and there is no leading brand. Larger local brands, such as a break and a good boy, have no absolute advantage over foreign brands, such as Snoopy and Li Yingfang. Wahaha, with its strong capital strength, has positioned itself as a “high-end clothing, middle- and low-end price” for its children's clothing, and has entered the market with a higher price/performance ratio than other brands.

But in reality, "positioning is not designed but done." This positioning of Wahaha children's clothing has not been fully reflected in practice.

The Li regime believes that in terms of appearance, Wahaha children's wear is not obvious in quality, and it does not show any difference from other brands in terms of fabrics, styles and colors. At the same time, it does not include the concept of green health, including hygroscopicity, breathability, and softness. Sexuality, security, etc. are clearly communicated to consumers in marketing.

Children's clothing consumption also has a distinct feature, because the child grows quickly, and a piece of clothing does not wear long enough to be small. Wahaha children's clothing fabrics and quality are very good, but many parents prefer to strive for practicality. This makes some of the garments of Jiangsu and Zhejiang manufacturers more competitive in the children's wear market with "moderate quality and style and lower prices."

The root of these problems lies in the fact that Wahaha itself is also facing a transition into a new industry. Many previous experiences and human resources are no longer applicable. They also started recruiting professionals, accelerating the training of existing employees, and recruiting top designers. However, this change cannot be accomplished overnight. Wahaha has a long way to go if it wants to achieve a decisive victory in the children's wear market and become the "first brand of domestic children's wear."