Chinese Oreos: Localization Done Right
Recently I wrote a post about “Lazy Localization“, a term coined by Shaun Rein in a post he put up regarding the Chinese retail market. With the enormous market potential in a rising Chinese middle class, it seems that far too many western MNC’s put the rush to Chinese market entry over market research (and sometimes over plain common sense). Unfortunately, “lazy localization” cost these firms more than wasted time and money in the Chinese market. They also cost them in terms of brand perception with Chinese consumers.
Last week I ran across an article that demonstrates a company that entered China the right way, and is reaping the rewards for its forward, culturally aware thinking. An article in the Wall Street Journal titled “Kraft Reformulates Oreo, Scores in China“. Kraft took the Chinese Oreo to such a level of localization that it essentially abandoned the product completely, opting to sell the brand attached to a substitute product. Genius! The result? Kraft became the #1 “biscuit” maker in China, capturing 23.4% of a $1.3B USD market.
Kraft’s Oreo efforts have paid off. In 2006, Oreo wafer sticks became the best-selling biscuit in China, outpacing HaoChiDian, a biscuit brand made by the Chinese company Dali. The new Oreos are also outselling traditional round Oreos in China, and Kraft has begun selling the wafers elsewhere in Asia…
Over the past two years, Kraft has doubled its Oreo revenue in China, and with the help of those sales, that revenue topped $1 billion world-wide for the first time last year.
[...] blogs I’ve written about the importance of understanding culture when marketing in China (here, here, here and here). Branding these Olympic buildings is an even more sensitive issue than [...]