Guangzhou’s “King of Condoms” Goes Online, Challenging Major International Brands
Source: Fanfang Metropolis Daily (Shenzhen)
After directly providing condoms for the Brazilian government during FIFA World Cup Brazil in July, Shuangyi Latex Factory (Shuangyi) under Guangzhou State-owned Assets Supervision and Administration Commission announced that it will launch its first condom brand MIO only available on the Internet during this year’s Guangzhou Sex Culture Festival in order to break the monopoly of foreign brands in the mid-end and high-end markets.
Formerly known as Guangzhou 11th Rubber Factory, Shuangyi is currently owned by Guangzhou Guangxiang Enterprises Group under Guangzhou State-owned Assets Supervision and Administration Commission ; it is capable of producing 700 million condoms a year. It used to a supplier whose condom products mainly meet the demands of governments.
Traditional “King of Condoms” Goes Online
Whether it is known as the “first condom manufacturer in New China” or as the “condom supplier for United Nations Fund for Population Activities and National Health and Family Planning Commission of PRC, these titles narrate the past glory of Shuangyi. In this age of the Internet, this “king of condoms” has to start from scratch.
Pei Yong, assistant general manager and marketing director of Shuangyi, during an interview given to a reporter from Nanfang Metropolis Daily, said that the Internet is not just a channel for condom purchase; it has become a norm in life and consumption.
The conclusion by Pei Yong is not only based on the statistics from relevant institutions, which show that the online sales of condoms have surpassed offline sales. Moreover, a survey of condom users reveals that the group of users who are 25 years old or younger is more likely to know about condom brands, the functions, and how to use them; they not only buy condoms online but also mainly discuss and share their opinions about condoms online.
“Now, China’s major traditional enterprises are rarely successful in their effort to go online, in large part because they don’t have enough understanding of ecommerce,” said Pei Yong. “Take condoms for example. Many of condom enterprises are doing ecommerce in traditional thinking, that is, they just take the Internet as a channel. In our case, we’re totally breaking away from the traditional marketing mentality; we try to research consumers and their lives with the attitude, mentality, and courage of “starting from scratch.”
However, most of the mid-end and high-end condom market share is taken up by foreign brands. As indicated by 2010 data, the condom market that year amounted to about RMB5 billion, but 75% of the market went to foreign brands. Durex, the British brand, led the market with a stunning 30% share; the brand Jissbon of Ansell from Australia ranked second by a 25% market share. Eight years ago, Ansell took over 70% stakes in Jissbon under Wuhan Renfu for RMB0.137 billion; after a series of operations, Ansell is now accounting for 90% of the stakes in Jissbon, an originally Chinese local brand.
As our reporter learned yesterday, Shuangyi set its online condom sales target at 100 million units. Its MIO condoms first found their way into B2C platforms such as Taobao.com, yhd.com, and jd.com, and have sold on alibaba.com, the country’s largest B2B platform. Besides, they will be sold on Shuangyi’s flagship store on tmall.com and at yao.tmall.com.
Is This a Move to Compete Against Foreign Brands?
Headquartered in Guangzhou, Shuangyi boasts a 130,000 square-meter production base with an annual capacity of 0.7 billion condoms. Formerly known as Guangzhou 11th Rubber Factory under the former Ministry of Chemical Industry, it later belonged to the local government; now it is owned by Guangxiang Enterprises Group under Guangzhou State-owned Assets Supervision and Administration Commission.
As a major traditional enterprise, Shuangyi is a manufacturer designated by the government to produce condoms. With its sales going online, however, it has resolved to be part of the competitive market and engaged in the cause of disrupting such major brands as Durex by acting on the “Internet model”. In order to make its online brand show the young people’s pursuit of individuality, Shuangyi has hired a 4A advertisement agency to make planning that lasted a whole year.