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New product launch & new ecosystem building created the second growth curve for a time-honored brand Yunnan Baiyao
By virtue of Illuminera’s strategy of "combination of branding and business impact” as well as solid capabilities in big data analysis and insight harvest, high quality outputs from strategy formulation, implementation and commercial impact were delivered. The entire new product innovation project was completed in just 6 months with the launch strategy, strategic brand positioning, and business model reshaping, laying the foundation for further exploration and building a new business ecosystem. In May 2022, oral freshening spray of Yunnan Baiyao "齿说" (ToothTalk) brand was successfully launched, and nearly 300,000 pieces have been sold so far, making it a blockbuster on social media platforms. The oral service platform “看呀” (See The Dentist) was officially launched too, forming an important part of the company's business landscape.
Tony Li
General Manager, Oral Smart Care Integrated Solution BU 
Yunnan Baiyao Innovation Incubation Platform

Traditional brands are facing more and more challenges. Category tracks become more crowded, product pipelines are onefold, needs of younger consumers are hard to grasp, digital transformation is difficult ...... How to break through the bottleneck of product innovation, how to plan the business landscape in advance, and how to maintain the long-lasting brand vitality……how should traditional Chinese brands respond to the above questions?

Yunnan Baiyao, a time-honored brand with a history of more than 120 years, continues to expand its business with a forward-looking layout while maintaining its leading position in the toothpaste category and promoting the second growth curve of the company. In less than half a year, Yunnan Baiyao's new oral care brand "齿说" (ToothTalk) and online oral service platform “看呀” (See The Dentist) were launched. As a strategic business partner, Illuminera participated in the whole process and summarized "three tips for strategic innovation" and "four principles for building ecosystem", which could be helpful to more traditional Chinese brands when seeking for further business growth. 



Products of "齿说" (ToothTalk) and online oral service platform

 “看呀” (See The Dentist)

Source: Yunnan Baiyao

Designed product pipelines and revitalized the path of transformation


In the category of toothpaste with many competitive products, Yunnan Baiyao has been in a leading position by virtue of its differentiation. However, throughout the whole market of oral health, there are numerous sub-categories, serious homogenization competition, and new categories are constantly emerging. Therefore, in the process of new product innovation, it is not only necessary to conduct a wide and complete market scan of the whole oral health industry, but also to explore profound category insights. In the market of hardware products (such as electric toothbrushes, oral irrigators, etc.), which have been popular among consumers in recent years, how will Yunnan Baiyao maximize its existing advantages and stand out in the new category? How to plan the product pipeline and design new product strategy based on its brand gene? 



New product innovation path


First, through the combination of big and small data, Illuminera identified unmet consumer needs and dove deeper into the market white space, sorted out market size, category trends and competitive dynamics, studied the product portfolio strategy, and compared it with existing consumers’ demographic profiles and assessed opportunities to precisely define high-potential category in the oral health market. Then based on different scenarios, combined with Yunnan Baiyao's unique DNA attributes, consultants helped the brand identify key new product opportunities. In addition, Illuminera also made an overall framework for new product planning by quantifying various indicators, launched new product portfolio directions and more than 40 product concepts, and finally formulated short-term, medium and long-term new product strategies and development paths.

Thanks to the efficient execution of the brand team, Yunnan Baiyao's oral science brand "ToothTalk" and its flagship product "ToothTalk Magic Box" (oral care integrated box) have been successfully launched in just 6 months, including electric toothbrushes, oral irrigators, mouth spray, oral visual mirrors and other products, officially creating the era of oral intelligent care 4.0, upgrading from "electric" to "intelligent" IoT (Internet of Things), leading the industry to the direction of science, professionalism and precision. 

For traditional enterprises seeking for category innovation and growth, GrowthX, an Illuminera boutique summarized from this case and strongly recommend "three strategic innovation tips".

Phase I: Identify Potential Categories
Tip: Big data + full-scenario scanning + cross-category mindset

To find new product opportunities in the potential categories, it is necessary to conduct detailed research on extremely segmented scenarios and clarify the role and tasks of new products. During full-scenario scanning, it is necessary to consider the situation of the whole industry and use cross-category mindset to guide the direction of new products, to give the product unique attributes at the beginning of the innovation phase. To achieve the accurate identification of potential tracks, the support of big data with greater coverage and higher level of granularity is needed. With strong capabilities in big data understanding and business application, Illuminera helped the brand to fully analyze the insights behind big data, comprehensively research the market size, competition landscape, high potential categories and other industry patterns, quickly and accurately find market "niches".

Phase II: Identify Key New Products
Tip: Focus on UI instead of PI to define the differentiation

The common approach to new product innovation usually starts with a me-too or me-better product, and the primary metric for evaluating new product opportunities is purchase intention (PI). However, according to Illuminera, the key to innovation is product differentiation, from the perspective of strategic innovation or later entrants to the industry. The Uniqueness Index (UI) should be the first indicator of key new product identification to enhance the competitiveness of the brand in the market segment. 

Phase III: Strategy and Development Path of New Products
Tip: formulate strategies in advance and consider financial metrics always

Many brands often focus on the product itself when formulating new product strategies, lacking overall thinking and strategic layout of business models, financial forecasts, supply chains, channel synergies, resource deployment, etc. This leads to many new products being stuck in the design stage forever or even "stillborn". With rich experience in Go-to-market strategy, as well as profit model forecasting and financial analysis capabilities, in the new product design stage, consultants from Illuminera boutique GrowthX planed the strategy model in advance, outlined the general path of launching, sorted out the financial, channel, supply chain and other indicators, helped brands understand the potential of new products more clearly, and unsurprisingly ensured the success of new products from concept output, to launching on the market, and then to commercial excellence. 


 
ToothTalk Oral Science Specialized Series
Source: Yunnan Baiyao

Reinventing the Business Model
Build a new ecosystem and explore long-termism

For traditional brands, if they want to go beyond best-selling product categories and seek new growth routes, they need not only disruptive innovative products, but also transforming and reshaping the existing business model. In Yunan Baiyao’s case, "ToothTalk Magic Box" is its strategic plan to explore new categories, while the combination of online oral service platform “看呀” (See The Dentist) is the brand's long-term strategy to build a new "product + service" business ecosystem.

The construction of business ecosystem can help brands better serve consumers and provide greater lifetime value. However, it is also a great challenge for companies to mobilize internal and external resources. GrowthX has identified “four ecosystem construction principles” that traditional brands should pay attention to when reinventing their business models, in order to maximize the implementation of new models and new ecosystems. These were also applied in Yunnan Baiyao's online service platform project, and the results were significant.

1. Irreplaceability
Irreplaceability can be said to be the foundation of ecosystem construction. Through scanning, segmentation and structural analysis of consumer needs, current market conditions and business models, as well as continuous exploration of market white space, we can find the starting point of business models. Business model design is not a closed-door process. It is important to focus on customer needs (including consumers and potential ecology stakeholders). The mismatch between consumer demand and market supply is the starting point of a new business model.

2. Feasibility
When designing the business model, on one hand, the executability of the business model should be fully considered, and the ecological services should be able to form a closed loop of business to reduce the loss of consumers; on the other hand, the financial feasibility of the business model should be ensured from the market scale, revenue and cost measurement, so that all the joints of the ecosystem can operate effectively.

3.  Value Symbiosis
Clarifying the needs and roles of different stakeholders in the ecosystem, the business model design meets the needs of all stakeholders, thus maximizing the ecological value. During the design process, we proposed different business model prototypes and validated them to all stakeholders, and finally selected the best solution, so that the ecological organizations form value symbiosis.

4. Sustainability
Segmented top-level design is carried out for different stages of business models. Find differentiation advantages through target user identification and prioritization to provide flexibility for ecosystem construction. At the same time, try new product investment with MVP, effectively control risks and costs, and create sustainable development space for future business expansion and a new round of product planning.

Unlike Internet traffic mindset, Illuminera proposed to use long-term thinking for top-level design of business models, solving real needs for consumers, analyzing and evaluating different types of business models under the ecosystem, developing profit models and estimating future business scale.



With the successful launch of the online oral service platform “看呀” (See The Dentist) APP and mini-program, Yunnan Baiyao is able to provide users with a full-cycle oral health service based on digital dental treatment system with precise care, prevention and guidance. At the same time, the IoT ecosystem is introduced to lay the foundation for the subsequent expansion of intelligent product pipelines.

With data-empowered marketing capabilities and consumer-driven insights, GrowthX helped Yunnan Baiyao identify market white space, formulate growth paths, and develop business strategies and implementation plans, ultimately created a second growth curve that matched its gene and brought vitality to this time-honored brand.

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