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Tea Warz: China’s Tea Trademark in Tussles

Weibo Brand War between two beverage tycoon JDB and Wanglaoji:Will the chinese herbal tea wars go on?

03·04·2013

Tea Warz: China’s Tea Trademark in Tussles

Weibo Brand War between two beverage tycoon JDB and Wanglaoji:Will the chinese herbal tea wars go on?

03·04·2013

Renowned as the Coca-Cola of China, the red-canned Chinese herbal tea (凉茶, liángchá) brand ” Wong Lo Kat” or “Wanglaoji” has recently attracted lots of attention due to the brand war on Weibo between Guangzhou Wanglaoji Pharmaceutical Company Ltd., and Jiaduobao (China) Beverage Co., Ltd..

It’s a story that has received very little fair attention in the Chinese media, due to the fact that this particular brand war involves a Hong Kong privately-owned enterprise, and a state-owned pharmaceutical enterprise.

Background
“Wong Lo Kat” is the Cantonese transliteration of its name in Chinese character 王老吉 (Wánglǎojí). It is said that Wong Lo Kat is originated in 1828 during the Qing Dynasty(1616-1911)in Heshan county, Guangdong Province, founded by a doctor Wong Chat Bong (王泽邦). Because the Wong family was the inventor of tisane brewing in southern China, the brand is synonymous with this type of drink—“herbal tea”, which is brewed by certain Chinese herbals with the effect of clearing away excessive internal heat and removing damp qi in the body (清热祛湿,qīng rè qū shī) and avoiding inflammatory or other lesions.

In the 1950s, Wong Lo Kat Herbal Tea split into two branches because of the Communist takeover. The government seized the rights to produce Wong Lo Kat in the mainland under their state-owned enterprise, a subsidiary of the state-owned Guangzhou Pharmaceutical Holdings Limited. The descendants of Wang’s family established operations in Hong Kong, producing the original recipe under the company JDB, a subsidiary of  the Hong Kong Hung To Group Co., Ltd.(More details here)

The controversy boils down the fact that Wong Lo Kat (or  王老吉) was being produced in two different forms—a popular red-canned form (by JDB) and in green-carton form (by Guangzhou Pharmaceuticals). The return of Hong Kong, to the mainland, in 1997, complicated issues for the trademark of the red-canned 王老吉, and the trademark was leased, by Guangzhou Pharmaceuticals, to JDB for continued production. Sales of Wong Lo Kat/王老吉 by JDB increased rapidly, drawing the annoyance of the state, including Guangzhou Pharmaceutical, whose sales of the green-boxed beverage were much lower.  In 2011, the red-canned Wong Lo Kat sales exceeded 160 billion RMB.

In May 2011, Guangzhou Pharmaceuticals submitted a “Wanglaoji” trademark issue for arbitration to the China International Economic and Trade Arbitration Commission, proclaiming that the general manager of JDB had engaged in bribery during the original 2000 negotiations, and therefore, that the trademark was invalid. (More details here)

The Controversy
On January 31, 2013, the Guangzhou Intermediate People’s Court delivered the verdict: JDB Beverage Co., Ltd. immediately stop using ads that claim that Wong Lo Kat was renamed JDB: “The red-canned herbal tea with the position of sales leader on the whole country was renamed JDB” (全国销量领先的红罐凉茶改名为加多宝。 Quánguó xiāoliàng lǐngxiān de hóng guàn liángchá gǎimíng wéi Jiāduōbǎo.) or other similar ads in JDB’s advertising behavior.

After the verdict was read, JDB insisted that it could not accept the decision. On February 4, JDB posted four  micro-blogs with the theme “Sorry” together with the crying children pictures.

jiaduobaoshiqinian
Sorry, we are so stupid that we had to spend 17 years to make the Chinese herbal tea on par with the Coca-Cola brand.
Duìbùqǐ, shì wǒmen tài bèn, yòngle shíqī nián de shíjiān cái bǎ zhōngguó de liángchá zuò chéng wéiyī kěyǐ bǐjiān kěkǒukělè  de pǐnpái.
对不起,是我们太笨,用了17年的时间才把中国的凉茶做成唯一可以比肩可口可乐的品牌。

 

 

 

 

 

 

jiaduobaoliunian

 

Sorry, we are so selfish that we always occupied with leading sales for 6 consecutive years, and  didn’t help our competitive company to build factories, improve channels to achieve its fast-growth …
Duìbùqǐ, shì wǒmen tài zìsī, liánxù liù nián quánguó xiāoliàng lǐngxiān, méiyǒu bāngzhù jìngzhēng duìyǒu xiūjiàn gōngchǎng, wánshàn qúdào, kuàisù chéngzhǎng……
对不起,是我们太自私,连续6年全国销量领先,没有帮助竞争队友修建工厂、完善渠道、快速成长……

 

jiaduobaodaguansi

 

 

Sorry we are so incompetent that we are only good at herbal tea sales, not at litigation.
Duìbùqǐ, shì wǒmen wúnéng, mài liángchá kěyǐ, dǎ guānsi bùxíng.
对不起,是我们无能,卖凉茶可以,打官司不行。

 

jiaduobaocaogen

 

 

 

 

 

 

 

 

 

Sorry, we come from grassroots, and only have 100% genes of private enterprises.
Duìbùqǐ, shì wǒmen chūshēn cǎogēn, chèchedǐdi shì mínqǐ de jīyīn.
对不起,是我们出身草根,彻彻底底是民企的基因。

 

 

 

 

 

 

 

 

 

 

The four micro-blogs resulted in more than ten million users’ forward and comments. Some netizens commented: “It’s a brilliant PR crisis case.”

When JDB’s micro-blogs were highly praised by the netizens, just a few hours after the microblogging, on weibo appeared a Wanglaoji version of “It does not matter” together with other coopted pictures of children, as a response to JDB’s “Sorry” posters.itsoesntmatter

It does not matter. We want to win, not only in herbal tea sale, but also in litigation.
Méiguānxì, shì wǒmen yào yíng, liángchá yào mài hǎo, guānsī yě bùnéng shū.
没关系,是我们要赢,凉茶要卖好,官司也不能输。

 

It doesn’t matter. We are well-born, but that hasn’t changed our vision of self-determination.
Méiguānxì, shì wǒmen chūshēn yōuyuè, dàn bù gǎi yī kē zìlì de juéxīn.
没关系,是我们出身优越,但不改一颗自立的决心。

 

It doesn’t matter. We are so awkward that we had to spend 17 years to realize we are the rightful managers of Chinese herbal tea, inherited from our ancestors.
Méiguānxì, shì wǒmen tài jiǒng, fèile shíqī nián de shíjiān cái dǒngde zǔzōng liú xià zhōngguó de liángchá xūyào zìjǐ xìxīn jīngyíng.
没关系,是我们太囧,费了17年的时间才懂得祖宗留下中国的凉茶需要自己细心经营。

It doesn’t matter. We are so magnanimous that we let you go on in the past 10 years, did not intervene in the daily management, channel development, and just supported you quietly behind the scenes.
Méiguānxì, shì wǒmen tài dà dù, liánxù shījǐnián ràng nǐmen fàngshǒu qù zuò, méiyǒu jièrù rìcháng jīngyíng, qúdào jiànshè, zài bèihòu mòmò fùchū.
没关系,是我们太大度,连续10几年让你们放手去做,没有介入日常经营,渠道建设,在背后默默付出。

Later, Although Wanglaoji clarified the “It does not matter” miro-blogs was not its work, it still attracted tens of thousands of netizens’ attention. Even VANCL posted a weibo: “Sorry, we are so incompetent that we only sold 6,070,000 pairs of plimsolls in 2012.” Most netizens say that no matter how noisy these brand wars are, for consumers, the taste and the price of the products is the most important matter.

Since 2011, the JDB company has gradually renamed, from 2011 to May 2012, the red cans are now printed with “JDB produced Wong Lo Kat” (加多宝出品王老吉, Jiāduōbǎo chūpǐn Wánglǎojí) and have been explicitly printed with “produced by JDB” on red can products. The product’s name has been completely changed to “JDB” (Jiaduobao, 加多宝) and advertised under a new slogan that reads “The red-canned herbal tea with the position of sales leader within the whole country, now renamed to JDB”, or “We will not use the old trademark which was used in the past 17 years.” (不再使用过去十七年沿用的商标 bú zài shǐyòng guòqù shíqī nián yányòng de shāngbiāo).

Photos are from Sina weibo and master photo from Jike.com