Last week, I read the blog “HEYTEA’s success: a new marketing strategy” by ChenShi and was inspired by the revolutionizing marketing strategies used by the business that leads to their breakthrough in the market. Chen Shi interpreted Heytea’s success from four key approaches (which I highly agree): the emphasis put on refined customer experience, the appropriate brand positioning and specifically targeted consumer sector, the precise choice of store locations, and efficient advertisement through digital medias.

 

From my experience, Heytea is a typical example of China’s “Wang Hong stores”—a phenomenon arisen in recent years in which stores become popular on the Internet and thus attract an unusually large flow of customers. (Wang Hong store stands for “web star stores”). Those stores utilize essentially the same marketing strategies; they specifically target young poeple who fully immerse themselves in the power of social media and who pursue brands more so than the actual commodities purchased. Those customers who visit the store take pictures and post on social media, thus promoting the brand to even more people—forming a positive feedback loop. Those pictures increase viewers’ curiosity and eager to try the products—even if the cost is a two-hour lineup.

 

Despite initial success, I believe that there are certain defects with such marketing strategy. Using Heytea as an example, the post purchase experience is nearly ignored by the stores. After the initial visit, the long wait time and extra effort put into purchasing the product becomes disproportionate to the result obtained. The marginal benefit for purchasing one of these “Web Star Product” substantially lowers, and it’s no longer worthwhile to lineup for two hours to purchase one of these products. Thus, the percentage of returning customers is comparatively low, and consumer loyalty is harder to achieve.

 

Further, the long line-ups in front of stores make customers perceive the products as more attractive and worthwhile to line-up for. However, as most people finish making their first purchase, the size of the line-ups shrinks, further decreasing the perceived attractiveness of products. Long term wise, sales will shrink. As less customers visit the stores, the effect of secondary online advertisements also decreases, potentially creating a negative feedback loop. As a result, Wang Hong stores lose their popularity quickly. (just like what happened to Simmer Huang—a Web Star restaurant in Burnaby—which used to have very long line-ups but now gradually lost its appeal.)

Although Web Star stores gain quick popularity through their marketing strategies, the strategies could be unsustainable, and stores like Heytea has to continuously revise their strategies—possibly introducing new product lines or new advertisement methods—to ensure their position on top of the supply chain.

 

 

 

Word Count: 444

Reference:

Chen, S. (2017, September 26). HEYTEA’s success: a new marketing strategy [Blog post]. Retrieved from Sylvia Forman’s Blog: https://blogs.ubc.ca/chenshi/

Ma, J. J. (n.d.). Secrets of wanghong stores. Global Times. Retrieved from http://www.globaltimes.cn/content/1065835.shtml

Simmer Huang in Vancouver [Photograph]. (n.d.). Retrieved from https://www.vandiary.com/2016/11/05/simmer-huang-kingsway/