Richora: How Manuka honey is delivering the sweet life for Chinese

Jerry Li, CEO of Richora, speaks to WARC’s Jenny Chan for the Marketer’s Toolkit 2022 about his Manuka honey brand and how he was able to build up in a short time what was once an unknown brand in China.

WARC: The Richora brand entered China not so long ago. Why did you choose this time to enter the market and what are the key characteristics of the Chinese honey market?

Jerry Li: The Richora brand has actually been in China for some time. It was founded in 2000 and officially came to mainland China in 2013. The preferred channels at that time were high-end department stores such as Jiuguang Department Store and Isetan in Shanghai and super chains across the country, including Ole, City Shop and City'Super.

Back then, Manuka honey wasn’t highly regarded by consumers but we had three demographics in mind.

Jerry Li, CEO, Richora

The first group is Chinese high net-worth individuals. They look for products that are functional, high-quality and have a good level of international prestige attached to them. For example, well-known products like saffron from Iran and rose oil from Bulgaria – these have the same reputation as Manuka honey from New Zealand.

The second demographic is tourists. Over the years, we’ve seen an expansion of the Chinese middle-class and a dramatic increase in their consumption power. More people are now traveling to Australia and New Zealand and have found that both countries offer particularly good health products – there is a connection in people’s minds between “Australia” and “New Zealand” and the words “natural” and “pure.”

The third demographic is acquaintances of the first two groups in China. They have a growing impression of Manuka honey as “liquid gold” because of all the reverential aspects associated with the product. This group’s growing understanding and general awareness of Manuka honey is growing day by day.

China is one of the top 10 honey-producing countries in the world with annual production of about half a million tones. But there isn’t really a specific honey brand that anyone can name, which means there is a massive gap in the market, especially because honey has been associated with good health for thousands of years throughout Chinese history. It’s a huge opportunity.

That means that Manuka honey from New Zealand is in a prime position to create a large presence in the Chinese honey market. When we first entered the China market, we focused on prestige – the highest price and the highest quality – but our sales suffered as a result and we realised that we needed to operate in line with the times in China. We started in department stores and sold products via TV shopping but in 2019, we decided that it was time to go full steam ahead into e-commerce.

Livestreaming attracted more consumers to Manuka honey, far exceeding the original expectations of the potential for honey to outsell the mainstay products from Australia and New Zealand, dairy and cosmetics. No one predicted how successful such an unknown brand could be.

WARC: You mentioned a strategy that utilises a full range of parallel channels. Can you elaborate on how Richora makes use of this?

Jerry Li: The standard industry sales approach talks about the "explosive product approach", where one hit product holds a brand together. For Richora, Manuka honey is naturally unique in that it has three core healing properties targeting stomach problems, oral health in terms of plaque and anti-inflammatory effects, as well as a skin balm helping to heal burns and scalds. With so many wonderful properties, why should raw Manuka honey be limited only to the food category? That may appear to be our original strategy but it doesn't mean we have to stick to it. We want to speak out on behalf of the whole industry, so Manuka Honey is going to move into all these parallel categories as well.

The soul of Richora is both Manuka and Manuka research. If we don't do research in deeper areas related to Manuka, we lose some of the value of the brand. So we should be able to make a single ingredient cross categories and break the bottleneck from a food technology perspective. We'd love to come in and be the first mover to try that.

WARC: With the evolution of emerging platforms and the increasing sophistication of livestreaming, how has Richora updated its marketing approach as a high unit-price product? What key messages do you convey when livestreaming?

Jerry Li: It is difficult to explain Manuka honey clearly because the cultural significance of the brand, the history of the brand, the function and form of the product, the manufacturing process and the market impact all add up to a very comprehensive structure. So when we communicate with livestreaming anchors and KOL experts, we are down-to-earth in fully introducing the entire brand story. For example, we are a pioneering brand in the category of Manuka honey enzymes, a classic New Zealand premium Manuka brand with a basic luxury positioning, and our ingredients are limited, so we have to tell them again and again about the different functions of graded Manuka honey according to industry association standards, and the different usage scenarios for different quality levels of the product.

In the education process, more and more livestreaming anchors are willing to engage with us from a learning perspective but they also need to make an emotional connection with the consumer when presenting the product, for instance to present scenarios for eating honey.

WARC: In what ways and from what channels does Richora tap into consumer needs for health?

Jerry Li: Honey as a product can be associated with lots of different drink options, like tea or coffee, while some supermarkets categorise it as a health food and others as a condiment or seasoning. I’m not saying that the honey market isn’t clearly positioned but at the same time, it has quite a range of usage and because of that, customers have had to deal with some bad faux-honey products over the past few years, fake flavourings and such. This has meant some pushback from consumers in terms of the quality and benefits of honey products but we think that people are starting to realise that products from real, quality honey brands are great for you.

We want to bring customers back to simply using honey as a standalone product. Perhaps they can swap their morning tea for sweet honey water, which has health benefits and can help with stomach problems, improve bowel function and also provide the calories that our bodies need to run. Around 70% of the body’s calories are sugar and we have to eat table sugar or sucrose to replenish our sugar stocks but these are multi-molecular and there are many people, such as diabetics, who can’t eat them, whereas honey, as a simple sugar, would be the perfect nutritional supplement.

Consumers have not necessarily turned away from honey over the years, it has just become less of a must-have. Now, our job is to make consumers aware of the culture of honey and its benefits.

For thousands of years, honeybees have been pollinating the world and without them, the world would not exist. There are lots of luxury brands – Gucci, Guerlain, Estee Lauder, etc – that all have their own bee range and bees are printed on the outer packaging of many luxury products. The division of labour, competition and hard work and simplicity of the bee is also akin to that of the Chinese people, so bees, and honey by extension, have a great culture behind it. The industry currently suffers due to the lack of a leading brand and the benefits that it can bring to consumer awareness. I hope that our Richora brand will not only represent our bee-based products but also the wonderful bee culture.

We want to communicate our spiritual aspirations to the world through such a good product and I think that is the historical responsibility of our whole business.

WARC: There is an important R&D element to Richora. Can you talk about the ways in which R&D and global supply chain issues help to guarantee product quality?

Jerry Li: First of all, this speaks to New Zealand’s overall food safety aspirations. As we all know, New Zealand has several star products and industry players, for instance, Fonterra in the dairy category and Zespri Kiwi in the fruit category.

Manuka honey itself is a product of New Zealand's crucially important primary industry, with beekeepers raising bees to make honey and processing plants completing the bottling process. This industry is heavily regulated by four separate authorities, the New Zealand Ministry of Primary Industries (MPI), the National Third Party Laboratory, the Customs Department and the Manuka Honey Industry Association. On each bottle of Manuka honey, in addition to the production date and shelf life, there is a traceability code through these authorities that provides information on exactly which region, which bee enclosure and even which hive in the eastern part of New Zealand's North Island a jar of honey originates from. Traceability ensures product quality and if something goes wrong with a product, it means a problem for the entire system. By being fully compliant and ensuring that there are no problems throughout the supply chain, Richora is ensuring the safety of our products.

Also, we get feedback from consumers about the product, such as a particular batch of honey is too thick or different in color. This is when we have to use a more up-to-date means of educating consumers that honey is a natural product and not an industrial product, so there is definitely something wrong with a honey if it is always exactly the same. Following the ways of nature is the core value. Only by doing this will consumers recognise that this is artisanal honey, the jewel of a bee's life, and they will cherish and respect it.

WARC: With the expanded audience base, plus the fact that there are now so many platforms and interfaces, how will Richora maintain user loyalty in the long run?

Jerry Li: The “honey” lifestyle requires consumers to have a strong awareness of the category. We want consumers to wake up every day and wash their face with our Manuka face wash, brush their teeth with Manuka toothpaste, use Manuka hand cream and skin lotion, have a cup of Manuka coffee at the office, have a Manuka salad for lunch, followed by a mouthful of Manuka honey enzyme jelly, take a throat lozenge when they commute to work, use Manuka mouth spray when they need to talk a lot, use Manuka for dinner to make barbecue food, or use Manuka honey drinks to detoxify themselves. Manuka for BBQ-type food, a Manuka honey drink for a hangover, a Manuka mud mask for strong cleansing and a paper mask for strong moisturising when they get home.

We have a range of bee-related preparations, materials and consumables that will surround everyone in every aspect of their lives. By launching co-branded products with many other brands such as oral liquids, powders and portable packs of honey, Manuka honey will be in every consumer's life scenario.

We asked consumers to tell us what flavours, styling and packaging they like and asked them to join us in this process of delivering sweetness. Already, many consumers are actively involved in product innovations like functional gummies and toothpaste, thereby participating in building our brand.

So we have a lot of interaction with consumers and what we need to do now is to go deeper. Some of them are professionals, some have an interest in aesthetics and some like to express themselves in words, so we need to find out specifically what each of these consumers likes, and then work with them to convey that spirit of the brand through "co-creation".

In addition to co-creation sessions on the app, stores and other platforms, we also organise offline meetings with fans of the celebrity anchors and the brand's own fans, and even invite fans to sit in our office to share their experience of the product with the product development department. The whole process of co-creation is very enjoyable and everyone finds it fun. If our target market is the post-90s, post-95s or post-00s generations, we have to look at everything through their eyes.

WARC: With stricter policies on data privacy, how will the effectiveness of marketing be affected? How will your brand shift its approach?

Jerry Li: Honestly, we tried online performance-based advertising for a period in 2020 and it worked quite well at the time; it was a good source of useful customer data. But we only used that business model for a little while before we stopped because we felt that it wasn’t exactly healthy to rely solely on information flow and network advertising placement to get customer data.

We still need to launch advertisements with solid content that can deliver more concrete information and experience to consumers, making them more willing to actively search for our products. I think this method is more suitable for the current development stage of Richora.

On the other hand, the customers that are attracted by lower prices are not necessarily going to be repeat customers. From an infomercial perspective, we’ve tried it and it actually works, but not necessarily for every product. Our standard, well-informed consumer would not necessarily want to be reached in this way.

So the plan is to use traditional department stores to acquire specific users and build a stronger relationship with them, which we think will be a better option for us in future.

WARC: Will there still be a focus on the offline channel?

Jerry Li: Absolutely, it will be a key focus for us. The brand started in China by using traditional department stores, so we attach great importance to these offline channels and do not plan to move away from them. Our first offline experience store will be officially launched this year.

Because of our history, we have a good understanding of how offline works. Specific consumer groups will go to specific consumption locations, as long as the location meets all the requirements they have in terms of the brand. We’re trying to fulfill these requirements in the same way that Watsons does for personal health care – we have a lot of products we think are a great match for offline sales and we’re going to be making a further big push into the offline market.

The product itself is an advertisement and a quality product speaks for itself. We can learn so much from product feedback in terms of future development, so it is really helpful for us if we have great partners that can give us accurate insights on the products.

I believe that if the product is good, it will be a success eventually. That's how Richora Enzyme Jelly was born. We didn’t base it on consumer data, it just came about as a eureka moment but now it is reinventing the jelly category. We chose to create a whole new category by taking the form of jelly and using it to encase Manuka honey, along with enzymes from Taiwan, New Zealand kiwi fruit and probiotics.

Along with the growth of e-commerce, Richora’s product range in China is also developing. There are more and more platforms through which consumers can find us and an increase in interest in healthy snacks, which is attracting a wide range of new people. Unlike before 2019, where we had a singular type of consumer – those looking for a solution to stomach problems – we've now found that customers who buy Manuka products are open to other products we offer and they're pleasantly surprised by every little innovation and the happiness that that can bring them. Maybe you'd think of using Manuka honey to make ice cream and lollipops but I bet you've never thought about making sweet garlic with it. We’ve done that and some of it is sitting on my desk right now, and it tastes great! It’s one of the many products we’ve developing in association with our customers.

WARC: Richora has just chosen star Wang Yibo as an endorser. Celebrity marketing can be a double-edged sword and there have been incidents that have caused losses for brands due to the personal crises of celebrities. What kind of principles do you think brands need to consider when using celebrities?

Jerry Li: The most important thing for us to consider here is “fit”. Wang Yibo fits well with our brand: he has lived overseas, he leads a healthy lifestyle including street dancing and skateboarding, and he’s even been called the “airport beekeeper” when he wears his hat, mask and casual clothes as he passes through an airport. These are all points that we can build upon to mesh well together. Also Wang Yibo's fans cover a wide range of ages, from under 10 years old to new mothers or older people. His fans are a diverse bunch.

Nowadays, it's not like a brand can just throw money at a star and they will do the endorsement. The star also has to screen the product. Wang Yibo does a lot of endorsements but only selects a few from specific consumer markets, so we know it's a two-way street for Richora. This is an important time for the classic Manuka brand to reach out to the Chinese market and the partnership with a highly influential Chinese celebrity gives us a massive opportunity in the sector. New Zealand Manuka Honey is not in itself a popular selling point just yet but it is great to have a top streaming artist to promote it and drive the overall development of the sector. The industry as a whole has grown and that in turn will lead to the creation of industry standards and relevant documentation.

On March 18, 2021, the day of the official announcement of Wang Yibo's endorsement, Richora achieved over 20 million sales in a single session on its own Tmall livestream and Tmall flagship store, which was a record for the brand's livestreaming broadcasts. During the ShakeOut Live's Rising Stars competition, we also achieved single day and single session sales of 3.5 million units, with Wang Yibo's fans becoming the backbone of the consumption. Richora did not raise its prices to a premium level for fans because of this endorsement but instead impressed consumers with lower prices, more attentive peripheral products, attractive yet eco-friendly gift boxes and interesting designs. It worked so well that our 9785 Little Gold Cup products sold out in one second both times they were launched.

We’re giving consumers benefits and discounts in association with endorsements instead of relying only on cutting prices. We’re keeping Manuka honey consistently priced and we want consumers to feel welcome throughout the livestream – we’re here to grow together with them, not to use them.

WARC: When Richora creates a co-branding partnership, what kind of mutual growth do you hope to achieve for each of the brands?

Jerry Li: In the past, we have cooperated with many well-known brands in the industry and this year, we will also start working with a few more but it only works if we can make sure we’re heading in the right direction.

There have been quite a few brands that have wanted to use our honey as a part of their portfolio and, for the most part, we’re happy with that as long as we can get something from the deal as well. Just as with the celebrity spokespeople we work with, brand partnerships are about “fit”. For example, because honey is a simple sugar, it combines very well with coffee; tea drinks can also be combined with honey. Some teas are naturally flavored and need to be tempered with honey. We’re starting a collaboration with Pechoin very soon, their “bird” and our “bee” will both be seen flying in the sky together – that’s one kind of fit, conceptually. We’re going to combine their products and ours in the Shanghai Nectar Restaurant. Many brands are now coming up with very interesting project proposals for us.

One thing we have to consider is the relatively high cost of our honey, meaning that brand partnerships usually have to be with major companies that are well-known in their own markets. We also have to really consider the fit with their consumer demographics.

WARC: How is Richora's team structure configured now, especially in terms of responding to rapid market changes and constant innovation in marketing approaches?

Jerry Li: We don't have that many people in our China team yet, around 40 or so, and they are a bit overwhelmed at the moment as they’re carrying the whole development of the China market on their backs. So this year, we are going to be very active in upgrading and adjusting our organisational structure on the brand and channel sides, as well as product development, the company's internal administration and more. We’re aiming to increase the company’s strength, especially in the CRM system so we’ll be heavily investing in computer systems and our supply chain system.

We always believe that a good brand needs a good structure to support it and that it's not okay to have sales increasing rapidly without a solid back office, and that's something we are addressing.

In the process, we have found many very good partners in the market and when they see how far we’ve come in such a niche market, they’re also excited and willing to join the family. So I think it’s a matter of building the brand and seeing which investors and brands naturally want to cooperate with us.