Sober Thoughts Behind the IP Joint Branding Fever

Recently, the joint product "Jiangxiang Latte" of Luckin Coffee and Moutai has made the topic of joint marketing and IP joint branding popular again. It can be seen that many brands are also cooperating to launch joint products, but why are some joint products popular while others are unknown? In this article, the author tries to think about and interpret IP joint brands. Let's take a look together, which may help you understand how to do IP joint brands correctly.

Scarcity makes things valuable.

In the past, when co-branded products were rare, they were a small blessing for consumers in their daily shopping, and they were very happy to get them. But when co-branded products are replaced on a daily basis, their scarcity is gone, and consumers will not impulsively place orders just because of the simple superposition of two logos.

In contrast, under the involution of joint ventures, consumers have put forward higher requirements for the innovation ability, content story, and emotional value of IP joint products. This is also the logic behind the recent explosion of the "Sauce Flavor Latte" jointly launched by Luckin Coffee and Moutai. The reason behind it is not only the creative depth of "fine wine and coffee", but also the high degree of fit between the two top consumer products in IP.

However, many brands have failed to grasp the core of IP co-branding and have embarked on an inefficient path of imitation and following trends. I hope this article can provide some inspiration for brands on "how to correctly do IP co-branding".

1. Don’t sign a joint name just for the sake of signing a joint name

“Everything can be connected.”

This is the classic philosophy of business model innovation for entrepreneurs in the Internet era. For example, search giant Google connects the world's information, Amazon connects goods with consumers, and Apple connects various smart devices including smartphones...

These connected things form a big network, making the value of a single connected element far higher than the value of an isolated state. This effect is also called network economy, which is one of the main moats for companies to resist external competition.

In addition to this networking connection, the connection in the business world is more about pursuing "bilateral enhanced connection" of "1+1>2", such as Huawei and Leica, Luckin Coffee and Moutai, Heytea and Fendi, Holiland and Harry Potter, Miniso and Barbie, etc. This connection is also called "IP co-branding". The simple and crude expression is the superposition of two logos, and the advanced implicit expression is the clever distillation of the common connotation of the two brands.

In any case, Node Finance believes that what IP collaboration pursues is the chemical reaction that connects two brands.

For example, the Luckin Coffee and Moutai this time, even if we don’t mention the top status of both parties in their respective fields, the idea of ​​“wine and coffee” is enough to excite consumers who are fickle for a while; for example, the visual linkage between LV and Yayoi Kusama’s “patterns and polka dots” at the beginning of the year created a visual feast for consumers; for example, the Strawberry Bear plush doll jointly created by MINISO and Disney gives consumers the emotional value of being cared for in addition to its function…

But unfortunately, the IP co-branding activities carried out by many brands did not produce the so-called chemical reaction, but were more like a disguised promotional behavior that was just a formality.

For example, some new tea brands frequently launch IP co-branded products with only the outer packaging changed, some clothing brands only print NBA elements on the back of clothes, and some retail brands even print Mickey Mouse images on all the eggs they sell for differentiation.

Although these collaborations also cost a huge amount of IP licensing fees and labor costs, they give consumers the feeling that they are "collaborating for the sake of collaboration." After throwing away the outer packaging, the content of the co-branded products is no different from the daily sales. After a long time, consumers will feel bored, and the marginal effect of the collaboration will rapidly decline.

Node Finance believes that the "IP co-branding trend" that has swept across all walks of life in recent years is essentially a competition among brands for differentiated competition. Co-branded products can not only continue to attract consumers, but also maintain a certain premium ability for the brand.

In this regard, MINISO can be said to have set a good example. As a global retailer of private-label products, MINISO founder Ye Guofu discovered in his business that consumers’ pursuit of the emotional value of “good-looking and fun” products even exceeds the functional value of “good-to-use” products.

In-depth collaboration with classic IPs can well meet this new trend of consumers.

MINISO has developed joint ventures with well-known IPs for common products in the past, such as tissues, combs, socks, and underwear. For example, the combs it has co-branded with Sanrio are not only exquisitely crafted, but also designed with cute IP shapes. Consumers find it very pleasant to use, and the wonderful consumption experience has further strengthened consumers' loyalty to MINISO.

This is the real meaning of IP co-branding. It is no longer a simple change of product packaging, or a rigid printing of IP colors and symbols on the product, but a combination of product attributes with the core of IP to create a brand new product from the inside out.

From this perspective, those brands that blindly follow the trend of IP collaboration should stop and think: "What was their original intention in doing this?"

2. What is the purpose of IP collaboration?

As we mentioned above, "networked connections" have created a barrier for enterprises in the network economy, making their position difficult to shake. However, brands that are keen on IP co-branding do so precisely because their moats are not high enough. IP co-branding has become one of the few low-cost ways for them to create brand differentiation.

A set of data shows that my country's "number and scope of IP co-branding in industries such as apparel, tea, toys, baking, and retail are at unprecedented highs."

In the clothing industry, Uniqlo is an evergreen in the IP co-branding industry. Since the launch of the "UT Series" T-shirts in 2003, Uniqlo has extended its tentacles to major IPs, major brands and well-known artists. Uniqlo's co-branding usually adheres to the consumer experience of "spending little money to buy big brands". It only sells T-shirts co-developed with top artist KAWS for 79 yuan, and also uses the clothing co-developed with minimalist designer JIL SANDER as a regular series in the store - "Uniqlo + J Series".

Behind these collaborations, what UNIQLO wants most is to capture the favor of the "post-90s and Generation Z". As an affordable clothing brand, UNIQLO responds to the ever-changing consumer trends in the clothing industry with a business philosophy that caters to young people.

In the tea industry, Heytea, Nayuki's Tea, Mixue Ice City, and Chabaidao have taken the IP joint-branding competition to a new level. Taking Heytea and Nayuki's Tea as examples, according to rough statistics from the media, Heytea's IP joint-branding frequency is once every half a month in summer and once a month in winter; Nayuki's Tea is nearly once a week.

But as we mentioned earlier, "the focus of IP collaboration is not to blindly follow the trend, but to create something again." In this regard, the quality of Heytea's collaboration is obviously better than Nayuki's Tea. In the past six months, Heytea not only launched a phenomenal collaboration with the luxury brand FENDI "Joy Yellow", but also previously exported its own flagship product "Succulent Grape" to Holiland.

Compared with Uniqlo, which aims to attract young people, Heytea's IP collaboration is more concerned with upgrading its own brand tone. The Heytea brand team once revealed: "When choosing daily IP collaborations, whether it fits with Heytea's brand spirit of 'joy' is their primary consideration."

In the baking industry, Holiland has also taken IP collaboration to a new level. Since accepting the output of Heytea's reverse IP in 2019, Holiland's progress in the field of IP collaboration can be described as "the younger generation is better than the older generation."

According to statistics from Jiemian, from 2019 to date, Holiland has had more than 37 collaborations with different brands, including food brands such as Heytea, Haagen-Dazs, Oreo, Lycoris, and Wanglaoji, as well as big IPs such as Pokemon, Ultraman, Harry Potter, Disney Princesses, and Barbie, as well as art and designer brands such as UCCA and Youmu.

Walking into Holiland's stores, the co-branded products of IPs such as Harry Potter, Barbie, Hello Kitty, and Pop Mart not only give people a visual impact in terms of shape and color, but also make a difference in taste that is consistent with the tone of the IP. It is reported that the monthly sales of Holiland's co-branded products once exceeded 50%.

Haolihao's purpose of IP collaboration is mainly product-oriented, and it innovates in taste based on IP characteristics. For example, the company's previous collaboration with Heytea on fleshy grape edelweiss cheese, the tipsy cheese with RIO, the strawberry half-ripe cheese with Yuanqi Forest, and the Liuliu snow-melted cheese with Liuliumei are all developed based on its own star products "half-ripe cheese" and "edelweiss cheese".

Finally, back to the retail industry, in addition to the above-mentioned MINISO, the fresh food retail brand HEMA also recently announced a partnership with Disney China. The two parties plan to launch nearly 100 Disney licensed products throughout 2023.

According to Node Finance, Hema has currently launched a number of Disney co-branded products including Mickey Family Series mochi shake cups, children's organic noodles and organic omega-3 selenium-rich baby eggs, as well as Toy Story-themed three-eyed green rice balls, Strawberry Bear mochi, etc.

In addition to this signed cooperation with Disney, Hema actually put IP co-branded products on the shelves as early as 2017. In the past six years, Hema has cooperated with more than 50 IPs. In 2023, the frequency of its co-branding has increased to about once a week.

At a time when competition among membership supermarkets is becoming increasingly fierce, Hema’s efforts in developing IP products are based on the “three-dimensional considerations of product communication power, sales growth, and product power.” However, its behavior of printing Mickey Mouse images on eggs is somewhat bizarre. Will consumers pay for these “Mickey Mouse eggs”?

The cases in the above four fields can basically reveal the reasons why brands are keen on IP co-branding. In summary, there are four points: attracting young consumers, empowering brands, driving sales, and creating differentiated products. Of course, these four purposes are often intertwined.

When IP collaboration becomes a regular weapon for brands, how should they use this weapon to achieve the phenomenal effect of “Luckin Coffee Latte”?

3. Sober thinking under the bustle

Charlie Munger, a famous value investment guru, is often asked by interviewees how to become rich, how to become happy, and other beautiful questions. His answer is "Think about everything the other way around." Knowing how to become poor and unhappy, and then avoiding these behaviors, things will move in a good direction.

This logic also applies to brand IP co-marketing.

At present, we see that the main reasons why many IP joint activities are not exciting or even overdraw consumer reputation are as follows:

1) Only focusing on the marketing gimmick of IP co-branding, without checking the taste of the product. For example, the co-branded product of Heytea and Chow Tai Fook was widely criticized by netizens on social media as "unpalatable". The same example is the co-branded product of Nayuki's Tea and Cardcaptor Sakura, which was also considered "unpalatable" by most netizens.

2) The purpose of co-branding is to "buy peripherals", and the products can be old wine in new bottles. Since many co-branded products have a limited sale period, and the frequency of brands launching co-branded products is increasing, the brands have no time to take care of the development of new products, and are more focused on flavor innovation on basic products. In order to recoup the licensing fees, they focus on selling peripheral products such as theme bags and mugs.

3) Choose a non-famous IP with no compatibility for co-branding. The essence of co-branding lies in the chemical reaction between the brand and the IP. All co-branding should be carried out around this core concept. If you do not build a large IP co-branding library or rashly co-brand without finding the compatibility between the two parties, the result will definitely not be ideal.

In addition to avoiding pitfalls, brands also need to establish a higher-level co-branding concept - strive to retain co-branded products.

At present, although co-branded products are very popular, most of them are fleeting. As consumers become less excited about co-branded products, the input-output ratio of co-branded products is facing increasing challenges. It is reported that the profits of many co-branded products cannot cover the hard costs of IP licensing fees and soft costs such as communication costs.

We can see from the IP collaborations of Luckin Coffee, Holiland and other brands that their gameplay is more advanced - turning related co-branded items into regular store items. For example, Luckin's previous collaboration with Coco Tree on "Raw Coconut Latte" and Holiland's co-branded items with the Harry Potter series.

Wang Wei, the integrated marketing director of Peak, once summarized the two principles of IP co-branding, which Node Finance believes makes sense. He said: First, product innovation should take precedence over IP co-branding; second, IP co-branding should achieve brand association.

The first principle is that product innovation and IP co-branding will change consumers' bad habits of one-time consumption, thereby empowering products and brands in the long run. The second principle is that when the brand and IP are in harmony, when consumers see the co-branded products, they will not only think of the concept represented by the IP, but also the brand's values.

By driving IP collaboration through product innovation, brands are more likely to achieve the multiple goals of “selling products, breaking out of the circle, and accumulating brand assets.”

In short, the high-level co-branding concept solves the problem of how brands can gain long-term growth. Instead of simply focusing on the frequency of co-branding, it is time for brands to think about co-branded marketing from a higher level.

Author: Wuzhou

Source public account: Jiedian Finance (ID: jiedian2018), focusing on the value discovery of listed companies.