Why does Coco Tree still make a fortune even though it doesn’t sell any products?

Why has Coco Tree's "marginal marketing" been successful for 40 years? If live streaming doesn't sell goods, does Coco Tree lose or gain? In this article, the author analyzes Coco Tree's marketing strategy from a professional perspective. It is for reference only and I hope it will be helpful to you.

Coco Tree’s live broadcast has been on the hot search list for so many days, and the official finally responded positively.

On June 2, the Coconut Tree Group accepted its first media interview and said: "The live broadcast style of Hot Dance is to express the central idea of ​​'men have masculinity, women have femininity, coconut milk has the taste of coconut milk, and the main focus is on the original flavor', which is completely different from what is on the market."

I believe that anyone who has been to the Coconut Tree live broadcast room can associate it with the "original" images. On May 24, Coconut Tree launched its first live broadcast on Taobao. It was still the same formula and the same taste, with plump beauties and muscular men filling the screen, creating a visual impact.

From TikTok to Taobao, Coco Tree can be said to have implemented the concept of "equally objectifying every gender" to the end.

Interestingly, the live broadcast has nearly 700,000 views, but Coco Tree does not plan to sell a bottle of coconut juice. The only link in the live broadcast room is "disco tickets". In the recent live broadcast preview, the same vest as the anchor is also for sale. It is purely marginal and does not sell goods. If Dong Jie and Zhang Xiaohui are the immortals in the live broadcast industry, then Coco Tree is simply a mudslide, and the kind with oil.

From the launch of Coco Tree Douyin last October to now, the controversy surrounding it has never stopped.

However, even though it was fined by relevant departments and criticized by official media, Coco Tree has no intention of making any corrections. In fact, under its persistent brainwashing, some people have already accepted this aesthetic, and there is a trend of reversing public opinion.

Why has Coco Tree's "marginal marketing" been so successful? Did Coco Tree lose money or gain money if it didn't sell goods through live streaming? In this article, Dao Fa Research Institute analyzes Coco Tree's marketing strategy from a professional perspective. This is for reference only and does not represent Dao Fa's aesthetics and value orientation. We would like to remind everyone that marginal marketing is risky and that imitation should be done with caution.

01 40 years of professional edge-wiping experience, why is Coco Tree the only one that can do it?

I have seen companies that do marginal marketing, but Coco Tree is the only one in the entire brand circle that has made marginal marketing a corporate culture. Before entering the live broadcasting market, Coco Tree’s most popular advertising slogan was “I have been drinking it since I was a child”, and beautiful women were an indispensable element in packaging and advertising.

From this perspective, Coco Tree can be said to be a loyal practitioner of the "3B Principles of Advertising" - Ogilvy founder David Ogilvy once proposed that advertisements using beauties, animals and babies as means of expression are in line with human nature and are most likely to win the attention and favor of consumers.

Wang Guangxing, founder of Coconut Tree Group, once publicly stated: "Advertising slogans should be straightforward and easy to understand, and advertising images should be intuitive, clear, beautiful and clear, so that consumers can know that it is our product at first glance."

It is said that a brand is the embodiment of the founder's will, and the founder's aesthetics is the upper limit of the brand. However, Coconut Tree has proved through its actual actions that a brand can not only fully reflect the founder's will, but also continuously break through and create new edges based on his aesthetics.

In the era of traditional advertising, the Coconut Tree Group used to put up advertisements on buses, such as "Wives like their husbands to drink Coconut Tree brand pomegranate juice" and "Papaya is plump and I am plump." On the product side, not only did they print beautiful women on the packaging, they also launched a "breast model bottle" for volcanic rock mineral water. The advertisement "I have been drinking it since I was a child" was also played in movie theaters on a loop. So much so that when people watched the Coconut Tree live broadcast, they would have the illusion that "the Coconut Tree advertisement has come to life."

Such blatant skirting of the line will naturally attract supervision. The local industrial and commercial department ordered the bus advertisement to be stopped immediately and fined 1,000 yuan. In 2019, the National Radio and Television Administration stopped the advertisement "Drink from childhood to adulthood" for being vulgar and skirting the line, and fined 200,000 yuan.

Fines are commonplace, but Coco Tree has become more and more courageous. In 2021, it applied to register the "From Childhood" and "Drink to Adulthood" trademarks, and designated them for use in Class 32, including beer and beverages.

Without strong psychological qualities, you really can't do marginal marketing. Adhering to the principle that black and red are also red, Coco Tree also released a good news in 2022, saying that the advertising storms in 2019 and 2021 attracted a total of more than 500 million people's attention, once again enhancing brand awareness and promoting sales growth against the trend.

The penetration of the will of the coconut tree boss is not only reflected in marketing, but can also be seen from the brand vision and even recruitment.

The classic yellow and black combination and typography style runs through product packaging, advertising copy, and recruitment advertisements. In the joint venture with Luckin Coffee last year, the official launched a vote on the packaging design. Between the design styles of the two brands, Coconut Tree finally won. It can be seen that the Coconut Tree style has successfully brainwashed the public.

A netizen once commented: "Coconut Tree Coconut Juice is a true culmination of the best of all worlds. It has the style of Hong Kong's neon advertisements, the essence of Macau casino advertisements, and the style of small cards on hotel door cracks. It is a packaging design with extremely social characteristics."

It can be said that the visual system of Coconut Tree has become a symbol. Regardless of whether it is worthy of being accepted by the public, it is able to achieve a high degree of unity from brand concept to visuals and content, and has remained the same for decades. Coconut Tree at least has a "core text" and a complete brand expression system.

In addition, product strength is the key factor that has enabled it to survive despite repeated marketing storms. Based on its geographical advantages, Coco Tree was the first to purchase fresh coconut juice at low prices in China on the supply chain side, and once monopolized the coconut juice market. In 1990, Coco Tree's coconut juice was selected as the state banquet beverage by the Diaoyutai State Guesthouse. Although its advertisements have been criticized, few people have criticized its products. Coupled with its strong channel capabilities, Coco Tree actually has no worries about sales.

02 Coco Tree makes more money even though it doesn’t sell any products through live streaming?

It is not difficult to find out from the brand history of Coco Tree that it often relies on marginal marketing to attract attention and stimulate sales. However, in the era of live e-commerce, the channels have changed.

Although the current live broadcast of Coco Tree focuses on "purely touching the edge, not bringing goods", Coco Tree also sold products when it first live broadcasted on Douyin, but the sales were dismal, with only 134 units sold in a single broadcast. After starting the live broadcast of men, according to data from Chan Mama, the Douyin account of "Coco Tree Group" had 93,000 viewers on March 1 this year, but the average sales per broadcast was only 750-1,000 yuan. Another live broadcast on March 8 had 788,000 viewers, with an average sales of only 10,000-25,000 yuan.

We have no way of verifying whether it has become a pure live broadcast out of necessity or on purpose. But one question that can be discussed is: what is the purpose of live broadcasts without selling goods?

Before answering this question, let’s take a look at Coco Tree’s performance.

From 2014 to 2019, the Coconut Tree Group achieved operating revenues of 4.477 billion yuan, 4.450 billion yuan, 4.336 billion yuan, 4.021 billion yuan, 4.157 billion yuan and 3.916 billion yuan, respectively, showing an overall downward trend and falling below the 4 billion yuan mark.

Until 2020, sales rebounded to 4.329 billion yuan, and further increased to 4.616 billion yuan in 2021. The cumulative sales of JD.com and Tmall from April 2021 to March 2022 reached 1.677 billion yuan, and sales in 2022 increased by 5% year-on-year. Interestingly, these two years are when Coco Tree encountered the most controversy due to its vulgar advertisements.

Although sales have rebounded, the declining market share in the past two years still shows the sense of crisis of this old company. In 1994, Coco Tree ranked first in sales among beverage companies nationwide. In 1999, Coco Tree's coconut juice market share reached 75%, but by 2019, this figure was only 26.3%.

Faced with internal and external troubles, Coconut Tree certainly wants to grow. The key is how to achieve the effect? ​​Rely on live streaming to sell goods? At present, it seems that Coconut Tree does not intend to take this path, but is replicating the growth path of 2020-2022, "marginal marketing" to attract traffic, expand brand awareness, and then convert traffic into performance.

In terms of performance, profit margins may be more important than sales.

Supermarkets, convenience stores, and restaurants are the main sales channels of Coco Tree. The strong distribution network accumulated by Coco Tree over the past 40 years is the key to supporting sales and profits. The most direct way to sell online live broadcasts is to offer discounts and promotions. Many emerging brands have used this to quickly get started, but are stuck in the problem of profitability.

For Coco Tree, which has already taken root offline, it is not cost-effective to use online promotions to squeeze profit margins in exchange for sales.

Compared with traditional advertising, live broadcasting is a more effective amplifier. By inviting beautiful women and strong men to dance in the live broadcast room, Coconut Tree attracted a lot of traffic and topics, and also made many young users who didn't know Coconut Tree know about this brand. Although the postures are not very elegant, the impression is really deep.

The essence of a brand is the psychological impression of consumers. As long as users come out of the Coco Tree live broadcast room and see Coco Tree products on the shelf, they can't help but take a few more glances. When mentioning coconut juice, the first thing that comes to mind is Coco Tree, and this live broadcast is a success.

03 All brands imitating Coco Tree have failed

Although Coco Tree has walked out of this black and red road, this road is not the right one and is not suitable for most brands.

In April, during a live broadcast of Mixue Ice City, the lively Snow King was replaced by two sexy girls wearing low-cut maid outfits and wild catwoman outfits. During the live broadcast, the camera would occasionally aim at the female anchor's chest. The male anchor next to her would also dub at the right time, "What do you want to see? Click to see it." Although it seemed to be no different from the large-scale live broadcast of Coconut Tree, the reaction of netizens was completely different, and they all said that "it was too good of a waste of goodwill."

Coincidentally, the snack brand Weilong designed a package in early 2022, using words such as "Meet", "Big", and "Tough" as slogans. As a favorite snack for primary and secondary school students, it triggered public criticism. One netizen commented, "If children read these words directly from the package, the scene would be too eye-catching."

Wahaha, also a youth drink, once printed the following on its packaging: “When I was in high school, someone in my class said that drinking AD calcium milk could change my grade from A to D. Then it started a trend and all the girls in my class started drinking AD calcium milk,” which was hotly mocked by netizens.

Compared with these imitations on 2D planes, Euler more directly moved the macho men in the Coco Tree live broadcast room into 3D reality.

At the Shanghai Auto Show in April, Ora invited a group of muscular men in vests to do exercises and boxing at its booth, and later invited female guests to come on stage to graffiti and draw on the male model's white T-shirt. Such bold behavior in public can only be said to be a disregard for public order and morality.

Although these brands are taking the edge route, they only bring "black marks" to the brands, but fail to get the desired "red". Brand marketing is a combination of punches. If you only see the surface popularity and imitate the trend, without considering the user group and brand image, you are likely to suffer a backlash.

Coco Tree’s “borderline marketing” is not worthy of praise. Instead of imitating others to gain popularity, the brand needs to think more about how to make good products and find a stable brand value system.

Author: Jingmin, Li Zi

Source: Knife Skills Research Institute (ID: DigipontClub)