Coca-Cola launches herbal sleep-aiding drinks in China and tries social e-commerce

On May 20th, the Coca-Cola Tmall flagship store launched new products. The new product is promoted as a type of functional drink which has promoted with beauty, sleeping and some other health-care efficacies. The product is not bottled but bagged, and is not sold in single, but a box which contains seven bags for a week`s consumption, priced at 198 yuan.

Coca-Cola said that the product was locally developed by Coca-Cola’s Asia-Pacific Technology and Innovation Center in Shanghai and took two years from conception to launch. The list of ingredients shows that the product contains some herbal materials. Because of its “sleep-aiding” effect, Coca-Cola does not advise consumers to drink it on driving, tests, meetings, and other similar occasions.

The product is produced by Daminshipin, a third-party contract manufacturer. Data shows that Daminshipin mainly produces instant tea powder and various plant extracts. It is a raw material supplier to many beverage enterprises, such as Coca-Cola, Pepsi, Nestl é, Lipton, Kang Shifu and so on.

Coca-Cola announced that for the first time, the corporation will try new methods to promote new product, such as social marketing and live streaming. This may be Coca-Cola’s first attempt on social e-commerce. It has been revealed that Shandongzhuangdie Co. Ltd is the exclusive online distributor of the product.

Also See: The De-Colonization of Chinese Drink

Social e-commerce is having a strong impact on traditional e-commerce in China. The booming development of Pinduoduo, a typical social e-commerce platform, has threatened the dominiant position of Taobao, China’s most famous e-commerce platform.

Compared with traditional e-commerce, social e-commerce has lower marketing cost and faster user growth, because it spreads through other social platforms which belong to other companies, such as the famous WeChat.

Social eCommerce operators tend to claim that they are closer to consumers, better understand their needs and are able to provide better goods as a result. They call themselves an important channel for China’s “consumption upgrading”.

But opponents agrue that social e-commerce tends to provide cheaper rather than higher-quality goods. Pinduoduo uses a large sum of sales expense for promotion and marketing, which makes it stay in constant loss. In addition, Pinduoduo’s poor quality, even fake products also had a certain impact on its reputation in the early developing stage.  The difficulty in ensuring product quality has also become a major issue for all kinds of social e-commerce, such as live streaming.