Competing with diaper-wearing Goliaths
Samuel L. Po is the founder and president of JS Unitrade Merchandise Inc., a leading consumer goods company known for selling trusted brands such as EQ Baby Diapers, Charmee Feminine Protection, Caress Incontinence Care, Secure Adult Pull-Up Pants and Nursy Baby Wipes.
With a mindset of an entrepreneur growing up in Iloilo City, Po struck out on his own after school and dabbled in different businesses. In 1990, he first entered the consumer goods industry by introducing affordable baby diapers to the market.
Q: Before JS Unitrade, you were in the electrical business. What made you enter the diaper and sanitary care industries?
A: My wife and I had a hard time looking for disposable diapers to use [for our newly born son] when we were outside. The diapers were quite expensive and a luxury back then and the quality was not so good.
At one point, I had even ventured as far as Alabang from our home in Quezon City just to buy diapers. I then realized that there must be an opportunity so I took a closer look.
With feminine protection, there were the multinational brands selling their products at amazing prices and then there were the local brands that had inconsistent quality, but selling for very cheap. We felt that we could bridge this by offering good value: high quality products at affordable prices.
In short, I identified gaps in the market where we could add value through our own products.
Q: JS Unitrade has been market leader versus multinational players in diapers (since 2012) and a close challenger in the sanitary protection. It took you years to conquer these Goliaths. What were the key turning points that made you gain market shares?
A: When we started, we were basically a trader. We had costs to operate and we marked up products from our suppliers to cover that, plus a little profit.
At one point, we were selling several competing brands and even various products from diapers to wafers to food for pets. We had lots of products and not much market share for each to show for it.
What I learned from that experience was to focus on products that had the most potential rather than to have an array of products that kept us busy but produced little result.
After the Asian financial crisis, we stopped distributing a lot of the other products and focused on baby diapers, particularly a premium Taiwanese diaper brand. However, during the crisis, baby diapers began to be more widely accepted but people were looking for more affordable variants, and we found an opportunity to launch a mass brand, which is how EQ Diapers was first conceptualized.
Several years after, people became more affluent and discerning, which is why we launched EQ Dry. We also got our first celebrity endorser, as we wanted to position the diaper as an aspiring yet friendly brand. We also continued innovating and launching new product features like cloth-like backsheet and magic tapes, which moms appreciated.
We made sure to communicate these to consumers, and that we were available in the right channels.
For Charmee, we actually made a slight error in thinking that the opportunity was only slightly trailing the leading brand when, in fact, the dynamics of the category necessitated that we target a different consumer segment. The consumers are highly loyal in this category, thus it is important to catch them when they are open to trying the brand.
When we switched strategies, it enabled us to talk to the right consumers rather than trying to appeal to too wide a segment that was really not interested.
Another key was uncovering our own strengths and weaknesses, and improving on them—improving our product (which we would know from receiving consumer feedback), refocusing our efforts (knowing which promotions were appealing to consumers) and also studying our results (knowing what particular products had potential).
Q: Multinational competition invests heavily in marketing communication to build brand equity and emotional connectedness. Local competitors have been following your low price strategy. How can you sustain your low price advantage?
A: Investing in marketing communications has its place in brand building as consumers need to know what we are offering—in terms of the benefits from the product itself and the trust associated with the brand. We concentrate on offering good value products, and this can mean different things to different people, which is why we have different tiers serving different kinds of moms.
For baby diapers, we have EQ Dry for more discerning moms who want the more premium quality and features; EQ Plus for moms who are juggling a budget and want some extra features that does not sacrifice quality; EQ Colors for moms who want a very basic yet reliable diaper; and recently, we also introduced EQ Pants, an underwear format that provides convenience and easy diaper changes.
We believe that a “low price advantage” is relative to the consumer’s expectations, just like in the car industry where some may want to pay for a luxury car, but others just want something that can take them from point A to point B.
Anyone can bring out a cheaper alternative by removing features or even undermining quality, but we would like to strike a balance. We don’t aim to be the cheapest, but to bring the best value for each of our consumers. We try to do this by making sure we are offering something that consumers actually want.
Q: Can you share some specific hard-to-forget marketing and business failures to our young readers? What lessons did you learn from them and how did they shape your subsequent thinking and behavior?
A: As I mentioned, at one point we were selling pet food that we did not really know much about. In the end, we could not really sell these properly, had issues with warehousing, and eventually had to dispose them at a loss.
You have to know what you’re selling, and be willing to invest time and resources to get to know it. Focusing and knowing your product is crucial.
A few years ago, we introduced biodegradable and flushable wipes—the product quality was good, but consumers were not yet ready to pay a premium for environmentally friendly wipes. Wipes were just starting to take off at that time and consumers just wanted the regular ones. That product got delisted.
Timing in launching products is crucial and can be a very costly mistake, especially since you have to spend a significant amount to have some channels to carry them.
Q: What do you want your legacy to be?
A: We actually did a self-review earlier this year and came out with a refreshed company purpose, principles and shared values. We looked back at what we, as a company, have stood for and how that aligned with where we wanted to go, and how I personally saw the company.
We see the company as a vehicle to make a difference in the lives of our consumers. It’s why we want to offer high quality products at reasonable prices to begin with. We believe that our products today, and in the future, should be able to make the lives of our consumers better in some way—whether to simply make their lives more convenient, more hygienic or even to enable them to do something.
To sum it up, JS Unitrade’s purpose is to enrich the lives of families worldwide one product at a time. It’s an ambitious goal, but we believe that it encapsulates our fundamental and timeless reason for existence. I think this also captures my desired legacy and purpose on a personal level as well. —CONTRIBUTED
Josiah Go is chairman of Mansmith and Fielders Inc. Read full transcripts as well as his interviews with other thought leaders at www.josiahgo.com.
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