Once Abandoned, OLAY Successfully Transformed into A Mainstream

The reason OLAY, with a little “older”, got revival by P&G that should thank to an ingredient – niacinamide.

Now when it comes to “OLAY”, many people may not have heard of it. But when it comes to its Chinese name “Yu Lan You”, then you will definitely “so it is, I know”.

Almost 30 years ago, Yu Lan You was the more widely known name. In 1989, Olay, a subsidiary of P&G, entered China under the Chinese name of “Yu Lan You”. With its whitening and moisturizing products, Olay caught up with the first trend of consumer upgrading in China and the slogan “Surprise begins with skin” became widely known with high-density TV commercials.

“Yu Lan You” Changes to “OLAY”

For a long time, Olay was one of the top brands in the Chinese skincare market – In 2004, on the 15th anniversary of its entry into China, Olay beat out the then Chinese brand Dabao to become the largest skincare brand in the Chinese market with 12.38% of the Chinese skincare market.

However, in the following 14 years, the Chinese skincare market has been iterating at an extremely fast pace. In addition to the continuous subdivision of product functions, the entry of Japanese and Korean brands has broken the dominant pattern of European and American brands and consumers have become more and more discerning. The marketing tools that can be used to sell a bottle of cream are also changing day by day. TV commercials are no longer being enough and Olay’s advantage were narrowing. According to international market research firm Euromonitor, Olay’s market share in the mass skincare market fell from second place with 7.2% in 2013 to 4.1% in 2018, ranking fifth and falling behind Chinese brands such as CHANDO and Pechoin.

During Olay’s failing years, the Chinese skincare market was changing drastically. Chinese brands such as CHANDO and KANS took the mainstream market around 2008. Japanese and Korean inexpensive brands such as Innisfree and ETUDE HOUSE penetrated the younger generation. High-end brands such as Estee Lauder and Lancome gained the attention of the truly mature demographic. From being educated to buy whatever is on display through big department, people have become proactive in choosing different channels to shop in the context of information explosion.

So, starting with the name, Olay embarked on a complete overhaul. In 2015, Olay decided to transform itself in China. In 2017 this plan went into action. The direction of the transformation is high-end. First, in 2016, China stopped using the Chinese name “Yu Lan You” in advertisements, keeping only the English trademark “OLAY”.

The Rise of “Niacinamide”

The reason OLAY, with a little “older”, got revival by P&G that should thank to an ingredient – niacinamide.

In fact, OLAY’s products have always contained niacinamide for many years. But it was not until 2017 that people who are particularly concerned about cosmetics and other ingredients began to emerge and this skin care consumer group pushed “niacinamide” into the top of whitening. In view of the changes and needs of consumers, OLAY has also made niacinamide the selling point of its star product, the WHITE RADIANCE.

Today, when it comes to niacinamide, OLAY is still the first skincare brand that most consumers will think of. This is also because OLAY has a differentiation. Its technological strength of its ingredients – made up of many ingredients rat her than a single one.

“The Chinese skincare market is growing rapidly and leading the global beauty development. At the same time, the Chinese market has seen the emergence of more and more consumers who value ingredients and technology and are smarter in judging and choosing the right brands and products for them.” Li Zhujiong, President of P&G China’s Beauty and Fashion Division, said, “OLAY will innovate products according to consumer demand and it is the brand’s R&D innovation and product strength that is the most fundamental guarantee of whether a product can become hot-selling and innovation is the lifeblood of the brand.”

Li Zhujiong said “The reason why OLAY WHITE RADIANCE has become the king of the whitening market is that we have been working tirelessly for 26 years to develop the high-purity whitening ingredients niacinamide and Sepiwhite. The combination of these ace couple can directly attack the 4 major pathways of melanin production, intercepting 96% of melanin production signals, and together with the luxury whitening ingredient AA2G. It gives consumers the most efficient and pleasant experience from formulation to skin feeling, which is deeply loved by consumers.”

Turning a loss into a profit

OLAY has seen significant growth after transforming into a premium brand in the Chinese market. P&G CFO John Moller had publicly stated in October 2019 that premium skincare brands SK-II and Olay were popular with Chinese consumers and achieved rapid growth.

According to the relevant data, in the Top 10 brands of beauty sales across the network in Double 11 – Chinese Shopping Festival- in 2017, OLAY also ranked fifth. But by Double 11 in 2018 , OLAY has dominated the first of the Top 10 across the network while still being the first in the Double 11 all-day time, without being overtaken by other beauty brands.

During Jingdong promotional campaign on June 18th in 2020, OLAY turnover doubled year-on-year in 10 minutes on June 1st. Throughout the day on June 1st, OLAY’s star product Spot Fading Essence was ranked in the Top 3 in beauty single products and OLAY Youth Protect Aqua Sheer Lightscreen became a Top 5 single product in the Jingdong sunscreen category. In September of the same year, sales of Olay’s online flagship store reached $118 million.

In fact, every brand has its own life cycle. The only way to maintain the vitality of the brand and its performance growth is to continuously rejuvenate and iterate to keep pace with the times and the changing needs of consumers.



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