Saturday, April 20, 2013

Cola Wars, China Style


(Guangzhou) -- Eighteen years ago, a Hong Kong businessman named Chan Hung-to took a sip of an herbal tea produced by a government factory in Guangzhou and tasted the future – a beverage that he imagined could be the Coca-Cola of China.
The sweet, cold drink called Wanglaoji herbal tea is an acquired taste, a blend of seven medicinal herbs and flowers, including honeysuckle, mint and chrysanthemum.
Chan succeeded in making it China's favorite drink. After licensing the tea's name and recipe, he took it out of its dowdy green package, put it in an iconic red can with a bold golden logo and spent millions of yuan on massive marketing campaigns. By 2009, it was outselling even Coke in the country.
Now, Chan and his erstwhile government partners are locked in a series of bitter trademark battles. While the court hearing for the latest lawsuit is waiting to be held, the real story of Wanglaoji may be that winning in the marketplace is more important than winning in court.
But whether Chan can maintain market share if he loses the rights to use the bright red can design is a question worth billions of yuan.
Feng Zhimin, a senior executive at Chan's firm, says they are almost ready to throw in the towel on legal action. "If we lose this case again, there is no justice. We will give up," he says.
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