[Chinese Packaging Network News] Before the outcome of the red can decoration dispute was finalized, JDB (Jiaduobao) appears to have succumbed to pressure and is preparing to change its packaging. According to sources from yesterday, JDB has decided to replace its current red cans with a new design. Although the company has not officially confirmed the news, internal staff have verified the update. Analysts believe that packaging is a crucial visual identity for any product. Losing the iconic red can could be as damaging to Jia Du Bao as the trademark case three years ago.
Jiaduobao has essentially completed the final stage of the transition. According to recent market reports, the company has already made the decision to switch to gold as the background color, with the new packaging using a different shade of red instead of the traditional yellow-red combination. Another source revealed that mass production of the new cans began at the end of last week, and the updated herbal tea version is expected to launch before the Dragon Boat Festival.
In December last year, the Guangdong Provincial Higher People’s Court ruled that the ownership of the red can herbal tea belonged to Wang Laoji, stating that JDB's packaging had infringed on Wang Laoji's rights. Legal experts and industry insiders at the time suggested that JDB might eventually have to change its packaging. However, JDB insisted it would appeal the ruling.
Rumors about the packaging change have resurfaced in the market, but as of now, the company has not provided an official statement. A source close to JDB, who preferred to remain anonymous, said that the packaging replacement is "already in progress," but details such as when the old red cans will be phased out and when the new ones will hit the shelves are still unclear.
It’s worth noting that the legal battle between Wang Laoji and JDB over the red can and packaging rights was still in the appeal stage. After Wang Laoji won the first trial in December, JDB had not yet gone through the second instance. At this critical moment, JDB chose to proactively change its packaging, which industry insiders interpreted as an indication that they have accepted their fate. The chances of overturning the initial ruling appear slim.
A person close to JDB told Beijing Daily News reporters: “If JDB were confident in winning the lawsuit, there would be no need to spend resources on new packaging.†Yao Huanqing, deputy director of the Legal Science Research Center at Renmin University, also shared insights with Beijing Commercial News. He mentioned that the Guangzhou Higher People’s Court has submitted the appeal to the Supreme People’s Court. Due to the complexity of the case, the final judgment is expected by 2015. This means that JDB has limited time to adjust and promote the new packaging.
Currently, the new packaging design for JDB is nearly finalized. Zhang Zheng, research director at Beijing Fulai Brand Consultancy, explained that effective packaging can quickly establish product positioning and generate higher profits while resonating with consumers. “For many years, the red can has become a symbol of herbal tea in the minds of consumers. It is precisely these habits and perceptions that make color a key factor in brand recognition. Replacing this iconic image will inevitably affect sales and market influence,†he added.
Another concern is the potential increase in costs due to the packaging change. Zhu Dan Peng, a researcher at China Food Business Research Institute, pointed out that the festive season is a crucial period for JDB’s sales. With major festivals like Mid-Autumn and Spring Festival driving demand, the company may face challenges during these times.
Additionally, industry analysts noted that after the 2012 trademark change, JDB saw a sales increase of over 20%, but at a high marketing cost. In 2012 alone, marketing expenses reached 5 billion yuan, and similar amounts were spent in 2013 and 2014. While JDB reported sales of 20 billion yuan in 2012, marketing costs accounted for a quarter of total revenue. Changing the packaging carries similar weight to changing the trademark, and JDB will face both financial and operational pressures. Moreover, with its usual strategy of boosting market presence through heavy advertising, increased marketing costs could further reduce profits.
Zhu Dan Peng also highlighted that the packaging change could create more pressure on JDB’s sales network, particularly among channel partners and dealers, who might face risks and uncertainty. This could provide an opportunity for Wang Laoji, whose sales system is weaker, to gain ground.
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