Exclusive Interview with Canban: the Innovative Giant Leading the Oral Care Industry

Consumer Staples Author: Qinqie He, Katherine Jul 25, 2023 03:12 PM (GMT+8)

In the fiercely competitive global oral care market, a Chinese brand has emerged with remarkable innovation and high-quality products. Meet Canban (Chinese: 参半), a consumer goods conglomerate focusing on oral care. Among them, Canban stands out as a leading oral care brand established in 2018.

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Since its inception, Canban has been dedicated to providing comprehensive oral care solutions and has now developed an extensive product matrix, serving over 40 million users and safeguarding their oral health. Throughout 2021, Canban achieved significant milestones with sales of over 20 million bottles of its flagship probiotic mouthwash and over 30 million packs of portable strip-shaped mouthwash, setting a new industry benchmark.

Recently, EqualOcean had the privilege to interview Canban's founder and CEO, Yin Kuo, who shared insights into the company's leading position in the oral care sector and its innovative strategies.

High-Cost Raw Materials: Ensuring Superiority of Canban Products

The key to Canban's leadership in oral care lies in its extensive use of high-cost raw materials. Yin Kuo emphasized that, in comparison to traditional daily chemical brands, Canban has raised the average transaction value of its core products, such as toothpaste and mouthwash, and invested 50% to 60% more in raw material costs. This approach enables Canban to choose superior, cutting-edge materials and conduct thorough clinical validations.

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According to Yin Kuo, traditional brands may not necessarily avoid expensive raw materials due to reluctance but rather because they have long relied on fixed price anchors, which limit the potential for cost improvement. However, Canban has gained consumer recognition through premium pricing, providing sufficient resources for selecting top-quality raw materials and cost optimization. Such a strategy ensures the high quality and efficacy of their products.

Clinical Trials and Scene Innovation: Dual Safeguards by Canban

The innovative strategy of Canban encompasses clinical trials and scene innovation. Yin Kuo pointed out that Canban focuses on probiotic oral care products and collaborates with renowned tertiary hospitals and probiotic raw material suppliers to establish joint laboratories, continuously deepening the application of oral probiotics in their products to ensure effectiveness. Many of Canban's toothpaste products have undergone extensive clinical trials to guarantee outstanding performance.

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With regard to scene innovation, Canban has extended its traditional toothpaste and toothbrush products to various scenarios. Yin Kuo mentioned the introduction of oral sprays, mouthwashes, and solid toothpaste to meet diverse oral care needs in different settings. Furthermore, Canban delves into user demands, launching products like children's toothpicks tailored to their needs.

All-Channel User Profiles: Canban Becoming a National Brand

Regarding Canban's user profiles, Yin Kuo emphasized that their products cater to a broad spectrum of consumers. In its early stages, Canban primarily attracted young, fashionable women seeking a high-quality lifestyle. However, with expansion into more channels, the proportion of users aged above 40 has gradually increased. Yin Kuo believes that oral care products are essential consumer goods with diverse applications, positioning Canban as a potential national brand.

Venturing into the Southeast Asian Market: Interpreting Challenges and Responses

When it comes to the challenges and strategies during Canban's entry into the Southeast Asian market, Yin Kuo stated that Canban chose to enter the Southeast Asian market due to the unmet demand for oral care products in the region. In several Southeast Asian countries, oral care consumers faced limited brand choices. However, with the rapid spread of information and increasing demand for personalization, the Southeast Asian oral care market has shown vast untapped potential.

Yin Kuo believes that China's domestic market has met increasingly sophisticated demands in recent years, allowing Canban to bring this information-based scenario and a broader product range to consumers in other countries. Nevertheless, Yin Kuo candidly acknowledged that entering the Southeast Asian market poses various challenges, including cultural differences, regulatory compliance, warehousing, and logistics. To overcome these difficulties, Canban has deepened its understanding of local cultures and increased operational investments, aiming to provide superior services. Yin Kuo is optimistic that with a deeper understanding of the local market, Canban will gradually improve its presence in Southeast Asia and achieve its internationalization goals.

Breaking Stereotypes: New Discoveries in the Southeast Asian Market

Mentioning stereotypes about the Southeast Asian market, Yin Kuo admitted that initially, lacking sufficient knowledge of the market, he also believed that the region had lower GDP and modest consumption levels, potentially resulting in lower average transaction values. However, after Canban introduced moderately priced products, such as toothpaste priced at around 20 RMB, they discovered that such prices were not considered high by local consumers. This revelation shattered initial stereotypes and enhanced Yin Kuo's optimism about the market's potential.

Scientific Research and Product Innovation: Canban's Focus

As for scientific research and product innovation, Yin Kuo mentioned several key areas. Firstly, he emphasized the importance of following cultural and trend changes in oral care. He pointed out that as cultural aesthetics and individualization trends evolve, the oral care market will undergo changes. To meet higher-level user demands, Canban conducted in-depth research on fragrances and flavors in toothpaste formulas, aiming to provide a more enjoyable experience after brushing. Yin Kuo highlighted that such research leaves a profound impression on users, differentiating the brand from traditional competitors.

However, Yin Kuo also mentioned that in the mass consumer goods domain, scientific research focuses on fundamental cleaning, whitening, and oral disease prevention. In contrast, Canban has not conducted extensive research into more advanced disease treatment directions.

Establishing a Strong Domestic Foundation: Laying the Groundwork for Internationalization

Yin Kuo emphasized China's significant progress in supply chain facilities and production management systems. He pointed out that China's research and development capabilities in the daily chemical industry have reached world-leading levels, providing robust support for Canban's internationalization. Additionally, over the past two to three decades, China has maintained a trade surplus, with exported products predominantly in technology, infrastructure, small appliances, and 3C digital sectors. This advantage in advanced manufacturing, low-cost supply chains, and competitive labor costs presents valuable opportunities for Chinese enterprises to gain a competitive edge in international markets.

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However, Yin Kuo admitted that venturing abroad in the daily chemical sector still faces numerous challenges. He pointed out that, unlike the rational and calm 3C digital category, daily chemical products are emotional purchases, demanding higher adaptability to different countries and cultures. He recalled the difficulties faced when Canban attempted to enter the daily chemical market 15 years ago, emphasizing the challenges of establishing brand recognition in this sector on the international stage. Nevertheless, Yin Kuo remains optimistic about China's growing national strength and highlighted the potential provided by China's cultural and entertainment industry's internationalization efforts, as well as the "Belt and Road" initiative and the internationalization of the Renminbi, all of which offer fresh perspectives for China's daily chemical sector in international markets.

Outlook for the Future: Canban Leading the Global Oral Care Trend

Regarding the future development trend of the oral care consumer market, Yin Kuo presented his predictions. He believes that oral care categories will become more diverse, scenes will become more refined, and more submarkets for oral care products will emerge. With more diverse scenes and finer consumer demands, average transaction values will gradually increase, expanding the overall market size. Yin Kuo also forecasted that China's oral care consumer market will offer internationalization opportunities, leading to more global prospects.

Yin Kuo expressed that Canban will continue to monitor market trends and constantly innovate and develop based on consumer demands. His hope is for Canban to become an international oral care giant in the future, providing comprehensive solutions and serving a broader range of consumers.