JDB Herbal Tea (A): Got Inflammation? Drink Wong Lo Kat
Established in 1995, the JDB Group never expected that it would be stopped (by a court ruling on May 12, 2012) from using the Wong Lo Kat brand it had cultivated over the years. Nor did it expect that the brand would become a weapon used by Guangzhou Pharmaceutical Holdings Limited (hereafter referred to as GPHL) to compete against JDB. In 1995, JDB leased from GPHL the right to use the Wong Lo Kat brand in mainland China. Over the course of 17 years, JDB made Wong Lo Kat the top herbal tea beverage brand, with a sales volume exceeding that of Coca-Cola in China. Wong Lo Kat’s annual sales had increased rapidly over the years, from less than RMB 200 million in 2002 to RMB 17 billion in 2009–2010. However, during this growth process, the relationship between JDB and GPHL gradually worsened. In the opinion of GPHL, the trademark lease agreement signed previously with JDB could not assure that GPHL would share the benefits from the sharply growing sales volume of red-can Wong Lo Kat. On May 9, 2012, it was ruled that JDB was to stop using the Wong Lo Kat trademark as of May 12. How could JDB transfer the brand assets to a new brand? How could JDB continue to use the experience and resources of marketing Wong Lo Kat to market a new brand? All these challenges appeared before JDB almost overnight.
Published by：China Europe International Business School