MollyBox Case Study: Lessons Around Subscription Models and D2C in China
Mollybox teaches us some valuable lessons about subscription models in China, D2C commerce, growing during the COVID-19 lockdown and some differences with pet ownership in China.
Imported cat food was the top selling category during last year’s Singles’ Day on Alibaba’s cross border marketplace, Tmall Global. Since then, Chinese consumers’ love of their pets has continued to accelerate. The COVID-19 outbreak saw a few pet owners abandon their dogs and cats out of fear that they would be little spreaders of the virus. But most pet owners became even more connected to their furry friends. During the lockdown, pets became a comforting influence in many households, and even more of a source of companionship when other connections were few far between.
With owners elevating their pets even further than before, there were a handful of brands who really capitalized on this and seized the opportunity delivered by the unique circumstances of the lockdown. Mollybox was one those brands.
Mollybox is an online subscription platform for pet products. With many of its customers facing the possibility of running out of pet food, MollyBox responded swiftly by implementing three initiatives:
1. Operations: Mollybox established a backup warehouse to increase city coverage
2. Delivery: Supported initiatives and teams to ensure delivery would continue as usual and as efficiently and fast as possible. When delivery was unable to reach cities due to the lockdown, they works with an NGO to find a solution
3. Consumer Service: Organized an online medical service for cats.These initiatives were rewarded with positive comments on social media. Customers praised the company for getting them boxes in time, and averting a crisis of running out of cat food.
These comments helped inspire the MollyBox team to continue to work above and beyond the call of duty, and further increased consumer trust and loyalty to the brand.
Adapting to China’s Unique Pet Market
The MollyBox team launched WoofBox in 2015 in China. But when this failed, they transferred their focus to cats with its signature product MollyBox. The founder realized how different Chinese consumers keep dogs as pets to those in America. He realized that he couldn’t just create another “BarkBox” in China. What he needed was a deeper insight into consumer behaviour and psychology.
“Cat owners are different from dog owners,” said Mollybox founder & CEO Yi Ju in a Chinese language interview with BrandStar. “Dog owners are more like mothers looking after their children - they are willing to shop around and find the highest quality products that are best value for money. While cat owners are more like fathers looking after their children, who believe that they can find one solution that delivers to their needs.”
Launching in August 2017, MollyBox became the first subscription ecommerce platform for cats in China, focused on being a one-stop solution for cat owners. Their boxes contained at least one type of cat food and several snacks, alongside toys and other handy items. Pricing covered different customer willingness to spend on their felines, with packages costing ￥99 ($14), ￥199 ($28), ￥299 ($42), ￥399 ($57), with flexibility around subscription frequency. By last year, there were 350,000 customers subscribed to the service.
Acquiring Customers to the Service
Mollybox approach to acquiring new customers can be summarized by its three strategic pillars:“Create”, “Borrow”, and “Buy”.“
Create” is to create alluring content to attract consumers, such as the Christmas and Chinese New Year themes below. MollyBox aims to surprise and delight its consumers, so that they are always looking forward to their delivery. Below highlights the fun MollyBox had producing a new theme for each month in 2019, which delighted customers are were shared enthusiastically on social media.
“Borrow” is to borrow - or tap into - others’ momentum in the form of partnerships. An example of this is the partnership they did with Feline Natural X MollyBox X New Zealand Trade & Enterprise (Left) and ZIWI X MollyBox X New Zealand Trade & Enterprise (Right).
MollyBox also cooperated with other industries, such as gaming, ONMYOJI and culture such as the Xi’an Museum. The customizable boxes not only increased sales and revenue, but also provided relatively cheap method of maintaining consumer curiosity and loyalty.
“Buy” is paying for ads and key opinion leaders (KOLs). Mollybox found the return from advertising on WeChat was good, but cooperating with KOLs was even better.
“We found that the only way a KOL can be successful is when consumers believe that his/her way of looking after pets is the right way, and something these customers can relate to with their own pet ownership,” said Yi Ju.
Ensuring repeat custom for a subscription service
When MollyBox launched, it provided plenty of incentives to purchase a long term subscription through discounts: A one-off box is￥159, a seasonal subscription is ￥139/pack, six months’ subscription is ￥119/box and yearly subscription is ￥99/pack - a discount of almost 40%. Yet few customers opted for the longer, discounted subscriptions as consumers “did’t want to pay that much at one time.”
In answer to this insight, MollyBox implemented the WeChat credit and Zhimi Credit auto monthly fee deduction function during second half of 2018. By the middle of 2019, 40,000 customers were taking advantage of this.
I am a happy MollyBox customer, and my personal experience is a good example of the attractiveness of the fee-deduction feature. I saw this brand for the first time in 2017, but the pricing was over ￥2,000 ($284) for a whole year’s subscription - 12 boxes. So I tried a single box. I was very satisfied with it, but I still didn’t subscribe it again, as I thought the yearly subscription was large expense. As I was unable to enjoy the discount, I gave up. On Singles’ Day that same year, I saw the auto fee deduction monthly function, and purchased it without hesitation.
To summarize, understanding what consumers are thinking through big data, qual and quant analysis can assist brands in designing pricing structures that best address their pain points. This research can also provide insights into what consumers are expecting, and what will surprise and delight them, so as a brand, we can do just that. Talk to China Skinny about how we can assist with this.
