Bai Xiang Food’s Misleading Packaging Scandal: When Marketing Tactics Backfire

Summary

– Bai Xiang Food continues selling “Duoban” instant noodles despite pledging to remove all misleading packaging after a June 2024 trademark scandal
– Channel investigation reveals widespread availability of deceptive products both online and offline weeks after promised recall deadline
– Over-reliance on online sales causes pricing imbalance that sabotages offline distribution networks
– Failed diversification attempts in beverages and fresh noodles leave company dependent on struggling core products
– Growth slowdown signals mounting challenges as trust erodes among consumers

The Packaging Controversy That Shook Consumer Trust

In early June 2024, Bai Xiang Food found itself embroiled in a nationwide scandal when eagle-eyed consumers discovered deceptive packaging practices. The company’s “Duoban” (“Mostly Full”) instant noodles prominently featured claims implying substantial extra product volume – but buried in packaging fine print was the revelation that “Duoban” was merely a registered trademark, not a quantity guarantee. The ensuing backlash went viral across Chinese social platforms, spotlighting how packaging and trademark tactics were blatantly misleading customers about product value.

Facing mounting pressure, Bai Xiang issued a formal public apology on June 4, acknowledging that the packaging language “caused misinterpretation.” In carefully crafted statements, CEO Yao Zhongliang committed to re-branding Duoban noodles as “Noodle Cake 120g” and discontinuing old packaging “within the month.” The company staged high-profile promotional events announcing the “new” product, complete with exuberant claims about pioneering transparent quantity labeling. Yet barely six weeks later, investigative reporters discovered an inconvenient truth: Duoban products remained widely available across multiple sales channels.

Consumer advocates argue this incident reveals deeper structural problems. As Zhongnan University marketing professor Dr. Liang Fei notes, “The gap between corporate promises and operational execution reflects prioritization of short-term profits over consumer trust. When companies treat packaging transparency as optional, they gamble with their reputation capital.”

Implementation Failure: The Persistent Distribution of Deceptive Products

Evidence of Unfulfilled Promises

The discrepancy between Bai Xiang’s public commitments and marketplace reality became shockingly evident during July 2024 retail investigations:

– Physical stores across Beijing districts showed Duoban inventory freely selling at identical prominence to rebranded replacements
– Official Tmall store maintained multiple Duoban product listings with significant transaction volume
– Huanghou milk tea shop observed Duoban containers occupying over 60% of Bai Xiang shelf space
– JD.com fulfillment centers confirmed ongoing shipments without clear discontinuation timeline

Quantitatively, Ele.me and Meituan data revealed roughly 37% of Bai Xiang SKUs transacted in the Beijing market during the third week of July still bore the discontinued Duoban labeling.

The Recall Reality Gap

Industry insiders cite logistical and economic factors behind the implementation failure:

“Recalling nationwide inventory would cost upwards of 28 million RMB according to basic supply chain math,” explains former Nestlé China operations director Mei Linwei. “Small distributors lack compensation mechanisms for unsold stock. Without corporate-funded buyback programs, the old packaging inevitably trickles through secondary channels.”

Supply chain consultant Wu Jiang of Roland Berger notes that “such marketing crisis transitions often allocate zero budget for reverse logistics. Executives prioritize PR announcements while treating existing stock liquidation as secondary concern.”

Marketing Missteps Compound Problems

The rebranding campaign itself attracted criticism when social media users noted uncanny similarities to Kangshipu’s “Noodle Overlord 120” line launched in 1997. Food historian Peng Lijun confirmed “the visual similarities and promotional language track Kangshipu’s historical campaigns with concerning fidelity,” suggesting Bai Xiang’s designers borrowed too liberally from competitors during their rushed damage control.

The combination of unresolved original violations with derivative marketing created what Tsinghua University branding expert Xu Min calls “double-layer trust erosion.”

Consumer Trust Erosion and Backlash

Consumer reactions have crystallized into measurable behavioral shifts:

– A Weibo poll (28,000 respondents) showed 42% “lost all confidence” in brand promises
– Repeat purchase intention scores plunged from 78% to 39% across nationwide taste panels

“I collected every Duoban promotional item since 2022,” says Shanghai superfan Liu Wenqi. “Seeing Bai Xiang lawyers debating what ‘mostly full’ means while stores kept selling the noodles revealed true priorities. This wasn’t a misunderstanding – it was deliberate deception.”

The psychological impact violates fundamental consumer-brand contracts. Nanjing University consumer psychologist Dr. Zhao Ming explains: “Packaging serves as tangible representation of values. When graphics imply generous quantity while legal disclaimers contradict it, brains register literal betrayal response. Neural imaging shows such contradictions activate deception-detection networks equivalent to broken personal promises.”

Channel Warfare: Online Gains Undermining Offline Foundations

The Duoban crisis amplified long-building channel conflicts threatening Bai Xiang’s growth trajectory.

The Online Dependency Trap

Bai Xiang’s initial success came through pioneering direct-to-consumer models and influencer collaborations that bypassed traditional retail hierarchies:

– Douyin LIVE sessions account for approximately 45% of sales volume
– Official store promotional pricing consistently 10-15% under distributor prices
– Delivery integration creates convenience premium over physical retail

The digital-first strategy now creates crippling downstream consequences:

– Online discounts establish value expectations untenable for physical stores
– Brick-and-mortar margins collapse below viability thresholds
– Field sales teams lack resources to defend shelf placements

Distribution Disintegration

Beijing retailer Zhang Yong displayed distributor pricing sheets showing Bai Xiang items yielded just 0.5-0.8 RMB per unit profit versus 1.6-2.1 RMB for Kangshipu equivalents. “When razor-thin margins combine with slow rotation,” Zhang explains, “shelving Bai Xiang actively loses money after rental calculations.”

Sales velocity data confirms troubling patterns:

Growth Metrics Turning Negative

Channel conflicts now manifest in core performance indicators:

– Market share plateau peaked in Q3 2023 at 19.6%
– Q4 2023 saw first sequential decline to 18.8%
– Year-to-date growth turned negative (-3.2%) by May 2024

Former McKinsey China strategist Fang Lei sees parallels with other digitally-native brands: “What initially appears as online efficiency invariably creates channel conflicts. Those failing to invest commensurately in offline ecosystems typically plateau before crossing 20% market penetration.”

Brand Expansion Struggles Beyond Instant Noodles

The Diversification Dilemma

Bai Xiang’s strategic dilemma extends beyond its core noodle business into broader portfolio stagnation:

– Non-core products contribute below 12% of total revenue
– Seasonal novelty launches account for nearly 70% of non-noodle SKUs
– Market penetration remains sub-5% across beverage/ready-to-eat categories

Liang Chen Restaurant Group purchasing manager Sun Tao reports: “Except for Beijing flagship stores request Bai Xiang Goods series sauces, hospitality demand focuses exclusively on instant noodles. No consistent pull exists for other SKUs.”

Launch analysis demonstrates failed scaling:

– Fresh Noodles brand ‘Xian Mian Chuan’ settled at under 2% national penetration
– Bubble tea collaborations generated social buzz but minimal repeat purchases
– Restaurant wholesale initiatives consistently fail to meet quarterly SKU rotation targets

Innovation Versus Imitation

The beverage division reveals problematic development patterns:

– Bai Xiang green tea packaging indistinguishable from market leader Uni-President
– Carbonated line fails penalty-covered differentiation versus PepsiCo offerings

Consultancy China Foods Insight identifies branding dissonance: “By leveraging identical packaging pathways without established beverage credentials, Bai Xiang triggers ‘me-too’ associations rather than preference creation.”

Category Expansion Missteps

Analysts identify flawed expansion sequencing:

– Conservative investment behind frozen food business versus competing specialists
– Limited production capacity delegated trial markets
– Inconsistent flavor profiles alienating convenience store operators

The China Chain Store Association’s category manager Zhou Ling reports frozen snacks performing “far below benchmark velocity” amid inconsistent quality feedback.

Crucially, Bai Xiang’s flagship noodle innovation also struggles:

– Trend-driven flavors (coriander, holboellia) fade quickly after novelty phase
– Collagen infused products achieved less than 40% forecast penetration
– Signature Soup Delicious line suffers flavor consistency complaints

Reclaiming Consumer Trust: Strategic Imperatives

The path forward requires fundamental operational shifts:

– Manufacturing Transparency: Real-time production visualization systems should replace vague quantity claims
– Supply Chain Integration: Comprehensive POS integration required for product phase-out compliance
– Channel Equity Investment: Direct offline support funding must triple to rebalance distribution economics

Structural reorganization could prioritize:

– Legal packaging validation committees auditing all claims
– Independent verifiers confirming marketplace transitions
– Retailer compensation funds eliminating liquidation conflicts

Trustmark Campaigns:

– Verified Weight Certification seals moving forward
– Third-party audit publication schedule
– Digital identifiers confirming production timelines

Marketing communications must migrate from quick-fix promotions toward trust-building narratives. Noah Zhou of AdWeek China observes: “Cultural value propositions outperform discount messages in intermediate-term loyalty models. This packaging crisis presents opportunity to anchor better brand ethics.”

The Integrity Imperative for Sustainable Growth

Consumers have decisively signaled intolerance for packaging deception amid rising transparency demands. As multinational competitors strengthen collaborations with regulators through China Consumer Association’s Green Packaging Initiative, domestic players face clear choices about brand integrity.

Bai Xiang still commands opportunity to transform this crisis into catalyst for trust-based growth – but only through concrete actions matching previous commitments. Failure to decisively resolve outstanding packaging deception concerns risks permanent erosion among critical urban demographics.

Food industry futurist Lin Ming sums up the next-phase imperative: “When incremental tactics undermine fundamentals, only radical authenticity restores trajectory. Packaged goods compete on reputation velocity. Every hour old packaging remains available calculates compound trust debt.”

Corporate leadership now faces defining questions: Will they implement truly transparent manufacturing systems? Can offline partnerships become equitable priorities? Most fundamentally, will they align operational behavior with proclaimed brand values? Consumers nationwide await answers displayed on store shelves rather than press releases.