Eleven Trends Predicted for New Consumer Brands in 2022

The collective rise of new consumer brands is undoubtedly one of the most noteworthy phenomena in China's business field in the past two years. A wide range of new consumer products and brands continue to appear on social networks, shaping a new lifestyle for contemporary young people. In the capital market, both the primary and secondary markets are always paying attention to the new consumer track.

Behind this new consumption upgrade, there is undoubtedly the combined effect of multiple factors, such as the increase in China's per capita disposable income, the expansion of the middle class, the generational change of the consumer population, and the improvement of China's supply chain and new commercial infrastructure. Overall, consumption upgrading will obviously be a long-term trend, so the rise of new consumer brands may also become the main theme of China's business in the next few decades.

Compared with the long-term macro-optimism, the more realistic question is - where will the new consumer brands go in 2022?

Recently, Weibo released the "2022 China New Consumer Brand Development Trend Report" (hereinafter referred to as the "Report"). It is worthwhile to combine the content of the "Report" and start from the classic "people, goods and places" analysis to predict the development trend of new consumer brands in 2022.

Reconstruction of “people”: new groups determine future new consumption

All companies will ultimately serve consumers, and changes in consumers themselves are the root cause of the emergence of new consumer tracks. According to data from the National Bureau of Statistics, China's per capita national income has exceeded the 10,000 US dollar mark since 2019. The rapid growth of national income can directly stimulate the development of mass consumption, thereby promoting the formation of a new consumption track.

In addition to the improvement in mass consumption levels at the macro level, what is more worthy of attention is the differentiation of consumer groups and a series of changes in consumption preferences.

Trend 1: Four new consumer groups emerge

According to the analysis in the report, China's new consumption industry has four typical incremental user portraits, namely: the new generation, the new elderly, the new small town youth, and the new middle class. These four groups have different consumption demands, but have shown strong growth rates in the past few years, continuing to stimulate new vitality in the consumer market.

The "new generation" refers to the internet-born generation born between 1995 and 2009, with a number that has reached 264 million. They grew up in an environment with relatively abundant material conditions and high economic growth. In addition, most of them are only children and have a high level of education. Therefore, in terms of daily consumption preferences, they are more keen on self-pleasing and personalization, and are attracted by trendy culture and brand values; the "new elderly" will become an important consumer group in an aging society. By 2050, there may be 500 million new elderly people over the age of 60. Different from the consumption habits of the elderly in the past, they are more willing to consume for themselves and attach importance to health and cultural products.

The "new small town youth" are distributed in county-level cities in third- and fourth-tier cities and below, with a group size of about 227 million people. They usually have less pressure in life, are willing to try new consumption online, are easily influenced by products, and prefer domestic products and cost-effective products. The "new middle class" group is usually around 35 years old, with high education and high income as their typical characteristics, and tends to consume technology, intelligence, health and culture.

The consumption preferences of these four major consumer groups are the main line of development of new consumer brands, from which it is not difficult to infer the future popular trends in the new consumer industry.

Trend 2: Top 10 new consumption trends in 2022

By analyzing the consumption preferences of the four new consumer incremental groups, Weibo has summarized the top ten new consumption trends in 2022 in the "Report", including smart trying new things, pleasing yourself first, saying no to anxiety, diverse lazy home life, health illustrations, extension of the original fever, new sports, empathetic experience, national style and trend, and companionship of cute things.

With the expansion of the new consumer incremental group, these ten trends will also release more market space in 2022, which is worthy of the attention of new consumer companies in advance.

Overall, the consumption demand of the four incremental consumer groups is obviously far from saturation. At the same time, as the size of the four major groups expands, new consumer companies have just begun to explore the needs of the incremental groups.

Reconstruction of “goods”: product upgrade drives brand upgrade

Products are the most direct link between users and brands. Brands must not only meet user needs through products, but also convey brand value concepts through products. With the diversification and personalization of consumer demands, the products of new consumer brands have also shown more obvious "new and unique" characteristics. By observing the new consumer market in the past two years, it is not difficult to find that the iteration and upgrading of products has gradually deepened from large categories to vertical sub-sectors, presenting a state of flourishing development.

Trend 3: Four major product innovation development paths

In the "Report", Weiboyi summarized the four product-based development paths of new consumer brands: "attracting new customers, renewing the old, innovating, and launching new products": emerging brands have risen in both mature and emerging categories with differentiation, segmentation, and regionalization strategies; while classic and mature brands have activated the market and expanded their user base through youth, value, and technology. Emerging brands break through and attract new customers in mature categories, or create entirely new categories to occupy the minds of users; while classic and mature brands reshape their image and refresh their products in mature categories, or expand and launch new products in new categories.

Trend 4: Commonalities of the four new consumption golden tracks

Judging from the current industry distribution characteristics of product categories, industries with low market concentration, fast product iteration, low brand effect and low consumer compromise are more likely to become the track for the rapid rise of new consumer brands. The report shows that food and beverages, beauty and skin care, clothing, shoes and bags, mother and baby, and pets have become mainstream new consumer brand gathering industries; if we look at the future development space, the two major industries of home appliances and daily chemical cleaning and care have high traditional brand barriers, so the possibility of new consumer brands counterattacking mature brands is relatively low.

Trend 5: A/B testing and user co-creation drive production model upgrades

Through the analysis of the "Report", new consumer brands also show obvious differences from traditional consumer brands in product R&D strategies. On the one hand, new consumer brands usually use A/B testing to conduct rapid product iteration testing. On the other hand, creative inspiration for product development often comes from the co-creation of users and KOLs. In this way, new consumer brands have higher product iteration efficiency and promote user loyalty and consumption stickiness to the product.

Trend 6: C2M+DTC realizes the upgrade of new consumption supply chain

From the perspective of industrial development, what drives the upgrading and iteration of new consumer products is actually the model innovation of the new consumer brand supply chain. Under the traditional product development model, new product development and sales are often driven by user research and technological breakthroughs, but this model obviously has a long cycle and is difficult to adapt to the rapid changes in current user needs.

In the report, Weibo found that there are two main supply chain models for China's new consumer brands: C2M and DTC, and both models can be adopted by brands at the same time. C2M refers to on-demand production based on user orders, and can even achieve reverse product customization with a flexible supply chain. This not only meets the personalized needs of consumers, but also reduces the inventory pressure of the company. DTC refers to direct sales from brands to users, which allows for deep links between brands and users and reduces marketing costs in the intermediate circulation links. The main methods include self-operated e-commerce, private domain operations, etc.

As a bridge between brands and users, products are both solutions to user needs and communication channels between brands and users. The iteration of products is based on the comprehensive upgrade of the supply chain system, product R&D strategy, and product methodology, and this trend will be further deepened in the future.

Reconstruction of “Field”: Comprehensive Renewal of Brand Marketing

Changes in the communication field have a more profound impact on the operations of new consumer brands. Different from the traditional centralized media communication model, the current media ecology is more fragmented and diverse. User time and attention have become the object of competition among brands. This has also caused the traditional "high-profile" marketing model to gradually fail. Brand marketing has undergone major changes in sales fields and communication models.

Under the traditional model, brands mainly use campaigns as the main communication cycle nodes for core media placement, which we can understand as "pulse" marketing communication, with different brand marketing entities at different stages. The logic behind this is that consumers’ consumption decisions go through different stages, and the final sales conversion can be achieved through promotions with different themes and in a progressive manner.

However, today’s consumer attention is fragmented, the communication and marketing model has a long cycle, and it is easy to fail to keep up with the changing pace of user needs. At the same time, this also drives the shift in the marketing focus of new consumer brands: from hard advertising media to social media, and from “brand notification” to “brand awareness”.

Trend 7: KOL marketing focuses on daily promotion, and the demand for bringing goods is growing rapidly

According to Nielsen data, 84% of people trust recommendations from social media, compared to only 42% who trust recommendations from online hard ads. According to Morketing data, social media advertising has become the largest channel for new consumer brands, followed by e-commerce advertising, search advertising and game advertising. It can be seen that social media and KOL communication have become a core battlefield for brand marketing.

Judging from the KOL marketing demands of new consumer brands in 2021, daily promotion is still the main demand, accounting for 45%; followed by e-commerce conversion, new product promotion, and live streaming, accounting for 25%, 20%, and 17% respectively. Overall, the average growth trend of effect-related demands is obvious, with the growth rate of live streaming sales at 112.5% ​​and the growth rate of e-commerce conversion at 98%. The overall average growth of effect-related demands is 42.22%. It can be seen that new consumer brands are increasingly paying attention to the shelf function and effects of KOLs and KOL marketing, and their marketing demands are gradually shifting towards conversion.

Trend 8: KOL investment volume is highly positively correlated with e-commerce sales

In the report, Weibo studied the relationship between the number and amount of social media investment of 30 new consumer brands and the sales volume and sales revenue of brand products on e-commerce platforms and found that: with the increase in social media investment, the overall conversion effect of e-commerce will also increase accordingly, which indirectly confirms that social media investment has a promoting and driving effect on the conversion of e-commerce.

Moreover, judging from the specific case data, in addition to major marketing nodes such as 618 and Double Eleven, the effect of KOL investment can be directly reflected in the e-commerce conversion data of the month, showing the same frequency phenomenon in the same month.

Trend 9: KOL procurement moves towards IT platformization

In the mainstream market, new consumer brands mainly cooperate with KOLs through self-operated commissions and platform purchasing. Typically, new consumer brands in the early stages of growth usually adopt a self-operated commission-based approach, that is, using the company’s internal media BD model to achieve rapid KOL placement and market expansion. However, this KOL procurement model requires a large number of internal personnel support and is less efficient. New consumer brands in the later stages of growth usually use a platform-level purchasing model for large-scale placement, which is more efficient and the KOL cooperation price is more controllable.

Trend 10: KOL marketing becomes more sophisticated and scientific

From the distribution of KOL investment in new consumer brands, we can find that in the marketing scenarios of daily grass-planting, KOL investment focuses on the tail influencers and general interest influencers; under the appeal of topic marketing, KOL investment focuses on the top influencers and general interest influencers; in the marketing scenarios of new product promotion, KOL investment focuses on the top influencers and vertical influencers; and under the appeal of e-commerce conversion, KOL investment focuses on the mid-level influencers and vertical influencers. In summary, in different marketing scenarios, new consumer brands will choose different KOL strategies to promote and achieve the best marketing results.

Of course, different new consumer brands face different difficulties and challenges. For example, the resources and competitive environment owned by start-up emerging brands and new brands incubated by traditional enterprises are very different, so they need to choose different marketing and communication strategies. However, it is not difficult to see that social media communication has become a compulsory course for the growth of new consumer brands. Whether good KOL marketing effects can be achieved and successful KOL delivery strategies can be applied will largely determine whether new consumer brands can be recognized by the target consumer groups and continue to break through the circle in the future.

The ability to integrate people, goods and markets has become the key to success for new consumer brands

"People, goods and places" have been broken down and reorganized in the current digital business context. It can be found that new consumer brands have achieved a considerable degree of digital transformation in every link and element of "people, goods and places", thereby building a more comprehensive and intelligent growth path and reshaping the matching efficiency of "people, goods and places" through a three-dimensional retail model. From a long-term perspective, the integration efficiency of the three elements of “people, goods and places” is the biggest competitive advantage of new consumer brands.

Trend 11: Data becomes the “new infrastructure”, and KOL marketing moves towards data intelligence

The digitalization of "people, goods and places" is undoubtedly an inevitable trend, but it is worth noting that unlike products, supply chains and other sectors that can be achieved through digital closed-loop management of internal processes, when brands conduct marketing communications to external consumers and external channels, since it involves external data, they cannot conduct precise marketing through self-built data middle platforms, and it almost must be achieved with the help of third-party platforms. Taking KOL marketing as an example, brands not only need to connect with a large number of KOL resources through third-party trading platforms, but also need to rely on the platform’s own data capabilities to achieve precise delivery and continuously improve marketing conversion efficiency.

In other words, the third-party KOL delivery platform not only needs to achieve delivery transaction matchmaking, but also needs to empower brand marketing with full-link digital capabilities. In KOL delivery, Weibo uses data analysis to achieve pre-delivery strategy support, communication execution during delivery, and post-delivery effect evaluation and optimization, forming an intelligent marketing chain of "data-driven, smart insight, full-chain engine, and smart operation."

In addition, based on years of deep data analysis, application, and operation capabilities, Weiboyi used the industry matching index, commercial promotion index, and SNBT (socialnet work behavioral targeting) index as selection criteria, and released a list of 180 hot-invested KOL experts in various major tracks and platforms in 2021, providing a reference for brand marketing in 2022.

It is not difficult to see that the intelligent marketing formed by "data + AI" will become the dominant model of future marketing, and data-driven trading platforms such as Weibo are also becoming an open "marketing data middle platform" for new consumer brands and a "new marketing infrastructure" for the development of the new consumer industry.

The digital reconstruction of “people, goods and places” is both a challenge for China’s consumer industry and an opportunity for new consumer brands. In the coming 2022, the three elements of "people, goods and places" will obviously further realize the in-depth development of digitalization, open up a larger blue ocean market space for new consumption, and generate more business opportunities.

The rise of new consumer brands will be the main theme of China's commerce in the next few decades. Under the transformation of "people, goods and places", past business rules and marketing rules are being rapidly rewritten. Just like every business transformation in the past, we may see the emergence of more new leaders and the decline of old leaders in the future, but the business world is still relatively fair. Whoever can master new ways of playing and adapt to the new era faster will be able to stand out in the transformation and win the hearts of consumers.

Author: weiboyi

Source: weiboyi