Analyzing the logic of hot-selling domestic brands from three dimensions

In the darkness, only the hot products can bloom a flower.

A flower that attracts users, impresses users, and makes users "scream".

In the Internet age, if a company wants to succeed, it must create explosive products and have products and strategies that can detonate the market.

The logic of explosive products runs through the entire process of brand development. The 0-1 stage is only the basis, and crossing the 1-10 or even 10-100 stages is the key to the logic of explosive products.

How can emerging brands rely on the “hit-selling logic” to become the biggest winners in the new consumption 2.0 era?

This article will analyze the logic of new consumer brands' explosive sales from three dimensions: product selection, marketing, and sustainability.

1. Product selection logic: Pain point rule, creating the ultimate single product

In the past two years, we have witnessed the birth of many cutting-edge brands.

From Yuanqi Forest, which focuses on the sugar-free concept, to Perfect Diary, the representative of domestic beauty products, to Pop Mart, the leader in trendy toys, the popularity of these domestic brands is inseparable from the "explosive product logic."

These domestic brands are also happy to continue launching new products, hoping to become the next "explosive product".

Taking the beauty industry as an example, the new product launch cycle of international brands is generally 6-12 months, while Perfect Diary can shorten it to 3 months.

In 2019 alone, Perfect Diary launched 2,000 new SKUs, with a best-selling rate of about 20%.

As Perfect Diary's strongest competitor, Huaxizi is no less inferior. It has seven or eight hundred products, and its best-selling rate is as high as 30%.

In addition to the two emerging brands mentioned above, there are many other cases of explosive products with excellent data.

In comparison, old brands have relatively low rates of new product launches and best-selling products.

The logic of explosive products runs through the path of brand development. The 0-1 stage is only the basis, and the leap from 1-10 or even 10-100 is the key to the logic of explosive products.

How can emerging brands rely on the “hit-selling logic” to become the biggest winners in the new consumption 2.0 era?

First of all, we need to understand what a hot product is?

Simply put, a hot product is a single product that becomes popular through various communication channels.

A hit product must have three elements: an ultimate single product, a killer application, and an explosive word-of-mouth effect.

The core is to attract traffic, and choosing entry-level products to make hot-selling products is the top priority.

Courageous entrepreneurs only make one hit product and make it number one in its category, such as Coca-Cola.

Some companies that are good at learning develop a single product in traditional categories through combination innovation, and the effect can also be very good, such as Ramen Says.

The logic behind these hot-selling products is based on the pain point principle, that is, creating the ultimate product around user pain points.

When developing new products, brands should be results-oriented and put consumer pain points first.

1. How to find user pain points

First, data analysis, research and observation of consumers.

Companies with strong data analysis capabilities, such as Alibaba, can conduct their own research and analysis to capture user pain points.

Most companies will choose to cooperate with business data companies that analyze users to obtain first-hand information such as user preferences and pain points.

Second, obtain information from suppliers and distributors.

In addition to understanding consumer preferences through data analysis, you can also extract information from suppliers and channel partners.

For example, liquor is suitable for extracting information from distributors.

Generally speaking, innovation in the liquor category is relatively slow, and the offline market is far more active than the online market, so the experience of distributors is very important.

If you want to innovate the liquor category, visiting experienced distributors is a good way, or simply follow the distributors to drink.

If it is a baking brand, it is a good choice to obtain information from suppliers, because many suppliers will recommend their new products to downstream companies.

Third, learn from innovative categories at home and abroad.

There are always similarities in the development paths of businesses. Yesterday’s foreign brands may be today’s domestic brands.

Some new foreign product categories are full of hidden business opportunities and are worth exploring, learning from and referring to.

For example, Wang Baobao, a brand that positions itself as a healthy cereal, got its inspiration from a food blogger on a foreign social media app.

It targeted the domestic blank “baked oatmeal” meal replacement market, formed a market competitive segmentation with traditional brands, and quickly became an Internet celebrity brand.

In addition to the above three methods, brands can also understand popular trends by observing the innovative dynamics of leading companies, participating in industry conferences , etc.

After understanding the user pain points, the next step is to determine whether a category is suitable for developing new products.

2. Two dimensions for judging whether a category is suitable for developing new products

There are two dimensions to determine whether a category is suitable for developing new products: the degree of category involvement and the degree of brand differentiation.

Categories with high brand differentiation and low involvement are suitable for online launch , such as "size-free/insensitive underwear" in the clothing field.

The representative brands are mainly Ubras and Bananain.

Ubras focuses on the "size-free" concept, which reduces consumers' selection costs while also taking into account comfortable and slim-fitting wearing effects.

Bananain focuses on "no feeling", mainly focusing on body sensing science to create a sense of the future.

Mineral water belongs to a category with low involvement, but its brand differentiation is small, which leads consumers to buy it habitually, so there is little need to launch new products in this category.

For example, we can actually tell no difference between drinking Nongfu Spring and Wahaha mineral water.

2. Marketing logic: omni-channel layout to create a DTC marketing closed loop

The communication characteristics of traditional marketing are centralization and traffic diversion.

The most typical example is that Wu Xiaobo mentioned in his early book "The Great Failure" that in the 1990s, health products were popular in my country, such as Giant and Sun God.

These brands all relied on the MLM or direct selling business model. At the time, the online promotion methods were relatively simple, and sales could be guaranteed as long as the CCTV advertisements were placed. Even the goal of most brands is to become the "highest bidder" for CCTV advertising that year.

This type of marketing method has concentrated information and relatively low density. The products mainly meet the physiological needs of consumers, and the marketing is mainly based on functions and product advantages.

Brand building, marketing and sales systems are separated from each other and do not interfere with each other, which also causes the brand to be far away from consumers.

Gradually, brands have discovered that the current era of consumption is people-centered, and the goods-centered "goods find people" model is outdated.

Therefore, new consumer brands have abandoned the traditional marketing model and adopted social media marketing methods, using a decentralized, delivery-based approach to conduct traffic and marketing.

The information of social media marketing is relatively scattered, the products are centered on consumers, focusing on the individuality and spiritual needs of consumers, and the marketing is mainly based on emotional appeals and spiritual resonance.

New consumer brands are good at building a closed marketing loop under the DTC model through omni-channel mind-planting, private domain operations and consumer purchases.

Below we take adopting a cow as an example to briefly analyze the marketing logic of new consumer brands.

Adopt a Cow was founded in 2015. It has torn a hole in the dairy market which is almost monopolized by giants such as Yili, Mengniu, Telunsu and Bright Dairy, and quickly entered the public eye. It plans to be listed on the A-share market.

It has won the top spot in annual sales of dairy flagship stores on Tmall and JD.com, and during last year's Double Eleven period, it became the top spot in the dairy segment, joining the billion-yuan club.

Compared with the rich product matrix of leading companies, the product categories of Adopt a Cow are very limited, and it mainly relies on two types of explosive products to gain momentum.

First, the code for traffic: seize the social dividend.

The brand adopts a multi-channel layout, with WeChat, Douyin and Xiaohongshu as the main social media platforms.

Over the past year and a half, it has shifted its investment focus from Weibo to WeChat and Douyin platforms, especially WeChat platform, where the estimated investment amount exceeds 50%.

In terms of the number of accounts, the number of accounts for Adopt a Cow on Xiaohongshu accounts for about 51%, and on Douyin accounts for about 26%.

Adopt a Cow gathers a large number of Xiaohongshu influencers to promote content and quickly attract consumers.

At the same time, with the help of cross-border marketing, more hot topics are produced, which continuously detonates Xiaohongshu's traffic pool, and takes advantage of the opportunity to direct public domain traffic to private domain scenarios such as corporate WeChat and official accounts, thereby achieving rapid expansion of the private domain.

After the “two microblogs”, up-and-coming platforms such as Xiaohongshu and Douyin are becoming new battlefields for brand investment.

Second, pay attention to private domain operations and increase customer stickiness.

Adopt a Cow has been well aware of the importance of private domain traffic since its inception. In the early days, it gained the first batch of seed users through in-depth cooperation with well-known self-media such as Wu Xiaobo Channel, Dingxiang Doctor, and Dad Review.

After a long period of deep cultivation in the private domain, the brand has covered nearly 200 million people in total, laying the foundation for its formal entry into the private domain and building a private domain scale of tens of millions.

In addition, it also enhances consumer interaction and participation through the adoption model.

In order to improve product conversion effects, we have adopted a distribution mechanism co-created with users to lock in long-term consumption and increase user stickiness.

For example, users can apply to become cattle-raising "distributors" and, through private domain methods such as forwarding in Moments and attracting new members to join groups, drive sales and obtain commission rewards.

"Distributors" not only have stronger word-of-mouth publicity and social fission capabilities, but brands can also use them to establish direct contact with customers, build brand assets, and promote long-term repurchases.

Third, establish DTC conversion channels.

On the channel side, Adopt a Cow has established a wealth of online and offline DTC conversion channels.

Offline, Adopt a Cow has deployed over 5,000 terminals, and has been fully rolled out on various types of online platforms including boutique e-commerce, social e-commerce, and traditional e-commerce.

Through the DTC model, brands can directly connect with consumers and understand changes in consumer demand, which is conducive to establishing long-term relationships and increasing repurchase rates.

3. Iteration logic: How can a hot-selling product remain popular for a long time?

Short-term sales are not enough to represent the success of a hit product.

A true hit product should be one that can span multiple cycles and last forever.

Speaking of essence, the first thing that comes to our mind is Estee Lauder's Little Brown Bottle. It has been on the market for more than 40 years and is now in its seventh generation. The Little Brown Bottle accounts for 20% of Estee Lauder's single brand revenue share, and the repurchase rate is as high as 40-60%.

When it comes to skin care water, SK-II's "Fairy Water" is always the best.

In a sense, these popular beauty and skincare products can represent an entire category.

The reason why these popular products can be popular for a long time is, on the one hand, because these old brands entered the market early and created new categories; on the other hand, it is because these old brands have the ability to iterate, continue to invest in research and development and marketing.

Of course, the iteration of hot products also needs to look at the specific categories. For example, SK-II has two large-scale marketing campaigns every year to promote its Facial Treatment Essence, and on this basis drives the sales of other old and new products, while Lancome launches many new models every year.

On the contrary, big single products like melon seeds and nuts do not need innovation, they just need to keep selling well year after year, but snacks must be constantly updated to meet consumer demand.

1. Keenly observe changes in consumer demand

As a legendary skincare brand, SK-II has withstood market iterations and won the favor of generations of consumers.

In addition to its excellent product efficacy, it is also inseparable from keen consumer insights and accurate grasp of changes in consumer demand.

For example, in 2016, SK-II filmed an advertisement titled "She Finally Went to the Blind Date Corner", which resonated with a large number of female consumers on social media at the time.

Many women are labeled as "leftover women" and these women hope to receive more understanding and respect.

SK-II transformed it into a marketing idea, seizing the pain point of women's age anxiety, opened up a new topic, and set off a sensation on social media.

According to statistics, from April to December 2016, SK-II's sales soared by 50% in 9 months.

Kylene Campos, global brand director of SK-II, once said that the "Blind Date Corner" advertisement helped SK-II win over professional women and female executive type consumers, and created positive emotions among retailers and consumers.

2. Product co-creation to increase user participation

In the new consumption era, the application of product co-creation and content co-creation has become the best practice within the industry and even across industries.

For example, the emerging brand Santonban has embedded user co-creation into its DNA since its inception and has recruited product experience officers across the board online and offline.

Santonban carefully selects high-quality UGC content producers to serve as the mysterious "navigators". Currently, there are more than 500 "navigators" who not only bear the responsibility of brand promotion, but also participate in the process of polishing the product.

By increasing user participation, the interactive communication between the brand and fans is strengthened, and loyalty is cultivated.

In addition, unlike other brands that cooperate with top KOLs, Sandunban focuses on cultivating potential KOCs, that is, key opinion consumers.

During the product development and iteration stages, Sandunban will listen to the opinions of these KOCs because this group's observations of the industry are more accurate than those of ordinary people.

3. Adapt to the market and match the company's strategy

The iteration of popular products must adapt to the market and match the company's development strategy.

For example, during the epidemic period, in order to maintain the popularity of hot products, brands pay more attention to the layout of online channels.

Now that the economy is gradually recovering, some offline channels have become a battlefield for brand competition.

The dimensions that match the company's development strategy mainly include organizational structure, timing of product launches, publicity cycle, focus at a certain time, etc.

For example, many emerging brands usually adopt a group form in their personnel structure, with one team responsible for a new product, from innovation to market launch to iteration.

If the new update fails, the group members will be split up to form new groups.

It can ensure both professionalism and efficiency.

Under the premise of inefficiency in manpower, the more groups there are, the larger the scale will be.

IV. Conclusion

In the post-traffic era, the era of relying on marketing and traffic to create explosive products is over.

Brands should return to their essence and use product power to support growth.

As Jin Cuodao said in "The Strategy of Explosive Products": Product is 1, marketing is 0.

In the Internet age, all intermediate links have been cut out. Only if the product is eye-catching enough can you amplify its power 10 times or 100 times through marketing.

In product selection, explore user pain points;

On the marketing side, we deploy all channels to build product reputation;

Finally, the product is quickly iterated to adapt to the market and become a “long-lasting” category.

References:

1. "Explosive Product Strategy", Jincuodao
2. "2021 China KOL Marketing Report", Weiboyi
3. How does SK-II, which has stepped out of the "rich lady circle", impress young consumers? Titanium Media
4. How can a new brand create a hit product? An article reveals the advanced path from product selection to iteration, Growthbox

Author: Nicole

Source: Consumer Industry