6 marketing breakthroughs for billion-dollar brands

In the trillion-dollar new consumer market, why is it that some brands can become the focus of attention right after their debut, and reap both popularity and sales for a long time; while others retreat from the center stage to the edge, gradually disappearing from people's sight; and some new brands may not even "survive" more than three years, and end as soon as they start?

The "2022 China New Consumer Brand Development Trend Report" studied 180 new consumer brands, and summarized 6 typical skills for growing into the next billion-dollar long-lasting brand in the new consumer reshuffle from aspects such as their founder characteristics, supply chain management models, marketing and promotion channels, and team management models.

1. What Brand Founders Need to Have

The founder's business genes often determine the vitality of the brand. Who are the founders of new consumer brands? What qualities and abilities do they possess?

Through studying hundreds of founders of powerful new consumer brands, Weibo found that the "behind-the-scenes promoters" of these brands have two prominent circle characteristics.

The first category is the professional system brand group with professional training, among which the international consumer giant Procter & Gamble accounts for the largest proportion.

Since entering China in 1988, P&G has been famous for its systematic training management and outstanding marketing capabilities, and is known as the "Whampoa Military Academy" in the marketing industry. It has trained a large number of outstanding talents for the Chinese consumer goods industry, including the founders of new consumer brands such as Perfect Diary, HFP, Usmile, Zhiguan, PMPM, and Wonderlab.

These "former P&G people" have a keen sense and inherent advantages in the fast-moving consumer goods industry, as well as extraordinary capabilities in data analysis, consumer research, and corporate management. This allows them to quickly capture entrepreneurial opportunities in the new consumption trend and makes it easier for them to stand out in the fierce competition in the consumer market.

Li Lun, partner of Panda Capital, believes that among the new wave of entrepreneurs, the elites represented by Procter & Gamble, who have received systematic training and have Internet capabilities, are the best group of entrepreneurs.

Another type of new consumer brand founders are business-oriented people who are good at traffic channel strategies. The ability to understand traffic may be an important trait of these consumer brand founders.

For example, Polyvoly founder Li Zijia, Ketang founder Zhao Wei, MENXLAB founder Liu Yixun, M Stand founder Ge Dong, and BUFFX founder Kang Le, who all came from Alibaba, have rich experience in Internet operations and marketing. They are not only good at using traffic to deal with users, but are also good at refined marketing and digital operations.

But overall, no matter which group of founders, their previous business experience has enabled them to make better use of Internet thinking and technology to improve product supply efficiency, brand marketing efficiency, team management efficiency, and digital operation efficiency.

2. Skills to improve product supply efficiency

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. In this 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.

DTC refers to sales between brands and users, which allows for deep links between brands and users and reduces marketing costs in the middle of the circulation chain. The main methods include self-operated e-commerce and private domain operations. Perfect Diary uses the DTC model to establish deep links with users and uses global data to conduct behavioral research and make quick scientific decisions, shortening the product listing cycle from the traditional 6-12 months to 3 months. In 2019 alone, Perfect Diary launched 2,000 new SKUs.

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 enterprises. Xiaoxiandun was the first to apply the C2M model to the bird's nest industry. After the customer places an order, the order goes directly to the factory, is stewed on the same day, and shipped to the customer within 24 hours.

The DTC and C2M supply models with small batches, personalized customization and flexible production not only make it possible to have a self-controlled chain integrating design, production and sales, but also enable many new consumer brands to achieve a leap from OEM to brand creation. It also greatly shortens the time cycle for new consumer brands to launch new products from consumer demand insights, production to sales, and greatly improves the efficiency of creating "explosive products".

Before 2000, it generally took 24 months for a new product to go from research and development to design to shelf launch. Today, this cycle has been compressed to 6-18 months, or even shorter.

Bear Electric Appliances: 7 R&D teams with a total of 278 R&D personnel, developing more than 100 new products each year, with a CAGR of 60% in product R&D investment. Bestore: In the first half of 2020, more than 1,500 SKUs were on sale, covering 14 major categories, with new products accounting for 18.25%.

The speed of product innovation has always been the core driving force of growth. New species rely on a more streamlined supply chain path to allow products to be launched very quickly, while continuously optimizing and iterating products.

In addition, new consumer brands usually use A/B testing to accelerate product iteration testing, and the creative inspiration for product development often comes from the co-creation of users and KOLs.

The specific method is that after the new product is tested by internal employees, users and KOLs are recruited to experience it, product feedback information is collected, and then the product is continuously optimized and iterated until 90% or more of the users are satisfied, then it can enter the market for large-scale sales.

Taking Santonban as an example, when launching new products, they will send product samples to KOLs and heavy users on the Xiachufang platform to solicit suggestions and continuously optimize and improve the products. In the process, they have created a new way of playing in the consumer relationship between "navigators" and "pre-navigators".

Huaxizi started "user co-creation" on Weibo when the brand was just founded, and moved this system to the mini program in 2019. So far, tens of thousands of users have participated in product co-creation.

In 2020, Yuanqi Forest, which has been producing many popular products, also began to use mini programs to build the same system, with more than a thousand people participating each time.

This model, in which users participate in the production and design of brand products, help improve them, and jointly create value, can not only efficiently feed back product R&D efficiency on demand, but also effectively promote user loyalty to the product and increase consumer stickiness to product purchases.

3. Skills to improve brand marketing efficiency

In a mobile Internet environment where attention is increasingly dispersed and information acquisition is fragmented, the founders of new consumer brands are well aware that centralized, hard-advertising marketing methods are obviously no longer suitable for Generation Z.

In the past, 5-7 ad impressions were enough to trigger consumers’ purchasing decisions. Today, even if it happens 30 times, consumers will not be aware of it.

In the past, only one central touchpoint, Taobao, was needed to establish e-commerce connections with consumers. Today, brands must establish at least 5.2 touchpoints, including decentralized touchpoints such as WeChat, Douyin, and Xiaohongshu, otherwise consumers can easily "lose connection".

Therefore, the founders of new consumer brands basically no longer rely on a single channel for exposure, promotion and sales conversion, but instead build more powerful omni-channel operation capabilities.

New consumer brands build their reputation through cross-platform and full-area deployment, and use their voice and scale to drive sales conversion growth.

In the layout of word-of-mouth building, social media and KOL promotion have become the main marketing and promotion methods. Among the many online channels, social media advertising accounts for a large proportion of nearly 60%. Through the strategy of combining top, middle and tail KOLs on social media platforms such as Weibo, WeChat, Xiaohongshu, Bilibili, and Kuaishou, the brand voice is quickly expanded and consumers' mental awareness of the brand is quickly established.

4. Skills to improve team management efficiency

The more successful new consumer brands all have one common feature in their organizational structure: young team members.

Taking eight fast-growing new consumer brands as an example, among the nearly 100 employees in core functions such as products, marketing, and technology, 72% are under 30 years old, and those born after 1995 who are under 25 years old account for 30%.

It can be said that employees born in the 1990s have become the main force in the new consumer brand team, and those born in the 2000s are also ready to go. In addition to bringing new ideas, new concepts, new vigor and other positive energy to the company, given the generational differences and characteristics of the new generations born in the 1990s and 2000s, there may be higher management difficulties and method challenges than employees of other generations.

The Amoeba model, which is highly compatible with the mobile Internet era, is undoubtedly the best solution. The Amoeba management model originated from Eastern philosophy and is a management method created and developed by Kazuo Inamori, the Japanese business god. Based on the philosophy of self-interest and altruism, the company divides accounting units into smaller units to independently conduct operations and accounting. Secondly, it introduces the market competition mechanism into the company, and finally realizes internal transactions and trains talents with business awareness in batches and enables full participation in management, which greatly enhances the subjective initiative of employees.

The Amoeba management model breaks down departmental barriers, connects the front, middle and back ends, and accelerates innovation and collaboration. It fully meets the individual needs, growth needs, attention needs, recognition needs and belonging needs of the new generation of employees born in the 1990s and 2000s.

Zihaiguo adopts the Amoeba management and operation model of "brand manager system", which not only ensures independent thinking of different teams, but also effectively encourages each employee to actively participate in management and effectively enhance the competitiveness of the internal team.

Use operations to simplify management, so that post-90s employees who already pursue openness, freedom, win-win and autonomy can think, make decisions and act like bosses and operate independently. I believe that in the future, A-MEBA will be applied to actual corporate management by more and more new consumer brands.

5. Digital business skills

It can be said that "digitalization" is engraved in the bones of founders of new consumer brands when they start their business. When Yuanqi Forest was first established, the first thing it did was to establish a business operation system. At the beginning of its establishment, Luckin Coffee realized the five online aspects of users, products, transactions, marketing and teams. Its digital system covers multiple levels such as store purchasing, sales, scheduling and inventory.

Digital operations can not only help companies deal with emergencies such as the epidemic, but also help companies integrate resources more effectively and respond flexibly to business changes.

6. Skills and sensitivity in exploring blue ocean incremental markets

First, from the perspective of population growth.

"He who wins the young people wins the world" has long been regarded as a golden rule in the brand marketing industry. The “new generation” born between 1995 and 2009 has become a must-attend group for every new consumer brand.

Generation Z 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. They are keen on self-pleasing and personalization, and are attracted by trendy culture and brand values. These consumption preferences have released a large amount of consumer demand. It can be said that Generation Z is taking over the baton of new consumer demands and is gradually becoming the main force in the Chinese and even global consumer markets.

It has become a consensus among new consumer brands that whoever can capture the "Z generation" will become the next king. Whether it is the design of young and fashionable products or the social marketing channels that young people love, such as Douyin, Bilibili, and Xiaohongshu, brands are scrambling to "please" this group of consumer "gold mines".

However, in fact, in addition to Generation Z, the three major groups of "new elderly", "new middle class" and "new small town youth" also have huge commercial potential and are worthy of attention.

At present, China's fertility rate has dropped below the replacement level, and the life expectancy and mortality rate of the population are close to those of developed countries. The national population aged 60 and above accounts for 18.70%, and the degree of population aging is deepening. It is estimated that by 2050, there will be 500 million new elderly people over the age of 60. The new elderly will undoubtedly become an important consumer group in an aging society.

However, unlike the consumption habits of the elderly in the past, the consumption characteristics of the "new elderly" have shifted from survival-oriented to enjoyment-oriented. They are more willing to consume for themselves and attach importance to health and cultural products.

By 2050, China will have a silver consumer market space of 60 trillion yuan waiting to be developed. The elderly group with money and leisure time is becoming an important force in the consumer market that cannot be ignored.

In addition to the new elderly, the new small town youth should not be underestimated.

In 2020, when the epidemic hit, while urban residents' consumption fell sharply, rural residents' consumption continued to grow, which shows their consumption potential. Among them, the "new small town youth" has made a great contribution. They are distributed in county-level cities in the third and fourth tier and below cities, 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 things, and prefer domestic products and cost-effective products.

Pinduoduo's strategy of sinking into the market fully demonstrates the market value outside the Fifth Ring Road. In essence, there are no such things as “low-end users” in the business world; there are only groups whose needs are not met.

In addition, the "new middle class" group with high education and high income should not be underestimated. They are around 35 years old and tend to spend on technology, health and culture. They are the group with the fastest growing consumption level.

With the new generation, new elderly, new small town youth and new middle class as the four main consumer groups, Weibo predicts that ten major consumer keywords will emerge in 2022, including smart new experiences, self-pleasing first, no anxiety, diverse lazy homes, health illustrations, extension of the original fever, trendy sports, empathetic experience, national style and trend, and companionship of cute animals.

On the whole, whether it is the new generation, the new elderly, the new small town youth or the new middle class, the overall common feature is the change from pursuing the national belonging of "WE" to being keen on the subjective expression of "ME". The changes in consumption behavior brought about by the awakening of self-awareness of these new generation of consumers have driven the consumer market from a mass circulation orientation to a circle-based demand-driven one.

Circleization is a completely new market structure that is completely different from massization, thus forming a new business logic of new consumption "starting from the heart".

Secondly, from the perspective of industry growth.

Weiboyi believes that industries with low market concentration, fast product iteration, low brand effect, and low consumer compromise are likely to become tracks for the rapid rise of new consumer brands. Food and beverages, beauty and skin care, clothing, shoes and bags, mother and baby, and pets are industries where new consumer brands gather.

From the perspective of the future development of new consumer brands, the two major industries of home appliances and daily chemical cleaning have high barriers in terms of CTR concentration, technology accumulation, brand effect, etc. There are currently few emerging brands, and the possibility of counterattacking mature brands in the future is also low.

Finally, from the perspective of category growth.

According to the data from the "2021 China New Consumer Brand Growth Power Survey TOP300", consumer brands established within 5 years account for as high as 58%, and "young" is undoubtedly the core label of new consumer brands. "Segmentation, differentiation, and regionalization" have become important handles for new brands.

Perfect Diary avoided the skin care product category where big brands were crowded, and entered the market from cosmetics, gradually opening up the market; Huaxizi Lipstick started with lipstick, a category that seemed to have relatively low technical requirements and relatively little competition from big brands, and formed a differentiated advantage through traditional Chinese style design; Heytea, Nayuki's Tea, Lelecha, Chayan Yuese, etc. created a new tea beverage track; Jiang Xiaobai created a new wine beverage track, etc. In the fields of trendy toys, new wine drinks, new tea drinks, anti-sugar meal replacements, sleep economy, smart small appliances, etc., it not only appears as a new brand, but also a "re-creation of species."

They stirred up the Chinese consumer market like a catfish, rewrote business and marketing rules, brought about unprecedented business changes, and gradually "awakened" a group of "predecessors." At present, many old players are actively trying to keep up with the trend of new consumption, activating the market and expanding the user base through youth, value and technology. Classic and mature brands are reshaping their image in mature categories or expanding into new categories.

For example, after Yuanqi Forest, PepsiCo, Coca-Cola, Nongfu Spring, Wahaha and others began to increase the promotion of their own sugar-free sparkling water drinks; traditional convenience food giants such as Master Kong and Uni-President have entered the high-end instant noodle market with a customer unit price of 10-20 yuan; after seeing Oatly set off a popular trend for oat milk, traditional dairy giant Yili also began to follow suit.

In the future, perhaps we will witness more new brands breaking through through category innovation and scenario innovation. At the same time, we will also see more mature brands and even classic brands at the "time-honored" level subvert consumer perceptions through youth.

The only constant in the world is "change". With the consumption development trend of a small wave every five years and a big wave every ten years, only brands that treat change as the norm, adapt freely and maintain continuous innovation can become promising future brands.

Author: Micro Broadcast Easy

Source: Weibo