Internet celebrity brands seek change and fight back!

As the year 2021 is about to pass, the new consumer track is booming, with capital and highlights flying together.

• In January, Nayuki's Tea completed a C round of financing of over US$100 million;
• In February, the emerging maternal and infant consumer brand Babycare completed a RMB 700 million Series B financing;
• In March, Jane Eyre Yogurt completed a round B financing of 800 million yuan, which was used to build ranches and create a super supply chain;
• In April, the men's comprehensive personal care brand Li Ran received nearly RMB 300 million in Series B+ financing;
• In May, Weilong, the spicy snack brand, completed its Pre-IPO round of financing;
• In June, Wuye Noodles’ Series A financing exceeded 300 million yuan;
• In July, Hefu Lamian completed its E round of financing of 800 million yuan;
• In September, Mixue Ice City started its sprint to listing;
• In October, Adopt a Cow signed a listing guidance agreement;
• In November, Xiaohongshu completed a new round of financing of US$500 million, with a post-investment valuation of US$20 billion...

Source: Blue Shark Consumption 2021

Under the trend of new consumer brand unicorns & future unicorn industry distribution, it is a year of new changes in business. The Internet dividends are disappearing, the miracle of god-making is gradually coming to an end, and even ByteDance has stopped user growth. "Optimization" and "last-place elimination" have become the keywords at the end of the year.

As the industry's most sensitive lifeline, VC is always one step ahead. In the second half of this year, investment in new consumer brands has cooled down on a large scale, capital has cooled, and the proportion of investment and financing events in October fell by more than 27%. Under the general trend of consumption upgrading, it may be biased to say that the track is saturated, but it is indeed extremely difficult for a new force to emerge, break the existing pattern and attract new capital injection.

1. Bubbles and difficulties after the decline of traffic

From Taobao to Xiaohongshu, from live streaming to Douyin, every time there is a bonus, there is a new dark horse seizing the opportunity and occupying a place in the market dominated by a number of veteran brands with Su Bingtian's 100-meter speed.

Most new consumer brands started online. Take Adopt a Cow, which became popular with its original "adoption model", as an example. Its three-year compound growth rate was as high as 110%, while the average annual compound growth rate of dairy products in the past five years was only 3.6%. According to 36Kr,

Online revenue of Adopt a Cow accounts for 70% of the company's revenue, but with the disappearance of traffic dividends, rising customer acquisition costs and continuously declining ROI, the brand suddenly realized that it was working for kols and platforms. The marketing-driven online path is unsustainable, and it is difficult to gain scale advantages in a short period of time by deepening the supply chain and building brands. Without a sustainable way to acquire customers, there will be many challenges like adopting a cow at the door of listing.

In addition to adopting a cow, the cereal brand Wang Baobao's lack of growth is also evident. According to data from Magic Mirror Market, Wang Baobao’s sales in the first round of pre-sales for Double Eleven this year was 1.429 million yuan. The figure for the same period last year was 5.324 million yuan, a drop of nearly 73.2%. Despite the decline in traffic, the above two brands have still managed to break through the nearly saturated market with difficulty. However, countless new consumer brands are not so lucky. They do not have the long-term supply chain accumulation of traditional companies, nor do they have the patience and time to accumulate brand effects. We know that

The only way for a new consumer brand is to replicate itself until the brand can truly achieve a breakthrough with its products or complete a nationwide layout, and then the demand for Internet traffic will decrease. However, many brands die on the road to progress before that time.

If buying traffic through various online methods was the main way of playing in the first half of new consumption, then the current time has entered the post-traffic era: replacing homogeneity with differentiation, replacing price wars with value wars, and replacing traffic drive with brand drive.

If there is a stage, it is the stage after the brand has strong core competitiveness and supply chain barriers, which can avoid the bursting of the bubble.

2. The second half of the new consumption: retraining and catching up on basics

1. Offline channel counterattack

Whether it is to make up for shortcomings or expand scenarios, offline exposure has become the "killer weapon" for new consumer brands to create brand display windows.

In September 2021, Three Squirrels, a giant snack food company, announced a new trend of "focusing on nuts and focusing on offline distribution." Zhang Liaoyuan, the father of Squirrel, said that because the largest sales volume in the entire nut consumer market comes from offline distribution, only by winning this core battlefield can Three Squirrels truly become the leading nut brand in the country.

In June, we began to organize the distribution division and set up five major war zones and 21 provincial sales organizations across the country. The goal is to recreate the “10 Billion Squirrels” goal in five years by expanding the distribution system and incremental market.

Shu Baiyi (Wu Feng), general manager of the distribution division of Three Squirrels, believes that with the diversified development of offline channels, the logic of channel traffic is changing, and brand owners should focus on building brand awareness and forming customer minds. Three Squirrels has to face the "blockade" of traditional offline snack stores such as ChaCha, Yanjinpu, and Liangpinpu, and this distribution war is about to break out.

From the perspective of the brand life cycle, when new consumer brands develop to a certain stage, the acceleration of their growth period requires a counterattack on the offline "kingdom" on the channel side.

2. Product differentiation becomes an inevitable trend

There is a leading law in traditional positioning theory: it is much easier to create a new field in which you can be the first and gain a first-hand impression in the minds of potential customers than to make customers believe that your product is better than the first brand in this field.

For new consumer brands with weak foundations, creating a new category is undoubtedly difficult. Therefore, new consumer brands are destined to take the second path in the future: category differentiation, and become more vertical and precise in segmentation. From the traditional chicken feet category, there are tiger skin chicken feet that are more delicious after frying and then braising, Wang Xiaolu; from the traditional instant noodles and semi-dry fresh noodles category, there are ramen with meat and ingredients, Ramen Shuo; from the traditional cereal category, there are cereals with freeze-dried fruits, Wang Baobao cereal. In the end, all businesses will either create new categories or differentiate old categories. This is an immutable law.

3. Basic skills of the industry chain of the first generation of Internet celebrities

If the new consumer brands' counterattack in offline channels has just begun, then the years of accumulation of the entire industry chain may have been long-planned.

Jiangji Winery, which covers an area of ​​760 acres, began to expand in 2014 with a total investment of nearly 3 billion yuan and a production capacity of 60,000 tons. Jiang Xiaobai, which has been "silent" for a long time, once again became popular with 100 posters topping the hot search list on the occasion of its 10th anniversary. Behind the seemingly grand event is its product ambition. In November just past, Jiang Xiaobai launched the 52-degree "Golden Cap" to compete for the mainstream market.

The 500ml large bottle and 52-degree alcohol content are undoubtedly a challenge to traditional wine companies. Tear off the "young people" label, pave the way with subversive new products, and enter a new battlefield backed by a high-quality supply chain built at a cost of nearly 3 billion yuan. In a business environment that changes rapidly, some conditions are variable and some are immutable.

The so-called variable conditions are some dynamic capabilities that are easy to copy or weaken, such as various marketing tricks of an enterprise; the immutable conditions are the moats accumulated over a long period of time. In the next 10 years, the only thing that remains unchanged is the upstream supply chain.

From the upstream raw grain planting, to the midstream brewing and packaging and technology research and development, to the downstream channel network... the coverage of the entire industrial chain has also become the confidence for Jiang Xiaobai to launch an offensive.

Since its inception, Jiang Xiaobai has been questioned for only creating a market through beautiful marketing. However, in the following few years of silence, Jiang Xiaobai has been quietly cultivating its internal strength and has survived ten years in the liquor industry by relying on the underlying logic of the supply chain, becoming a new consumption model that transcends cycles.

In the past 10 years, Jiang Xiaobai has started as a marketing legend that told us stories of youth, and gradually upgraded to the younger segment and multi-category expansion track, and now has built a complete advantage barrier for the entire industrial chain. Every step Jiang Xiaobai has taken along the way is the next step that the new consumer brands are taking.

In addition, it is worth mentioning that in addition to the new consumption beacon Yuanqi Forest, emerging domestic brands such as Chinese ice cream Zhong Xuegao and the first beauty stock Perfect Diary have begun to focus on the supply side of the supply chain, and the new consumption battlefield has opened a new prelude.

4. Open a new chapter in brand building

When the overall environment shifts from traffic-driven to brand-driven, major brands' perceptions of brand building and value creation change from passive observation to active participation.

On December 15, HEYTEA released a brand promotional video with the theme of "Inspiration Comes When You Are Unexpected", inviting 6 B station UP hosts from different fields to start as co-creators, explore the pursuit of inspiration, and interpret HEYTEA's inspiration concept through various moments of rest in life to let inspiration come.

This is the first time that HEYTEA has released a brand promotional video since its establishment in 2012. This is the first brand promotional video released by HEYTEA since its establishment in 2012. It can be understood as a formal dialogue between HEYTEA and the public at the brand level. As a guiding light, Heytea is like a brand window, opening a new chapter in the brand building landscape of the new consumer market.

5. Offline media becomes a battleground for brands

Miaozhen's "Community Elevator Media Advertising Marketing Value Report" points out that elevator media is the top outdoor traffic type that advertisers plan to increase investment in in 2021.

At a time when online traffic is being exhausted, elevator media has reached a new small peak and become a must-have for major brands by virtue of its four major characteristics: mainstream population, must-go, high frequency, and low interference. From Perfect Diary, Huaxizi to Yanjing, Wang Xiaolu, Zhong Xuegao...

A number of cutting-edge top brands have ignited the mass market with their elevator media advertising creativity, and elevator media is becoming a huge new offline traffic entrance. Because of its high-frequency repetitive nature, brand memory points are planted into the minds of users over and over again. Only when consumers have brand awareness can there be the possibility of further communication and transactions, which happens to hit the pain point of low repurchase rates for most online brands.

I think that, to some extent, elevator media is expected to become a new channel to solve the problem of difficulty in integrating brand and effect.

Conclusion

In the first half of the new consumption, major emerging brands have stood at the forefront of consumption upgrading with their innovation and precise insights. In the second half, the challenges of fighting monsters and upgrading will follow one after another, and rebirth and change will become the main theme. The horn of a new battlefield has sounded. Should we move forward, or move forward? Or forward?

Author: Community Marketing Research Institute

Source: Community Marketing Research Institute