The 4 principles and 4 risks of influencer brands (Part 2)

The 4 Principles and 4 Risks of Internet Celebrity Brands (Part 1)

New media interpretations have encouraged more young people to try new brands, while also pushing new brands one step closer to becoming “ Internet celebrity brands .” As the saying goes, “Fame brings trouble,” and the same is true for brands. But next, "Internet celebrity brands" will face a more complex competitive environment.

According to the research of our Cliff Positioning Institute, "Internet celebrity brands" usually face the following four risks: the risk of being abandoned by the media, the risk of being challenged by "new new brands", the risk of being blocked by the entry of large enterprises, and the risk of rising channel costs . In practice, “online brands” cannot avoid these risks, as Mr. Lin Sheng, founder of Zhong Xue Gao, a representative of “Internet celebrity brands”, said:

"Popularity" is the way for contemporary consumer goods companies to survive, but at the same time you have to be careful with "popularity". After becoming popular, you have to think about how to move forward.

Is that really true? Let’s take a look at the development of “Internet celebrity brands” through cases.

• Tmall was founded in 2011;
• The first batch of Internet celebrity brands appeared in 2013, especially in the women's clothing market, where a large number of Internet celebrity brands emerged. In the list of the top ten women's clothing sales that year, Internet celebrity brands occupied 5 places, and then the list continued to decrease;
• In 2014, the ranking of online celebrity women's clothing began to decline;
• In 2015, the number of online celebrity women's clothing dropped sharply from 5 to 3, and the ranking dropped sharply;
• In 2018, only one online celebrity women's clothing brand entered the top ten list, and ranked only sixth. This brand is Han Du Yishe, while the original online celebrity women's clothing brands: Inman, Artka, Liebo, Chuyu, etc., have fallen out of the list.

A recent practical case is Perfect Diary.

• In 2019, Perfect Diary ranked first in the cosmetics category on Tmall Double 11;
• In 2020, the good momentum of 2019 continued, making it the defending champion in cosmetics sales;
• But in 2021, Perfect Diary fell into the growth bottleneck of Internet celebrity brands, and its ranking dropped to eighth place in Tmall's Double 11 pre-sale.

What’s worse is that “short-lived phenomenon” has become the fate of many internet celebrity brands, such as Diaoye Beef Brisket, Hammer Mobile Phone, etc.

Therefore, de-"Internet celebrityization" has become the key task of Internet celebrity brands. Hu Richa, vice president of Zhong Xuegao, has a deep understanding of this. He said: Zhong Xuegao became an Internet celebrity in half a year in 2018, and its goal for 2019 is to "de-Internet celebrity".

Why do you want to become an internet celebrity? Let’s start with the four major risks faced by influencer brands.

1. Four major risks faced by influencer brands

1. The first risk: the risk of being abandoned by the media

There is an old Chinese saying: Water can carry a boat, but it can also capsize it. This sentence is also appropriate for the media. The media can promote a new brand to become an Internet celebrity, but it can also ruin its reputation.

The media doesn't do this intentionally, but that's its function. The purpose of the media is to attract attention, and to achieve this goal, their means is to release unique information.

When brands become Internet celebrities, their negative information will attract more audiences’ attention, and then the media will try their best to dig up their negative information to satisfy the audience’s curiosity.

After MINISO became successful, the media paid great attention to the negative information about MINISO and fully explored its negative information.

Therefore, negative reports about MINISO began to appear in large numbers. Some media reported that it was a fake Japanese brand, some media reported that MINISO's design was plagiarized, there were also reports that MINISO squeezed dealers' profits, and some media reported that there were major hidden dangers in MINISO's product quality, and so on.

Yuanqi Forest has recently been involved in negative reports. Hey Tea became famous in 2019 and reached its peak in 2020. At this time, most media were promoting why Hey Tea could be successful?

In 2021, the media began to take an interest in digging up negative information about Yuanqi Forest. Because, they try to attract the audience's attention by reporting different information. Next, reports about Yuanqi Forest being a fake foreign brand, pseudo Japanese brand, reputation crisis, and zero sugar crisis followed one after another.

Another internet celebrity brand: Perfect Diary has not escaped this unfavorable situation. The media is interested in his negative information.

How to deal with negative reports is a problem that Internet celebrity brands must face. The more popular a brand is, the more likely it is to attract negative criticism. Companies should prepare plans to deal with negative reports in advance and eliminate negative information at an early stage.

2. The second biggest risk: the risk of the “new new brand” challenge

When a brand enters the Internet celebrity stage, it means that more consumers are using the product, which is what companies want to see. The downside is that more people consuming also leads to changes in brand perception.

The direct impact is that the brand’s “identity signal” becomes weaker, and the consumers who initially use the product are no longer the exclusive symbol of uniqueness or trendiness. On the contrary, it has become a symbol of popularity or following the trend.

As a result, true fashionistas will switch to another item. Outsiders change the meaning of a brand’s “identity signal,” and a once-popular brand becomes unpopular.

This is because young people always like new things, and new brands cannot guarantee that they will always be the choice of the new generation of consumers.

When "new new brands" emerged, they began to become the objects of pursuit among young people, and the original "Internet celebrity brands" were defined as the previous generation, and were thus replaced and quickly forgotten.

Let’s take a look at Perfect Diary’s situation. After Perfect Diary went public, the media that had previously flocked to it left one after another, and the departure of the media caused the brand’s popularity to cool down rapidly.

Since May 2021, Perfect Diary's Baidu search index has shown a downward trend.

In sharp contrast, the "new brand" Hua Xizi has begun to become the "new darling" of the media. In media articles, the number of articles interpreting Perfect Diary has decreased, while the number of articles interpreting Hua Xizi has begun to increase.

A set of data also reflects the real situation of the popularity of the two brands, Perfect Diary and Huaxizi:

• Before July 2020, Perfect Diary’s search volume surpassed Huaxizi;
• From July 2020 to May 2021, the search volume of the two was in a stalemate;
• After May 2021, Huaxizi's search volume surpassed Perfect Diary.

Perfect Diary has become the "old generation" in the eyes of the media, and Hua Xizi has replaced it to become the new generation of Internet celebrity cosmetics. At the same time, the media interpreted Huaxizi's success.

“New New Brands” make new brands become old, which leads to a decline in their attention and the loss of their internet celebrity attributes. This is a risk faced by every "Internet celebrity brand" and it is basically unavoidable.

3. The third biggest risk: risk of being blocked by large companies

The commercial war between Yuanqi Forest and Nongfu Spring in the field of "0 sugar sparkling water" has been widely known by the media. Yuanqi Forest obtained capital support and eventually survived. But not all "Internet celebrity brands" are so lucky.

An unfortunate case is Wang Baobao. During the Tmall Double 11 in 2019, Wang Baobao defeated old cereal brands such as Quaker and Calbee, and took the No. 1 spot on Tmall cereal.

Wang Baobao’s new generation of cereal attracted the attention of Wugumofang. In 2020, Wugumofang launched a new brand "Eat a Rainbow" to enter the cereal market. On Tmall Double 11 in 2021, "Eat a Rainbow" replaced Wang Baobao and became the cereal brand with the highest sales on Tmall Double 11.

There are countless similar cases:

• Children’s snack brand : Three Squirrels’ brand “Little Deer Blue” topped Tmall’s children’s snack sales list, a position previously held by the internet celebrity brand “Baby is Craving”.
• Leading pet food brand : Vespa entered the pet nutrition market with its new brand “Pet Food” and quickly took the number one spot, taking the previous number one spot away from the competition.
• Xinfengxiang Group has launched a new brand : Youxing, entering the ready-to-eat chicken breast market, with Shark Fit as its target.

When it comes to business competition, there is nothing wrong with what big companies do. Luo Yonghao, founder of Smartisan smartphone, felt deeply touched and said helplessly: "Smartisan Technology has not been successful in six years because all the ideas have been copied by big companies."

The practices of large enterprises are enough to arouse the vigilance of Internet celebrity brands or entrepreneurs. The development of enterprises is not always smooth sailing, and they need to pay long-term attention to the dynamics of competitors. Once large enterprises join the battlefield, new brands may be killed at any time.

4. The fourth risk: the risk of rising costs of new communication channels

In the early stages of the “Internet celebrity brand”, the value of new media played a vital role. However, new media will fall into the same situation as internet celebrity brands and be replaced by newer media. It is not difficult to find that the bonus period of new media is also extremely short.

The figure below is a study of new communication channels in the United States by "Growth Hacker". The study found that the communication efficiency of new media presents a "parabola" and its communication efficiency will gradually decrease over time .

There are two reasons why the communication efficiency of new communication channels is declining.

The first reason is rising costs.

One of the student companies of Cliff Positioning Institute is also a well-known Internet celebrity brand. They are very good at operating new media and have done thorough research on it.

He revealed to us their research conclusions: In 2019, their input-output ratio on Douyin was 1:1.8. Up to now (the first half of 2021), the input-output ratio of Douyin is only 1:1.2. He believes there are two reasons for the decline in media investment-output ratio:

The first reason is that the entry of big brands has pushed up the cost of traffic; the other is the entry of new brands, whose prices are lower, causing our transaction rate to begin to decline.

The second reason is that when new media becomes mainstream media, young people will look for other media (communities). The migration of young people in the media is consistent with the logic behind the migration of Internet celebrity brands, that is, the "identity signal" has changed.

The changes in new media bring inspiration to "Internet celebrity brands" or entrepreneurial brands: since old brands are slow to respond to new channels, new brands have to enjoy the new media dividends for a period of time. After "Internet celebrity brands" get started with the help of new channels, they should get rid of their dependence on new media traffic as soon as possible.

2.3 Suggestions for dealing with the four major risks

"Internet celebrity brands" will inevitably encounter four major risks. In the short term, "Internet celebrity brands" will usually face a trend of declining influence.

During this period, some "Internet celebrity brands" successfully resolved risks and became long-lasting brands, as shown in the curve in the figure; but unfortunately, many "Internet celebrity brands" began to show signs of decline and failed to recover, as shown in the curve in the figure.

Next, we share three key points for transforming from an “Internet celebrity brand” to a “long-lasting brand”.

1. Point 1: Enter the mind and establish cognitive barriers

The “Internet celebrity brand” can only be considered to have a safe landing when it becomes a real brand. As Lin Sheng, the founder of Zhong Xue Gao, said: "With time, Internet celebrity will become a brand. This is a destined path. You can become an Internet celebrity first, and then slowly turn yourself into a brand."

The brand landing point is the mind of potential customers. Once a brand enters the mind, it will be able to break free from media constraints, channel constraints, competitor bans, and challenges from new brands to the greatest extent possible.

Therefore, the urgent problem that "Internet celebrity brands" need to solve is to think about how to get themselves into the mind. The mind is a brand new battlefield.

The advantage of a brand entering the mind is that it no longer relies on external traffic, new channels, KOLs, celebrity endorsements, etc.

These competitive elements are easy to follow. Once a brand enters the mind, it competes with competitors based on the perception it creates.

The ultimate battlefield of business is not channels or traffic, but consumers’ minds.

As the most successful "Internet celebrity brand", Zhang Liaoyuan, the founder of Three Squirrels, also agrees that the ultimate battlefield of business is not channels or traffic, but the minds of consumers.

When a brand enters the mind and becomes the representative of a certain category in the mind, the brand can obtain long-term and repeatable traffic.

What does it mean to represent a category? How to measure? Our standard is that when a certain category is mentioned, your brand is the first thing that comes to mind. We regard this cognitive reaction established between the brand and the category as indicating that the brand has become the representative of the category.

Giving examples can help deepen understanding. Take air conditioners as an example. When you think of air conditioners, you think of Gree. This means that Gree represents air conditioners. It can be said that Gree will be able to obtain long-term and repeatable traffic from now on.

How big is Gree’s traffic? In the Chinese market, approximately 36% of consumers think of Gree when they mention air conditioners. There are 1.4 billion people in China, and 36% multiplied by 1.4 billion equals 500 million. This is Gree’s traffic, and it exists every moment.

2. Point 2: Run faster

The second suggestion is to "run faster". Let’s make a vivid metaphor and regard brand creation as a 100-meter race.

If a runner can get a head start, he or she can gain a short-term advantage, which is likely to last the entire race; however, if the runner does not gain a head start, he or she must run faster to win the race.

The same is true for business. When faced with opportunities, speed is the key. This is not a profound truth, but it is easily overlooked.

In fact, investors attach great importance to the development speed of the brand. Investors are at the forefront of business every day and have a better understanding of business and opportunities than ordinary people. When choosing investment projects, they attach great importance to the speed of brand development.

Sequoia Capital's Shen Nanpeng's view is: The best martial arts in the world is speed, not attack, and companies must maintain sufficient flexibility at all times.

Let’s take a look at the views of Xu Xin, who is known as the “Queen of Investment”. She emphasized:

I have been engaged in venture capital for 21 years now, and I have a few insights to share with you. The first realization is that speed is more important than anything else. When you see a new category coming, you must rush for it as fast as possible. You will only be safe when your market share reaches more than 30%. At this time, you don’t have to worry about profits and returns on investment. You just need to quickly get users, not your income.

Wei Zhe, former CEO of Alibaba and chairman of JoyLeader Fund, expressed his opinion: Speed ​​is of the essence on the battlefield, and the same is true in the business world.

"Getting faster and running faster" is an important principle for the development of new categories and new brands today. "Running faster" is to enter the mind and become the representative of a category.

For example, the success of the Three Squirrels brand is based on its status as the representative of nuts. Mr. Zhang Liaoyuan, the founder of Three Squirrels, strongly agrees with this view. He believes that the long-term value of a brand mainly depends on the extent to which your brand can represent a certain category.

3. Point 3: New categories rather than new concepts

The value of new categories has been discussed above, but companies must be wary of new concepts of “non-new categories”.

Because, new concepts are given popular elements, and they will disappear as the popularity disappears. The reason is that it fails to establish a habit in life.

A truly new product category can establish a consumption habit in people’s lives and become a necessity in life. The prerequisite is that it must have perceptible use value. The lack of practical value is the core reason why many popular concepts are difficult to maintain long-term popularity.

In general, "I like" is a new concept and "I need" is a new category . Let us explain this with an example.

• TCL has pioneered the "literary mobile phone", but "literary mobile phone" is a new concept, not a new category. Some people may like “literary mobile phones”, but they are not necessary.
• The new concept of Smartisan Technology’s Hammer Phone is “Craftsman Phone”, but it is not a new product category. What is a new category?
• OPPO’s “fast charging phone” is a new product category because at that time, people needed a “fast phone”. Similarly, VIVO’s “music phone” is also a new product category.

Therefore, for companies, creating a brand requires distinguishing between new concepts and new categories.

3. Summary

Looking back at today’s sharing content, the first step to creating an “Internet celebrity brand” is to create an attractive new brand. To make new brands attractive, companies need to use new teams to create new categories and allow new brands to appear in new channels.

The second step is to encourage more consumers to buy new brands . The specific approach is to create a brand hot-selling phenomenon through means such as KOLs, celebrities, and live broadcasts, and use the speed of Internet communication to promote new brands to become "Internet celebrity brands."

In today's business environment, it has to be said that "Internet celebrity brands" are indeed extremely dazzling, triggering a large number of entrepreneurs' yearning for "Internet celebrity brands", which is indeed a shortcut to creating a brand.

However, the four major problems faced by "Internet celebrity brands" are enough to destroy it. Therefore, the urgent problem that "Internet celebrity brands" need to solve is to get rid of the brand's long-term reliance on the Internet, KOLs, and celebrities for promotion, and to promote new brands into the mind through mainstream methods and become representatives of the category, thereby obtaining a steady stream of traffic.