The 6 underlying logics of brands behind Douyin’s full-case launch!

In recent years, new brands have risen rapidly, new stars have become dazzling, and capital has been vying for supremacy. This scene seems familiar. The demographic dividend has ended, the Internet has become the infrastructure of society, and the return of new consumption has become a new battlefield. These years have been the best time to start a consumer brand business, with the right time, place and people. More importantly, "all products are worth redoing."

I have been engaged in the fields of Internet, marketing and e-commerce for more than 15 years. In the past three years, I have invested in many Douyin full-case projects, far more than 100 Douyin full-case projects, serving various international, local, emerging and other consumer brands. The services include KOL, KOC, Dou+, expert bidding, information flow, UD, Co-Ads, Qianchuan, etc., Douyin closed-loop or full-link delivery.

I have invested in many hit products and witnessed the process of many brands from their inception to their peak. I have also seen many brands quickly fall after becoming popular overnight. I have communicated and discussed with many brand founders, and have been thinking about what is the underlying logic behind the growth of consumer brands?

It took a lot of courage to write this article, and I am grateful for the encouragement of many friends. The six underlying logics of consumer brand growth are some of my thoughts and summaries in recent years. I hope it will be inspiring to you.

01The first underlying logic: category innovation

The most terrifying thing about starting a business is that if you choose the wrong direction, no matter how hard you work, it will be in vain. Consumer brand entrepreneurship is also a typical "choice is greater than effort" model.

What is a good track?

The essence of the track is category selection. Even today, I believe that the ultimate goal of most consumer brands is to become a "category brand."

Only by becoming the representative of a certain category and its characteristics in the consumer's perception can you have a chance of success.

For the selection of tracks, I have summarized an “optimal market model”:

First, category scale:

Judging the market capacity from a macro perspective is the basis for market selection. If the market size is too small, no matter how hard you try, the growth rate will still be limited.

Second, category growth rate:

Judge the market growth space based on future trends. Perhaps your development can go with the flow. Never choose a market that is going downhill.

Third, category competition:

When the competition environment is so fierce that it is obviously a red ocean or an oligopoly has emerged, please enter the market with caution. Of course, we should also focus on who the potential players are. They may be currently inconspicuous rising stars, or they may be outsiders who are logically suitable for cross-border robbery. Often, when an industry is disrupted, many of them are "barbarians" outside the door.

The first three points require a lot of data support. Today, information is transparent enough and there are many tools available. In addition to insights into e-commerce data, I believe that social data insights are more valuable. E-commerce data is "what has happened", while a lot of social data is "what will happen in the future" or "new needs". It more objectively restores the real needs of consumers.

Fourth, category innovation:

I think the key to whether or not to choose a certain category is whether there is still room for innovation in this category. "Appearance is justice" and "ultimate user experience" are the basic skills of future consumer brands. The essence of innovation is how to find new blue oceans or value depressions in the red ocean market, and go ALL IN to seize the minds of users in this field and become an innovator or even a disruptor of the category. The higher the barriers to category innovation, the more difficult it is to disrupt. If you use 100% of your strength to break through a point, and a mature brand only uses 10% of its energy to copy it, do you think you can win?

Huaxizi is a typical category innovator. It has chosen the cosmetics market, which has a large scale and a fast growth rate. The competition in the category is fierce. The biggest competition does not come from mature brands, but from emerging brands of the same period, such as Perfect Diary, Zhiyouquan, ZEESEA, etc. The category innovation is "Oriental Cosmetics", which has re-established the market structure from the perspective of culture and aesthetics, and opened up a blue ocean in the red ocean market.

We started serving Hua Xizi in early 2019. I communicated with Hua Xizi’s founder Hua Mantian and asked him: "What do you think will be Hua Xizi’s biggest shortcoming in the future?" Hua Mantian said: "I think it is how to build a brand. Our team does not have a brand gene. I consulted many industry leaders, and they did not agree or think it was a good idea. But I think it is possible. We have to take a different path." During the 618 event in 2021, the Huaxizi brand became the No.1 cosmetics brand on Tmall, No.1 cosmetics brand on JD.com, No.1 cosmetics brand on Douyin, and No.1 cosmetics brand on Kuaishou.

Some time ago, I talked about Focus Media with Mr. Sun, the founder of Lin Qingxuan. Lin Qingxuan has invested in many elevator advertisements. The conclusion we came to after our discussion is: Focus Media is not aimed at brand mind, but at category mind. If we look deeper, users' curiosity and attention towards category innovators will be much higher in memory than mediocre brands. This is definitely not achieved by brainwashing, but rather by upgrading user needs.

Before cars, horse-drawn carriages were the best.

The hottest brand in the underwear market this year should be Ubras. I believe many people have seen their Douyin ads, or Ouyang Nana and the size-free Little Cool Breeze series underwear on Focus Media. Ubras' "size-free underwear" is an innovative category. It is no longer important whether Ubras is the pioneer of this category. What is important is that through category innovation and saturation investment, Ubras has firmly established itself as a size-free underwear brand in the minds of consumers. No one even thinks about who is second.

Once the track of category innovation is formed in users’ minds, they rarely remember who is the second place. When big brands wake up and want to enter a new track, can they reposition the brand or incubate one to compete? The outcome is self-evident.

02 The second underlying logic: product coefficient

After the generation of consumers born after the 1990s, a new generation of consumer circles is formed every five years. The new generation market is driving the brand's younger wave, as well as the cultural and brand confidence that accompanies the rise of national strength. In the past, the older generation of consumers admired "foreign goods", but today young people are trending towards "domestic trends".

A popular saying in recent years is: All products are worth redoing. Today's so-called Internet celebrity products will eventually return to dust if they cannot stand the test of time.

Peter Thiel, a famous Silicon Valley investor, said in his book "From 0 to 1": "The Power Law is the law of the universe and the most powerful force in the universe."

R(X) is the result you want, a is the coefficient, and b is the power. For the same power (b), the higher the coefficient (a), the larger the result (RX). Power quantitative change can produce exponential qualitative change. Before reaching the exponential qualitative change, it is nothing, but once it reaches the qualitative change point, it is an upgrade of the "steep curve", that is: exponential growth.

The growth logic of consumer brands completely conforms to the power law, and the product is the coefficient (a) of the power law.

In a fully competitive environment, only by innovating can latecomers gain market share and turn the tide. Just as the product is the coefficient of the power law, if the product coefficient of others is 1, then it is linear growth. If your product coefficient is 1.1, then the long-term acceleration will be faster. If the product coefficient is 1.2, then the more time passes, the more likely it is that you will be far ahead and grow exponentially.

What can enhance the product coefficient?

First, category innovation

This may be the highest product coefficient. Before the qualitative change of category innovation, the competitive environment is a zero-sum game, and players in the market compete for limited resources in the stock market. The value of category innovation lies in the breakthrough from a limited market (red ocean) to an unlimited market (blue ocean).

Second, appearance justice

Good wine needs no bush, but today this has become an inefficient marketing. From the moment you start to market, consumers have not yet understood or experienced the wine, so how can they know the aroma of the wine? But at least you have to make her stop, attract her, make her heart beat, and take action. Only with cognition can there be the next step.

Third, quality and efficacy

Quality is the longest-term investment for a brand, and the essence can be seen in the long term. In terms of Douyin's delivery logic, effectiveness means being able to hit pain points. Pain points and rigid needs can produce good content, and good content will have the effect of both brand and effect. Douyin's popular products actually have something in common. Appearance is just superficial. Underlying them are "functional" products with "strong demand".

Fourth, mental attitude

Due to the fragmentation of today's media, brand communication is a very inefficient process. Consumers' perception of brands is bottom-up. They develop brand awareness through product exposure and feeling the brand attitude, which will develop a long-term brand mindset. The brand's attitude and spirit must be implanted in the core products. The recognition of the product to a certain extent represents the recognition of the brand. Every opportunity to co-create with KOLs and reach consumers, a short video, a script, a sentence of copy, a landing page, if there is no spiritual inheritance, then at most it is just a hot product that can be forgotten at any time.

Consumers are attracted by novelty, attracted by appearance, loved by quality and loyal to attitude.

I remember when Hua Xizi launched its first wave of Douyin products, many people didn’t know about it, and it had almost the highest price in the same category. Judging from the market feedback from the first launch, it was not very ideal. At that time, the Huaxizi team was most concerned about the real feedback from bloggers and users, and continued to polish and upgrade the products until the "Hundred Birds Paying Homage to the Phoenix" carved eyeshadow product was launched. When I saw the product at that time, I felt shocked and amazing. As expected, when this product was promoted on Douyin, the proportion of KOL and KOC "explosive" videos was very high. In addition to bringing a large amount of brand exposure to Huaxizi, each viral video also generated at least six-digit transaction data. More importantly, it demonstrated the brand's attitude time and time again.

After that, Huaxizi's products were like a charm. The Miao Impression, Twin Hearts, Delicate Flower Dew and Peony Moon-carved ones have astonished the world time and time again.

Today, consumers have a clear attitude towards the Hua Xizi brand. If oriental cosmetics are mentioned, people will only think of Hua Xizi. Let's go back and review, where are the variables of Huaxizi? It is obvious that they have been increasing the "product coefficient" and ultimately relied on products to achieve qualitative changes and exponential growth.

03The third underlying logic: content construction

My biggest feeling in recent years is that brand building has gradually changed from the top-down approach of traditional media to the bottom-up approach of social media.

Today, consumers learn about a new brand more often through social media bloggers, a product recommendation note, or a short video recommending a good product. Through these "product recommendation contents", they discover a treasure, ignite their desire to buy, and then place an order to start trying. Starting from the outer packaging, to the product copy, to the card in the package, to the product effects and the experience of using it, consumers will feel the brand's attitude through these "contents" during the process and multiple uses. When a consumer is repeatedly exposed to "grass-planting content" in the communication channel and she also strongly agrees with the "attitude" conveyed by the brand, she will develop a brand mindset in that category.

I believe that today is the best era to start a consumer brand business, because building a good brand no longer depends on how many media resources you can buy, but on whether you can create good content at the source.

Today, "brand building" is almost equivalent to "content building", which means that content is no longer a "tactic" but a "strategy".

Two years ago, I served a well-established domestic cosmetics brand. At that time, I often communicated with the brand founder. In the years when Douyin was rising rapidly, their attitude changed from disdain to hurried follow-up. There were some dividends and good ROI in the early stage, but due to their shallow understanding of Douyin, they only focused on ROI during that period and pursued quick success and instant results. As you can imagine, ROI continued to decline and budgets continued to shrink. While their competitors were scrambling to grab land, they were lost for two years.

I served this client again this year. The founder has reflected a lot in the past year and believes that social media content is the lifeblood of the brand. He also got involved and led the team to actively participate in everything from product development to content delivery. Fortunately, we found the breakthrough point. We spent three months deeply delving into the content and created a hit product with good content and traffic. Recently, they tried their hand at live streaming on TikTok. In a horse racing live broadcast among five other companies, their team came in first place and was far ahead. The founder shared a lot with me. For example, the decoration of the live broadcast room is content, the product sales talk of the anchor, and even the anchor’s feelings towards the brand are all good content.

If you agree that content is a strategy, then brand founders should get involved.

In the past, I worked for a leading domestic skincare brand, which was quite traditional and its products were seriously aging. I remember the first time I went to the client's company, the table in the large conference room was full of products, and they asked us to help select products for Douyin. I remember that I asked several key questions at that time, such as brand positioning and brand culture. I did not just look at the launch from a product perspective, because I knew that the choice I made today and this product might very likely represent the future of the brand.

The subsequent product selection combines the core genes of the brand, and even the ingredients themselves can represent the brand. After that, we invested in Douyin KOLs for no less than 12 months (with the added traffic), and were determined to use the power of content to influence consumers' minds. The content always revolved around the three highly brand-related keywords "little white light", "whitening", and "pearl polypeptide". As a result, a year later, the brand occupied the No. 1 position in the domestic whitening essence market. It was once considered a Douyin Internet celebrity brand, and this star product almost represented the brand itself.

If products today rely on content to spread, consumers receive not only the product itself, but also the attitude conveyed by the brand. In the long run, brand mindset is determined by the brand attitude.

Based on our extensive experience in content delivery, we have also summarized some content methodologies, such as social symbols (social promotion), PAVG (KOL selection algorithm), 4T rule (content co-creation), etc.

But I think these are just efficient tools and cannot replace the soul of the brand (content) itself. I think there are no secrets in today's social media communications. The communication carriers are the same, so why are the communication effects of different brands so different?

Without deep thinking about the content, the creations are likely to be without attitude and soul. What brands should abandon is content marketing, and what they should face up to is content strategy.

04The fourth underlying logic: effect flow

In the traffic investment business, I have always held a point of view, which I call the "one-zero rule": The speed of a train depends entirely on the lead, the content is "one" and the traffic is "zero".

Only if one (content) is good enough, can you add countless zeros (traffic) behind it. If there is no one (content), the following zeros (traffic) are all wasted.

Most brands on Douyin pursue brand-effect integration and also devote a lot of effort to traffic investment. However, judging from a large number of case data, the quality of content affects the results of traffic investment, and I think it may account for more than 50% of the factors. The other 50% of the influencing factors are the combined application of flow-investing products.

In fact, I came into contact with traffic investment by chance, and it takes a process to open up the entire chain of investment.

In the first stage, our team has been engaged in social media content marketing for a long time. On the Douyin platform, as the price of KOLs continues to rise, ROI is bound to decline. However, KOLs do have huge advantages in communication influence and conversion models. How to hedge traffic costs and increase ROI is what we have been exploring.

In the second stage, we first used the Dou+ tool. Dou+ is a good product and a content traffic pool. It can not only amplify traffic, but also help KOLs to impact the next traffic pool to a certain extent and obtain natural traffic feedback. We have also reaped the benefits of Douyin Taoke and enjoyed the short-lived pleasure of wild growth. Dou+ can deliver millions of traffic.

But the volume of Dou+ was still not enough, or not extreme enough, so we started to use content promotion (today called content service), with a more precise audience and a larger traffic scale. Content services can deliver millions of traffic, but there are still limitations.

In the third stage, we were the first to try new things in the industry. We invested in the influencer bidding that appeared later on Douyin and the KOL native information flow, and continued to add traffic to KOLs, continuing to pursue the ultimate effect of content traffic. Expert bidding can generate millions of traffic.

Then, with the KOL’s video authorization and after editing, the flow of high-quality content can be further amplified through the information flow. The information flow can project tens of millions of flows.

In the fourth stage, the emergence of more traffic investment products such as UD, Co-Ads, Qianchuan, and Douyin search, different traffic pools, and more traffic combinations will maximize the effect of content.

Finally, after a lot of practical implementation, I summarized the solution for Douyin's full-link closed loop, "Douyin's Seven-Part Theory of Content Traffic".

We have invested in many cases and have more and more investment products. Data sedimentation, management and interpretation have become big problems, seriously affecting labor efficiency. In order to improve the efficiency and effectiveness of investment, we have developed an integrated "social effect investment middle platform" to complete data return and effect analysis and optimization. The investment middle platform has covered Xingtu KOL, Douyin AD, Ali UD, Qianchuan, etc.

In so many cases of investment, I summarized three key points:

First, focus on the content itself

Content is the key to prying open the Douyin pie. The message conveyed by your content is not just the brand’s desire to do this business, but more importantly, the content represents the brand’s attitude.

Second, good content traffic should not be wasted

Content has a high cost. If we don’t amplify high-quality content, it will be a waste of cost and a waste of communication efficiency and effectiveness. Therefore, the investment and traffic combination should maximize the value of the content as much as possible. Douyin’s content traffic closed loop is: KOL+Dou+content service+expert bidding+information flow+search.

Third, content can be distributed outside the main battlefield of Douyin

Once high-quality materials are verified, they will have good effects in different traffic pools. The omni-channel distribution logic includes: Alibaba UD, Bytedance Qianchuan, JD Co-Ads, Kuaishou Magnetic Engine, etc.

This year, I served a skincare brand of a Fortune 500 daily chemical group. Our team was in charge of the entire product line, from the initial single product. Before taking this case, I learned about the client's past practices. The Marketing department has always used conventional content marketing methods, looking for Douyin KOLs to promote products. Although shopping carts were also added, the ROI was very low. After analysis, the main problem was that there was no traffic support. The KOL's natural traffic was limited, and no matter how good the content performance was, the output was very limited.

The solution I came up with after taking over was the "TikTok full-link closed-loop" delivery strategy, which involved selecting KOLs who could bring goods, inferring the content model based on the ROI results, and then maximizing the traffic scale to improve the delivery effect. In this case, many popular videos were launched, and there were also several KOLs with sales exceeding one million. Behind these KOLs are a large number of traffic products. The traffic products we use include Dou+, content services, expert bidding, information flow, and search. For each segment of traffic, we will calculate its ROI and delivery limit to pursue the ultimate effect of volume growth. The co-created content produced with ROI as the guide, ultimately helped the brand achieve the triple harvest of brand communication, product promotion and business growth with the support of traffic.

In the 2021 Tmall 618 promotion, the brand dominated the top three in the body care category.

Back to this case, this is actually my core idea. Content is "one" and traffic is "zero". If the content is not good, the traffic efficiency is low. If the content is good but the traffic cannot be maximized, it is also a waste.

05The fifth underlying logic: channel distribution

As competition in the Douyin traffic market becomes increasingly saturated, traffic costs are rising and ROI effects are declining. Although there are still small dividends in some local spaces, overall, it is difficult for brands to maintain long-term business by relying solely on traffic investment to acquire customers.

After communicating with many brand founders in the past few years, we basically have a similar consensus. In the past, advertising on CCTV media could quickly become popular in China. Today's Douyin is actually similar, but the operation is more complicated and more sophisticated, and naturally more difficult. However, if it is managed properly, it will have similar effects to CCTV, and the controllability will also be better. Today's sales channels are actually more receptive to the hot products that have become popular on Douyin.

I remember talking about this with the founder of a certain brand, and he said: "This is the same as what we did in the past. We hyped up a hot product and wholesaled it through all channels, but today we have changed to TikTok." This should be the simplest, crudest and closest to the essence of understanding.

The competition in the sunscreen category can be described as extremely fierce. Since December last year, some sunscreen brands began to lock in KOL schedules, and in February this year, the competition in the Douyin sunscreen market began to heat up. The person in charge of a sunscreen brand said: "By March, we can no longer book any KOLs. The slightly better ones may have been snapped up two months ago."

This year, one of our clients has made a comprehensive effort in the sunscreen category. They learned from last year's experience, laid out the market in advance, and carried out saturation investment in the entire matrix of endorsements, KOLs, traffic investment, and live broadcasts. By May, sales had exceeded 120 million, ranking No. 1 in the sunscreen category. At the same time, it has almost achieved full-channel distribution coverage on major e-commerce platforms, live broadcasts, offline supermarkets, and CS chain stores, and the online channels have obtained the most resource positions, and the offline channels have obtained the largest display. In almost all major channels, the brand's sunscreen products are among the top sales.

Today, consumers' purchasing decisions have been front-loaded. The browsing time of product detail pages on e-commerce platforms has been shortened from several minutes to more than ten seconds. They are attracted by the product details on social media and come to the e-commerce platform to place an order. As for what is written on the details page, it is not important in this state. This is why I did not focus on the operation of the site.

Douyin has been working hard to build a closed loop of e-commerce this year. I think there is a high probability of success. Consumers’ decision-making mentality has already taken place on Douyin, and the importance of where to place an order has been diluted. If you can continuously cultivate a purchasing mentality on the platform through KOL recommendations and store self-broadcasting, then purchasing on Douyin will be an unintentional but natural thing.

If a consumer knows or hears that a product is very popular on Douyin, it will be given priority for conversion when it is exposed to her in her circle of life or through other purchasing channels. If it is then exposed to targeted marketing, the consumer will believe it without a doubt.

In this situation, hot products are king and channels are in a weak position. Channels are willing to waive listing fees, provide more resources and even subsidies to promote hot products, because in the final GMV calculation, this is still a cost-effective account.

Hot-selling products have become popular outside the circle and have touched the purchasing minds of consumers. They can get the best resource positions wherever there is traffic, and brands are harvesting fields in the channels.

The brand's investment in content has established the reason for the popularity of the product, and the investment in traffic has established the accumulation of amplified voice and monthly sales, which ultimately makes the popularity of the product in the market soar to the sky, and the 10w+ monthly sales on the sales side complement the "popularity", thus creating such prosperity. But this process is bound to be loss-making. As for how much loss, the full-link ROI model can be used to accurately calculate.

Back to this case, the bottom line of the brand is that Tmall will not make a loss as a whole, and all gross profits will be invested in creating explosive products. Then it is obvious for brands to make money. They sacrifice the profits of one channel, invest the budget in Douyin, create popularity for hot products, and ultimately reap profits across all channels.

Why are many emerging brands seen as money-burning machines? Because there is no channel profit feedback. Only by burning out hot products and building a brand can there be a possibility of reaping the benefits. The creation of explosive products and the rhythm of channels complement each other. Channels are not built in a day, but every step counts.

06The sixth underlying logic: private domain operation

I found that mature mass brands create popular products through Douyin and rely on omni-channels to reap profits, while many emerging brands have no channel accumulation and even find it difficult to lay channels in the early stages. At this time, the significance of private domain is very important.

If a consumer brand creates a hit product through Douyin’s marketing strategy, but is unable to reap profits through channels or in the private domain, how can this brand survive in the long run?

From an investment logic perspective, I prefer consumer brands that have the ability to go private, because not all brands are suitable for private domains, which in itself means a very high threshold, and in the long run, it will be an ever-increasing brand barrier.

Let me talk about my views on private domain operations:

First of all, not all brands are suitable for private domain

The premise of privatization is that the category has the characteristics of cyclical purchases and a high repurchase rate, otherwise private domain operations will basically not be established.

Secondly, privatization has high requirements for brand characteristics

What kind of characteristics and emotional connection do you have that make it worthy for users to choose your private domain, interact with you, and be loyal to you? This requires reasons that can stand up to scrutiny. Otherwise, wouldn’t it be easier to choose more mainstream e-commerce platforms such as Tmall and JD.com?

Third, the contribution of private domain to profits is absolute

There are no exorbitant taxes and fees imposed by the platform, but there is higher user loyalty and higher ROI, which means that when delivering the front-end link, the acceptable customer acquisition cost is higher and the scale of delivery is larger.

Fourth, private domain is anti-public

At least users with certain characteristics gather here. Private domain users should be cherished. I even prefer to call private domain users brand experience officers. They help brands polish new products, provide feedback, and are participants in the brand building process. They are also the group with the highest brand loyalty. If it rises to the level of brand sentiment, that is the highest level of private domain.

I think the best company in China in the private sector is Xiaomi. Although making cars is a natural move, it is more like the popular wish of Mi fans, which connects Mi fans emotionally and elevates it to brand sentiment. Based on this logic, Huaxizi may reach unattainable heights, rising from brand sentiment to national sentiment.

If I were an investor looking at investments in consumer brands today, I would give priority to projects with the potential for privatization, and then work my way back to the brand's chosen category track and product innovation. If the "head" and "tail" are chosen properly, the future growth logic is almost certain, and I will invest in such projects. I believe that today, capabilities in content, traffic, and channels have become very standardized. This can be achieved whether it is in-house or with external professional division of labor. Even if standardized capabilities are amazing, in the long run, they may not necessarily form a very high brand barrier.

For emerging brands that are still in their infancy today, my advice is to make sure you develop your private domain. This is one of the barriers for future brands. If you find that consumers have no reason to choose your private domain, it means that you may not have done it right from the beginning.

Today, consumers’ purchasing decisions are all moved forward to social platforms. It no longer matters which platform the transaction takes place on. Brand operations have also gradually shifted from platform operation logic to consumer operation logic, becoming operational management of the consumer life cycle.

Brands will also gradually evolve from consumer product sales companies to consumer operations companies.

Today's consumer goods market is very impetuous, and hot money from capital is also fueling the flames. Everyone is enjoying the feast of bubbles in the myth of growth and capital valuation. When this huge wave recedes, how many emerging brands will remain? I believe that every brand that remains will find the answer in the hearts of consumers.

07Full-link ROI model

In addition to these six underlying logics, I also often discuss the relationship between growth and business with brand founders. I find that the same thing, different cognition, different understanding, and different choices will lead to hugely different results.

Based on my years of experience, I will recently share the "full-link ROI model" with consumer brands. It is obvious that today, with a single channel and a single delivery model, it is difficult to make a direct profit unless it is in the bonus period. The "full-link ROI model" allows the brand's operations to be viewed in a longer-term and clearer manner. The data-based results are measurable and decomposable, becoming the brand's future "business compass."

Full-link 1.0 model:

If a single product is invested in Douyin and then on Tmall, and the immediate conversion ROI is obviously difficult to exceed 1, then with this model, the brand is bound to lose money.

Full Link 2.0 Model:

Outside the site, single products can be invested in Douyin and Tmall to achieve instant conversion and attract new customers. Within the site, UD+ within the site delivery, high ROI harvested. The comprehensive ROI of a single product in and outside the site can be calculated. Some brands break even on this model.

Full Link 3.0 Model:

Outside the site, single products can be invested in Douyin and Tmall to achieve instant conversion and attract new customers. On the site, UD + on-site delivery + natural traffic + live broadcast, Tmall single link monthly sales, divided by the monthly investment of a single product, is the Tmall single product ROI. Many brands use this model to create hit products, and some more extreme brands calculate the ROI of the entire store. Why is this model suitable for hit products? Because as long as the product breaks even, it can increase sales rapidly.

Full-link 4.0 model:

The total sales volume of a single product across all channels divided by all the product placements is the total channel ROI. This model is an advanced strategy, a brand profit harvesting model.

So here we can understand why some brands are clearly not making money but have been investing heavily, but in the end it seems that they have not lost money and have continued to grow, while some brands are cautious and have fine control, but their business is getting smaller and smaller. In fact, the kind of thinking you use will determine the kind of results you get.

The full-link model from 1.0 to 4.0 has been proven through several years of implementation to be capable of accurate calculation and measurement, with continuous monthly review, iteration and revision, and can serve as a compass for brand operations.

08 Conclusion

The six underlying logics of consumer brand growth are actually a combination of punches. The track determines the product, the product determines the content, the content determines the dissemination, and the dissemination determines the growth. This itself is a "spiral upward" process.

Why do many emerging brands today adopt in-house strategies? In my opinion, if time can be extended long enough, only the brand’s in-house team can achieve a breakthrough from “quantitative change to qualitative change”. Having complete capabilities is the only way to upgrade a brand in the future.

Today, the height of a brand depends on the shortest board in the bucket. None of the boards, including supply chain, products, content, traffic, operations, channels, and private domain, are easy.

In the short term, external agencies can help brands fill that gap. In this process, I think the most important thing is the in-house team’s ability to learn and iterate continuously. But to be honest, outstanding talents in the consumer industry are very scarce, and the mobility is high, so it is quite difficult. Another way of thinking is In-house and Agency horse racing.

From a long-term perspective, the In-house and Agency horse racing is a better choice. During the horse racing process, the team can continue to learn and iterate. In the internal and external competition, the internal In-house will not be proud and complacent, and the external Agency horse racing must win. Both sides will work hard to do better and it will also be safer.

Finally, I would like to go back and talk about the "power law", which I think is the most important underlying logic, not just any other.

With the support of content and traffic investment capabilities, as well as the thinking of the full-link model, assuming that this is no longer a scarce capability, then amplifying the effect and creating a hit will not be a problem, and the market will return to a zero-sum game.

If the market outcome is like this, the value of the "product coefficient" will be more prominent, because the breakthrough in "category innovation" is the highest coefficient of the power law.

If you are 10% ahead of your opponent, your advantage will continue to grow as the powers accumulate, and the longer the time, the more likely it is to create exponential growth.

I firmly believe that "product is king" and consumers vote with their feet to decide the future.

Author: Fei Yang

Source: Growth on the way