Although today, many emerging consumer brands have emerged, such as Wang Baobao for cereal, Zhong Xuegao for ice cream, Xuanma for egg yolk pastry, Hua Xizi and Perfect Diary for beauty products... There are emerging brands in every vertical category, there are simply too many opportunities.
We believe that the rise of these consumer products is more due to their ability to quickly grasp new user demands and make full use of channel communication dividends, that is, the combination of product innovation and marketing innovation. However, we believe that, on the one hand, product innovation is somewhat accidental. Just like the output of popular content, few brands can continuously output popular products, and will eventually return to the arithmetic game of competing in R&D investment. In this way, emerging brands will not have an advantage when facing giant brands. On the other hand, no matter what the model of marketing innovation is, whether it is private domain traffic or KOC batch seeding, the key is to seize the channel dividend with high ROI. However, as competition intensifies, high ROI will not always be maintained, and brand marketing advantages will also be difficult to sustain. Of course, as emerging brands grow, they must not only escape their dependence on traffic platforms and e-commerce platforms and learn to create their own traffic to break through the ceiling, but sooner or later they will come into direct contact with giant companies to compete for core market interests and usher in a truly crucial battle. Let’s first look at some common problems faced by emerging brands:The first is that some brands are too dependent on channels. It is difficult to say that brands that are overly dependent on channels are truly strong brands. For example, many so-called Internet celebrity brands are actually popular brands on e-commerce platforms such as Taobao, but once they are separated from the strong e-commerce platforms, their sales will plummet. We have come into contact with some of these brands before. Their creation of the so-called "Internet celebrity" is actually more supported by the platform operation capabilities. They have not built their own traffic conversion closed loop and mistakenly regard platform operation as brand building. The key to solving this problem lies mostly in how to enable operators to form branding ideas.The second is over-reliance on hot-selling products or marketing concepts. The promotion of brand communication can rely on popular products or marketing concepts, but these alone cannot sustain the brand's popularity, and ultimately it must return to the product matrix. For example, products that were popular at the same time as Zhong Xue Gao included Double Yolk Ice Cream, and HFP was also discussed at the same time as Perfect Diary, but their popularity is now not as high as before. The entire consumer goods industry is being quickly digested, and users’ attention focuses are constantly rotating. The theory of explosive products and concept marketing are only suitable for the early stage of brand promotion. As we have said before, the competition among brands in the future will be an overall melee, or a competition between brand ecosystems. It is not just as simple as products or marketing.The third is that brand premium and gross profit have not increased. Although the current emerging consumer brands are the brand dividends under the general trend of consumption upgrading, in fact, in terms of premium ability, they are still inferior to traditional big brands. In other words, in new consumption, the brand premium ability is insufficient. The rise of new domestic consumer brands is somewhat similar to the rise of Xiaomi. Although it has greatly increased the general public's acceptance of emerging brands, new consumer brands are still positioned in a mid-to-low-end product range, and it is difficult to improve product gross profit margins and brand premium capabilities. For example, Perfect Diary's lipstick has been recognized and praised by the public, but its selling price of dozens of yuan shows that it is still in the mid-to-low-end market below the big brands. In any case, with the rapid growth of emerging brands, they will eventually reach the online ceiling, and entering the offline market will be a decision they have to make, otherwise they will be slowly defeated by giant brands. The problem lies in entering the offline market. We believe that this is the key for new consumer brands to find the so-called "second curve". Online and offline are completely different things, and require companies to have different capabilities. Companies need to make many changes in their thinking. Generally speaking, there are three aspects:The first is the difference in consumption scenarios and transaction logic. Online marketing is not simple, but its convenience lies in that a closed loop of traffic conversion can be built online. For example, from promoting content, to adding customer service, to clicking on landing page coupons, to the final conversion and transaction, whether it is a public or private domain gameplay, it can isolate the comparison of competing products to a considerable extent and guide users to directly conduct transactions. This is even more obvious in short video and live streaming sales. But this cannot be done offline. When we commented on OFO and Mobike two years ago, we said that the offline scene is a collective shelf scene, and brand products cannot monopolize users' attention. If it is an offline store in a shopping mall, such as Perfect Diary, users will compare it with other competing stores when shopping in the mall and finally make a consumption decision; if it is an offline convenience store channel, such as Yuanqi Forest, users will directly compare it with competing products on the shelves while shopping and then make a consumption decision. In short, offline is a highly competitive scenario, which also leads to the fact that offline decision-making factors are multi-faceted and comprehensive, and are truly demand-oriented. It is unlikely that there will be instant conversions like live streaming and short video sales. This difference may cause online traffic strategies to fail offline. Offline operations are a new topic for Internet brands.The second is the difference in management capabilities and dimensions. Online marketing and operations can be compared to a large centralized store operation, while offline requires the management of countless physical stores, franchisees, channels and related operations. The management capabilities required for the two are completely different. Due to the centralization of online marketing, most marketing methods are 2C. The marketing ideas are nothing more than where to attract traffic and how to convert the traffic, so as to continuously improve the overall online marketing efficiency. However, each offline store, channel, and dealer can be regarded as B-end users. In other words, the management and operation of brand offline business are essentially 2B behaviors. How to activate the enthusiasm and operational efficiency of the terminal units is the key to offline. Offline also involves the coordination and deployment of various supply chains and logistics, which is even more of a traditional B-side management area. Dealer management, offline stores, and price management all have a series of complex issues. Online marketing only requires a small lightweight team to complete, but with the penetration of offline channels, it also means that the company will become heavier and the difficulty of management may increase exponentially. Of course, the expansion of stores will certainly bring about economies of scale in terms of supply chain and other aspects, but that is a story for later.The third is the failure of marketing tools. Since the online world is like a centralized, super-large store, brands can guide traffic and conversions by adjusting prices. For example, by releasing more coupon ads, online traffic will increase significantly, and transaction conversion rates will also increase directly. However, there are problems with channel dealers, distributors, and stores offline, which means that the brand needs a stable pricing system, and price, the traffic killer, becomes ineffective. Other content marketing and grass-planting marketing methods are also greatly restricted offline. In addition, the source of online traffic is essentially infinite. As long as you spend money, you can purchase the corresponding traffic and enter the conversion loop. However, the traffic in offline scenarios is relatively stable, and the radiating population is limited by geographical location. The most important thing is how to make good use of the traffic and improve the conversion rate, which will test the store's operating capabilities. In other words, there are significant differences in online and offline marketing operation ideas and methods. In any case, we believe that the expansion from online to offline is an important corporate test for new consumer brands, and the solution to this difficult problem requires breaking away from the reliance on previous growth paths. It is likely that it will require inviting external senior talent for support and going through a process of rapid personnel expansion, entering a thrilling stage of "changing engines while flying a plane." But only by successfully overcoming this difficulty can an emerging brand grow into a mature brand and the company can establish its own true moat.
