---
title: "19 Major Problems Facing 19 Star Consumer Companies"
description: "In 2021, consumer, e-commerce, and entertainment sectors faced significant changes, with a common pain point being growth ceilings. This article examines 19 core problems for 19 star consumer companies in 2022, from e-commerce giants like Alibaba and JD.com to new consumer brands like Pop Mart and Genki Forest, as they navigate challenges in a post-growth era."
author: "虎嗅"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2022-01-18"
language: "en"
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---

# 19 Major Problems Facing 19 Star Consumer Companies

> In 2021, consumer, e-commerce, and entertainment sectors faced significant changes, with a common pain point being growth ceilings. This article examines 19 core problems for 19 star consumer companies in 2022, from e-commerce giants like Alibaba and JD.com to new consumer brands like Pop Mart and Genki Forest, as they navigate challenges in a post-growth era.

Source: HUXIU APP (ID: huxiu_com)

Note from HUXIU: 2021 was a year full of variables: regulation, layoffs, the pandemic, and Sino-US relations profoundly impacted our business world. In 2022, these variables will bring greater uncertainty.

HUXIU attempts to identify the core problems these 50 star companies will face in 2022 through an annual series, to better understand the upcoming challenges and uncertainties. The series is divided into three parts: consumer, hard tech, and finance/real estate.

This article interprets the 19 core problems faced by 19 consumer-related companies.

In 2021, major events occurred in consumer, e-commerce, and entertainment sectors, such as top livestreamers retiring due to tax issues, Alibaba and Meituan being fined 18.2 billion yuan and 3.442 billion yuan respectively for monopolistic practices, the opening of WeChat ecosystem, and the crackdown on fan circle chaos. Behind these events, a common pain point is the "ceiling" these industries face.

In 2021, domestic internet traffic hit a ceiling, marking the end of the extensive traffic era. In November, ByteDance reported a halt in domestic ad revenue growth, its first "growth crisis" since commercializing in 2013. From 618 to Double 11, Taobao/Tmall only maintained moderate growth. In 2022, they face refined cultivation of traffic and users.

Even in new consumption sectors with frequent overnight success, ceiling issues are prominent. Internet-born Genki Forest faces production and channel ceilings, seeking new growth in traditional channels. In beauty, Florasis's most discussed issue is its growth ceiling: since 2020, it seems stuck in a GMV range, stable in top two positions but struggling to exceed 300 million yuan monthly GMV outside promotion periods.

Traditional consumer sectors have long faced ceilings; Moutai and Haitian only gain growth through price increases, which is not a long-term solution.

In 2022, these star companies must answer: how to break through their ceilings? This concerns their growth curves and competitive dynamics.

Frequent leadership changes in e-commerce giants highlight industry pressure.

**Taobao/Tmall: Super Livestreamers Gone, Dai Shan Takes Charge**

In Taobao and Tmall history, 2021 will be significant. This year saw major personnel changes: Alibaba announced Dai Shan would succeed Jiang Fan as head of Taobao/Tmall, and the integration of B-side and Taobao/Tmall is seen as a key adjustment in the company's 20+ year history.

This year also saw changes in livestreamers: from Snow Lee to Viya, both top Taobao livestreamers retired due to tax issues. The disappearance of super livestreamers may qualitatively impact the entire Taobao livestream ecosystem, as they were among the most important advertisers besides brands.

Many hidden changes occurred. In H2 2021, multiple Taobao and Tmall departments saw personnel changes; for example, Dao Fang succeeded Xuan De as head of Taobao Livestream in September. In early December, Tmall Haofang underwent structural adjustments affecting 14 executives.

Financially, Taobao/Tmall was not in its "golden period" in 2021; from 618 to Double 11, it only maintained moderate growth rather than explosive growth. In Q3 earnings, Alibaba's e-commerce business revenue was 126.827 billion yuan, up 33% YoY, but customer management revenue only grew 3%. Excluding Sun Art consolidation, e-commerce revenue grew only 12% YoY, compared to 62% last year.

What Taobao/Tmall experienced in 2021 means the extensive traffic era is over. In 2022, they face refined cultivation of traffic and users. As domestic internet traffic peaks, this will be the approach for all internet companies and e-commerce platforms.

In September, Tmall released a new brand strategy, aiming to continue as a D2C platform: brands' stores on Tmall belong to them, allowing direct user operation and membership conversion. Results may become clearer in the future.

With Dai Shan's upcoming appointment, the integration of B-side and Taobao/Tmall will be a key theme in 2022. Currently, B-side platforms like Taote and Taocaicai show strong user acquisition. Taote has over 240 million annual active consumers in 18 months, adding over 50 million net users in one quarter. In 2022, the incremental effect of "three Taos linkage" will be an industry focus.

But this is not an easy task. In Taobao/Tmall's core market, content e-commerce platforms are rising aggressively; in lower-tier markets and community e-commerce, major players are entrenched.

This is a key test for 23-year-old Alibaba: what stance will it show in fierce competition in 2022? For a company of Alibaba's size, winning or losing a city is not key; gaining momentum is more important than scoring points.

**JD.com: Stable but Insufficient User Growth**

JD.com proved its stability throughout 2021. In the first three quarters, JD's net margins were 2%, 0.3%, and 1.3%, consistent with its description of "maintaining low-margin operations."

Continuous investment in logistics and new businesses is key to JD's low margins. On logistics, JD added 500 warehouses in nearly a year, equivalent to 40% of its total, making it the fastest warehouse construction period in history. In Q3, JD's new business losses reached 2.073 billion yuan, up 72% YoY.

JD executives stated in earnings calls that "JD's core capability has always been supply chain; we are better able to maintain business stability." In a sense, JD, based on first-party supply chain and self-built logistics, became more physical in 2021, making its model and financials more stable.

However, this stability is less rosy in user growth. In Q3, JD's active users reached 550 million, up 25% YoY, with growth slowing; new active users were 20.3 million, slightly below market expectations of 24.91 million.

JD's challenge is user numbers. Alibaba, Pinduoduo, and Meituan all have over 600 million users; JD ranks fourth. But in user growth, Pinduoduo and Meituan are growing faster due to community e-commerce expansion. This means JD may "stably" rank fourth for a while. But this might not be bad: JD is focusing on refined user cultivation; Q3 data shows average purchase frequency per user increased 23% YoY.

Notably, JD attracts younger generations: consumers aged 18-25 increased consumption frequency significantly. These young people are less price-sensitive and demand instant gratification, creating opportunities for JD with its self-built logistics and first-party supply chain.

In 2021, the cancellation of "choose one of two" was a window for JD. During Double 11, JD's new clothing products were 15 times last year's, and new brand entries increased over 10 times daily compared to October.

With livestream e-commerce ecosystem changes, JD may see a wave of brand entries in 2022. The challenge is how to absorb this wave and capitalize on dividends. Perhaps JD needs to add "courage for mutation" beyond its stable genes.

**Meituan: Financial Winter, Revenue Growth Without Profit Growth**

After receiving its largest fine in October, Meituan reported its "worst" quarterly report in November, with adjusted net loss of 5.53 billion yuan, a record.

Behind the financial "winter" is Meituan's chronic problem: "revenue growth without profit growth." With continuous investment in new businesses and policy adjustments in food delivery, this may become Meituan's "new normal."

Despite fine pressure and delivery cost pressure, Meituan resolutely continues investing in retail-focused new businesses. In a sense, Meituan has "no regrets" in this field: since September last year, Meituan has invested over 10 billion yuan in new businesses.

In 2021, Meituan tried to reverse its passive situation. On one hand, it rebuilt a "subsidy traffic engine" in food delivery; on the other, it adjusted some community e-commerce layouts and optimized local BD personnel to reduce costs.

But Meituan is not in a "single-player mode." In local life services, Douyin is aggressively attacking; in community e-commerce, Meituan, Pinduoduo, and Alibaba are in a "big three battle."

Clearly, every battlefield requires Meituan to fight with determination. So Meituan made its largest structural adjustment in recent years, transferring elite talents around 35 to core frontline businesses, and streamlining decision-making processes among executives.

An insider said Meituan plans to "go all out" in 2022. This may not be false: after the fine pressure period and digesting delivery costs, Meituan will have a relatively relaxed "layout period" in financial reports. In short, even if Meituan increases investment in core businesses, it won't overly strain cash flow or make reports too ugly.

**Douyin: Is Interest E-commerce the Right Answer?**

In 2021, after Liang Rubo took over from Zhang Yiming, company restructuring, business pace, and commercialization speed slowed down. In November, ByteDance reported a halt in domestic ad revenue growth, its first "growth crisis" since 2013. Thus, e-commerce becomes a new engine to support ByteDance's commercial ceiling, with resources shifting toward e-commerce.

In December 2021, Douyin E-commerce launched a standalone app, "Douyin Box."

On one hand, traditional e-commerce platforms like Taobao and JD get traffic from search, allowing brands to easily capture market share through advertising and operations. Search traffic becomes a tool for promotion and ROI improvement. In contrast, Douyin's interest e-commerce continues ByteDance's algorithm logic: recommendation algorithms limit top players' traffic capture, distributing natural traffic based on product and video content popularity.

Essentially, this is a "product finds person" model: the platform recommends livestreams to users via algorithms, driving consumption, rather than providing an active consumption entry.

On the other hand, as an independent product for Douyin's e-commerce, it can build a complete e-commerce ecosystem to differentiate user perception, cultivate consumption habits, and strengthen scenarios through repurchase. Also, Douyin Box's relationship to Douyin is similar to Diantao to Taobao: after splitting e-commerce, Douyin's content ecosystem becomes purer, reducing user experience loss from high ad load. Otherwise, as e-commerce grows, Douyin becomes bloated.

However, compared to traditional e-commerce, Douyin's "interest e-commerce" is still low-frequency or low-density behavior. Stronger demand needs "shelves" like traditional e-commerce: platforms need to expand content SKUs to increase user stickiness, usage time, and retention.

Content SKUs are an evolution in display richness and diversity compared to product SKUs in shelf e-commerce.

From the development path of livestream e-commerce over the past two years, its business logic is to normalize promotions, which fundamentally doesn't align with business logic. If livestream e-commerce doesn't change its profit distribution logic, it just transfers all saved distributor profits. Moreover, livestream relies heavily on trust endorsement, essentially weakening brand influence. So big brands' traffic acquisition stickiness is questionable.

In 2022, the short video industry enters a stock competition stage, making content SKU user experience and supply more important.

Douyin vigorously supports livestream e-commerce as a strategic push, but heavy reliance on influencers and celebrity livestreams may become unsustainable due to continuity issues. Livestream must ultimately return to efficiency and returns.

**Kuaishou: Abandoning "Traffic Hunger"?**

On February 5, 2021, after Kuaishou met capital at the Hong Kong Stock Exchange, its aspiration to rival Douyin vanished. After enduring H1 2021, Kuaishou accelerated its transformation into an internet giant.

On one hand, through bold organizational restructuring, it shifted from function-based to business unit structure, fixing management issues top-down. On the other, content (Olympics, short dramas, new knowledge broadcasts) enriched the ecosystem, increasing user stickiness and community activity, breaking away from single content narrative.

In 2022, Kuaishou must abandon "traffic hunger" and answer the market: what differentiates Kuaishou e-commerce from Douyin e-commerce?

In commercialization, private domain traffic makes information feed ad monetization sluggish and difficult. Kuaishou will expand monetization to public domain traffic while accelerating commercialization. Public domain has larger traffic; brands and creators need more exposure, and Kuaishou needs ad revenue from public domain.

Moreover, private domain traffic, though not good for ads, is very good for livestream e-commerce and tipping.

Taobao and JD's shelf e-commerce emphasize products; all means under traffic feeding serve to improve gross margin. But Kuaishou e-commerce is driven by "content + social," with purchase conversion rates far above industry average due to host trust endorsement; buyers' average monthly repurchase rate exceeds 65%, forming a unique consumption field.

Kuaishou e-commerce's core advantage is e-commerce hosts + industrial belt white-label supply. So this year's "big push for brands" needs to address traditional brands' weaknesses in supply.

Additionally, to cut into e-commerce, brands are the first hurdle. Now, Kuaishou's user base in first-, second-, and third-tier cities is rising to 15%, 30%, and 24% (total 69%), becoming more diverse. First- and second-tier users have huge brand demand, so Kuaishou should accelerate increasing brand goods' share in GMV and reduce white-label proportion.

The second hurdle is calming "price wars" among hosts. In the past, the "family model" validated private domain advantages for hosts: content, old iron (followers), and business formed a self-consistent closed loop—content as a carrier for personalization, old iron bringing trust and stickiness, business accumulating commercial value.

If both can coexist symbiotically, great, but often not: top hosts expand and challenge the platform, as seen in Xinba's confrontations, replay bans, and retirement hype.

So in 2022, Kuaishou must provide old iron with more cost-effective products, including traditional brands (e.g., Anta, Coca-Cola) + new brands (e.g., PMPM, Bingquan) + brands rising in Kuaishou ecosystem (e.g., Duola Duoshang, Han Xizhen, Dailai Xi) + traditional white labels (trademarked but no brand power).

Also, Kuaishou must better implement "trust e-commerce," including basic governance, industry-specific services, and changes from emotional connections between hosts and fans.

Price increases seem one of the few options for traditional consumer companies.

**Kweichow Moutai: Where is the Higher Ceiling?**

Moutai is unique, a consumer product with luxury and investment attributes.

Two issues to note:

First, the tallest tree invites wind; Moutai's market cap exceeds 2.5 trillion yuan. There's an invisible "ceiling" in everyone's mind for the highest-valued company. If Moutai were in the same capital market as Microsoft or Apple (1-2 trillion USD), it might reach 1 trillion USD. But the A-share market currently cannot accommodate a 5 trillion yuan Moutai.

Also, Moutai's price increase is sensitive: gross margin exceeds 90%, so it can't use raw material or labor cost increases as a reason. As SOE leaders, Moutai management faces obstacles and risks, leading to hesitation. Fortunately, Moutai can effectively raise ex-factory prices through "increasing direct sales and reducing distributors," which has had significant effects in recent years, but it's gradual. Thus, "price increase expectations" repeatedly disappoint.

Second, Moutai is the ceiling for the entire baijiu sector. Don't invest in other baijiu stocks just because Moutai is "expensive." Baijiu is a sunset industry; "volume flat, price up" is a wishful thinking. Sales have been declining unilaterally in recent years, an irreversible process, not a "cycle."

A few high-end baijiu brands follow Moutai as luxury items, like Swiss watches surviving after mechanical watch decline. But unlike Swiss watch diversity, Moutai has overwhelming dominance in high-end baijiu. Some big trees shelter small grass; some trees allow nothing to grow. Moutai is likely the latter.

Consider: does Moutai drive other baijiu consumption or squeeze their space? At banquets, high-end baijiu is for face. If there were no Moutai, Wuliangye, Luzhou Laojiao, or Shanxi Fenjiu would suffice. With Moutai, if the host doesn't offer it, other "high-end baijiu" may lose face. If Moutai is served, Wuliangye won't be; if not, Wuliangye might be embarrassing.

**Muyuan Foods: Pork Prices Bottom, Stock Soars, Dare You Chase?**

Listing data from 2000-2002, 2002-2006, 2006-2010, 2011-2014 clearly shows four "pig cycles." But those in the industry at the time could only guess market trends, unable to predict cycle length (2, 3, or 4 years).

The current "pig cycle" in China's pig farming started in 2016. But "black swans" and "gray rhinos" like African swine fever and COVID-19 caused disruptions, making it risky to apply previous cycles.

A cyclical fluctuation's root cause is poor supply elasticity. New capacity based on optimistic expectations doesn't immediately enter the market to lower prices and stop sellers. After a while, a flood of new supply crashes prices. Then capacity shrinks, and prices regain support.

After multiple cycles, practitioners, consumers, investors, and society think they "know the drill." For example, Muyuan expanded counter-cyclically when pork prices fell; when the whole industry lost money, Muyuan's stock soared.

When pig capacity doesn't bottom with pork prices, a peak may occur in H1 2022. Expectations of further pork price increases weaken, and Muyuan's stock has fallen significantly.

In short, don't simply apply the so-called "pig cycle"; return to its principles, closely monitoring sow inventory, total inventory, and hog prices.

**Haidilao: Will a Second Wave of Store Closures Come?**

On September 5, 2019, HUXIU's article "Boiling Haidilao, How Much Foam?" argued: "Since 2018, Haidilao's rapid revenue growth is mainly due to aggressive new store openings. By end of 2018, 430 of 466 stores were in mainland China, 36 overseas. By June 2019, total stores reached 593, with 550 in 116 mainland cities."

Regarding the hype, the author said: "Haidilao's high valuation is based on 'fast and good' store openings, but we shouldn't be blindly optimistic about how many Haidilao stores mainland China can accommodate. Some predict 3,000, which is a stretch. Whether it can double the existing 550 to 1,100 while maintaining over 50 million yuan per store revenue is a big question."

By June 2020, Haidilao expanded to 1,597 stores; in 2021, it announced closing 300 stores. Haidilao also pursued external expansion by investing in new fast-food brands; currently, 4 of 8 brands have closed stores, and a "second wave of closures" may come.

Haidilao is known for service, but its taste doesn't match its reputation. Now the halo has dimmed: waiting times have significantly decreased, and there are empty seats at noon on non-holidays and non-core business districts.

Haidilao's rise and fall proves consumer stocks have no long-term investment value, only short-term speculation targets.

**Haitian Flavoring: What After "Soy Sauce Freedom"?**

The basic assumption for investing in consumer stocks is that performance only rises. For companies in a buyer's market, this assumption doesn't hold.

For example, "With a richer life and attention to nutrition, Huiyuan Juice sales and profits must be good," or "People live on food; Xiabuxiabu's performance is highly certain." People may consume more juice and love hotpot, but they won't only drink Huiyuan or only eat Xiabuxiabu.

Haitian's soy sauce has ranked first in national sales for 24 consecutive years, with gross margin around 50%, earning it the nickname "Soy Sauce Moutai." Its latest market cap is 450 billion yuan, with a P/E ratio over 70.

Two issues to note:

First, condiments (including soy sauce, MSG, vinegar, cooking wine, etc., 17 subcategories) are not a sunset industry, but there's little growth space. For example, soy sauce demand was 10 million tons in 2015 but only 6.86 million tons in 2020. Because Chinese people have achieved "soy sauce freedom," economic development and delicious food mean usage decreases, not increases.

Second, Chinese people will always use soy sauce, but no reason to always use Haitian. Not to mention Quanjude, Goubuli, Donglaishun; Huiyuan Juice and Xiabuxiabu have lost their glory, and Haidilao has started closing stores.

Again, consumer stocks have no long-term investment value, only short-term speculation. Haitian may not be the leader in 10 years; a 70x P/E is inflated.

**Luckin Coffee: Is the Crisis Really Over?**

Luckin doesn't want stores to be places for "sipping coffee all afternoon." Whether as pickup points or delivery origins, stores are hubs in the fulfillment chain, like Cainiao for Tmall or JD's logistics.

Luckin has two trump cards:

> First, data-driven. Starting with delivery, Luckin profiles users through order categories, frequency, amount, time, and location, guiding store location, category adjustment, taste optimization, promotion strategy, and supply chain and delivery staffing.
> In daily operations, store managers don't worry about raw material quantities for the next day, and staff training is relatively simple. "Data-driven" is the foundation of Luckin's rapid expansion.
> Second, cultivating user taste. China has no coffee-drinking tradition; most young white-collar workers haven't had freshly ground coffee before graduation. By subsidizing to lower barriers, Luckin becomes "the first cup of freshly ground coffee for young people," and persisting for a year or two cultivates taste preference for Luckin.

Pinduoduo also started with subsidies, but users are loyal to cheapness, not Pinduoduo. Coffee is an addictive product; taste preference is inherently subjective. When Luckin started, complaints about "bad taste" were everywhere; now they're rare.

A source close to Luckin's senior management told HUXIU that in 2021, Luckin's management tried hard to sort out a new business model; "the fundamental challenge is questioning the business model." The source revealed that publicly, people only see Luckin in the spotlight, but deeper is that Luckin's underlying business model is questioned: the extensive model of crazy store openings and high subsidies is unsustainable.

Now, tea drink companies like Heytea and Naixue have launched coffee products, and online star brand Saturday's coffee shop opened in Shanghai in September. After the 2020 turmoil, Luckin, gradually recovering, may face a new "siege"—a new coffee world of local coffee startups.

After the initial social and traffic dividends disappear, new consumer brands face growth bottlenecks to varying degrees.

**Pop Mart: Where is the Next Hit IP?**

Pop Mart is trying to solve production capacity issues.

An insider told HUXIU that Wang Ning (CEO) and Si De (co-founder) have been on long business trips to Guangdong since September, seeking more quality OEM factories in Dongguan and other "toy industry belts."

Production capacity has become a "Sword of Damocles" over Pop Mart.

From February to March 2021, Pop Mart experienced a "stockout" crisis: multiple core IP series blind boxes were unavailable or had extended pre-sale periods online and offline. The core IP blind box "DIMOO Siamese Cat" had its shipping date adjusted to end of October after launching in late February.

By June, stockouts persisted in Sichuan and other regions. After the Little Duck series became popular in Sichuan, it disappeared from stores in Chengdu and elsewhere.

Since its founding, Pop Mart has used OEM production, with core factories mainly in Guangdong. It uses MTO (make-to-order), sending designs to factories at least two quarters in advance, then factories produce quickly.

Behind the stockouts is a more intense competitive landscape in the designer toy track.

It's said that domestic quality toy OEM capacity is limited and concentrated in Guangdong and East China. Pop Mart's 2020 listing sparked a wave of designer toy startups, even beverage and snack companies entering. These brands' orders suddenly "crowded" into Guangdong factories.

This makes production capacity increasingly scarce. Supply-side changes also affect demand. When more brands and varieties flood the market, Pop Mart's key challenge is: with more options, young people's wallets are limited.

This is Pop Mart's deeper challenge: compared to its rise, in 2021 it faces fiercer competition, more fickle consumers, and wallets that haven't grown significantly.

In 2022, Pop Mart needs to return to the essence of toys: providing enough freshness and fun.

This is the challenge for Pop Mart's hundreds of designers and its large design support team (PDC, POP Design Center): developing new hit IPs like Molly, PUCKY, and Dimoo. After nearly a year since listing, Pop Mart hasn't launched a new hit IP, still relying on several core IPs and collaborations. In a sense, Pop Mart urgently needs new creativity.

**Genki Forest: "Overtaking Pain" and the Traditional World**

Genki Forest wants to cover in three to five years what traditional beverage companies took 20-30 years to do.

At the end of January 2021, an OEM factory temporarily notified Genki Forest of a full production halt. In May, a bottle cap supplier "broke the contract," and soon a preform supplier also stopped supply.

This is just a glimpse of Genki Forest's production capacity challenges in 2021.

On the channel side, Genki Forest faced aggressive "counterattacks" from the traditional world: some traditional beverage brands began to fully block Genki Forest, even engaging in "all-out battles" over freezers. In convenience stores and supermarkets, some international brands lowered their profiles, courting channels, so some former "allies" turned to big brands.

Thus, we see Genki Forest changing its strategy in 2021, returning to the underlying rules of the beverage track: building controllable factories, expanding offline channels, and deeply cultivating distributors.

Since July 2020, the "light-asset" Genki Forest, once fully reliant on OEM and e-commerce, has rapidly evolved into a "heavy-asset company" with 5 beverage factories and over 183,000 traditional channel terminals. Its annual target has become traditional: 7.5 billion yuan in offline sales for 2021, over 9 times its online target.

For factories, Genki Forest has invested over 5.5 billion yuan in its "Five Factories" plan, with total capacity exceeding 5 billion bottles after full production. Notably, under its self-built factory model, it will improve self-production capabilities including caps, preforms, liquid, and packaging materials.

Returning to traditional beverage logic, Genki Forest is being re-evaluated by capital markets. As of end of 2021, after two new financing rounds, its post-investment valuation exceeds 15 billion USD.

But Genki Forest hasn't reached the celebration moment. After rapid expansion, it faces "digestion pain": total employees exceed 7,000. Since December 2020, Genki Forest has expanded by nearly 50%, with over 70% of new talent from traditional food and beverage companies.

Also, Genki Forest faces countless imitators.

Now, Genki Forest needs to think about how to truly win in the traditional world in 2022: the capillary-like beverage world of small supermarkets, corner stores, restaurants, parks, wholesale markets, and even village shops.

**Florasis: Trapped in Chinese Style?**

Florasis is still the No.1 domestic beauty brand in GMV, but it has hit a growth ceiling.

In 2020, Florasis's annual GMV reached 3 billion yuan. After surpassing another local brand in July, it almost "locked" the No.1 monthly domestic makeup GMV position, but its GMV hovers around 200 million yuan.

For example, in February 2020, Florasis's GMV was 288 million yuan. In the first three months of 2021, monthly GMV was 285 million, 288 million, and 277 million yuan. From July to September 2021, GMV was 190 million, 270 million, and 180 million yuan.

A senior industry insider told HUXIU that in the beauty circle, the most discussed issue about Florasis is the "growth ceiling": "Since 2020, Florasis seems stuck in a GMV range; it can stably rank in the top two (local makeup), but it's hard to exceed 300 million yuan monthly GMV outside promotion periods."

When this issue is extended, it becomes about Florasis's future expectations and valuation: as the largest local makeup brand by sales not yet listed, with annual GMV in the 3-4 billion yuan range, what should Florasis be valued at?

Interestingly, many insiders believe Florasis "succeeded because of national trend," but its emphasis on "folk style" makes it hard to become a true "mass brand."

A platform executive told HUXIU that from 2020 to 2021, over nearly 24 months, Florasis showed strong "stability." Even when other big brands cut prices, Florasis's GMV remained "resilient."

"This means Florasis has a core user base." But from another angle, is it good for a new brand to have stable sales for 24 months?

Perhaps Florasis needs to learn to be "rebellious."

And at a deeper level, Florasis needs to return to the essence: the product itself. To date, Florasis relies heavily on OEM. An insider told HUXIU that some "technological advantages" promoted in Florasis's marketing have patents held by OEMs, not Florasis.

A Xiaohongshu beauty creator said Florasis's packaging design gives her a sense of quality higher than the product experience. "In the future, Florasis needs to work on the product itself."

This is what Florasis needs to solve in 2022. As livestream selling changes qualitatively, Florasis, deeply reliant on livestream rooms, may need to rebuild its traffic logic. It will face new consumers who are more picky and fickle Gen Z, where "Chinese style" is not a fuse for high repurchase.

**Naixue Tea: Learning to Grow Up**

Naixue's listing on June 30, 2021 was like a coming-of-age ceremony.

It not only faces volatile stock markets but also needs to learn to be scrutinized under a "magnifying glass" for every food safety detail. Naixue also needs to re-understand traffic, user acquisition, repurchase, and location—in the more competitive 2021 tea drink track, every brand is searching for the "future code."

The key logic behind all challenges: under pandemic impact, the extensive tea drink growth model has been completely rewritten. Throughout 2021, Naixue evolved from extensive growth to refined operations.

Increasing revenue and reducing costs became Naixue's "theme." For store models, the lower-cost, higher-ROI "Naixue Tea PRO stores" proportion increased significantly.

This store model, launched in November 2020, not only reduces area and optimizes SKU structure but also controls labor costs: in the first six months of 2021, over 90% of new Naixue stores were PRO type.

This change helped Naixue exit its loss period: in H1 2021, Naixue's store operating profit reached 385 million yuan, up 497% YoY.

But store model adjustments can't solve all problems. For Naixue, with over 20,000 employees and 700+ direct stores, human efficiency and operational efficiency are critical. This has become a must-answer question for tea and coffee track players in 2021.

So Naixue unprecedentedly invested heavily in digitalization: in H1, it invested 48.3 million yuan in technology capability building, equivalent to 2.2% of half-year revenue.

Simultaneously, an online transformation occurred. Naixue is changing its traffic logic. In the first six months of 2021, the proportion of "in-store cashier" at Naixue stores dropped to 27.8%, compared to 92.5% in 2018.

But online transformation is not a completed exam for Naixue. The deeper issue is efficient conversion and private domain cultivation, so in 2021, WeChat mini-programs became Naixue's key focus.

But this is also what many tea and coffee brands are doing. In a crowded exam room, Naixue needs to find its own mini-program and private domain play.

In 2022, Naixue's key challenge may be here. Currently, Naixue has over 7.4 million active members (Q2 2021), its base. But how to increase repurchase rate and consumption frequency among these core users?

This isn't just a technical problem. In the increasingly competitive tea track, rapid iteration of core SKUs is a main battlefield—everyone wants to be the next quarter's hit.

**He Fu Noodle: Aftermath of Rapid Expansion**

Noodles were a highlight in the 2021 restaurant investment circle.

He Fu Noodle is undoubtedly a representative, with 800 million yuan in financing, a record for noodle categories in 2021 (total valuation 7 billion yuan).

But the highest-valued noodle isn't without worries. In July, He Fu Noodle publicly apologized over a "mouse" incident. On platforms like Douyin, Xiaohongshu, and Bilibili, He Fu Noodle, with an average per-person spend of 50 yuan, has been criticized as "expensive" and "taste needs improvement."

In some investors' and insiders' views, He Fu Noodle's story is representative: over 9 years, it evolved from a bustling noodle shop into a "digital model" that capital likes: nearly 400 stores but a supply chain supporting 1,500 stores; it built an information system rare in the noodle circle, accumulating 3.5 million members.

As a noodle shop capital likes, He Fu Noodle raced on expansion in 2021. It opened a new store every 2 days on average, the fastest expansion period since founding.

But rapid expansion with capital backing is bringing challenges. For example, how to maintain operational efficiency amid rapid scale growth, and increasingly complex food safety issues.

In July, an employee at a Shanghai He Fu Noodle store, after finding a dead mouse, "threw" it back into the kitchen through the serving window. Public information shows some store-level employees can start work after one day of training.

An insider told HUXIU that after rapid expansion, He Fu Noodle faces a series of "digestion challenges" in 2021, including talent and new store operations. "Especially talent challenges are huge; brands can quickly find locations, but quickly cultivating core talent is extremely difficult."

An investor once told HUXIU that many "noodle shops" received financing this year because, when the restaurant track lacks good targets, staple noodle categories are easiest to standardize and chain.

Among them, 9-year-old He Fu Noodle is more likely to be "highly expected" by investors, but the investor admitted that while capital wants rapid expansion, it also worries about the "short-term training pressure" on talent.

The exam on He Fu Noodle's table isn't just talent. "Taste" has always been a keyword. This is a question He Fu Noodle must face: is there a natural gap between capital-favored restaurant models and consumer-favored good taste?

Entertainment is one of the most policy-affected sectors, bringing significant changes to business models.

**Zhihu: Is It Worth Trying So Hard to Make Money?**

In 2021, Zhihu, listed in the US, faced multiple pressures from capital markets and regulation: on one hand, volatility in Chinese stocks and capital concerns about Zhihu's commercialization prospects; on the other, community commercialization easily creates a sense of utopia collapse, as niche professionalism and mass commercialism have irreconcilable conflicts.

2021 was also a period of major revamps and new business validation for Zhihu. Paid novels, video livestreaming, and revamps to strengthen public domain traffic control and distribution all show Zhihu's commercialization determination.

But whether pushing video, livestreaming, or prioritizing video content after revamps, it inevitably brings content dilution, atmosphere deterioration, and concentration of user groups, leaving some old users at a loss—Zhihu no longer seems like a growing ecosystem but a cunning "merchant" being ripened by capital.

Some interpret this as: "Zhihu's obsession with commercialization and data growth after listing is causing its development to deform," i.e., improper expansion is making Zhihu an "other."

This change isn't silent; it began when Zhihu embraced commercialization in 2018, but in 2021 it became more naked, intense, and disorienting.

Admittedly, user base expansion inevitably leads to "hard to please everyone," but Zhihu's problems can't be entirely blamed on that. Zhihu's user segmentation, content layering, and promotion mechanisms lag behind platform expansion and growth; the mismatch is the crux.

Now, Zhihu's timeline is full of partisan debates; questions and answers are tense and intense, reducing user experience. Second, Zhihu has taken away creators' right to delete comments, and the confusion of public and private domains often makes comment sections spiral out of control. Even when deep discussions become noisy, Zhihu is no longer that warm community.

Of course, a company's commercialization can't always cater to community atmosphere, culture, and user experience. But after falling into capital narrative traps, Zhihu's official planning and operations collaborate with external influencers while being lukewarm to its own authors, crushing the commercial value aspirations of creators still working on the platform.

**Tencent: Losing Its Sense of Smell**

In 2021, Tencent remained a high-speed "money-making machine," but it was a turbulent year: from antitrust deepening reshaping its investment landscape and business synergy, to games having to restructure revenue structure under environmental impact, Tencent is continuously digesting enormous pressure from inside and outside.

For a long time, Tencent's deterrence in China's internet ecosystem was based on two trump cards: social and capital.

Although Tencent gave "half its life" to partners, it has become a pipeline connecting tens of thousands of companies and billions of jobs. Once Tencent becomes a broad internet entry point through continuous underlying technology and digital investment, it will be powerful.

Especially as China's mobile internet reaches maturity with user and traffic peaks, regulation will focus more on industrial internet advancement, meaning Tencent is at a critical juncture for ecosystem reconstruction.

This is especially evident in gaming. Although China's gaming industry is only a few hundred billion yuan, Tencent has unshakable market position from R&D to channels.

However, in 2021, "Genshin Impact" single-handedly broke through traditional channel defenses, reshaping the channel landscape—on one hand, since the full implementation of version number policy in 2019, game approvals have plummeted, moving from extensive development to refined stock competition; on the other, good works' market appeal is weakening traditional channels' dominance.

For a long time, traffic efficiency amplified mobile manufacturers' channel advantages, with channel revenue exceeding traffic investment. But now, traditional channels' "lying flat to earn" model yields less. Thus, in 2021 alone, Tencent invested in or increased stakes in 80 game companies, drawing industry attention.

Behind this is both hedging against competitors like Alibaba and ByteDance increasing game investment, and prudence in pre-empting new forces to avoid missing another hit.

After all, miHoYo's "Genshin Impact," Alibaba's "Three Kingdoms Tactics," and Lilith's "Rise of Kingdoms" all abandoned traditional app stores for TapTap and achieved unprecedented success, confirming Tencent is losing absolute control over channels.

A deeper concern: Tencent is losing its sense of smell, not seeing the essence of gaming trend changes—"Tianya Mingyue Dao" doesn't fit the latest trends, "Honor of Kings" may be replaced by "League of Legends," and "Genshin Impact" and "Guiguzi" aren't its own.

So Tencent is densely "carpet-bombing" the gaming field in the short term, trying to solve problems with resources. This investment frenzy may only ease when the next "Honor of Kings" appears.

**Bilibili: I Can't Make Money?**

In 2021, Bilibili's fate was like a roller coaster, with huge stock price fluctuations and polarized user attitudes.

On one hand, Bilibili's game business shifted from co-operation and exclusive agency to self-developed games starting in 2020, but throughout 2021 it didn't make much splash. Even after releasing 16 new games at a new game conference, Q3 and Q4 earnings showed mediocre game performance—a dangerous signal: the former pillar business is now "dragging behind."

However, Bilibili is still in rapid development, and the "video-ization" trend offers huge dividends. The platform needs decisive investment during rapid growth (user acquisition, community ecosystem building, R&D, etc.), especially game investment as a bet on a future ticket.

Second, aside from the bleak environment for Chinese stocks, capital market changes because Bilibili's core content like anime and guichu has been diluted by life content as users diversify. These contents exist on Douyin and Kuaishou, forming no barrier.

Once Bilibili is on the same front as Douyin and Kuaishou for users, its algorithm and operations would rank last.

Finally, video sites' core is traffic monetization, mainly through ads and e-commerce.

The problem is Bilibili not only dares not openly sew ads into videos but also carefully uses information feed ads—because CEO Chen Rui publicly promised long ago not to do pre-roll ads. This established Bilibili's community atmosphere and platform tone, but at the cost of making Bilibili and pre-roll ads opposites, with users even more sensitive to ads than other platforms.

Bilibili's 2021 earnings also show expense ratios haven't significantly improved; "burning money" efficiency is still too low. No wonder some say Bilibili is becoming like Kuaishou or iQiyi.

In summary, in 2022, Bilibili must answer two questions: one is its game self-development capability, proven by products; the other is, after being labeled by core users, the market needs to see management give a different product positioning, differentiating from Douyin and Kuaishou. That is, under the trend of "short videos getting longer, long videos getting shorter," how Bilibili leverages mid-form videos to become an ecosystem with both content supply and brand influence.

**Weibo: Only Half a Life Left**

In 2021, regulation of deformed fan culture and celebrity chasing was like taking "half a life" from Weibo.

At its inception, Weibo revolutionized interpersonal interaction, spawning new social organizations and mobilization methods. Netizens enjoyed constructive discussions on specific issues, and Weibo balanced traffic distribution across fields, forming a powerful public opinion field and collective opinions.

Thus, the slogan "Watching Changes China" once flew as a banner on Weibo.

Unfortunately, due to various reasons, Weibo gradually shed its early media and celebrity attributes, becoming a traffic pool for entertainment stars.

In 2022, Weibo, with 46 vertical categories and control over Gen Z's opinion battlefield, can still hold a place in Chinese internet. But Weibo is increasingly losing itself in publicness and ecology, becoming repulsive—especially when celebrity press releases, e-commerce promotions, and small ads are everywhere, user reputation plummets, and people behind screens no longer want to "talk warmly."

Now, Weibo has built a mature advertising product line, including splash screens, hot search lists, homepage feeds, search boxes, and comment sections, all available for ads.

Estimating Weibo's hot feed information density, about 5-6 ads per 30 posts, a load rate of about 20%-25%. This is double Douyin's rate (with similar DAU) and over five times Kuaishou's.

This is evidenced in Weibo's latest earnings: its 2021 interim report shows ads contribute over 85% of revenue, still Weibo's lifeline.

Weibo is like an internet "utility pole" covered with ads. The reason: with the rise of black industry and mature ad monetization, Weibo maximizes traffic monetization. Visible metrics like reads, likes, and reposts are wrapped in profit, and the gray industry equates data with money.

In this "data-only" false prosperity, even hot searches have become a "business"—though Weibo denies it, it's an open secret. Stars, influencers, brands, and even ordinary users can use "money power" to meet data needs.

Even when other traffic entrances are consumed by advertisers, comment sections become the next data maintenance battlefield. Comment control becomes common, high-like comments become deceptive, and the entire comment section, after commercial battles, becomes a gathering place for small ads.

In other words, gray industry backlash exacerbates the lack of quality ad resources. Wedding photography, hair transplants, teeth straightening, acne treatment ads become compromises, and these ads, nourished by Weibo's abundant entertainment traffic, build consumerist traps and an alienated community.

**Are you "watching" me?**


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