Click the image to register for participation.

1 Behind "consumption upgrade" lies opportunities for a wave of innovative brands. People pursue personalization, differentiation, and self-expression. Coupled with the segmentation and fragmentation of social networks and media, uniform big brands are destined to be replaced by numerous "beautiful and excellent" small and medium-sized brands. Thus, we have seen Heytea and also Xiaoguan Tea. According to the latest "China Internet Consumption Ecology Big Data Report" released by "CBNData", consumers' consumption concepts are upgrading, with an increasing pursuit of quality. Labels such as country of origin and brand are being weakened; consumers no longer blindly pursue imported or big brands, but focus more on the quality of the product itself. This is an opportunity for numerous entrepreneurial brands in the consumer sector.

2 Unless you are a company with an internet gene and massive users, do not touch the markets of third-, fourth-, fifth-, and sixth-tier cities. In business, whether in the enterprise market or consumer market, there are essentially only two ways to make as much money as possible:

  1. Sell products with low average order value to as many customers as possible; For example, Pinduoduo, NetEase Yanxuan, Miniso, Uniqlo, Dedao, Alibaba, Tencent...
  2. Capture the most valuable customers and sell to them as much as possible; For example, Ctrip, Lianjia, TAL (Xueersi), VIPKID, McKinsey, IBM, Accenture, Huawei... Generally, those selling standardized products tend to use the first method, while those selling services and solutions tend to use the second. Since the trend brought by consumption upgrade is quality products and personalized products/services, I say, unless you have massive users and use internet low-cost traffic acquisition methods to achieve "small profits but quick turnover", do not easily enter the markets of third-, fourth-, fifth-, and sixth-tier cities. Otherwise, either you won't make money and will be unable to make ends meet; or local players can defeat you in no time. But does focusing only on high-end quality users mean a limited market? Not necessarily! Don't forget the vivid example around us—Apple. We can also see clues from the latest case—the race between Douyin (TikTok China) and Kuaishou: Douyin initially radiated from first- and second-tier cities, while Kuaishou started from rural areas surrounding cities; all roads lead to Rome. However, in 2017, Douyin's user growth fully surpassed Kuaishou, occasionally surpassing WeChat to rank first on the App Store free chart. "All fun people are here," who wouldn't want to take a look? The "45-degree upward looking principle" applies not only to communities but also to all products with expression needs.

3 Capturing consumer demand is the only opportunity. The first step in building a brand is insight into consumers. What do consumers really want? Products that are good and cheap? Products that communicate and express personality? Products that reflect identity and status? Which level of Maslow's hierarchy of needs does it satisfy? I tend to believe that products that deviate far from consumer demand are unsustainable. Take the relatively hot knowledge payment market last year. If it only addresses the demand for solving knowledge "anxiety", this market is destined not to grow big, whether it's Hundun University or Dedao. Let's also take the hottest "new retail" as an example, with the case specimen being Uniqlo, the top apparel category on Tmall. Uniqlo has its own official online store (although the final transaction will jump to Taobao/Tmall/Alipay system) and offline stores; Uniqlo and Tmall's cooperation is a multiplicative relationship, not a parasitic one. Without Tmall, Uniqlo would still be a brand that captures consumers. Therefore, Uniqlo can achieve the same price online and offline, plan marketing activities according to its own rhythm, and not be led by the nose by e-commerce platforms. This is the real "new retail" for brand owners, not the "new retail" of e-commerce platforms like Alibaba and JD.com. Brand owners focus on product and service usage experience; what e-commerce platforms call "new retail" is shopping experience. (Because shopping experience is an important part of their product!) Brand owners should not be led astray by e-commerce platforms... Take NetEase's e-commerce business as another example. NetEase Yanxuan's gameplay is different from NetEase Kaola's. NetEase Yanxuan's approach is closer to that of a brand owner, because it has itself become a brand. No matter what strategy or concept, in the final analysis, it is about capturing consumers, or more precisely, capturing consumer demand. The first step in marketing and advertising is also insight into consumers, or more precisely, insight into consumer demand.

4 Not every link in what you do creates value. The essence of an enterprise is to organize resources in a way that is more efficient than the social average to create value. The method of creating value can be in the production link or in the circulation link. This is the most popular interpretation of the "value chain" theory. The "value chain" theory was proposed by Michael Porter, a professor at Harvard Business School. The basic viewpoint is: among a company's many "value activities", not every link creates value. The value created by a company actually comes from certain specific value activities on its value chain; these business activities that truly create value are the "strategic links" of the company's value chain. The strategic links that determine the success or failure and efficiency of a company's operations can be product development, process design, marketing, information technology, or operations management, etc., varying by industry: For example, in high-end fashion, this strategic link is usually design capability; in beauty and personal care, it is mainly advertising and marketing capability; in e-commerce, it is product selection and logistics capability. Let's look at JD.com. At its smallest, it is a curated store; at its largest, it is a logistics and marketing company, earning profits from the circulation of goods. Manufacturing ex-factory prices are around 10-20%. Internet e-commerce platforms compress the intermediate circulation links, creating value. Hence, there are opportunities for JD.com, Tmall, and NetEase Yanxuan. Manufacturers earn money from production (e.g., Foxconn), e-commerce earns from circulation (e.g., JD.com), and brand owners earn after-tax profits from what consumers are willing to pay minus all production and circulation costs and internal costs (e.g., Apple). Of course, brand owners can also choose to build their own factories or their own e-commerce. (If the brand owner considers it a "strategic link".) For a company to develop, it must at least achieve above the social average in one link. Therefore, I strongly suggest that before doing business and marketing, first think clearly about which link you create value in. Not everything is worth your key focus.

5 C2B model truly integrates production and sales, shifting the business model from product-based to relationship-based. Here we need to talk about three cases: 7-Eleven, Miniso, and NetEase Yanxuan. Behind them are two key groups: users and suppliers. 7-Eleven captures users within 1 kilometer of high-end communities; the secret to Miniso and NetEase Yanxuan's success lies in capturing users who pursue good quality and low prices—the core value chain behind them is based on understanding users, grasping SKUs, and selecting suppliers. However, the paths to success are different: 7-Eleven's key to success is location; NetEase Yanxuan lies in ODM model with preferred suppliers; Miniso's secret lies in a set of streamlined, standardized, and systematic franchising mechanisms, operating mechanisms, and management systems. The integration of supply, research, production, and sales has finally become a reality, but the order has changed to sales-research-production-supply. The upgrade path all starts from retailers accumulating users, then providing own-brand products targeting users. Following this model, it is essentially an upgraded version of Uniqlo and IKEA. You should know that the convenience store 7-Eleven's highest profit margin product is actually its own brand "Hot Cook" (Oden). You should know that whether it's NetEase Yanxuan doing curated e-commerce, or 7-Eleven and Miniso doing chain stores everywhere, they will inevitably do their own brands.

6 Marketing in the next three years should seize the three major dividends: social, content, and super users. Traffic is getting more expensive; we have entered the era of refined traffic and user operations. Social dividend: rely on social to drive word-of-mouth and leverage free traffic. Content dividend: rely on content to attract free traffic, organic traffic. Super users: refined operation of quality traffic (users), relying on super users to generate continuous repurchases or bring free traffic. A trend that must be seen here is: the dividend period of official accounts/WeChat groups/Moments has passed. Reasons: On one hand, there is a flood of content, bad money drives out good, and quality users are not so easily "attracted"; On the other hand, a large amount of quality content has also emerged, making it harder to stand out. However, according to the latest data of 900 million daily active users, WeChat is still the national app and the largest social platform. It remains the first choice for corporate-owned media, and to some extent, its importance is even higher than the official website. In this regard, don't have the fluke mentality of overnight success in WeChat official account investment; "new media" operations should become the "new normal".

7 Creative short videos are not necessarily a good opportunity for brand building. The hottest application is undoubtedly "Douyin" from Bytedance. Can Douyin, which occasionally surpasses WeChat to rank first on the free chart, become an important platform for corporate brand building and marketing communication? The answer is: not necessarily. There are three reasons:

  1. It tests creativity too much and is not sustainable;
  2. The ecosystem has not yet formed;
  3. It is easy to distract attention, focusing on form itself and ignoring the core message of brand communication; However, according to the principle that where consumers are, where attention is, brands should go there, any rapidly rising platform is worth attention, observation, and even early planning, but in the short term, it should not be a priority.

8 Be careful of the pitfalls of live quiz shows. Should brands ride the wave of live quiz shows? For brands, if there are conditions and low-cost quality traffic, of course, you should ride it, just see how much low-cost traffic it can bring you. Since the technical threshold is not high, should brands make their own live quiz APP? Definitely not. Ask yourself: is your business a traffic operation business or a product and service operation business? Do you need that much traffic? Can you capture and digest so much traffic? Can you monetize it? Otherwise, Coca-Cola is such an excellent content marketing company with billions in annual marketing expenses; making a live quiz APP should not be a difficult thing, right?! In the end, attracting traffic, traffic management, and traffic monetization are things that internet companies do. For brands, setting aside core products and services to make a live quiz APP deviates from the "value chain" and strategic links. Similarly, I do not recommend brand marketing practitioners to pay too much attention to industry hotspots such as blockchain, Bitcoin, or even artificial intelligence, because in the foreseeable 10 years, it is impossible for them to integrate into your core value chain of production and operation. (Except for strategic layouts by super giants; except for media; except for speculative behavior.)

9 The internet has already sunk down; digital marketing must also integrate online and offline. Both Alibaba and JD.com are promoting "new retail", and even Ctrip has gone offline: According to a report by CBN Weekly, Ctrip's brand stores in Beijing number 50. Combined with the stores of Traveling Bestone and Qunar, the Ctrip you know currently has more than 6,000 stores nationwide, covering more than 200 cities. "Ctrip does not want to continue to be seen as a mobile app and website product; it prefers to be seen as a travel company that can provide comprehensive services." In the past three years when "internet thinking" was heavily discussed, this was almost impossible. In plain terms, online traffic is saturated, and internet companies want to compete for offline traffic. On the other hand, IKEA, which has never embraced e-commerce, finally can't sit still. In 2018, it will cooperate with third parties (Amazon or Alibaba) for e-commerce. We can clearly see that online and offline channels are merging. Dyson opened an experience store in Shanghai; MUJI opened a hotel in Shenzhen; Tsutaya Books became popular in Japan, and Yanjiyou is blooming everywhere in China. Everyone is watching the Apple and Xiaomi models. Internet companies are merging offline, and the offline battlefield is precisely the opportunity for so-called "traditional industries", but even in offline scenarios, the old playbook may not necessarily beat internet companies. In 2018, go offline! Complete the innovation of digital experience offline! After talking about digital marketing for so many years, using digital technology to integrate consumers' offline experience is the real digital marketing. Otherwise, just call it internet marketing or online marketing.

To summarize, the 9 sentences to share today are: 1. Behind "consumption upgrade" lies opportunities for a wave of innovative brands. 2. Unless you are a company with an internet gene and massive users, do not touch the markets of third-, fourth-, fifth-, and sixth-tier cities. 3. Capturing consumer demand is the only opportunity. 4. Not every link in what you do creates value. 5. C2B model truly integrates production and sales, shifting the business model from product-based to relationship-based. 6. Marketing in the next three years should seize the three major dividends: social, content, and super users. 7. Creative short videos are not necessarily a good opportunity for brand building. 8. Be careful of the pitfalls of live quiz shows. 9. The internet has already sunk down; digital marketing must also integrate online and offline. This is my "digital marketing business scripture" for 2018. —End— This article is sourced from WeChat public account: Yingchuang Lab (ID: mktcreator). For reprints, please contact the original account for authorization.