First, a prediction: in 2023, new consumption will return to its true value. In previous years, new consumption was tarnished by speculators and quick-money seekers. Now, when people talk about new consumption, they think of internet celebrities; when they talk about new domestic brands, they think of white-label products. Those truly dedicated to their craft are frustrated. Before writing these few lines, an entrepreneur messaged me on WeChat, saying, "Please don't call us new consumption anymore." That made my face burn as if I had COVID. But looking back, 2021-2022 were two years of little vitality in the industry, and most opportunists couldn't sustain themselves. Some voluntarily switched tracks to mess around in the metaverse; others tried to make one last grab, only to end up unable to afford high-speed rail home for the New Year. The laws of market economy exist objectively; they may arrive late, but they will come. In 2023, let's pull up chairs and wait together.

Earlier, when writing about the baijiu brand Guangliang, I stated my view: consumption is not divided into new or old. The moment you categorize yourself as new or old consumption, you've already lost. As one of the oldest industries, it is constantly renewed. In the 1990s, when P&G brought Head & Shoulders against Shanghai Bee & Flower, some probably called it new consumption. And in another 20 years, today's new consumption brands will definitely be called old brands, traditional brands, or ancient brands by our younger siblings. So, consumption is consumption. If you do business in this industry, you must respect its oldest and most fundamental logic. One of my financial idols, Jiang Nanchun, founder of Focus Media, summarized this logic in eight characters: deep distribution, seize mind share. First, the product must be good; that's the basic premise. Perhaps good products no longer speak for themselves, but you must believe that bad products spread far and wide. When product strength is comparable, then you compete on channel strength and brand strength. But in the consumer industry, there's another unavoidable topic: giants. Even without gray-area tactics, in normal business competition, you may not outplay them. Generally, giants adopt a cost leadership strategy. Take Coca-Cola: a decade ago, data showed it sold 1.8 billion bottles daily. Through such scale advantages, it reduces marginal costs in procurement, production, channels, and organization, achieving overall cost leadership. As a result, Coca-Cola hasn't raised prices in China for years, staying at 3 yuan. Three yuan is a strategic price, a killer move. Below this price, small and medium brands can't profit; above it, users are reluctant to pay. This applies to other industries too. Even in the most down-to-earth chili sauce sector, Laoganma does the same. Laoganma occupies the 8-15 yuan price band. New chili sauce brands cheaper than Laoganma struggle to profit; more expensive ones struggle to gain market share. What to do? The first competitive principle for new entrants is "I have better." Facing the Coca-Cola pincer, Genki Forest made a better product, first sugar-free, now preservative-free. Also, Purcotton uses spunlace non-woven fabric for wet wipes, and bebebus uses military-grade carbon fiber for strollers. The second competitive principle for new entrants is differentiation. Giants make underwired bras; I make non-wired. Giants enter supermarkets; I enter mom-and-pop stores. Giants make shampoo; I make men's shampoo... Differentiation is the mainstream growth path for new consumption.

Dayao Soda's differentiation. As a domestic soda brand, Dayao Soda faces the two cola giants. But it differentiated by launching large bottles. Traditionally, soda came in 240ml glass bottles. This is industry conventional thinking; with mature supply chains and cost structures, few break out of existing playbooks to think of something new. But Dayao Soda pioneered 520ml and 550ml large glass bottles. What's the biggest benefit? Disrupting the price anchor in consumers' minds. When buying the same size soda, Coca-Cola's 3 yuan price is a cognitive anchor. But Dayao Soda cleverly escapes this price dilemma with a "large bottle." Although consumers are savvy, in offline purchases, not everyone calculates which is more cost-effective by volume. At this point, Dayao Soda adds unique aesthetics and brand attributes to jump out of Coca-Cola's competitive dimension. In 2021, Dayao Soda's annual revenue reached 3 billion yuan.

Hubang Chili Sauce's differentiation. The chili sauce industry is dominated by Laoganma, which monopolizes the 8-15 yuan price band and has an oligopolistic presence in supermarkets across provinces. At this point, Hubang Chili Sauce proposed a differentiated channel: food delivery. In 2015, the subsidy war among Baidu, Meituan, and Ele.me unfolded, lowering the barrier for adding value to delivery orders. Moreover, delivery consumers are mostly young people willing to try new products and less price-sensitive. More importantly, no chili sauce brand had entered the delivery channel. Of course, the real demand for adding chili sauce to delivery meals to enhance flavor is the core of this scenario's growth. Soon, Hubang partnered with 70+ chain brands among the top 200 delivery merchants and 30,000+ merchants, expanding nationwide. By 2018, Hubang's delivery terminal network exceeded 100,000 outlets, becoming the "first internet-famous chili sauce." Behind channel differentiation is also product differentiation. For example, Laoganma typically sells half-jin (250g) products in glass bottles, which is unsuitable for delivery. Hubang needed to offer single-serving 15g packets, avoiding breakable glass and using the ketchup packet style of Western fast food. Additionally, Hubang priced these small packets at 3-5 yuan, catering to users' need to meet minimum order thresholds or free delivery, making them a "cart-filler." Of course, targeting the young delivery demographic, Hubang's packaging is trendier and more stylish. All these efforts serve the scenario and the user experience within that scenario.

One Cow's differentiation. The dairy industry is a red ocean. When a user walks into a convenience store to buy milk, they barely think about choosing between Yili and Mengniu. Whoever is closest to the user's hand gets drunk. The era of channel dominance is not over. Many regional milk brands even install milk boxes at every household's door. If users subscribe, they get fresh milk first thing every morning. Subscription is actually a differentiation in "customer relationships." Among these, the emerging dairy brand One Cow is a representative of reconstructing customer relationships. Its core is in its name: "adoption." The first type is cloud adoption, like virtual petting. Users can play a mini-game on Taobao or WeChat to raise a virtual cow and watch live streams from the farm. The second is co-branded adoption. One Cow partners with Wu Xiaobo Channel, Dunhuang IP, etc., to launch IP co-branded cards. Users can buy seasonal, half-year, or annual cards to get co-branded adoption rights, enjoying regular fresh product home delivery and themed membership benefits. The third is real-name adoption, becoming a true cow-raising partner. This requires users to reserve milk a year in advance from dedicated farms. Top-tier members can even name the cows, and One Cow regularly sends photos and growth data of the cows. In this way, One Cow locks in long-term consumption. From 2019 to 2021, One Cow's revenue was 865 million yuan, 1.65 billion yuan, and 2.566 billion yuan, with growth rates of 90.79% and 55.55% respectively.

In previous years, new consumption differentiation focused mainly on categories. When a brand equals a category in consumers' minds, it gains more traffic. For example, when I buy a mop on Taobao, I don't search for "mop"; I directly go to David. When I buy plum wine on JD.com, I don't browse categories; I go straight to Meijian's flagship store. Seize mind share, be the first in the category. Even if it means creating a category and becoming the first, it's worth it. But eventually, the industry formed another term: "super segmentation." This term is great; many fields can be segmented into numerous tracks, but after intense competition, the market size of many tracks cannot support a brand's growth. The business ceiling is always below the category ceiling. But now, besides categories, we can differentiate in other places, not because categories are exhausted, but because the logic of category business is changing. The old search-based shopping is being transformed by Douyin and Pinduoduo into interest e-commerce and scenario marketing. At this time, consumption often occurs because users are attracted by scenario content while playing on their phones, leading to purchases. In this context, brands need to differentiate by scenario. Hubang Chili Sauce is now third in the industry. Why? It didn't segment categories, and its product barrier is so low that anyone can enter. It simply anchored on scenario differentiation. In a dorm room, it might be Laoganma, but in delivery, it's definitely Hubang. As scenario habits form, brands naturally spill over. After ordering delivery five times a week and eating Hubang, would you bring Laoganma on a weekend camping trip? Next time you secretly cook rice in the dorm, wouldn't you choose Hubang? Penetrate one differentiated scenario, then spill over to other user scenarios. It's said Hubang expects revenue of 400 million yuan in 2022. Differentiated categories offer opportunities for new brands, and differentiated scenarios also offer space for new brands.