On the evening of November 19, Yixian E-commerce, the parent company of the new domestic beauty brand Perfect Diary, successfully IPO'd on the NYSE. The IPO price was $10.5 per share, with a market value of nearly $7 billion (about RMB 46 billion). From the launch of Perfect Diary's Taobao store in March 2017, to riding the Xiaohongshu platform dividend in 2018, to now being listed on the NYSE, it has completed a beautiful transformation in less than four years, making it a phenomenal growth case for new domestic brands in recent years. Looking at the new domestic brands that have emerged in recent years, there are many that have risen rapidly from 0 to 1. After experiencing a brief period of glory in the surging traffic feast, they began to lose momentum and gradually fell behind in the journey from 10 to 100. Brands like Diao Ye Niu Nan, Huang Tai Ji, Answer Tea, Mourning Tea, and Instant Noodle Cafeteria, which were very popular a few years ago, have now gone quiet. In contrast, why can Perfect Diary escape the post-debut slowdown, while many other brands fall behind after crossing the 1-10 threshold? What should new consumer brands do in the 10-100 stage to continue turning the growth flywheel? These questions are worth our deep thought. -01- The "Traffic Bottleneck" of Viral Brands Looking at the new consumer brands that have risen rapidly in recent years, they share common characteristics: they place great emphasis on traffic operations and have a distinct "internet celebrity" trait. Their access to traffic is mainly due to the following three dividends: First, the new category dividend. Due to the new consumption habits of young people and the application of new technologies in products, the demand for new categories continues to grow, driving the sustained growth of brands in these tracks. For example, the popularity of Wang Bao Bao is largely due to young people's demand for healthy, low-fat, and convenient options. Second, the new traffic dividend. For example, Perfect Diary relied on the contentization of Xiaohongshu in its early days, HFP relied on dense seeding on WeChat official accounts, and the rise of Douyin, Kuaishou, and Taobao Live brought new traffic dividends. Third, the aesthetic dividend. New brands generally attach importance to packaging design and also favor cross-border communication. High-value design and novel cross-border co-branding easily inspire users to share photos on social media, spreading rapidly. However, many things in the world have their downsides. These traffic dividends on online channels have facilitated the rapid rise of new brands, but they also make them form a "path dependence" on traffic, easily falling into a "traffic bottleneck." Just like in the home appliance industry, whoever first seized the traffic dividend of new channels like Gome and Suning could see sales surge, but after the short dividend ended, the platforms entered a harvesting period, and the profits of many home appliance companies were squeezed by channels like Gome and Suning. Until the rise of JD.com and Tmall brought a new wave of channel traffic dividends, and after that dividend ended, many home appliance companies began to experience the dual squeeze of fierce price competition on e-commerce platforms and rising traffic costs, with profits getting thinner... History is always surprisingly similar. Because there will be more entrants in new categories, competition will intensify; the traffic costs of new channels will rise, ROI will decline, and the dividend has or will eventually disappear. Over-reliance on traffic, excessive indulgence in the internet celebrity halo, and excessive pursuit of one hit product after another, round after round of cross-border co-branding, often leads to "defocusing," neglecting the polishing of basic skills such as brand and product. Without the support of core brand value and differentiated recognition in consumers' minds, the brand will lose momentum over time. This may be the internal logic of new brands falling into a "traffic bottleneck." In fact, many new brands are famous but still weak internally. Product sales rely on live streaming and seeding, lacking a moat of core brand value. If new brands do not fill these gaps, they may find it difficult to escape the fate of "peak at debut" for internet celebrity brands. New brands can leverage new channel and traffic dividends to debut, but they must not get lost in the wilderness of blindly competing for traffic. On the path from 1 to 10 and from 10 to 100, new brands need cognitive iteration to open up a broader world. -02- New Brands Need to Cross Three Hurdles to Advance The author believes that in the 1-10 stage, the most important thing for new brands to avoid the "traffic bottleneck" is to switch tracks in time, moving away from relying solely on traffic and shifting to a path driven by both brand and traffic. Because traffic dividends are sporadic, cannot be accumulated, and are difficult to sustain. As an asset, a brand can be accumulated over a long time, making friends with time, enjoying the compound interest of time, and promoting the sustained growth of the enterprise. First, from traffic to mind, build a brand moat. Through traffic, a brand can instantly attract countless fans, but the connection between fans and the brand is very shallow, because they often just want to satisfy curiosity, try something new, or follow trends. Fans check in because of external popularity, and this connection often comes and goes quickly, making it hard to last. To win lasting users, brands must focus on building product strength and brand strength, and through efficient brand communication, occupy consumers' minds, making the brand a tool for deep, sustained connection with consumers. True brand mind is a distinct imprint stored in consumers' brains that differentiates from competitors. It must first solve two problems: Who am I? What differentiated unique value can I bring to consumers? For example, Genki Forest is the "sugar-free expert," and its unique value to customers is "sugar-free and delicious"; Florasis is "Oriental makeup," and its unique value is "Oriental aesthetics, extracting natural flower essence, suitable for Oriental women." After answering these two questions, the brand needs to condense them into a compelling slogan, a tonally consistent visual, and through systematic communication, let the target audience form a clear understanding, completing the "registration" of the brand in the brain. Only then can it be said to have occupied the mind. In today's brand communication, new brands mostly focus on online performance-based media. These media have advantages in driving purchases, but they have major blind spots in shaping brand mind: they are very fragmented, making it difficult for brands to concentrate and detonate. Because online media reach is scattered and fragmented in space and time, coupled with complex information and many distractions, consumers' attention is dispersed, and brand effects are easily diluted. Various promotions and diverse selling points appear together, constantly changing postures to get better clicks, making them increasingly difficult to remember. At the same time, the precise targeting of online information feeds can easily create an "information cocoon" effect, missing many potential consumers and relevant actors, experiencers, and communicators who may influence consumption decisions. Advertising becomes narrow advertising. When a brand lacks effective large-scale reach and cannot form high-density, high-concentration penetration, it cannot reach the tipping point to form social consensus. In the current media ecosystem, when a brand advertising campaign sets a slogan and plans to strongly detonate it to hundreds of millions of people, the available platforms are already very scarce. Because it needs to meet many conditions:
(1) The audience is broad enough to cover multi-scenario, multi-channel people;
(2) Centralized, able to coordinate in time and space, concentrate placement and detonation;
(3) Effective reach, high readership, low information interference;
(4) Sufficient strength and authenticity, conducive to enhancing brand momentum. What kind of media meets these conditions? Some say television, which was true in the past. But now the mainstream urban population's TV viewing rate has dropped significantly, with more elderly and children watching, so target audience coverage and concentration are insufficient. As for video site ads, opening a membership can block ads, so the ad information never gets a chance to be seen by people with spending power. The author believes that in today's fragmented era, the national elevator media represented by Focus Media best meets the above conditions for detonating brands and can be called a truly centralized media. According to CTR data, in September 2020, among channels for advertising nationwide, elevator TV grew 27.2% year-on-year, and elevator posters grew 50.8%, far higher than other media. According to Ipsos surveys, because Focus elevator media is located in the living spaces that 300 million urban mainstream people pass through daily, such as apartment buildings and office buildings, in the low-interference closed elevator scene, ads reach users with high frequency and force, making users who wait for and take elevators at least 4-6 times a day have a deeper memory of the repeatedly played slogans and brands on Focus elevator media. From Ipsos research results, 81% of popular Chinese advertising slogans are remembered from Focus elevator media, making it one of the few core positions in this era that annually creates popular slogans and detonates brands. For new brands, using the centralized elevator ads that 300 million users pass daily to achieve concentrated detonation, efficiently amplifying the brand momentum accumulated in the early stage, and quickly occupying user minds is a replicable, feasible methodology with a high success rate. It can complement online media, making up for the mind gap caused by single-channel seeding and traffic tactics. The practices of Perfect Diary in recent years can also support this. After being crowned online, Perfect Diary upgraded its brand image and launched a new brand layout, increasing offline placement, massively dominating national elevator media, occupying the minds of more offline people, and further seizing market share. Second, from niche to mainstream, break the circle to become a national brand. Looking at the path of new brands rising in recent years, they generally have a circle-based characteristic. Products are initially endorsed by experts and professionals in the circle, then through sharing photos, live streaming, seeding, etc., they are purchased and shared by more people. The reason for this phenomenon is that online media has a majority of young people, especially Gen Z, who like to gather and interact in various circles online, such as ancient style, Hanfu, goods, pen, and furry circles. New brands can use these niche circles to avoid the encirclement of big brands and focus on breaking through with the origin group. However, niche brands sound nice, but the customer base cannot always be confined to niche circles, otherwise it cannot support the sufficient scale for the brand to go from 1 to 10 and then to 100. Therefore, when a new brand has gathered a group of fans online, to continue growing, it must face a problem: how to break through the circle and "make waves" on a larger scale, so that the brand is accepted by a broader mainstream population. So, how to break through the circle? Let's return to the origin: where are the high-value mainstream people? In real life, the mainstream population aged 25-45 with higher income levels is actually more offline. They value career and family, and the scenes they frequent most and spend the most time in are nothing more than work, home, and shopping/leisure. From this perspective, media that can cover these typical scenes are nothing more than apartment buildings, office buildings, shopping malls, cinemas, high-speed rail, and airports. These living spaces cover 80% of urban consumption power, are opinion leaders and trendsetters for brand consumption, have strong brand diffusion and penetration capabilities, and can help brands efficiently reach and detonate urban mainstream people. For new consumer brands to break through the circle and become public brands, star brands, these living spaces based on the most daily and highest-frequency passing of urban trendsetters are the core contact points for brand advertising information dissemination. This is why new consumer brands like Perfect Diary, Florasis, Xiaoxian Dun, Winona, and Genki Forest are all focusing on living spaces in major cities, with the core purpose of breaking through the circle and aiming for national brands. From sales data, the returns are also considerable. It is reported that despite the pandemic in 2020, Yixian E-commerce's revenue in the first three quarters still grew by about 73%, with Perfect Diary accounting for 80%. In this year's Double 11, Xiaoxian Dun sales grew 263% year-on-year, Winona grew 102%, and Genki Forest sold a year's worth of sales in one month, winning the Tmall beverage category championship on June 18. Third, from single platform to multi-channel, become an omni-channel brand. Some new consumer brands that have risen in recent years often started on a certain online platform. Their success largely depends on the platform's ecosystem, such as traffic supply, operational gameplay, and communication and sales models, leaving the platform's imprint everywhere. Due to deep embedding in the original platform, these brands become uncomfortable once they leave the platform, with marketing, customer sources, and services unable to keep up. We have also heard many such stories: many new brands that started on Taobao or Tmall face the "out of Taobao" dilemma and suffer from acclimatization after leaving. However, e-commerce platforms have their ceiling, and over-reliance on platforms is not a long-term solution. For new brands to become true "national brands," leaving the swaddling clothes of the original platform and expanding to multiple channels is a path they must take. Taking this step is not easy, but once successful, it will greatly strengthen the brand's survival and competitiveness, moving toward a truly mature brand! Otherwise, if they stay trapped in the original platform, they will really become an online version of a "channel brand." This is why emerging e-commerce brands like Perfect Diary, Winona, and Zihaiguo expand offline to physical retail after becoming famous. However, multi-market, multi-channel operation is not easy. Terminal sales, logistics channels, and market maintenance are not to mention; even in brand promotion, they face completely different challenges from online. Because the demand structure, consumer composition, information reception habits, and shopping habits of markets across the country are different, finding these people accurately, making them remember the brand, and stimulating them to buy requires sufficient experience and wisdom. As brands develop into new channels, the operational logic is also quietly changing. The tactics of a single online channel may not be suitable for offline channels. If it is just a certain e-commerce channel, you might find a single channel like Xiaohongshu, Douyin, or WeChat Moments for seeding or live streaming, or place information flow ads where clicking links can smoothly reach and convert. But if it is multi-channel operation online and offline, covering markets across the country, then relying solely on a certain online medium cannot cover all target customer groups. In this case, the brand needs to break free from the rut of performance advertising, find integrated media that can cover the whole country, uniformly plan and place brand ads, and empower various physical channels and markets. At the same time, at important nodes like promotions and festivals on each platform, coordinate with some promotional ads, combining brand and performance ads to maximize advertising effectiveness. At the same time, when choosing ad placements, it is necessary to make flexible adjustments based on the specific conditions of each channel and region. If it is a key market, placement should be more intensive, with three-dimensional saturation attacks; for brands targeting young white-collar workers, more office building placements; for brands targeting families, more mid-to-high-end community placements; for brands with immediate stimulation, place ads as close as possible to terminal shopping scenes, such as shopping malls, cinemas, or in-store ads. -03- Summary New consumer brands can achieve rapid debut by riding the east wind of traffic. But when the brand develops to a certain stage, it needs to switch thinking, from relying solely on traffic to a dual-wheel drive of brand and traffic. Over-indulgence in a single traffic tactic can easily fall into a "traffic bottleneck" and lose the momentum for sustained growth. In the upgrading and development stage, the most important homework for new brands is to integrate centralized media and online media, quickly detonate the brand, seize brand mind, break through the limitations of people and platforms, and expand the brand to a broad mainstream population and more diversified channels. Only then can they stay popular for a long time and become true national brands. Tips will be paid 400-2000 yuan once adopted.