The following is the speech delivered by AKOKO CEO Su Mu at the "FMCG2019·China FMCG Conference" hosted by New Distribution, organized and published for readers. Thank you for this opportunity to share with you. What I'm about to say has nothing to do with the AKOKO brand; I hope this sharing can bring you new insights and thoughts. The Underlying Logic of Traffic Changes AKOKO has been around since 2016, and in three years, we've stepped on many pitfalls and fought many battles. For a brand to grow from being an internet celebrity to a "long-lasting" one, it needs not only category support and a stable brand strategy, but also planning and layout of traffic tactics. Today, I'll focus on sharing "traffic tactics." Every time we fight a small battle or a big battle, we deeply feel the changes in brand communication and channels. Nowadays, the overall brand communication media and channels have completely transformed, showing four typical characteristics: decentralization, fragmentation, content-orientation, and socialization. Currently, the national-level short video platforms are Kuaishou and Douyin. Kuaishou is more like a social platform, while Douyin is more like a content platform. Today's Douyin can be said to be a decentralized centralized media. If a brand has money, it can "consume" its CPT ads and homepage splash screens. But the influencers within Douyin are relatively decentralized media. Now, the millennial generation has become the main consumer force. Compared to before, the biggest difference is that they "recognize domestic products." The 60s, 70s, and 80s generations relatively prefer international big brands; they need symbols of status and wealth. But today's young people don't necessarily buy luxury goods; they have individual consciousness and value individuality. The awakening of individual consciousness will replace the original functional consumption. These people may buy products that are not functionally necessary because they like a sentence from an influencer, a piece of soft copy, or a touching phrase. This is typical interest-based consumption replacing functional consumption. Many times, we don't plan to buy, but because we are exposed to a certain content, we become interested and are then induced to buy. For example, users are willing to pay a premium for aesthetics; if the packaging is nicer and the product itself is better, consumers can bear more premium. Users are willing to waste time on interesting things; they are willing to spend more time on fun things. The immersive state of Douyin is that users are always looking for interesting content. Brand owners can observe these changes and seek to transform their traffic tactics. There is much discussion about traffic changes; many people think traffic is becoming more expensive. But from our own frontline experience, traffic doesn't seem to be getting more expensive; sometimes it seems cheaper. Instead, mismatched traffic is becoming more expensive. If you find the wrong traffic, it will be expensive because the input-output ratio is not proportional. If you find the right traffic, the cost of traffic is actually decreasing. Why do I say this? Because traffic is being reconstructed by three labels. Nowadays, traffic is no longer simple traffic; it is being irrigated by topics, nurtured by content, and washed by social interaction. Behind the fragmentation of traffic, it is divided into various topics like Kuaishou, Douyin, Weibo, etc. So many brand owners are also trying to build "private domain traffic," raising their own personas, and posting on Moments every day. In fact, through content, topics, and social forms, traffic is being raised. Response Strategies to Traffic Changes Facing various traffic ecosystems, how should we respond? First, let's talk about platform-based traffic. Our basic judgment is: If brand owners still fight from within the platform (in-site), it will be a dead end. Now, through burning Zhitongche, Drill Exhibition, Star Stores, Super Recommendation, etc., in-site traffic ads, trying to achieve a TPO-level brand on Tmall is already a dead end. This once made Three Squirrels, Liangpin Shop, and Baicaowei successful. That was the dividend period of in-site traffic, when traffic costs were cheap, but now it's no longer possible. Now, brands must use a comprehensive approach, combining in-site and out-site, coordinating internally and externally, to rise. Weibo is a community controlled by the Alibaba ecosystem. Frankly speaking, Weibo has the most severe fake traffic; it is the social platform with the most fake traffic among all content and social ecosystems. Of course, this does not mean Weibo has no value for brand communication. If you can cooperate with some external MCN agencies or cultivate your own internal team to understand and screen out some Weibo influencers, it is still doable. On Weibo, it's relatively difficult to achieve an ROI above 1; many brands are at 0.5 or 0.6. Currently, AKOKO has achieved 1.3. Xiaohongshu, after two years of "prevalence" in 2017 and 2018, especially after the rise of celebrity product placement dividends, now may only have the dividend of tail influencers left. The top celebrities on Xiaohongshu are already saturated. After Alibaba's strategic investment, Xiaohongshu content has added "product detail pages," which has disrupted the purchase decision path for female users. Brand owners should be cautious about investing in Xiaohongshu. Xiaohongshu has some bugs; we see some brands occupying the front pages of recommended content for a long time. Due to some algorithm issues, it is in the hands of a few, and it's not something ordinary new players can use. WeChat Official Accounts: In 2017, AKOKO used the official account system to drive sales. At that time, if the conversion rate from reads to orders was below 2%, it was considered low, but now reaching 2% is already good. In 2018 and 2019, WeChat official accounts have been declining year by year, including issues like subscription account redesign. In fact, Tencent has always wanted to change and launched live streaming to save it. WeChat live streaming started testing in April, and in August, it may bring some new opportunities. I think entrepreneurs can pay attention to it. Bilibili, B站. This is a platform I strongly recommend entrepreneurs or innovative brands to pay attention to; the pool is large, and ROI is relatively high. First, to register as a B站 user, you need to answer many questions and reach a certain score to register successfully, so fake traffic is difficult. B站 users follow a certain influencer because of spiritual recognition, so when an influencer promotes products, fans have high follow-through, and conversion is better. B站 is more suitable for new brands. Currently, B站 has not been plundered; there are still dividends. Although some beauty brands are heavily investing, in other categories, it's just beginning. For example, the recently popular "Perfect Diary" has shifted most of its investment from Xiaohongshu to B站, spending tens of millions a month on B站. Sometimes, observing the movements of leading brands can tell us where the dividends are. Community and social e-commerce are discussed a lot. It is both a brand promotion window and a major sales channel. We believe the connection cost of community e-commerce is relatively high now. It's not much different from offline channels. Especially for entrepreneurs, they need to pay attention to the hidden costs behind this channel. Some are head companies, but they may not necessarily survive well. We need to pay attention to financing; those that have recently received venture capital can be considered for cooperation. If it was a year ago, they might be panicking now, burning money quickly, and this channel has certain risks. WeChat distribution platforms, represented by Yunji, Beidian, and Global Catcher. Recently, they are also transforming, with the addition of POP store + distribution model this year. The original traffic was to "wash" C-end customers into the platform through WeChat, using bestsellers. Now they hope brands can settle in, which generates fees and deposits. POP store platforms can help you run activities, which is also a platform-style play, but overall it's declining. The last two channels are Douyin and Kuaishou. Let's talk about Douyin first. We believe Douyin is currently the largest brand communication field, the largest topic traffic pool, and the strongest user time drag. Douyin can be said to be the largest content platform, different from Kuaishou. Its content is better, with more story-driven short videos. With good content, product promotion is inevitable. We used to talk about whether content e-commerce is a pseudo-proposition. Now it seems that only when content is done well can e-commerce be established. Douyin may not be now, but in the future, it will definitely be the largest sales pipeline. Now we should associate more with Douyin. Kuaishou is currently the largest live streaming platform; most domestic streamers are on Kuaishou. But Kuaishou is a platform for "old iron" (close friends), with a strong rural flavor, but it also reflects a more real Chinese society; the appearance of Chinese society is in Kuaishou. So Kuaishou is socialized, and the rural flavor represents the relationship between our neighbors. It's the same community as Douyin, but with different tactics. Kuaishou has its value. Sharing these, if entrepreneurs have a faster speed and more possibility to burst forward, if possible, turn Douyin into a belief and match it with organizational structure. I don't know if my thinking is correct, but I think you should make recruitment Douyin-oriented, product development Douyin-oriented, product promotion, sales venues, and brand promotion Douyin-oriented. Ideally, everything Douyin-oriented. Temporarily Put Aside the Logic of Growth Hacking Now many people talk about "growth hacking," but I think growth hacking theory is more suitable for some APP playstyles, not necessarily for innovative brands. For consumer brand entrepreneurship, we should use the "SCBRS" theory: display, click, purchase, circle the traffic for repurchase, and do fission propagation. The first step is to have a large amount of public domain content appear; through public domain content, users will enter your store to make a purchase. The second step is to bring the transaction rights into your brand pool and nurture it. This is what P&G and Unilever didn't pay attention to in the early days. New brands must pay attention to it; it's a business asset that needs to be managed. Regarding KOL, KOL is always your endorsement channel. A KOL may help you bring goods once or twice a year, not repeatedly. So you need to prepare the schedule in advance, control it, polish it in advance, how to tell the brand story, how to tell the product story, practice more, and your endorsement ability will become stronger and have accumulation. Fighting from within the platform e-commerce is hopeless, but fighting from outside to inside is a big way. By diverting traffic from outside to inside, the platform will give you more traffic support; this is a virtuous cycle. Also, if you start from within the platform, the "xiaoxi" (platform staff) may not appreciate you, thinking you lack ability. Private domain traffic is for repurchase and retention. If you do "repurchase and retention" on Tmall, your sales costs will still be high because you need to reach old customers, use Drill Exhibition, and various paid tools within the platform. But if you do private domain well, no one charges you; for example, if you circle users in your own WeChat accounts and groups, no one charges you a toll. Also, regarding "customer acquisition," I hope everyone adjusts. Growth hacking talks about fission last, using old customers to bring new ones. But I think customer acquisition and fission should happen simultaneously, especially for consumer brands. When users just buy something, they feel the most; if you try to acquire new customers after a period, the cost and conversion efficiency may decrease. Case Studies: AKOKO and Bubble Mask Finally, let me share two cases: AKOKO and Bubble Mask. Currently, AKOKO's product matrix is not just cookies, but also snowflake crisps, mooncakes, and egg yolk pastries, as well as chocolate. Maybe next year we'll launch ice products. AKOKO has gone through four development stages overall. In the early stage, we survived by operating customer groups on WeChat; the second stage was through KOL distribution; the third stage was fighting from outside to inside, quickly achieving the top spot on Tmall; the fourth stage was doing heavy work. We stepped on many pitfalls, worked on the supply chain, and opened a factory. The A-round financing we got was mostly used to open the factory, working hard every day. Only by making our own factory can we control quality. Only after controlling the supply chain did we usher in the turning point of the project. Finally, Bubble Mask, I participated in this product. From the end of June to early July, with only half a month of investment, it immediately became a product with revenue exceeding 100 million yuan, with monthly sales exceeding one million units. In the first 15 days, we invested 2.6 million yuan in Douyin, generating 120 million yuan in sales, with monthly sales of over one million units. This is a successful case of a Tmall bestseller achieved entirely through Douyin investment. The specific approach: The first stage, IP testing. We prepared story-driven scripts, two scripts with strong sales ability, and found a dozen or so "mid-waist" influencers to invest in, running for two days to see the effect. Then, based on those with good story quality, strong sales ability, and high collection, conversion, and likes, we screened a round to see the IP test results and determine the final script. The second stage: We required all influencers to create according to the determined script and have it appear in large numbers in the Douyin public domain. On the eighth day after launch, Li Jiaqi appeared and started live streaming, posting a Douyin video with an investment of over one million yuan, pulling the volume to the hottest on the entire network again. The third stage: We laid a foundation of "ordinary users" (素人), even those with only two or three hundred followers. Now many Taoke (affiliate marketers) are promoting products on Douyin; Taoke have many accounts, thousands or tens of thousands, ensuring support for the video algorithm, and finally, some traffic will be recommended. The fourth wave of volume: a large number of influencers, even those not cooperating with Bubble Mask, will proactively go to the store to buy, and then shoot interesting videos in the live room.