Click to read the original article for details. Chili sauce, a market of 40 billion yuan, has only one leader: Laoganma. According to public data, Laoganma's annual sales are around 4.5 billion yuan, accounting for about 10% of the total market share. Other brands are scattered across regions, with obvious regional characteristics, presenting a pattern of "one superpower, many weaklings." Perhaps it is precisely because of this market environment that chili sauce has attracted the pursuit of entrepreneurs. Liu Siyan, a former executive at a Fortune 500 company, started the brand "Langcai"; celebrity Lin Yilun founded "Fanye" chili sauce, securing three rounds of financing in just two years; 64-year-old Yu Yanrong left her post as president of a listed company to enter the chili sauce business; Yang Shunlin, former editor-in-chief of Tencent's business channel, founded "Xiaoshimei" in 2015... Whether driven by personal preference or a keen sense of market opportunity, the entrepreneurial track in the chili sauce category seems never to have stopped. Although some have become martyrs, this has not affected the sustainability of the category's momentum. As the saying goes, the more "bustling" an industry, the more likely it is to progress. Today's protagonist, "Hubang" chili sauce, is one of the participants. Recently, New Distribution interviewed Mr. Hu Qiaosong, co-founder of Hubang chili sauce. As one of the many entrepreneurs in the chili sauce field, he knows well that although the market prospects are broad, truly entering and gaining a foothold is not easy. Laoganma's strength is not just brand strength; in terms of price, it sets the benchmark for the industry—too high and it won't sell, too low and it won't be profitable. At the same time, the chili sauce category has certain peculiarities: First, most consumers treat chili sauce as a condiment. Since it is a condiment, it naturally appears as a supporting role, optional. In this context, even though many entrepreneurs try to add meat or vegetables to turn a condiment into a main dish, the results often run counter to expectations. For consumers, a glass jar is hard to truly become the "protagonist" of a meal. In the daily "four dishes and a soup" environment, consumers rarely think of or are willing to treat chili sauce as a main dish. When consumer cognition is deeply ingrained, change is difficult. Second, the consumption of chili sauce varies significantly by region. Each region has different taste preferences, and the growing environments for chili peppers differ. Additionally, the easy availability of raw materials, simple processing, and convenient production lower the entry barrier, but cross-regional scaling is relatively difficult. Hu Qiaosong told New Distribution that at the beginning of the venture, Hubang conducted channel research in nine provinces and found that chili sauce is a relatively special industry. Laoganma's high distribution rate, high awareness, and strong brand power secure its top position in each province, but the second brand in each province is different. Although the vacancy for the second brand presents an opportunity, it has not been broken for years, which indirectly confirms the regional differences in chili sauce consumption. Facing such a complex and tempting market, how to carve out a path of its own once troubled Hubang. Hubang Sets the "Two Don'ts" Principle In the past, for a traditional brand to establish itself in the market, the conventional sales model was CCTV plus supermarkets—advertising online and distributing offline. As long as the brand effectively controlled a few media outlets and a few channels, and efficiently delivered products, consumers could see and buy them offline. But now, the internet has fragmented consumer behavior. Both channels and media have changed, and consumer demands have become increasingly diversified. In short, in the past it was "people looking for goods," but now it is "goods looking for people." The failure of traditional tactics led Hubang to set the "two don'ts" principle during its exploration: First, don't do anything that is the same as the traditional sales model, i.e., the advertising-plus-channel model; second, don't do anything that is the same as competitors' models. Laoganma's success is not replicable; the models of some other innovative brands may not last and remain to be verified. Based on these two points, Hubang began exploring multiple directions and forms. Hu Qiaosong told New Distribution that since starting the venture in July 2015, they tried many methods, including traditional content, content e-commerce, various O2O models, industrial parks, cafeterias, new retail, and so on. By chance, Hubang discovered the emerging "delivery" opportunity. The team spent nearly half a year on partial validation. By early 2016, Hubang decided to fully commit to the delivery scene, abandoning all other forms, concentrating efforts on solidifying the delivery consumption scenario. In Hu Qiaosong's view, the delivery scene matches the dining environment for chili sauce well; moreover, the delivery demographic is young people who are willing to try new products and are less price-sensitive; finally, the closed channel of delivery is also suitable for Hubang's early stage, with relatively low costs and risks. It is understood that to date, Hubang has developed over 100,000 restaurant terminals through the delivery scene, with an average annual growth of 200%. In 2017, the delivery market exceeded 300 billion yuan; data shows that in 2018, online delivery market revenue reached 471.2 billion yuan. For the chili sauce category, a huge dividend market has formed. New Scenes Require New Models Although it is a large market, for Hubang, the new scene also means many variables. According to Hu Qiaosong, in the first half of 2016, within just six months, Hubang pushed into 20,000 delivery terminals. But after distribution, sales showed severe polarization. Good stores had high sales; bad stores had extremely poor sales. The channel is the same offline dining, and Hu Qiaosong, a traditional marketing professional, was puzzled. After a period of exploration, he discovered the pattern: because the internet has no physical radius limit and directly connects consumers, traffic distribution exhibits a "head effect." For example, two adjacent ramen shops—one good, one average—relying on location, would generally not have vastly different natural traffic. Although business may vary, it wouldn't differ by more than double. Online, without spatial constraints, relying solely on word-of-mouth, the gap quickly widens. After discovering the uneven traffic distribution, Hubang abandoned the pursuit of network coverage and instead adopted precision strikes and deep service to merchants. Hu Qiaosong told New Distribution that on the delivery end, chili sauce is not just a complementary product; behind it lies a complex procurement relationship. At the same time, compared to other FMCG products, its consumption attributes lack independence. The optional nature, combined with uneven traffic distribution, requires Hubang to form deep cooperative relationships with merchants to take root in the delivery scene. He revealed that in this cooperative relationship, they actually act as a "marketing department," using the delivery platform as a carrier and merchants as targets for deep operations. At this point, the function of ground staff has shifted from a single distribution role to distribution plus service, with organizational upgrades and iterations. Chili Sauce Is Just the Beginning After nearly three years of effort, Hubang has gradually established a foothold in the delivery scene. With a basic model market in place, Hubang began seeking its second growth curve. Hu Qiaosong told New Distribution that for a startup like Hubang, delivery is the first battlefield where Hubang has stood firm. In the next stage, besides continuously replicating and expanding the delivery scene, they also need to open a second battlefield. Because Hubang has taken an "unconventional" path, with no reference experience or mature tactics, only through exploration and trial, and continuous iteration and error correction, can it forge its own path. In Hu Qiaosong's view, only through continuous iteration, constant experimentation, and sufficient genetic mutation can Hubang have more possibilities!