In recent years, amid the wave of consumption upgrading, a batch of localized, personalized, and precisely positioned consumer brands have leveraged precise positioning to continuously innovate in products and marketing, becoming leaders in their segments and gaining capital favor. At this juncture, how should we view consumer entrepreneurship? What are its main development models? What qualities do consumer entrepreneurs need most? What are the real opportunities for new consumer brands? Recently, the third session of the Wild Grass New Consumption Forum was held at Zhongguancun Entrepreneurship Street, with the theme "The Winning Path for New Consumer Brands" . Six outstanding entrepreneurs and investors in the new brand field were invited to share insights, and the sharing lasted four and a half hours, sparking many deep thoughts about the industry. Among them, Li Qian, founder of Emotion Technology, gave a keynote speech titled "Observations and Thoughts on New Consumer Brands" . She previously served as Managing Director at Tsingshan Capital and is a seasoned brand marketing expert. Based on her observations and entrepreneurial practice over the past year, she believes:

  1. Brands are luxury goods in the consumer world; they need nurturing. Brands are results and culture; marketing is a means, a mindset, and an execution process.
  2. There are two models for consumer goods: one is selling goods: traffic, de-branding, fast; the other is consumer insight and service: insight, brand-heavy, slow.
  3. Consumer entrepreneurship is not sexy; entrepreneurs must have hunger, meticulousness, endurance, and the ability to withstand loneliness; everything else is a bonus.
  4. In the future, there will be new forms of division of labor, new management methods, new profit distribution methods, and new models of consumer cooperation through mergers and acquisitions. Speech | Li Qian In 2017, I started my own business. Many people have the impression that I keep changing directions, but for me, there is a main axis that has never changed: the consumer brand I firmly believe in. From media to brand, to investment institutions, and then to entrepreneurship, I have always viewed consumption from different angles. Consumption seems very lively now. People think that new retail is a big trend, but when you actually do it, it seems there isn't much room for growth. However, I still am very optimistic about it because the gap between China and the rest of the world in consumption is too large. We have differences in many other things, but China is such a big country with so many people, such strong consumption power, and such a rapidly rising middle class. The gap between us and the world in consumption should not be this large. Currently, China's per capita GDP is over $9,000, equivalent to the level of the United States in the 1970s. All levels of consumer enterprises, including management, branding, and marketing, are still far behind, as I can clearly feel. Not long ago, at a meeting in Shanghai, I raised a question: Can China produce world-class brands like Starbucks or IKEA in the short term? This question sparked intense discussion at the time. I have no doubt that with China's current scale and consumption power, China can produce companies with even larger revenue than those, but I doubt whether China can produce such world-class brands in the short term. Because currently, China's capability in brand building is insufficient. Many Chinese consumer goods companies are striving to do marketing, increase sales and traffic, but they are not yet focused on building brands with heart. I believe that brands are luxury goods in the consumer world; they need to be nurtured. Brands are results and culture; marketing is a means, a mindset, and an execution process. From the very first day of a brand's birth, there must be a very clear cultural awareness: What kind of culture do I want? To what degree? What cultural crystallization can be formed after many years? I think this is difficult to replace in the short term. Brands need time to nurture, so they are luxury goods. Now, for consumer entrepreneurship, I think there are two ways to play. The first is called selling goods. The second is called consumer insight and service; you sell insight and service. What does selling goods mean? Simply put, you have goods, I have traffic, platforms, and channels, and I can help you move goods quickly. But I think this traditional model of selling goods is difficult; it requires strong experience accumulation, capital turnover, low costs, and improved operational efficiency, and finding a good traffic platform. That is the logic of selling goods. Moreover, selling goods emphasizes traffic; wherever there is traffic, you go to sell. This process is de-branding. On Pinduoduo, the brand attributes of products are weakened; it acts as a huge traffic entrance to attract merchants to sell goods. This model ultimately forms the platform's brand, not the merchant's personal brand. Getting traffic at the expense of brand is also the logic of selling goods. Some people say, "My dream is to create my own brand and then sell goods." I say, "Sorry, repeat your dream." Selling goods may not sound sexy, but it is not shameful; its logic is completely OK. It is the thinking of a merchant, the model of a businessperson. But you must accept the fact of de-branding in the short term, and you must be good at inventory management, warehousing, logistics, etc., with high efficiency in all links. If you do these, you can also run fast. The second is called consumer insight and service. This model suits those internet people who have not sold goods, not calculated accounts, and not done warehousing and logistics. Selling this service first means selling insight, emphasizing brand, but you must accept the fact that development may be slower. So, are you willing to spend a long time polishing a brand? Are you willing to take 10 or 20 years of your life and devote it to a consumer product, even if it might just be a spicy strip, a toy, or something else? But this itself is also a growth model for consumer goods. This process is destined to be long, so you must be prepared for a long-term struggle. Of course, after your brand is established, it may turn into a model of selling goods. I think there are still opportunities in the field of selling goods, because traffic appears in waves, whether it appears on Xiaohongshu, WeChat, or mini-programs, wherever it is, traffic never sleeps. Furthermore, consumers' time is divergent, and their attention constantly shifts. That is to say, in the entire world of consumer goods, there is a phenomenon of complete disloyalty in attention. So, don't worry about missing a certain wave of dividends; dividends come every year, like leeks, crop after crop, spring breeze blowing and growing again. The consumer goods industry is an industry that looks low-threshold but is actually very high-threshold. For example, if I make popcorn, throw it in a pot, pop it, and then box it and sell it, it seems there is nothing to say, but things are not that simple. Whether you make snacks or tea, you will find that the friction and resistance in the middle are unimaginable. When you look at consumer goods as a project, you think it's a good thing with great opportunities; when you talk to investors, you talk about lofty things, but when you return to the company, you find it's all trivial and complex things, so trivial that you are too lazy to describe it to others again, and so complex that you have to consider every link including goods, logistics, packaging, supply chain, etc. Consumer entrepreneurship is not sexy; it is easy to make a wish, but execution is particularly difficult, fully testing and honing one's patience. If you want to build a big brand, you really need to be mentally prepared to endure hardship and fight a long-term battle, but I still firmly believe in the growth space of Chinese consumer goods, because China has such great purchasing power, explosive power, and the big trend of middle-class rise, and we still have very few consumer brands that we can truly show off. In my view, there are four qualities that consumer entrepreneurs should possess most; everything else is a bonus. First, hunger. Many friends around me came to do consumer entrepreneurship, but later gave up because it was too troublesome. Because this "trouble" will wear away all your insufficient hunger. Of course, this hunger also includes hobby, that is, you truly love this thing, hungerly love it, so you don't think it's troublesome. Financial statements are boring, but some people enjoy reading them; they love this thing. Hunger is what I think is most important for consumer entrepreneurs, and I put it first. Second, meticulousness. If you are not sensitive to numbers in the consumer goods industry, it is also troublesome, because consumer goods, especially mass consumer goods, have razor-thin profits. At this time, if you are still careless and don't look at the accounts, you won't make money. It's that simple. Third, endurance. This process may be painful, especially in the early stage. There may not be so many teams for you to assign tasks; more often, you have to carry it alone, fix things, pack, carry goods, but you must endure and persist. You must put down all the cognitions you had in the past and do these things down-to-earth. Fourth, withstanding loneliness. Earlier we mentioned whether you are prepared for long-term loneliness, because even if you may temporarily have some internet celebrity phenomena, if you really want to do it long-term, you still have to withstand loneliness. A thing cannot be focused on for a long time, continuously exposed; the years in between when it is not exposed, not focused on, or even not favored, need us to endure loneliness and get through. Advertising—channel—service is what I think is an evolutionary trend in the field of FMCG entrepreneurship. China's first-generation consumer brands, like Wahaha and Naobaijin, took the path of advertising. As long as you could get advertising, you could get sales; as long as there was advertising and sales, then exposure and brand would all be there. But that era of concentrated traffic is gone forever. Next is channels. Like Three Squirrels, which we mentioned, and some brands built from subscription accounts, they have built very strong channels. Some offline brands have also leveraged very strong distributor channels, making their sales and scale grow large in a short time. Finally, I think it will move towards service. From my personal feeling, we currently have no concept of consumer service; in the past, we only had selling goods. You give me a dime, I give you a candy; that is the transaction logic between us. But now, you will find that the things you buy have copywriting, design, and various added values. Answer Tea is doing very well; it is a typical service-driven type, which is also the second model I mentioned earlier. In the past, when I drank a cup of tea, I gave you money, you gave me a cup of tea, I drank and left, you collected the money and said goodbye, and we had no more relationship. But now, while drinking a cup of tea, you provide me with multi-level services, including psychological counseling, divination, etc. I believe they will have more ways to play in the future and make services better. On the logic of traditional selling goods, if you carry a service value, then the goods you sell are essentially different from the original goods. 1. The brand road is rugged; are channel brands the future? China's market competition environment is very harsh, and I believe everyone has a deep understanding. In China, many copycat brands may appear overnight, especially in the tea and light dining fields. This year, I attended an event, and as soon as I entered, I was shocked. Besides Jiangxiaobai, there were actually Jiangxiaobai and Jiangxiaobai. China's market competition environment is very peculiar; it directly reflects a naked kill-or-be-killed competition. You don't need to talk to me about sentiment or morality; we only talk about who makes more money. So the brand road for entrepreneurs must be very rugged. Then, are channel brands the future? If everyone firmly believes that single products are hard to do, traffic is becoming more fragmented, or the cost of building a single brand is increasing, then we can consider playing the channel card. In the past, channels were formed by using one method to string together traffic; when traffic came, my channel was formed. Channel brands like Pinduoduo have created a new organizational model for channel brands: by attracting all the people and attention through group buying and low prices. As for supply, don't worry; China has too many suppliers now, and the supply chain is saturated. In addition, I think there is still room for business model innovation; you need to create a new way of organizing channels. As for how to view the opportunities for new consumer brands, the stupid method I can think of personally is: Channels gradually turn into brands through service. Seize the opportunity, enter the channel first, rely on this channel to do good service, and then build an independent brand. Ultimately, whether a company can stand firm and have its own core competitiveness depends on whether you have a complete brand. Many Chinese consumer goods have trademarks and exposure, but no brand; influence does not equal brand. Some brands are constantly exposed and sell a lot of goods, but in the end, the company collapses and disappears because it is not a real brand. A real brand is a culture and is not easy to disappear. 2. What new models will emerge under new consumption? I think in the future consumer goods field, China will see a large number of mergers and acquisitions. We said that consumption needs to be nurtured slowly, brands are luxury goods, and starting from scratch is a long process. But M&A can accelerate this process, so it is a new model of consumer cooperation and a direction that entrepreneurs can think about when starting a business. In the future, there will also be a consumption thinking called new division of labor, new management methods, and new profit distribution methods. This is a question I throw out for everyone to think about today. We should no longer think about consumption with old thinking: I build a factory, I produce goods, I package, I do marketing. It's not like that. Because in the future, our consumption may be broken up and then horizontally sliced; some people specialize in goods, some in packaging, some in branding, some in supply chain finance, etc. There will be new management methods and profit distribution methods. In fact, this division of labor has already begun. Source: Wild Grass New Consumption (ID: yecaoxxf) -END-