---
title: "Deep Dive | Big Brands Struggle with Precision, Small Brands with Scale: Where Is the Way Out?"
description: "Big brands face challenges in precision marketing, while small brands struggle to scale. The article explores the rise of small brands like Jiangxiaobai and Everlane, and suggests that brands should combine brand management with business strategy, pursuing personalization at the brand level and scale at the enterprise level."
author: "马法洲  杨 鹏"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-09-30"
language: "en"
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# Deep Dive | Big Brands Struggle with Precision, Small Brands with Scale: Where Is the Way Out?

> Big brands face challenges in precision marketing, while small brands struggle to scale. The article explores the rise of small brands like Jiangxiaobai and Everlane, and suggests that brands should combine brand management with business strategy, pursuing personalization at the brand level and scale at the enterprise level.

Click 'Read Original' for details.
Compared with the plight of big brands, "small" brands such as Jiangxiaobai, Shanzha Gushi, and Toutiao have risen rapidly. In traditional thinking, these small brands had little chance of success: high advertising costs, massive channel infrastructure, and resistance from big brands... So how did they rise?
However, over the past decade, about 4,000 small companies have received $17 billion in venture capital, and new brands have sprung up like mushrooms.
In contrast, big brands are in trouble: Kangshifu, Uni-President, Wahaha, Huiyuan... These once-glorious giants have experienced declining or stagnant performance in recent years, and even their once-dominant brand and channel strategies are being questioned.
**01 The Predicament of Big Brands**
Take Wahaha as an example. In the "2017 China Top 500 Enterprises" released by the All-China Federation of Industry and Commerce, Wahaha Group ranked 327th in revenue, down 56 places from the previous year. The performance is even more striking: from 2013 to 2016, Wahaha's revenue was 78.28 billion yuan, 72 billion yuan, 49.4 billion yuan, and 52.9 billion yuan respectively. In 2017, revenue shrank to 45.6 billion yuan, a cumulative decline of over 30 billion yuan in five years.
So where exactly is the problem? Actually, Uni-President's tea beverage business attempts are more illustrative.
In 2014, Uni-President's tea beverage revenue fell 10.05% year-on-year, but in 2016, it achieved counter-trend growth, increasing market share from 24.8% in 2015 to 27.8%. This was closely related to the contribution of new internet-famous brands like "Xiaoming Classmate."
These big brands traditionally adopted a "**company brand + product category**" approach, emphasizing the dominance of the company brand, like Kangshifu's Laotan Sauerkraut Noodles and Wahaha's Nutri-Express. Through massive media investment, they controlled the discourse and achieved good results in brand awareness, channel expansion, market coverage, and sales. But in the internet era, the marketing environment and consumer behavior have changed dramatically, challenging the efficiency and effectiveness of this approach.
Uni-President's "Xiaoming Classmate" changed the "big brand" strategy, aiming to build a more distinct and independent brand image that is "both tasty and fun." In brand operations, it targeted the post-95s generation, used "seriously funny" as the brand's main axis, and aggressively pursued entertainment and social marketing. It deeply integrated with QQ Family, iQiyi, Miaopai, and other online media, and continuously innovated content based on core appeals, such as the "Funny Theater 32 Scenes" comic series, the "666 Niuniu Niu" themed activities, and the "shameless" packaging that erased facial features, leaving only the face outline, encouraging users to imitate Xiaoming's funny expressions and actions and upload them to Miaopai... This series of creative initiatives fully penetrated the context of young consumers, generating excellent interaction and resonance, and continuously enhancing brand stickiness. As soon as the brand launched, it created an industry miracle with sales of 500 million yuan in five months.
It can be seen that **users are no longer satisfied with brand awareness as a basic brand element. The traditional "brand awareness to brand loyalty" theory starts from the brand, not the user.** Today's users pay more attention to brand values and the relationship between the brand and themselves. Especially with the rise of the younger generation, they are shifting from consuming a brand to belong to a group, to choosing a brand that showcases their individuality, even rejecting mass-market brands because they see mass as "following the crowd."
**Therefore, to meet more diverse needs, brands must become more diverse, which is also why more small brands are rising.** Even high-end strong brands face this dilemma. In 2017, Coach successively acquired Kate Spade and Stuart Weitzman, transitioning from a single-brand to a multi-brand operation. Kate Spade changed Coach's high-end and steady image, positioning itself as affordable luxury, pursuing simple and dynamic designs, bright and bold colors, and a lively and fun lifestyle attitude to better cover young users.
**02 The Rise of Small Brands**
Compared with the plight of big brands, "small" brands such as Jiangxiaobai, Shanzha Gushi, and Toutiao have risen rapidly. In traditional thinking, these small brands had little chance of success: high advertising costs, massive channel infrastructure, and resistance from big brands... So how did they rise?
Everlane is a typical example. In 2015, they had fewer than 100 employees, but by 2016, their valuation exceeded $250 million.
Unlike fast-fashion brands like GAP and Uniqlo, which mass-produce based on a trend and quickly push to market using brand and channel advantages, Everlane focuses more on the relationship between the brand and each user, emphasizing "slow classics" and launching products one by one.
**First, they try to build a highly transparent brand attitude to show respect for consumers.** On one hand, they present the production information of clothes to consumers, such as listing the cost of a garment: $22.17 for materials, $12.39 for labor, and $2.99 for taxes. On the other hand, they refuse to cooperate with "sweatshops" and publish the origin and factory information on their website, including factory photos and worker photos. These practices are basically impossible for other brand operators, but they help Everlane greatly eliminate the "barrier" between consumers and the brand, increase consumer participation, and build brand trust.
**Second, they try to build high-intimacy brand relationships,** fully utilizing social media like Tumblr, Instagram, and Facebook to publish information and directly contact users. Traditional advertising expenses account for only 5% of total company spending. They also created an iPhone app with shopping and weather functions. They also launched "Transparency Tuesdays" on Snapchat, where the company's social media head answers user questions online. However, email remains an important communication channel with users; they send thoughtful private emails, and users can even read the sender's concern.
**Third, they try to provide unique "high cost-performance" brand choices.** Their "slow classic" design philosophy gives the design team ample time to slowly develop an idea, so products don't become tiresome due to over-popularity. On the other hand, they mainly sell products on their company website, where users can register their email and place orders. They have no physical stores and don't sell on e-commerce platforms, eliminating middlemen and reducing costs. Consumers can buy clothes of the same quality at prices far lower than big brands. This high cost-performance has continuously expanded their fan base, with nearly 30% of consumers becoming repeat buyers.
From Everlane's success, we can see that the rise or success of "small" brands has inevitable trends:
First, consumption upgrading: user needs are more diverse and personalized. Compared with big brands, small brands are more focused, with more direct appeals and greater intensity.
Second, the internet, especially mobile internet development, has made online consumption a habit and new media highly developed. Small brands can use data analysis and social media to precisely target, deliver value, and intimately contact users. Users can also conveniently access rich brand information and communicate smoothly, so small brands won't be "buried."
**03 The Growing Pains of Small Brands**
Actually, small brands also have their own troubles.
**Small brands quickly open up by precisely focusing on a "niche" market, but the potential demand in a niche market is limited, and continued development will hit a ceiling.**
Jiangxiaobai, in the stagnant liquor market of recent years, swept through like a dark horse, sustaining rapid growth and achieving sales of 1 billion yuan in 2017 (externally estimated), creating a miracle as a "newbie" brand. Unlike traditional liquor brands, Jiangxiaobai directly targets the young market. Through its unique expression bottles, Jiangxiaobai-style copywriting became a representative of internet copywriting, directly hitting the post-80s and post-90s groups, achieving both sales and traffic.
Jiangxiaobai's success lies in finding a "**niche**" market. In this market, big brands pay little attention. Jiangxiaobai's precise positioning, emotional appeals, and light-taste product design resonate with users. These young users also use Jiangxiaobai as their label to showcase their individuality. They don't even think they are drinking alcohol; they use Jiangxiaobai's brand appeal to express their feelings.
If Jiangxiaobai seeks further growth, it not only needs to deepen its existing core market but also expand into new markets and extend its brand appeal to those markets. This would lead to the dilution or change of its original distinct brand appeal, causing brand generalization, and even being seen as a betrayal by existing "fans."
Even if it enters the mainstream mass market, user values have changed; "Maotai, Wuliangye, Jiannanchun" are the standard. It would be difficult for Jiangxiaobai to establish a similar position as in its current niche market. Even Everlane will face similar issues as it grows; for example, originally emphasizing online sales, Everlane has now started to try offline concept stores, which is a change from its initial approach.
**04 Afterword: Where Is the Way Out?**
**Big brands struggle with precision, small brands with scale. So where is the way out for brands?**
In fact, both big and small brands must accept a fact: **user needs and consumption behavior have undergone profound changes.** Needs are more diverse and personalized, and consumption behavior is more rational and mature. To impress users, relying on gimmicks and halos is no longer possible. Brand positioning must be more precise, and brand image must be more distinct.
Most importantly, the shift must be from brand communication to brand relationship building, starting from values, triggering resonance with users' personal claims and deep-level appeals, aiming to establish closer partnerships with users and turn them into loyal fans and sources of word-of-mouth. **Therefore, it is necessary to make brands "smaller," and of course, also "beautiful" and "quality."**
On this basis, try to resolve the conflicts between big brands and precision, and small brands and scale.
On one hand, for "big" brands, change the single-brand strategy and adopt multi-brand or parent-child brand portfolios. Leverage the influence of the original big brand, break it down into smaller pieces, and establish more "small" brands for different market segments to improve brand targeting. This also helps diversify single-brand risk, like Uni-President's Xiaoming Classmate and Coach's Kate Spade.
On the other hand, for "small" brands, start from behind the brand, use the existing brand's influence to consolidate channels and partner relationships, and then reverse channel operations. Differentiate the new brand from the old brand while leveraging original brand resources, avoiding negative impact on the original "brand."
**Therefore, making a small brand "big" is difficult, and making a big brand "small" is not easy either. It might be better to combine brand management with business management: place the pursuit of market scale at the enterprise level, and the pursuit of personalized user experience at the brand level. The organic combination of the two will help achieve the unity of personalized brand expression and scaled enterprise growth.**
Source: Sales and Marketing (ID: cnmarket)
**October 23-24, during the Autumn Sugar and Wine Fair, New Distribution will host the "2018 FMCG City Distribution Logistics Conference."** We will invite industry experts, FMCG warehousing and distribution specialists, and distributors who have transformed into unified warehousing and distribution platforms to discuss and answer questions about the future development trends of FMCG city distribution logistics and practical cases of distributor transformation, hoping to bring you different inspiration and thinking!
**Conference Time**
**October 23-24, 2018**
**Conference Venue**
**Hunan · Changsha Gaoqiao International Commodity Exhibition and Trade Center**
**Conference Content**
**October 23, Day 1, Sub-venue:**
"2018 Changsha Regional King Development Alliance Conference"
8:00-17:00 Focus on regional big distributor resource sharing, leading the S2B2C new business era
**October 23, Evening 18:30-21:00**
Private board closed-door exchange dinner (VIP)
**October 24, Day 2 Morning, Main Venue:**
**"2018 China FMCG City Distribution Logistics Conference"**
9:00-9:20 Ren Xiaodong, Secretary-General of FMCG Association and Partner of New Distribution: Launch and speech of China FMCG City Distribution Alliance Project
9:30-9:50 Zhao Bo, Founder of New Distribution: Same-city logistics: the most effective transformation and upgrade path for distributors
9:55-10:15 Wang Qi, CEO of Weijie City Distribution: "Follow the Rhythm of Commercial Flow, Focus on Platform Construction"
10:20-10:40 Chen Siting, CEO of Wanchaobang: "New City Distribution is a Key Link in Supply-Side Reform"
10:45-11:05 Xu Yonggang, CEO of Maidelin: "Differences Between Traditional Warehousing and Digital Warehousing"
11:10-11:30 Mu Wei, CTO of Zhoupu Software: "Technology-Driven Efficiency Improvement in Unified Warehousing and Distribution"
11:35-12:05 Roundtable Forum: City Distribution, What Exactly Should We Earn From? (Yishang Logistics, Gongwu Logistics, Kai Dongyuan, Yun Cangpei, Chengpu Logistics)
**October 24, Day 2 Afternoon, Main Venue:**
14:00-14:20 Sheng Yan, Yijia Logistics
14:25-14:45 Wang Jianjiang, CEO of Hailian Tianxia
14:50-15:10 He Yan, Fengwang
15:15-15:35 Zhong Shuo, CEO of Wangcang
15:40-16:00 Rong Jun, CEO of Jiangsu Huashang City Distribution
16:05-16:25 Lu Lixin, Gongwu Logistics
16:30-16:50 Roundtable Forum: How to Break Through When Distributor Peers Don't Enter the Warehouse?
Distributor transformation representatives: Shandong Yunbang Logistics, Hubei Pengdun Meiyitian, Jilin San Province United Purchase, Jiangsu Huashang City Distribution, Hebei Wulian Cloud Warehouse
**List of Participating Companies**
In no particular order
Hunan Zonglan Diandan Network Technology Co., Ltd.
Jingbang (Wuhan) International Freight Forwarding Co., Ltd.
Mengniu Dairy
Qinghai Hanxiang E-commerce Co., Ltd.
Unilever Services (Hefei) Co., Ltd. Shanghai Branch
HC360
Hunan Xuan'ang Food Co., Ltd.
Guangzhou Tongdaoren Information Technology Co., Ltd.
Qingdao 888 Trading Co., Ltd.
Uni-President Enterprises (China) Investment Co., Ltd.
Hunan Province Zhongxiang Gongpei Logistics Co., Ltd.
Shenglong Ingredients
COSCO Shipping Logistics Warehousing and Distribution Co., Ltd.
Guangxi Yongpai Liquor Industry Co., Ltd.
Shangqiu Kangrong Trading Co., Ltd.
Jinan Dingzhong Economic and Trade Co., Ltd.
Liaoning Bimai Agricultural Technology Co., Ltd.
Kunming Xiongjia Trading Co., Ltd.
Shaanxi Houheng Trading Co., Ltd.
Guangzhou Dingwo Enterprise Information Consulting Co., Ltd.
Shaodong Jiajiale Commercial Firm
Boda Trading
Industrial Bank Changsha Branch
Wuhan Mucheng Convenience Store Chain Co., Ltd.
Fujian Fuxing Cloud Warehouse Logistics Co., Ltd.
Guizhou Yilimi E-commerce Co., Ltd.
Jiangxi Xiao Laoer E-commerce Co., Ltd.
Jinshan Koufu
Shanxi Taihang Yuanjing Supply Chain Management Co., Ltd.
Shanxi Dezhun Supply Chain Management Co., Ltd.
Shaoyang Tongdeli Trading (Xiangbang Logistics)
Huanfu
Tongda Express City Distribution
Beijing Xinjingxiang Food Co., Ltd.
Wuhan Huizhong Tianhong Liquor Co., Ltd.
Changsha Paide Biotechnology Co., Ltd.
Chao'an Tuqiang
Guizhou Yihe Bopin Supply Chain Management Co., Ltd.
Jiangxi Kang'en Industrial Development Co., Ltd.
Xiangtan County Yisuhe Town Yuhua Paper Store
Luoyang Yuanlang Trading Co., Ltd.
Tongchuan Yaozhou Huayuan Supermarket Co., Ltd.
Hunan Yongfu Jiujiu Trading Co., Ltd.
Zhejiang Chengchengtong Logistics Co., Ltd.
Chongqing Kaiguo Materials Trading Co., Ltd.
Beijing Xianmaixianmai Data Technology Co., Ltd.
Hanchuan Qixing Trading Co., Ltd.
Tongxin Jiuzhi Trading Co., Ltd.
Guizhou Meiguo Guoguo Network Technology Co., Ltd.
......
**Distributor Transformation Representatives (Proposed)**
In no particular order
Rong Jun, Chairman of Jiangsu Huashang City Distribution Network Co., Ltd.
Wang Bo, Chairman of Hubei Yijiaren Logistics Co., Ltd.
Jiang Shuming, General Manager of Chengdu Xingrenxing Trading Co., Ltd.
Liu Jichen, Chairman of Shandong Yunbang Warehousing and Logistics Co., Ltd.
Tu Mingyu, Chairman of Chongqing Lingyu Consumer Goods Supply Chain Management Co., Ltd.
Yang Su, Chairman of Guangzhou Zhongshan Wanrong Marketing Co., Ltd.
Yuan Xia, Chairman of Sichuan Bajie Supply Chain Management Co., Ltd.
Li Qiangyun, Co-founder of Hubei Pengdun Meiyitian Supply Chain Management Co., Ltd.
Zhang Jianyong, Chairman of Xuchang Jiulegou E-commerce Co., Ltd.
Ma Haichao, Founder of Hebei Changyi Logistics Co., Ltd.
Meng Yucun, General Manager of Hebei (Chengde) Wulian Cloud Warehouse Co., Ltd.
Zhang Xun, Chairman of Urumqi Su'an Jinchi Logistics Co., Ltd.
Zhang Hailing, Chairman of Jilin San Province United Purchase
Qiang Huitao, Founder of Hebei Dunjie Supply Chain Management Co., Ltd.
Liao Lei, General Manager of Hunan Damei Supply Chain Management Co., Ltd.
......
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