A food startup launched its Taobao store in May 2018, with sales exceeding 2 million yuan in the first month; less than a year later, in May 2019, it became the top seller in Tmall's cereal category, and by September, it ranked first in the entire Taobao/Tmall instant food category. In 2019, it participated in 11.11, defeating Quaker, Calbee and other cereal veterans to win first place in Tmall's oatmeal category, with annual sales growth of over 20 times; subsequently, it was named Tmall's 2020 Benchmark Brand and the No.1 new grain meal replacement brand most loved by consumers. This company is the internet-famous 'explosive' brand 'Wangbaobao' cereal. As the 'fastest' growing food startup, Wangbaobao's growth rate is astonishing. Of course, behind the rapid growth, capital support is indispensable. In January 2019, it received a tens of millions angel round financing from Caitai Capital and Dexun Capital; in January 2020, it received a tens of millions A round financing co-led by Source Code Capital and Vertex Ventures. △Wangbaobao founder Yao Jing Recently, New Distribution had an in-depth exchange with Ms. Yao Jing, founder of Wangbaobao. As a food startup, how did it manage to rise abruptly in a very traditional cereal field? You should know that in the past, the core consumers of cereal were middle-aged and elderly groups, but now, Wangbaobao almost single-handedly successfully introduced cereal to young consumer groups, not only making it a hit product, but also driving the upgrade of the entire category, giving the 'old category' new vitality. -01- Established less than 2 years, achieving over 95% designated purchases Frankly speaking, in the current era, consumer needs have been fully met by various enterprises. For an enterprise to stand out, it must shift from 'meeting needs' to 'creating needs'. And recreating a category, or redefining consumers' perception or consumption scenarios of a category, is the opportunity for startups to break through. Before 2018, as a beauty and food blogger, Yao Jing found that young women in China were very keen on following and discussing food topics, and these consumer groups also preferred foods that are 'delicious but not fattening'. According to the data from the food accounts operated by Yao Jing and her team, staple-food-oriented and healthy products also had the best online sales conversion. After careful research, Yao Jing decided to take the traditional cereal category as the first 'physical' entrepreneurial foothold. Let's briefly review the domestic cereal market, which can be roughly divided into two categories:
The first is Western-style naked oats represented by Quaker, high in fiber and low in starch, mainly for health meal replacement for middle-aged and elderly people; The second is puffed oats represented by Japan's Calbee, which taste good but are easy to gain weight. Based on this background, Yao Jing combined the advantages of these two types to develop low-temperature baked roasted cereal that is both delicious and healthy, seizing the pain point of young consumers who 'love to eat but fear gaining weight'. After determining the R&D direction, Yao Jing began to polish the product, continuously collecting user needs through the original fans from operating the food account, and then determining flavors. Next, internal testing and screening were conducted, recruiting users to try and give feedback, further fine-tuning and iterating the product, and finally launching it to the market. For a completely new category and brand, Yao Jing used various new traffic platforms such as Xiaohongshu, Douyin, Kuaishou, and Bilibili to find KOLs to plant seeds for Wangbaobao. To guide more KOCs to share, Wangbaobao launched activities like 'Write a note to get free cereal' and 'Baobao flips cards' on various new media channels. By leveraging past new media operation advantages, coupled with category innovation that caters to consumption trends, Wangbaobao eventually became the 'synonym' for the cereal category in less than two years. There is a piece of data that I think is enough to prove Wangbaobao's momentum: in 2019, 95% of sales came from consumers' 'designated purchases'. Simply put, out of 100 target consumers, 95 opened Tmall and directly searched for the Wangbaobao brand, then clicked to buy. Behind this data, it shows that consumers are not choosing cereal, but choosing Wangbaobao. -02- Expanding into offline markets, but it's just a sales battlefield At the beginning of 2020, Yao Jing decided to fully expand into offline markets. You might wonder, from a business perspective, with less than 2 years since establishment, there should still be a lot of room for growth online, so why rush to go offline? Regarding this, Yao Jing explained that in the past nearly 2 years, we never thought Wangbaobao was doing 'sales'; we have always insisted on building the Wangbaobao brand, how to make users like it, and how to make the product better. The 95% designated purchase rate also shows the efforts Wangbaobao has made in the past. That's the first point. Second, whether online or offline, it has never been separated. Market and sales may be separated, for example, online Tmall is a carrier for sales. Similarly, offline stores, supermarkets, convenience stores, etc., are also sales carriers for Wangbaobao. We do marketing and branding online, and going offline is just to get closer to consumers. As a food product, cereal is relatively immediate, and Wangbaobao hopes users can buy Wangbaobao more easily. Third, during 2019, through Tmall data, we saw that the new category of 'fruit cereal' was growing very fast. It can be said that Wangbaobao and other brands did a lot of user education in this process, and some young consumer groups have already developed the habit of consuming cereal. Judging from past experience, when a category is very popular online, it is highly likely that it will spread offline after 1 year. 2020 is the right time. In Yao Jing's view, the offline cereal market will be ignited by the online heat. Of course, Wangbaobao's offline expansion is not without challenges. Offline sales are not as good as online, which has instant information communication and feedback. Offline, products are relatively static, and the information that can be given to consumers is very limited, with no more space for dialogue. Compared with brands that have been deeply cultivating offline for decades, Wangbaobao's brand awareness is not that high. Regarding this, Yao Jing admitted that offline shelf sales is a big subject. In the past, traditional food companies' approach was to advertise, build brand awareness through CCTV and satellite TV, and do sales offline. Although it has become ineffective now, the good thing is that online and offline are increasingly integrated, and the separation is not so serious. At the same time, the emergence of some new media, such as Focus Media, can also achieve precise targeting of target consumers. Some digital new retail platforms like Hema Fresh can achieve precise user reach. For offline brand promotion, at the beginning of this year, Wangbaobao launched a 'spokesperson model', inviting Liu Tao as spokesperson. Not only that, Wangbaobao will also focus on IP co-branding with some trendy well-known brands. Through a combination of various forms, not limited to a single online channel, to expand brand momentum. -03- Why can innovative consumer brands break out from giants? As traditional FMCG enterprises, strictly speaking, they are not lacking in product R&D. FMCG giants are very professional in nutrition, raw materials, and formulas, and their market and brand have been explored and cultivated for at least ten years, far surpassing innovative consumer brands. But why do they seem a bit 'old and sluggish' at present? Yao Jing told New Distribution that the core difference between startups and leading enterprises is the business logic. Leading enterprises often first have a product, then extract selling points based on the product, and then do brand promotion and market sales. Startups, on the other hand, often first study current users, gain insights into users, and then have the product. Through continuous communication with users, they refine product selling points and corresponding brand promotion strategies. Consumers today are severely stratified. Facing the same product, different young consumer groups have different demands. This means that using one model or a comprehensive product to satisfy all segmented consumers is no longer realistic. The 'professionalism' of leading enterprises can make products professional, but in addition to professionalism, in the current era, there must be insight into user needs to develop products suitable for young target groups. Looking back at the rise of innovative consumer goods in the past two years, we can find that startups can take shortcuts under the shadow of giants. A very important point is that in the era of universal online presence, startups are increasingly easy to obtain insights into users, and this insight is real-time, 1-to-1, and zero-distance. Although traditional giants are also very professional in user insight, obviously neither in time nor distance can they be as fast and effective as startups. For example, hiring Nielsen or Kantar Consulting to do consumer trend research, combined with the company's understanding of the product, to determine the R&D and production direction. This process may take half a year. For startups, 6 months is enough to complete the product from 0 to 1 stage. Not only that, from a business perspective, traditional giants already have a mature market, and the core business demand is growth, especially sales growth. Therefore, the key internal indicator is sales or market orientation. Startups have no existing market, and every sale can be said to be snatched. As the saying goes, 'The barefoot are not afraid of those who wear shoes.' Without growth pressure, the focus is on user management and brand building. At the same time, organizational flexibility allows startups to iterate quickly. However, traditional enterprises have serious departmental walls, each department has its own KPI, and in daily operations, there is no unified goal, making rapid iteration impossible. This is also the so-called 'big company disease'. Of course, this does not mean that startups can always win. Good startups complete the 0 to 1 stage, and as long as the organization grows, they may also face 'big company disease'. Nowadays, the popularity of the internet, with 1-to-1, zero-distance dialogue with users, provides startups with excellent growth soil. This is also the opportunity given to startups by the times. As traditional giants, big company disease is an objective fact that cannot be avoided, but the key is to learn the ability of startups to communicate with users. I think this is also the key reason why Wangbaobao stood out in less than 2 years, especially in this rapidly changing era. The first time to dialogue with users and insight into user changes gives it a first-mover advantage in business! If you want to communicate with the author, long press to add WeChat. When adding, please indicate your company/position and name. If a tip is adopted, a reward of 400-2000 yuan will be paid.