Hello everyone, I'm Lin Zhenghuan, partner of Dingding Lazy Dish. Dingding Lazy Dish is a pre-made dish company targeting C-end consumers. We were established in February 2020, with our parent company being the B-end supply chain brand Dingding Fresh Food. Dingding Fresh Food focuses on supplying semi-finished dishes to convenience stores in first-tier cities, with partners like 7-Eleven and FamilyMart. In 2014, we also launched the popular food delivery app "Go Home for Dinner" in Beijing, Shanghai, and Guangzhou, which was once valued at nearly 2 billion yuan. 2021 was a year of life and death for us; we almost stepped on all the pitfalls that new consumer brands encounter. Not only were sales dismal, with average monthly Tmall sales in the first half of the year only a few hundred thousand, but we also faced pressure from team members leaving in large numbers and the project being shut down. But in the second half of the year, we turned to Douyin. Although we paid a lot of tuition, our efforts paid off. In January just past, we achieved a monthly sales of 50 million yuan on a single platform on Douyin. A few days ago, I shared the ups and downs of this year with my old friend Jingyi, editor-in-chief of BotF Future Brand. She encouraged me to write down these feelings as a lesson for other brands. So here I am to share with you the N pitfalls we stepped on last year, the N detours we took, and some experience and methods on how new brands can scale up. The Pitfall of the Initial Platform "To build a brand, go to Tmall." This is the most familiar saying in the brand circle. Since our parent company is a supply chain brand, we yearned to build a consumer brand. Moreover, at that time, the common belief in the industry was to build a brand on Tmall, so even though we knew nothing about Tmall, we decided to establish ourselves there. We launched on Tmall at the end of May 2020, but as soon as we opened the store, we found that the basic volume of the sauerkraut fish category on Tmall was very small, making it hard to get traffic from within the platform. So we thought: how can we drive external traffic to grow on Tmall? We started looking for various celebrities and influencers to do live streaming to bring in traffic. On July 3rd, we had a grand cooperation with Douyin's top influencer Luo Yonghao. That live stream achieved sales of 400,000 yuan, and that month's Tmall sales reached nearly 1 million yuan, which was our brand's sales peak in 2020. But our overall sales were very unstable because influencer带货 contributed 50%-60% of total sales, while the brand's actual daily sales were actually poor. At the year-end review, we found that we had spent several million yuan on promotion, but the average ROI hovered between 0.8 and 1.5, with very poor advertising results. Luo Yonghao's live stream was the best in terms of ROI, costing us no more than 150,000 yuan. We summarized the reasons for the failure of external live streaming traffic, mainly three points: First, the early live streaming market was chaotic; second, the high slot fees of 20,000-30,000 yuan were hard to recoup; third, as a new brand, we lacked confidence and had to spend more when cooperating with bloggers and celebrities. The golden sales period for pre-made dishes is from November to February each year, covering the entire Spring Festival period. Logically, our sales should have improved at the end of 2020, but the overall data remained dismal. The reason was not the market conditions but internal issues. Most of Dingding Lazy Dish's sales came from live streaming带货, making sales very unstable, and the brand had no solid business foundation. Even at the end of 2020, when the entire category grew 2-3 times, we still couldn't catch the wave. In general, we didn't do well in 2020, mainly because we didn't find the right base. For newcomers, doing Tmall requires a long time to figure out. The pre-made dish category is not large enough on search-based e-commerce platforms like Tmall, directly because there is no consumer awareness, so there won't be basic sales. Moreover, food is a low-margin category, and it's very difficult to start based on search logic on shelf-based e-commerce platforms. Tmall's own platform growth and existing volume are small, making category growth difficult, and brand growth must be based on category growth. If there is one lesson to share, it is that when new brands decide whether to start on Tmall, they should first assess whether the category has a basic base on Tmall. **If the monthly sales of the pre-made dish category on Tmall is only 10-20 million yuan, it's hard for a pre-made dish brand to succeed on this platform. But if it's a mature category wanting to differentiate on Tmall, that's possible, but the cost will be relatively high. In the overall consumption upgrade environment, many pre-made dish brands will emerge, but it's less likely on Tmall. The Pitfall of Company Location Our parent company is in Beijing, so Dingding Lazy Dish also started in Beijing. At that time, our brand growth was very sluggish, and many team members left one after another, leaving only about 10 people in Beijing. We attributed the brand's failure to our lack of Tmall expertise, so we hoped to move closer to the e-commerce industry belt to get more information and resources to do better business. So at the end of September 2020, we moved the entire team to Hangzhou. Initially, we used a friend's temporary office, and later we moved the office directly near Tmall, re-establishing the e-commerce operations team. In October, we had an independent office. The advantage of locating near the industry belt is abundant information and resources. Beijing is relatively weak in e-commerce and Tmall information resources, while Hangzhou has many e-commerce talents and experts. For new brands, the team should continuously learn from those who have achieved results, which is greatly beneficial for brand development. After coming to Hangzhou, we had more opportunities to communicate and learn, and also chances to meet various people. The e-commerce circle in Hangzhou is very open; people don't hide things but genuinely share and improve together. For example, if we encounter Tmall traffic issues, many experts in Hangzhou who are good at Tmall traffic are willing to share their ready-made experience with us, and we then practice with our own products. Doing business here is like taking an open-book exam; others' successful experiences are in front of you, and it depends on whether you can copy them. There is a fundamental difference in e-commerce atmosphere between Hangzhou and Beijing, and there are also differences in labor costs, but the most important is the difference in the basic e-commerce industry belt. The Watershed: Abandoning Tmall for Douyin When we thought moving to Hangzhou and being closer to Tmall would solve our growth problem, reality gave us a resounding slap. At that time, we faced three major difficulties: first, no scale; second, no growth; third, low team morale. The brand hadn't gone from 0 to 1, and we couldn't find any breakthrough direction. Just as the parent company was determined to cut this business line, we decided to make a last-ditch effort, turn the ship around, and explore other platforms. At that time, both Douyin and Kuaishou were growing fast, but Dingding Lazy Dish's product characteristics were more suitable for Douyin's audience, so we began to focus on the Douyin platform. Initially, we approached many brands' Douyin teams with a learning mindset, and the answers we got were that advertising ROI was extremely low, and new brands doing Douyin was like drawing water with a bamboo basket. But we were prepared to burn our boats, so we started Douyin advertising in October 2020. We initially formed a 10-person BD team, focusing on finding Douyin's mid-tier influencers and KOCs for带货. We encouraged the team with the example of a friend's company achieving 5 million yuan in a month on Douyin and offered bonuses, but everyone gave up within a week because it was hard to produce results in a week. Later, the team hired two interns, and one of them found a mid-tier Douyin influencer in half a month, bringing in 50,000 yuan in sales in a week and 100,000 yuan in two weeks, which greatly encouraged us. After the Spring Festival in 2021, the BD team continued to expand, and the brand began to focus on the Douyin platform, growing from 50,000 to 100,000, then to 150,000, 200,000, 300,000, getting positive feedback bit by bit. By March and April, our KOC带货 reached about 500,000, but this was still slow growth, and compared to other projects of the parent company, it was basically "hopeless." So the parent company decided to set the project closure deadline at the end of June 2021. If it didn't pick up in the next two months, they would give up completely. But fortunately, after polishing in April and May, the team kept expanding, and we hired two full-time salespeople who had been sales champions in other industries. In this way, we were pushed onto the stage and achieved nearly 3 million yuan in sales in June, and the product began to explode. We finally confirmed that Douyin was our correct growth path. In general, the first half of 2021 was very difficult and tough for us. The highest monthly sales of 3 million yuan all came from mid-tier KOC带货, with no slot fees, only partial commissions. But this also made us see the huge dividend of Douyin. Tmall was no longer our main battlefield; we only used it to absorb search conversion and no longer did any Tmall live streaming or promotion. Because Tmall self-broadcasting is essentially like doing private domain traffic, with traffic completely dependent on the Tmall store. In contrast, Douyin live room traffic depends on the live room's performance, which are two completely different mechanisms. (Screenshot of Dingding Lazy Dish's Douyin account and live room) Douyin Business Explosion We went from 3 million to 50 million in monthly sales mainly by doing two things right: **First, we insisted on KOC带货 as a growth method, continuously expanding the team. By September, our KOC带货 performance had reached 10 million; ** Second, we prepared and launched brand self-broadcasting in July. By November, self-broadcasting broke 1 million, reached 6 million in December, and approached 20 million in January 2022. Achieving such results required continuous polishing, because we didn't have a professional team and had to keep learning and improving ourselves. When our brand friends around us were losing money on self-broadcasting, we went through great pains to find a few seemingly ordinary but very experienced big shots who were doing tens of millions in monthly sales on Douyin to learn from them. The important experience these big shots taught us was to keep a stable mindset. While brands focus on overall sales, we should instead focus on how much money we made today from self-broadcasting on Douyin, with profit as the guide. We made comprehensive improvements and upgrades in four aspects: channels, products, supply chain, and team. First, we made breakthroughs in KOC and self-broadcasting on the channel side; second, when the brand grows on a large scale, the underlying foundation is also important. This is like changing tires while driving on the highway; the "tires" refer to products, supply chain, and team. The quality of the product determines whether the brand can stand firm in the market. So we further polished the quality, supply chain stability, and price of our sauerkraut fish single product. During this process, we expanded from 20 people to a team of nearly 100. Although management pressure increased, our parent company has strong management experience in B-end business, so we handled the organizational issues well. Many Pitfalls in带货 and Self-broadcasting There are mainly two ways for brands to sell on Douyin: first, influencer带货, similar to offline retail distributors; second, brand self-broadcasting, similar to offline retail direct-operated stores. We stepped on many pitfalls in these two areas. The first pitfall was paying slot fees to influencers who didn't deliver returns, which was also the biggest pitfall. When influencers quote, they often say that a 100,000 yuan slot fee can bring 1 million yuan in sales, with an ROI of 1:10. But in actual带货, they might only sell 50,000 yuan, yet we still have to pay the 100,000 yuan slot fee, resulting in an ROI of only 1:0.5. Our most painful experience was paying a 150,000 yuan slot fee but ending up with only 200 yuan in sales. This situation is very common in live streaming带货. So later, we refused all带货 collaborations that required slot fees, because slot fees are like opening a blind box, with too much uncertainty, and in带货, as long as you don't lose money, you're making money. The second lesson is that, in terms of team, colleagues without e-commerce experience often do better than those with experience. **Currently, our team's hiring requirement is to recruit people without e-commerce experience. The reason is that experienced employees often carry baggage and constraints, while inexperienced novices can be more open-minded. For example, the fact that a sauerkraut fish brand can achieve monthly sales of over 10 million is something people in the industry don't believe, but inexperienced employees are like a blank sheet of paper; they believe it's achievable and are willing to execute it firmly. The biggest pitfall we stepped on in store self-broadcasting was that we started too slowly. But there are pros and cons, because being slow, we consciously avoided three pitfalls that most brands easily fall into when doing self-broadcasting: 1. Large-scale advertising or large-scale contraction. **Many brands preset an overly high goal when doing self-broadcasting and hope to achieve it through large-scale advertising. But in reality, relying solely on advertising or contraction cannot support the brand's high goals. Many people in live streaming teams earn commissions, so contraction means a significant reduction in salary, making the team increasingly unstable. 2. Hiring outsourcing teams too early. **Many brands choose to hire outsourcing teams for self-broadcasting. However, when the brand itself can't do the product well, it's hard for outsourcing teams to do it well either. But brands at different stages should make different decisions. When self-broadcasting becomes a regular channel, it's necessary to build an in-house team. 3. Not paying attention to short video content when doing live streaming. For new brands doing self-broadcasting, to have high ROI and stable volume, short video content is the biggest lever. Directly investing in live rooms has low ROI or can't scale, making it hard to sustain. Therefore, we focused our self-broadcasting team's energy on content creation, which is the core of our live room achieving nearly 20 million. This is also something many brands easily overlook in the early stages. As for the experience in creating short video content, I think it's simple but counterintuitive. Every short video on Douyin is shown to different new customers. Many people constantly look for new creative ideas when making Douyin videos, but actually, you just need to find a proven viral template and repeatedly copy it to continuously attract traffic. I believe all brands and categories can do the Douyin platform. The reason we rank Douyin before Tmall is that Douyin's growth is relatively faster, traffic costs are lower, and it has formed a fairly large-scale selling ecosystem. It's still not too late for brands to enter now. Even if it's late, Douyin is still relatively more suitable among many platforms. The dividend period of Douyin will last at least 1-2 years. Tmall is still a very good platform, but its scale has entered the stock stage. Understanding of Category and Brand Pre-made dishes have recently been hyped by the capital market, but this is actually a cyclical phenomenon that occurs every year. Personally, I think the concept of pre-made dishes is greater than the substance; it's just an upgrade in food processing. We only see one brand succeed, but behind it, more than 100 brands have died. We don't call ourselves a pre-made dish company; we say we sell sauerkraut fish on Douyin. When people's impression becomes, "Your sauerkraut fish has fish and ingredients," our goal is achieved. Because when the category lacks public awareness, brands can only enter from categories and scenarios that already have awareness, using single products to increase category and brand penetration. **The reason we chose sauerkraut fish is that it's the product with the highest conversion rate and advertising click-through rate. Doing products is like copying homework. We initially made all the top 10 pre-made dish categories on Tmall, including boiled fish and chopped pepper fish head, but only sauerkraut fish succeeded. We are also constantly launching new products, but we are very restrained with new products, similar to "Tian Ji's horse racing." Most pre-made dish brands make whatever they have, but we make what can succeed. Pre-made dishes don't have a mass foundation, so creating a high-awareness, fast-moving big hit is the core logic for new products. **We are very cautious about seasonal internet-famous products because the risk to the brand is very high. It's hard to guarantee every product will be a hit, and if a product doesn't explode, it will cause significant internal consumption for the company. Therefore, we don't bet everything on new products, but we continue to increase investment in products that perform well, improving the success rate of new products. In the short term, we will continue to focus on the core single product of sauerkraut fish, achieving greater victory where we have already won. The pre-made dish category has a certain repurchase rate, but compared to high-consumption, high-repurchase products like fruits, vegetables, and staple foods, it's hard for consumers to eat sauerkraut fish every day, which is determined by the category characteristics. So brands need to continuously attract new customers and improve product repurchase rates. We first need to make it a good business, then build a good brand. Brands should be viewed over a sufficiently long period. In the short term, talking about brand is meaningless. It's better to do the current things well and accumulate bit by bit to build a brand. Sauerkraut fish itself is a very basic product with not much added value. But if we can become the best-selling sauerkraut fish in the market over a long time, we will naturally become a brand, but the premise is to survive first. Factors for Success Brand growth comes from category growth, and category growth comes from market growth. The key factors for Dingding Lazy Dish's current phased success are two: First, maintain an empty cup mentality. No matter how great achievements were in the past, when deciding to do something new, you must become a novice; second, have the right learning methods, continuously learn and summarize from those who have results and experience. Our strategic goal for 2022 is to focus on Douyin, do Dingding Lazy Dish well, and make the scale bigger. Source: BotF Future Brand (ID: BrandoftheFuture) Author: Pang Jing -END-