---
title: "From SanDunBan, ZiHaiGuo, LaMianShuo... How New Consumer Brands Choose Their Categories"
description: "In the consumer goods investment circle, the category selection of a brand is highly valued, as it largely determines the brand's future potential, even leading to the saying 'category determines the world.' From successful new consumer brands in recent years, we can summarize some regularities about category selection, including several common approaches, which the author boldly analyzes below."
author: "派大鑫"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-10-16"
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# From SanDunBan, ZiHaiGuo, LaMianShuo... How New Consumer Brands Choose Their Categories

> In the consumer goods investment circle, the category selection of a brand is highly valued, as it largely determines the brand's future potential, even leading to the saying 'category determines the world.' From successful new consumer brands in recent years, we can summarize some regularities about category selection, including several common approaches, which the author boldly analyzes below.

In the consumer goods investment circle, the category selection of a brand is highly valued, as it largely determines the brand's future potential, even leading to the saying 'category determines the world.'
From successful new consumer brands in recent years, we can summarize some regularities about category selection, including several common approaches, which the author boldly analyzes below.
Miker Rice Sparkling Wine Image source: Weibo @MIK米客米酒
**-01- Characteristics of High-Potential Categories Prone to Explosive Growth**
First, the category has a certain cognitive foundation, which can reduce consumer education costs.
Many people believe that new consumer products must be novel and unique, but this is only half right. Because **if consumers have no awareness or consumption habits for a category, you need to spend enormous effort and money to educate them.** Before that, you may not be able to sell at all, and even surviving the initial period is difficult.
In fact, product innovation is often not in the category itself, but in the specific form of the product, which I will elaborate on later.
Xiaoxiandun Bird's Nest Image source: Weibo @小仙炖鲜炖燕窝
Second, the category aligns with consumption trends, has clear usage scenarios, and has the potential to 'break out' to the mass market.
Many new categories emphasize niche appeal, but this often confines thinking. **We say brands should be 'small and beautiful,' meaning they should have a 'niche feel'—a distinct brand tone and personality—not that you should seek categories with a very small audience.**
On the contrary, our category should have mass-market potential as much as possible, with clear usage scenarios. Even if it starts niche, as the market expands and demand shifts, it may explode, break out, and become a mass consumer product.
A simple example: robot vacuums were initially bought only by high-income people who love tech gadgets. As product awareness grew and manufacturing costs dropped, they became more mainstream, and now many busy young people buy them because they fit the fast-paced modern lifestyle. In contrast, truly niche items like DSLR cameras or guzheng (a traditional instrument) are genuinely niche and have little chance of mass-market breakout.
So, what categories have mass-market potential? I think there are two types:
**One type aligns with modern demand trends. For example, under the 'loneliness economy': pets, solo dining, solo travel services; under the 'lazy home economy': instant food, convenience food, mobile games; under the 'beauty economy': personalized clothing, cosmetics, small consumer appliances, light medical aesthetics; under the 'health and wellness' trend: natural organic food, health supplements, convenient health foods, low-sugar low-fat meal replacements, body fat scales, fitness equipment; under the 'entertainment economy': casual games, personalized snacks, video and live-streaming related products, dance training.**
Solo dining restaurant Image source: Weibo @尔已君17
**The other type is sub-categories under traditional major categories.** Since traditional major categories (like women's clothing, skincare, snacks, household cleaning, maternal and baby products) are already mature, **they have sufficient market capacity and consumption habits. By making your mark in a specific sub-market, you can support a large brand without worrying about insufficient market space.**
For example, Genki Forest sparkling water, Tiandi No.1 apple cider vinegar, and Xiaoxiandun ready-to-eat bird's nest are all sub-categories under major categories that can become large markets.
Genki Forest sparkling water Image source: Weibo @元气森林
Conversely, **categories that are already small in market size are not recommended for excessive segmentation.** Instead, focus on growing the overall market, because otherwise the market size will be too small to support a large brand.
Third, the category has no particularly strong competitors.
Categories with very strong incumbents, like cola, beer, or herbal tea, have high barriers. Entering them is difficult, and even if you succeed, you'll face strong resistance from the top players.
**The ideal situation is when the category is in a wild growth stage, with no clear leader or a weak leader, no dedicated brand for that sub-category, and not even industry standards.** Then, by using systematic and standardized brand strategies to 'attack from above,' strengthen category awareness and association, you have the opportunity to become the representative of that category.
When Three Squirrels chose nuts, it was because most sellers were individual vendors, and even brand manufacturers producing nuts didn't have a strong brand dedicated to nuts.
Three Squirrels Daily Nuts Image source: Weibo @三只松鼠
However, such ideal situations are hard to find. In reality, almost every industry has strong competitors, especially in mature major categories. So what to do? I'll provide countermeasures later.
Fourth, the category should have high repurchase rates and relatively high gross margins.
The hardest products to sell are those with low profit and low repurchase rates. **Only high repurchase rates can drive volume and reduce customer acquisition costs; only relatively high gross margins can support brand promotion and expansion.**
For categories with intense competition, transparent pricing, and razor-thin margins, it's best to avoid them. If you must enter, improve your product design, usage, and functionality, and find a differentiated price point to build value and profitability.
However, higher profit margins don't necessarily mean high prices. In today's increasingly transparent information and savvy consumers, those premium brands with high markups are no longer easy to 'harvest.' Look at Xiaoguan Tea, which has started to come down from its pedestal and cut prices, as the 'IQ tax' is harder to collect. To do well in consumer goods, high cost-performance is generally a safe bet (either high quality at moderate prices, or acceptable quality at lower prices).
Xiaoguan Tea Business Gift Box Image source: Weibo @小罐茶
**-02- Three Approaches for New Consumer Brands to Choose Categories**
**Approach 1: Sub-category Light Cavalry**
**Representative brands:** Perfect Diary, Florasis, ffit8, a1 Snack Research Institute;
In mature major categories with intense competition, market demand is large, but there are many competitors. To break through the deep moats of big brands, new brands can enter from sub-categories that big brands overlook or handle weakly, establish a strong position there first, and then expand to other categories. Of course, the premise is that these sub-categories themselves have sufficient demand.
a1 Snack Research Institute's baked goods Image source: Weibo @a1零食研究所
This approach is like light cavalry in warfare: **attacking from the enemy's flank, targeting weak defenses,** capturing the city, strengthening the base, and then conquering other territories.
For example, Perfect Diary avoided the skincare category crowded with big brands and entered through makeup, gradually opening up the situation. Florasis lipstick started with lipstick, a category with relatively low technical barriers and less competition from big brands, and differentiated through Chinese-style design.
ffit8 broke through with protein bars, which are more portable and stylish, rather than the more commonly consumed protein powder, and with trendy design and Luo Yonghao's endorsement, gained a legion of fans.
ffit8 protein bar Image source: ffit8 official
a1 Snack Research Institute started with cakes, a category lacking strong brands. Traditional cakes were mainly sold offline based on region, so moving online meant operating in a new scenario (casual snacking) and new market (snack food), with much less competition.
**Approach 2: Surprise Attack New Species**
**Representative brands:** LaMianShuo, Xiaoxiandun, Wangbaobao, Zhongxuegao, SanDunBan, HFP, Zhiguan, Zuodashi Sauce, Xiaohuangxiang Snacks, Miker Rice Wine, Shuimangmang Juice;
This is probably the most successful category selection method for new consumer brands. The specific idea is: **in mature markets, based on changes in consumer demand, marketing environment, and technology, redefine product connotations with new thinking, give products a completely new look, and differentiate from traditional brands.**
These iteratively upgraded 'new species' form completely different forms and play styles from traditional categories through new consumer group selection, new market positioning, new product innovation, new scenarios and usage methods, and new communication and channels, creating incredible disruption to traditional brands.
LaMianShuo Ramen Image source: Weibo @拉面说
This is like in warfare, where new-style armies use entirely new weapons and tactics (e.g., firearms vs. cold weapons, airplanes vs. cannons) to launch surprise attacks on traditional armies. The thinking and concepts are often incomprehensible to old rivals.
Often, we become accustomed to existing markets and play styles in mature industries dominated by giants, assuming the market structure is fixed and products should be as they are.
**Little do we know that consumer demographics are shifting, their lifestyles and needs are quietly changing, and new communication methods and sales channels are emerging. This is often fertile ground for new brands!**
For example, in the baijiu market, which is fiercely competitive and saturated, brands like Miker Rice Wine and Jiangxiaobai have carved out a space through low-alcohol, youthful, emotional products and internet-based play.
Jiangxiaobai Image source: Jiangxiaobai official
For example, in the instant noodle market, traditional instant noodles are convenient but not healthy, not authentic in taste, and have outdated packaging. LaMianShuo improved the product by combining healthy ingredients with high-end packaging, putting various regional flavors into bags, making it both convenient and healthy and delicious.
For example, in the instant coffee market, international giants like Nestlé and G7 dominate, but SanDunBan coffee uses cold-brew technology for cold-brewed drinking, with artistic packaging, internet word-of-mouth, and e-commerce channels, the little ant shook the elephant.
SanDunBan coffee Image source: Weibo @三顿半
There are many more examples: Xiaoxiandun made bird's nest ready-to-eat and used influencer marketing, avoiding the pitfalls of Yanzhiwu; Wangbaobao, undaunted by Quaker, incorporated nuts into oatmeal, which can be eaten directly or brewed, with high-design packaging and e-commerce sales helping it take the top spot; Zhongxuegao's creative and high-end ice cream new products generated traffic and orders; HFP became the favorite of skincare ingredient enthusiasts; Zuodashi developed small-pack rice sauce specifically for the food delivery scenario, leading the bagged sauce category...
Wangbaobao Oatmeal Image source: Weibo @王饱饱的麦片
It can be said that in creating new 'new species' in consumption, there are always new possibilities. The biggest enemy of new brands is not competitors, but insight and imagination.
**Approach 3: New Category Top Student**
**Representative brands:** ZiHaiGuo Instant Hot Pot, Genki Forest Sugar-Free Sparkling Drink, Xuanma Salted Egg Yolk Pastry, Lin Qingxuan Camellia Skincare, Winona Dermocosmetics, Pop Mart Blind Boxes, Durian Moment Durian Food, Yungeng Wuzuo Brown Sugar.
Durian Moment Durian Snowskin Mooncake Image source: Weibo @榴芒一刻旗舰店
Due to changes in consumer demand, certain products have the potential to form independent categories. Brands seize this opportunity, focus on the category, become the leader, and even the representative. There are three situations:
**First, a new category forms from scratch.** When a product category was originally small and insignificant, but as the market develops, sales scale begins to grow rapidly and form a trend, that's the best time to enter.
For example, dermocosmetics were previously sold sporadically by many brands, with too small a market to be a mature category. But as dermocosmetics became more popular, it created an opportunity for Winona to establish the category.
Another example is ZiHaiGuo instant hot pot. Previously, technology and consumer demand were insufficient, but with the solution of safe self-heating technology and the trend of young people seeking efficiency and deliciousness, the market began to grow, laying the foundation for ZiHaiGuo's rise.
ZiHaiGuo Self-Heating Hot Pot Image source: Weibo @自嗨锅
**Second, new categories differentiate from old ones.** Mature categories, due to diverse consumer needs, begin to see many differentiated sub-products. When certain sub-products reach a certain scale, they split into a new sub-category.
For example, skincare is a large category with many formulations, ingredients, and styles. Lin Qingxuan went further by creating camellia skincare, becoming the promoter of this new category.
**Third, small categories become independent.** These new categories existed before but were part of a parent category without independence, and the market lacked dedicated brands. At this point, brands choose to deepen and refine these products, bringing the category into the spotlight.
For example, salted egg yolk pastry is made by many major food brands, but often only as a product line alongside other foods. Xuanma improved the pastry to be healthier and more attractive, elevating it to a highly independent category.
Xuanma Salted Egg Yolk Pastry Image source: Weibo @轩妈蛋黄酥
To be a top student in a new category, **the most important thing is to have keen insight into the market and consumer groups, grasp the rhythm of category differentiation, and choose the best 'window period' to enter. Entering too early means consumption habits haven't formed and cognitive costs are high; entering too late means missing the dividend period and facing intensified competition.**
At the same time, brands should associate the brand with the category as early as possible, forming the perception of 'category = brand,' and thus become the representative of the category.
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