---
title: "How Can FMCG Brands Avoid Involution? Here's the Code to Crack It"
description: "In 2020, many companies began to build private domains because of channel involution. With rising customer acquisition costs and intense competition, brands are turning to private domains to directly connect with consumers, achieve precise communication, and enhance marketing efficiency. This article uses Telunsu's 'Mingshi Hui' as an example to illustrate how private domains can help brands shift from price-based to value-based marketing."
author: "任文青"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-02-11"
language: "en"
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# How Can FMCG Brands Avoid Involution? Here's the Code to Crack It

> In 2020, many companies began to build private domains because of channel involution. With rising customer acquisition costs and intense competition, brands are turning to private domains to directly connect with consumers, achieve precise communication, and enhance marketing efficiency. This article uses Telunsu's 'Mingshi Hui' as an example to illustrate how private domains can help brands shift from price-based to value-based marketing.

In 2020, a large number of companies began to build private domains.
Why? Because of channel involution. Today, when you open various e-commerce platforms, you can almost see various promotional information every day. During big promotions like 618 and Double 11, merchants even have to pay costs below cost, through price competition, to get better display positions. According to market research data, in 2019, the customer acquisition cost on the Internet in China was 486.7 yuan per person, while in 2010 it was only 37.2 yuan, an increase of nearly 10 times in 10 years. Online customer acquisition is difficult, and offline supermarkets are not easy either, especially under the influence of the epidemic. According to data from the National Bureau of Statistics, in 2020, China's total retail sales of consumer goods fell by 3.9% year-on-year, mainly due to the continuous decline in offline traffic, causing negative growth in physical retail sales. In the era of online and offline integration, the entire channel has entered a state of involution. In order to compete for consumers in the existing pool, brands have to invest a lot of money in brand exposure, user reach, and conversion. But whether it is online e-commerce or offline supermarkets, brands can only passively wait for consumers to click or visit. Companies invest heavily but cannot form user retention. Because, **the traffic in the public domain belongs to the platform, not the brand.** It is under this situation that private domains have become popular. What is a private domain? Simply put, **it is the consumer users you directly own and can actively and repeatedly reach.** For example, by sinking consumers from the public domain into WeChat official accounts, mini-programs, WeChat groups, etc., you can repeatedly reach users through operational actions, achieve conversion and repurchase, instead of only acquiring customers through continuous investment and price promotions on public platforms. **Achieving sales conversion and increasing repurchase are the main purposes for most companies operating private domains.** But is the value of private domains limited to this?
#### **Why should brands build private domains?**
Channel involution is serious. In the public domain, we have to engage in price marketing and pay high customer acquisition costs. Private domains can help us increase channel touchpoints, improve repurchase, and increase sales. **In fact, this is only looking at the problem from the merchant's perspective.** If we only build private domains from this angle, we will engage in short-sighted behaviors such as frequent information harassment and rapid monetization, resulting in users being disturbed and even disgusted, turning private domains into dead domains. This is a major misunderstanding in building private domains. Private domains should help us complete the transformation from price marketing to value marketing. To achieve this, we must learn to look at problems from the brand's standpoint. For a brand, what is the true core value of private domains? **It is to directly connect with consumers, achieve precise communication with them, gain insights into new consumption demands and marketing communication points, improve marketing investment efficiency, and feed back into brand building.** Why do we say this? This involves how we understand brands. **"A brand is a container, a container that holds consumers' 'understanding, trust, and preference'."** For example, when you go to the supermarket to buy milk, the material composition of different brands is actually not much different, but why do you choose A instead of B? Because you are more familiar with and understand A, and you trust its quality more. Those that cannot be prioritized by consumers are not brands, but trademarks. The purpose of a brand **is to let consumers understand you, trust you, and prioritize you among many products.** To achieve this, the key is whether you can communicate precisely with consumers and gain insights into their consumption needs. In the current era of extremely fragmented communication scenarios between brands and consumers, the value of private domains is very obvious. **In private domains, you can not only efficiently communicate and interact with consumers, understand their needs, and deepen emotional connections, but also help brands optimize the logic of brand innovation and improve the efficiency of public domain investment.** In other words, brands can shift from price marketing to value marketing through private domains. In this regard, the exploration and practice of high-end milk brand Telunsu in building private domains is very instructive.
How does Telunsu build private domains? What is the logic behind it?
#### **How does Telunsu operate private domains?**
Unlike many companies that only aim to solve traffic difficulties, Telunsu has completely different considerations in building private domains. As early as around 2008, Telunsu established the "Mingshi Hui" (Celebrity Club). After years of development, it has become a mature private domain operation platform for the Telunsu brand. What does this platform mainly do? **First, identify core brand users and enhance user stickiness through a membership system.** **Identifying and screening out users who truly recognize and love your brand is the first step in doing brand private domain operations well.** "Mingshi Hui" implements a membership system. According to different user points, it is divided into four membership levels: ordinary, silver, gold, and diamond. Members at different levels enjoy different membership benefits. **The essence of private domains is relationship, not connection.** In order to better interact with members, "Mingshi Hui" has created themed interactive communities including Su Su Shuo, Man Tan Hui, and Yun Mu Chang. **While gaining insights into user needs, it deepens emotional connections with users.** **Second, accumulate precise consumer groups and create a base for new product launches and customized product incubation.** Private domains can greatly improve the success rate of product innovation. Telunsu continuously launches niche single products through "Mingshi Hui" to meet segmented needs, and accumulates precise high-repurchase groups for different single products. With such a population base, **it is possible to do product innovation more targeted, verify new products in private domains, and in turn improve the efficiency of public domain investment.**
In 2021, Telunsu successfully launched multiple new products on the "Mingshi Hui" platform, such as Desert Organic Milk, Hi Milk QQ Customized Edition, Telunsu Hi Milk Duffy Family Customized Edition, Telunsu CBP High Calcium Milk, Telunsu M-PLUS High Protein Milk, etc. **Third, create beyond-expectation experiences and enhance brand influence through members' spontaneous fission-style communication.** **An important task in private domain operation is to cultivate KOCs (Key Opinion Consumers) so that they lead more people to choose the brand.** Every year on August 18th, the Member Day, "Mingshi Hui" initiates activities to reward members. For example, on August 18, 2021, Telunsu gave members a gift of Baby Pumpkin produced from the Ulan Buh Desert Oasis Ranch.
In this activity, consumers who had purchased Desert Organic Milk received gifts without knowing it.
After receiving surprises, a large number of consumers took the initiative to share on social platforms and post positive reviews. For core members, "Mingshi Hui" launched exclusive activities. For example, on Double 11, while the whole network was doing full reductions and gifts, "Mingshi Hui" gave 400 core diamond members a Double 11 exclusive [Crab Gift]. This made core members feel the differentiated dignity of exclusive services.
How does Telunsu operate private domains? Mainly 3 points. **1. Build a communication platform, accumulate core users, and deepen emotional connections; 2. Gain insights into consumption needs, verify new products, optimize product innovation, and improve public domain investment efficiency; 3. Cultivate KOCs to feed back into brand building in the public domain.** It sounds not complicated, but if you go deeper, you will find that this is the result of Telunsu's long-term layout, and it is a key part of Telunsu's digitalization practice. Why do we say this?
**Strategic thinking behind Telunsu's private domain layout** 2020 is called the first year of private domains because many companies only began to realize the importance of private domains that year. But from around 2008 to now, "Mingshi Hui" has been operating continuously for more than ten years, undergoing multiple iterations in the middle. From the initial "recharge + gift exchange" to the establishment of a CRM system, to refined consumer operation, today's "Mingshi Hui" has formed a mature digital closed-loop system. **Who are the more loyal fans of the brand? What products are more suitable for which groups? Where is it more effective to do marketing investment for which groups?** This relies on full-chain, full-channel data empowerment, and behind it is comprehensive technical support. For example, in attracting new customers, Mingshi Hui uses one-box-one-code to attract offline purchasers, and based on Tencent's precise targeting technology, locks onto online brand-interested groups to bring high-quality loyal consumers to the platform.
The "Mingshi Hui" mini-program mall, which carries the major task of consumer operation, is self-developed and customized, able to support more personalized functional needs of the brand and the daily operation needs of the population.
From creation to iteration, **"Mingshi Hui" is the result of Telunsu's long-term layout and long-term investment, not like many other companies that build private domains as a temporary measure in response to changes.** Moreover, from this, you can also see Telunsu's efforts to promote digital transformation. For FMCG companies, digital transformation is of great significance. Why? Now FMCG brands are laying out new channels and conducting omni-channel operations. However, although new channels seem to bring increments, from the overall market perspective, it is actually just a transfer of existing stock. The market has entered a state of involution, and FMCG brands are competing for existing stock across all channels! In stock competition, how can brands break through? The key is to see **whether you can seize the consumption increment in the consumer stock.** What does that mean? Stock is based on the overall consumer population in the market. From the perspective of national consumption upgrading and people paying more attention to health in the post-epidemic era, consumers' demand for dairy products, especially high-end dairy products, is actually increasing. **Seizing the consumption increment in the consumer stock is the direction for brands to find a new growth model. And the key lies in digitalization.** There are two reasons. **First, from the perspective of corporate decision-making.** Winning market competition depends on effective decision-making. FMCG brands face complex channels, long chains, fragmented consumption scenarios, and lagging feedback. For marketing, without data, you cannot make effective decisions, and this ultimately points to, or must achieve, digitalization. **Second, from the perspective of grasping consumers.** The sales figures of billions, tens of billions, or even hundreds of billions of yuan are brought by individual consumers paying. Companies must "grasp" consumers. Gain insights into needs, optimize product innovation, improve public domain investment efficiency; cultivate KOCs to feed back into brand building in the public domain. The brand private domain operation discussed in this article is only a part of it. The work of "grasping" consumers requires digitalization as support. **This is why we say that private domains are the result of Telunsu's long-term digitalization layout, and also part of its efforts to explore new growth models in the new environment.**
#### **Final thoughts:**
Channel involution, how should FMCG brands respond? In 2022, building private domains is already a must for brands. But do you only see private domains as a way to save traffic costs, increase repurchase, and increase sales? **Directly connect with consumers, achieve precise communication with them, gain insights into new consumption demands and marketing communication points, improve marketing investment efficiency, and feed back into brand building.** This is the true value of private domains to brands. Not only that, we also need to put it in the context of digitalization, thinking from the perspective of long-term layout and long-term investment. Only in this way can we truly do a good job in building a brand's private domain. Telunsu's exploration and practice, I hope it can inspire you. What do you think about this issue? Welcome to leave a comment for discussion.
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