Click the image above for details "Internet-famous" (wanghong) has been a buzzword in recent years, originally referring to online celebrities. But as the term evolved, it expanded from people to the business realm. This gave rise to internet-famous brands, with a range of products labeled as such—internet-famous bookstores, scenic spots, properties, and ice cream. It seems that once a product is tagged as internet-famous, it implies massive popularity, favor from the capital market, and promising financial prospects. For instance, internet-famous brands like Zhong Xue Gao, Genki Forest, and Heytea have achieved remarkable success in a short time, with valuations quickly reaching billions or even tens of billions. But one question is: they are very popular now, but can they withstand the test of time and go further? Not to mention century-old brands, can they maintain their current fame within 10 years? After all, history is replete with brands that burst into prominence quickly but then collapsed just as fast. Judging their future is not easy, but we can find clues from similar cases in the past. -01- First-Generation Internet-Famous Brands: Brands Wrapped in Internet Thinking Around 2012, with the advent of the mobile internet wave, the term "internet thinking" became popular. Many traditional products born in this era began to claim to use internet thinking or to build traditional brands with it. From today's perspective, those traditional brands with internet thinking were extremely similar to today's internet-famous brands in terms of visibility, public discussion heat, and the path to popularity. Representative brands include Huang Taiji Jianbing (founded 2012), Paofou Technology (adult products company founded by Ma Jiajia in 2012), Diaoye Niunan (started business in 2013), and Jiao Ge Yazi (founded by Qu Bo in 2014). They were typical representatives of using internet thinking to make traditional products in that era. Their characteristics are summarized as follows. 1. Upgrading existing products Around 2012-2014, although the concept of consumption upgrade had not yet penetrated people's minds as deeply as today, more and more white-collar workers were willing to spend more money for better products and a better shopping experience. These brands with internet thinking followed this trend, upgrading their products to a certain extent compared to similar products on the market, in terms of raw materials, packaging, dining environment, and consumption experience. For example, Huang Taiji Jianbing claimed to "insist on using organic lettuce, pure mung bean flour, and freshly fried dough sticks without alum," and its in-store dining environment was far better than street stalls. Diaoye Niunan had an elegant dining environment with waitresses wearing black veils serving you at all times. Jiao Ge Yazi allowed you to order duck delivery directly via WeChat. This also made their prices more than double those of similar products. 2. Social topic marketing These brands with internet thinking were basically born in the era when Weibo and WeChat marketing were at their peak. They were very adept at topic marketing on these social networks, essentially capitalizing on the dividends of Weibo and WeChat marketing. For example, Huang Taiji Jianbing repeatedly hyped the topic of "delivering jianbing in a Mercedes-Benz." Diaoye Niunan invited celebrities before opening, hyping itself as the restaurant in Beijing where you are most likely to bump into celebrities. When Cang (a famous AV actress) dined there, it became one of the hottest topics on Weibo that year. 3. Packaging concepts with user internet thinking Around 2012-2014 marked the beginning of the mobile internet's leap forward. When promoting, these brands would package themselves as using internet thinking to transform their brands as long as they had any slight connection to the internet. This was most evident in Ma Jiajia, founder of Paofou Technology. In 2014, Ma Jiajia's PPT shared at CEIBS, titled "A 90s Beauty's Wet Internet Thinking as an Adult Shop Owner," went viral online. From today's perspective, Ma Jiajia's marketing thinking in 2014 was cutting-edge. Many tactics are now routine, but they were indeed surprising at the time. For example, she positioned adult products as a trendy fashion brand. She amplified her own labels, positioning herself as an AV actress + goddess + loser girl. In reality, for Paofou Technology, the only connection to the internet was its viral topic marketing on the internet. As for the relationship between the product and the internet? I really don't see it. Some netizens summarized Ma Jiajia's internet thinking as: no upper limit, no lower limit, moving your tear ducts, and boosting your adrenaline. With the above elements, these brands with internet thinking quickly became internet-famous brands and occupied the pinnacle of public opinion. But this did not solve the core problem of these brands—the product. Huang Taiji was often criticized for tasting worse than the 5-yuan jianbing on the street. Diaoye Niunan was also considered not cost-effective, with many people not returning after the first visit. Paofou Technology never seemed to have any unique product. Therefore, most of them did not escape the fate of "not being popular for more than 3 years." Huang Taiji's founder, He Chang, was listed as a dishonest person subject to enforcement last year, and its stores were significantly reduced. Diaoye admitted earlier this year that he had transferred the store. As for Ma Jiajia, the 90s beauty boss who was once at the forefront, she has long been a thing of the past, washed ashore by the waves. The first-generation internet-famous brands caught the early dividends of consumption upgrade and mobile internet, rose with the trend, quickly established high visibility, reached their peak, but also declined rapidly due to product issues, which is lamentable. A cliché phrase explains it perfectly: Watch him rise from the ground, watch him entertain guests, watch his building collapse. With the deepening of mobile internet, the second generation of internet-famous brands began to rise. -02- Second-Generation Internet-Famous Brands: New Products, New Channels, New Marketing Most second-generation internet-famous brands became famous around 2018, rising with the emergence of video-based media like Douyin and live streaming. They are called internet-famous brands because they follow the term "internet-famous." Although the term had existed for a long time, the rise of short videos and live streaming brought it to prominence. Internet-famous is a double-edged word in the public sense. On one hand, they quickly establish visibility through video media, some even becoming famous overnight and gathering huge popularity in a short time. On the other hand, they are also seen as those who look alike, are good at hype, and rise and be forgotten quickly. The reason brands want to be internet-famous is mainly to replicate the popularity and speed of fame of internet celebrities. 1. New products: choosing blue ocean niche markets In today's increasingly competitive environment, it is basically difficult to find blue ocean markets in large categories. The main market share is firmly held by leading brands, making it hard to shake, such as Nongfu Spring and C'estbon in drinking water, Coca-Cola and Pepsi in cola, and Mengniu and Yili in milk. Internet-famous brands often find a niche market within a large category that big brands have not yet entered, creating a consumption blue ocean. For example, Genki Forest and Zhong Xue Gao have each carved out their own blue ocean markets in their respective categories. Genki Forest, in the large category of soda, entered two relatively niche segments: sparkling water and sugar-free soda. There are many products in the sparkling water market and many sugar-free soda products, but there are few competitors in the market for sugar-free sparkling water that combines both characteristics. Zhong Xue Gao is positioned as healthy ice cream, with low sugar and low fat as its features, which is similar to Genki Forest's sugar-free approach. Secondly, unlike most ice creams that are bought and eaten immediately, Zhong Xue Gao initially targeted the family-style storage consumption market. This made buying online and eating ice cream at home a new trend and scenario for ice cream consumption. Here, Zhong Xue Gao created a niche blue ocean market for family-storage low-sugar ice cream. 2. Riding the wave of consumption upgrade: appearance, experience, and emotion Consumption upgrade, as a trend, is irreversible. Today, consumption upgrade has deepened. Any brand that wants to operate long-term can no longer design products only for consumers' rigid needs. Besides product quality, it must also meet consumers' needs for aesthetic design, nutrition and health, consumption experience, and emotional resonance. Genki Forest's 0 sugar, 0 fat, 0 calories, and Zhong Xue Gao's low sugar, low fat, and zero additives hit consumers' needs for health and weight loss. These brands have also put great effort into design and packaging. Genki Forest's design adopts a Japanese style. The name uses "気" instead of "气," and this character is the most prominent on the bottle, creating a Japanese style for consumers. The bottle colors are mainly light colors like white, green, blue, and pink, looking fresh and free. Zhong Xue Gao's design is original, with tile-style design representing classical Chinese aesthetics. The name Zhong Xue Gao itself is a homophone for "Chinese-style ice cream." Heytea's cup has only a simple little person pattern, fitting the minimalist design style. The store's interior decoration also has unique features. For example, the new store in Sanlitun, Beijing, is called a "black gold store," with very distinctive recognition. All tables and chairs are exclusively customized by Heytea, and even the lighting is specially designed dark gold for this store. Therefore, the consumption experience of drinking a cup of milk tea at Heytea may be the best among all milk tea brands. In terms of emotional communication, the videos and stories behind Li Ziqi's Luosifen, and Zhong Xue Gao's product segmentation like Family Portrait, I Mean You, and Not One Less, all attempt to establish emotional connections with consumers. 3. New channels and new marketing: e-commerce channels—online seeding—offline advertising Compared to traditional brands' large-scale offline channel deployment, most internet-famous brands have risen in recent years with the explosion of mobile e-commerce and short video media. Internet-famous brands initially mostly chose e-commerce channels because they have low cost and fast conversion. In terms of marketing, they often did not invest heavily in advertising early on, but instead conducted seeding marketing on platforms like Xiaohongshu, Douyin, and live streaming. Searching for keywords like Zhong Xue Gao, Perfect Diary, and Heytea on Xiaohongshu and Douyin reveals endless content, with various reviews and炫耀 (show-off) seeding videos emerging in an endless stream. Live streams by internet celebrities like Luo Yonghao and Li Jiaqi have made these products aspirational for young people on these platforms. On March 8, Li Jiaqi sold 150,000 units of Genki Forest's new product in a live stream. On April 1, Luo Yonghao's first live stream sold 22,000 units of Zhong Xue Gao's Fresh series ice cream, with sales of 2.2751 million yuan. Luo Yonghao ate five and a half sticks in one go during the live stream. For these internet-famous brands, marketing online and converting directly through e-commerce is more efficient than the traditional method of offline advertising plus channel deployment. When internet-famous brands establish a certain reputation in a small circle, they will inevitably face the issue of brand awareness improvement and consumer expansion. So after new brands become internet-famous, they usually spend more money on advertising and channel expansion like traditional brands. For example, after gaining some fame, brands like Zhong Xue Gao and Genki Forest have invested in advertising on Focus Media, found spokespersons, and gradually sponsored some programs to expand their influence and visibility. -03- Differences Between Internet-Famous Brands and Traditional Brands Most second-generation internet-famous brands were born in the context of mobile e-commerce + video-based media. Under new consumption and market backgrounds, they have taken a path different from traditional brands. The main differences between internet-famous brands and traditional well-known brands are as follows. Most have been elaborated above. Here, I mainly discuss the advantages and disadvantages of internet-famous brands relative to traditional well-known brands. The advantage of internet-famous brands is that they were born in the mobile internet era, so they adapt to and embrace mobile internet the fastest. They can use new media like Douyin, Xiaohongshu, and live streaming for marketing at the fastest speed. Moreover, because they dare to try, they often create effective new plays. For example, Perfect Diary created the tactic of indiscriminately placing ads with Xiaohongshu and Douyin influencers to drive sales, while Luckin Coffee used offline advertising and online operations to create a traffic pool tactic. This new marketing approach is more attractive to young people. This is a disadvantage for traditional well-known media, as they have tasted success in traditional media and are therefore less willing to innovate in this area, making their new media marketing tactics relatively less innovative. The disadvantage of internet-famous brands relative to traditional well-known brands is that both product and channel capabilities are weak. The gap in product R&D and creation capabilities compared to brands with decades or centuries of history is basically comprehensive. In terms of channels, traditional brands have been laying them out for decades, and no matter how fast internet-famous brands are, it is difficult to catch up in the short term. Just like the market has been criticizing P&G in recent years, but if you look at P&G's annual sales revenue and products spread across every corner of the world, you know where the gap is. At the same time, internet-famous brands initially become popular in small circles. Since they start with niche markets, when they expand their market, they may find that many people are not interested in their products, and ultimately find it difficult to break out of their niche. -04- Can Internet-Famous Brands Go Far? Internet-famous brands have not been around for long. Although they become famous much faster than traditional brands, they have not yet undergone the test of a larger market and a longer time. Although internet-famous brands are very popular now, whether they can go further and become well-known brands is worth pondering. After all, most first-generation internet-famous brands did not escape the fate of "not being popular for more than 3 years." The biggest challenge internet-famous brands face is whether their products and supply chain can keep up with the brand's expansion pace when they gradually expand their market and target audience, and whether their products can meet the needs of a broader audience rather than just a niche group. 1. Can product and supply chain capabilities keep up with brand expansion? As mentioned above, the gap in product R&D and supply chain capabilities between internet-famous brands and traditional well-known brands is comprehensive. When your brand awareness gradually improves, and more and more consumers know about and try your products, whether your products can withstand the test is a very important issue. Xiaomi adopted hunger marketing in its early days, essentially because its supply chain capabilities were far behind well-known brands. The term "monkey teasing" became a sword hanging over its head. When Luo Yonghao made Hammer phones, the product yield rate was lower than some big brands, which turned many fans into haters. After Luo Yonghao switched to live streaming, he brought Xinliangji and Huadian Time. Both brands are considered internet-famous in their categories. However, due to product and supply chain issues, both were criticized and complained about by many consumers. Xinliangji was exposed by netizens for having production dates from June last year, packaging swelling, and air leaks. Huadian Time was exposed by internet celebrities for receiving flowers that were not fresh and were wilted. Expanding brand awareness through live streaming was originally an opportunity, but due to product and supply chain issues, the opportunity turned into a crisis. A big problem with internet-famous brands is that many people think their marketing outweighs the product itself. Because of excessive marketing, consumer expectations are high, but when the product fails to meet those expectations, their reputation declines. Early on, Huang Taiji's reputation declined rapidly, and today Li Ziqi's products are also considered by many to be not worthy of their reputation. Therefore, the product power of internet-famous brands is the biggest factor restricting their development. 2. Can products meet the needs of a broader audience? When internet-famous brands first enter the market, they choose to enter niche markets and use new media marketing. Although they become famous quickly, they face the embarrassment of being unable to break out of their niche and attract more consumers. Coca-Cola sells well because it satisfies people's innate preference for sugar. Evolutionary psychologists believe that humans like sugar because a preference for nutrient-rich, high-energy foods allowed ancestors to better adapt to the environment and reproduce, while those without such preferences were less likely to survive. Products like high-sugar, high-energy ones meet universal human needs, which have not changed for thousands of years, so their potential market is theoretically the largest. So even though Laoganma is high in oil and salt and high in energy, it does not stop people from buying jar after jar. McDonald's burgers are unhealthy, and we've been saying that for years, but its stores are still increasing, and the number of people eating burgers never decreases. Internet-famous brands like Genki Forest focus on 0 sugar, 0 fat, and 0 calories, which meets the weight-loss needs of a small group of people, but does not meet human nature—the pursuit of sugar and fat. Therefore, when their market expands, will people be willing to pay for it? Hard to say. Comparing Coca-Cola and Genki Forest, I think the former is a rigid need that satisfies human nature, while the latter is only a rigid need for some people at this stage. Therefore, the market capacity of the latter is destined to be incomparable to the former. Can products adapt to changes in consumption trends? The popularity of internet-famous brands is largely due to adapting to the current trend of consumption upgrade. As mentioned earlier, they meet consumers' needs for aesthetic design, nutrition and health, consumption experience, and emotional resonance. Japan, during its era of rapid economic development, also had conspicuous consumption, willing to spend more on design, experience, etc. But by the fourth consumption era (starting around 2005), Japan's economy was in prolonged downturn, and Japanese consumption habits shifted from pursuing famous brands to simplicity and leisure. They no longer had much enthusiasm for owning things. The popularity of LOGO-less basic clothing is a manifestation of this, which is why Uniqlo and Muji are beloved in Japan. The characteristics of Uniqlo and Muji are high cost-performance and "good enough." In other words, they are no longer willing to spend money on flashy products. This is also a feature of the so-called "low-desire society." In the past two years, the term "consumption downgrade" has been repeatedly mentioned in China. Consumption habits like Japan's "good enough" could potentially emerge in China. Therefore, when a product is priced too high due to design, packaging, experience, and other elements, it may encounter a cold market. For example, products like Zhong Xue Gao, which are 5-6 times more expensive than ordinary ice cream due to design and experience, currently have a number of consumers, but the future is uncertain. When consumption downgrade arrives, questions like the following will be repeatedly raised. -05- It's Easy for Traditional Brands to Become Internet-Famous, but Hard for Internet-Famous Brands to Become Well-Known It is not easy for internet-famous brands to compete with traditional well-known brands. With advantages in product R&D, design, and brand awareness, it is not difficult for traditional well-known brands to create an internet-famous product. For example, Want Want's 56-ethnic-group milk, and Wuling Hongguang's mobile vendor cart and Luosifen. But it is very difficult for internet-famous brands to become well-known brands. Five years from now, look at today's internet-famous brands. If their visibility and sales are still not inferior to today, it means they have basically established a foothold. Otherwise, they are just another case in the countless brand failures of being popular for a while and then rapidly falling. Source: Xunkong's Marketing Enlightenment (ID: xunkong2005)