In the Era of Niche and Segmented Markets, Companies Cannot Wait: Trial and Error First, Then Trial and Success!

01 Anyone engaged in practical work must deeply feel the importance of one word: pace. If you can't keep up with the pace, you'll miss the beat, and everything falls into chaos. So, the pace must not be disrupted. In the internet business world, the pace is completely different from traditional. The more experienced you are, the harder it is to adapt to the new pace. New concepts, new playstyles, new platforms, and new dividends are rapidly iterating and covering. Old hands are used to playing after understanding, but by the time they understand, it's already what others have "played out." The pace of change is too fast; you don't even get a chance to understand. Small trends, non-consensus, and segmented markets are the three keywords changing the business pace, and old hands are very uncomfortable with them. The old hands' pace is: see the trend clearly, seek consensus, and cater to the majority. Small trends and non-consensus are two concepts proposed by Luo Zhenyu when reviewing Luoji Thinking. I've never been particularly fond of Luo Pang, but these two words resonate with me; they're somewhat "insightful." Segmented markets, on the other hand, is a marketing topic that I and Teacher Fang Gang have been discussing. Using three words to describe this era is quite vivid. Since 2013, we've been living in an era where we can't find big trends, can't form consensus, and can't gauge mass demand. In such an era, the mistakes we're most likely to make might be: we can't find big trends, yet we're searching; there's no consensus, yet we're expecting; there's no mass market, yet we're reminiscing.

02 Small Trends Luo Pang often proposes new concepts and is good at making small things sound big and elevating concepts. That's his skill at bluffing, and it's also why I criticize him. However, it's undeniable that at almost every stage, Luoji Thinking has seized the dividends of small trends, even if only for a year or two. Does the internet era have big trends? Certainly, but there's no consensus. Instead, waves of small trends are very obvious. When a small trend comes, there's bound to be short-term dividends. Big trends are long-lasting; even if you miss the first wave, you have enough time to catch up. So, it's not about being slow, but about being wrong. The long-standing logic for catching big trends is: wait until the trend is clear before acting. Even if you miss the first wave, you can compensate for the loss of waiting with doubled resource investment. What about small trends? By the time you see them clearly, they're already over. So, the logic for small trends becomes: better to catch wrongly than to miss. Catching small trends doesn't require more resource investment, but rather the willingness to do it. In many people's minds, Jiangxiaobai started with "quotes" and "jokes" on expression bottles. Actually, early Jiangxiaobai played on Weibo, then WeChat official accounts, then communities, hip-hop, and Douyin, and now it's into anime. In six or seven years of entrepreneurship, it's almost one new thing each year. Jiangxiaobai hasn't missed any small trend in internet communication. When copycats imitated Jiangxiaobai, it was already playing with something new. As Luo Pang said, all media interpretations lag by more than a year. According to Liang Ning's compilation, since its founding in 2012, Luoji Thinking's positioning has evolved: self-media (2012) → internet community (2013) → community e-commerce (2014) → cognitive center (2015) → knowledge payment service provider (2016, 2017). Each year's change is the result of trial and error. Facing small trends, first, you need to be sufficiently sharp, have a keen sense, and perceive quickly; second, "trial and error" becomes an internal function of the enterprise. Trial and error first, then trial and success. Trial and error is experimentation; trial and success is promotion. If wrong, give up and try again; if right, model it and push forward quickly. Facing small trends doesn't mean going with the flow. At Uni-President and Jiangxiaobai, I've heard a common saying: "Ride the horse, wait for the wind." Riding the horse means laying out in advance. When the wind comes, you rise with it. Even facing small trends, Jiangxiaobai's Tao Shiquan says that growth and success are designed; every step of Jiangxiaobai's growth was thought out in advance. Big trends might just be a collection of small trends. Is this a rule or an exception? At the beginning of every new civilization (First Industrial Revolution, Second Industrial Revolution), such phenomena occur. First, technological innovation in the new era cannot be predicted in the short term; second, new technologies are invented quickly and cover rapidly. Only when the main technologies of a civilization era form do big trends become predictable.

03 Non-Consensus The biggest consensus is that there is no consensus. Non-consensus will become the norm, but we're not yet used to it. The AB-share structure of internet startups goes against traditional corporate governance. Traditional corporate governance is "majority rule," where majority equity decides, and consensus is the basis for decision-making. The AB-share structure gives founders voting rights several times their equity, effectively granting them a certain "decision-making autocracy." Because in the internet field, "consensus" might mean "too late" or "finished." Consensus only forms after the dust settles; there's no consensus in the decision-making process. Teams are important, but the founder's intuition and courage are more important. Of course, this is a double-edged sword; both "great losses" and "great gains" may stem from this. Since Taobao, Chinese society has had no consensus on internet companies. Alibaba grew amidst criticism, and even after growing big, it's still criticized; JD.com grew amidst doubt. Heytea and Luckin Coffee have always been controversial. Some say Luckin's gross margin is negative and illogical, but that doesn't stop Luckin's rapid development. Didi, Meituan, and Mobike are already oligopolies, yet they're still controversial. When Ma Yun proposed New Retail, mainstream experts immediately questioned it. Non-consensus is not only seen in entrepreneurship but also in consumers and critics. Companies like Pinduoduo are both sought after by the market and attacked by the mainstream. Large internet platforms have almost risen when the mainstream didn't favor them. Non-consensus also manifests in the diversity of business logic. Successful businesses must be logically self-consistent. Business logic cannot be mutually tested, meaning one successful business logic cannot be used to test another. However, almost every innovative business logic that appears is reviewed by critics using traditional business logic, and there are many such people. Non-consensus also arises because the "endgame" is unpredictable. China is a catch-up country in industrial civilization; the endgame state of each industry has already been played out in the West. New platforms walking in "no man's land" may not see the endgame. For example, Meituan was initially "group buying," but when "group buying" collapsed, no one expected Meituan to succeed in "food delivery." FMCG B2B fell into trouble in 2018, but unexpectedly, "community e-commerce" was ahead, and the supply chain, warehousing, and store stickiness needed for community e-commerce are precisely B2B's advantages. Some even view "consensus" as a disaster for decision-making in this era. The more consensus there is, the less you should do it. Teacher Fang Gang and I divide marketers into four categories: traditional offline (deep distribution), traditional online (e-commerce), new marketing (+internet), and new retail (internet+). These four seem to be separated by a wall, with no communication, each having its own business logic, not understanding each other, and methods not interoperable. How can consensus form? What to do without consensus? Seek consensus, or trial and error without consensus? It's not about waiting for time to form consensus, but about forming internal consensus through trial and error and iteration, and seeking external consensus in commercial conquest.

04 Segmented Markets In the first half of this year, I wrote a series of articles about niche markets with marketing expert Miao Qingxian, and readership was surprisingly low. Undoubtedly, the marketing world is still expecting "mass consensus" and the return of wave-like consumption. Last year, Uni-President proposed the "10-billion big single product" concept, and a recent article said "10-billion single products are hard to find." China has entered the era of niche and segmented markets. What is segmented markets? Teacher Fang Gang says it's "differentiated masses." I think "divided masses" is more accurate. One man's honey is another man's poison. Your preference is exactly what I reject. In liquor consumption, one extreme is rich flavor like Moutai, so many distilleries are now producing "compound fragrance," with one sip having three or four fragrances, for old drinkers to enjoy; the other extreme is minimalist style, like Jiangxiaobai, simple, clean, and pure, for new drinkers to accept. Jiangxiaobai's founder Tao Shiquan is from Hunan; he chose to start his business in Chongqing because Chongqing's small-qu liquor with light fragrance fits the "simple and pure" characteristics. Rich fragrance and simplicity are the two poles of liquor, but the two poles tend to repel each other, each unconvinced. Jiangxiaobai has half a ticket to nationalization, with 70% of terminals stocked. Not many national liquor brands achieve this scale, but it's still widely criticized in the mainstream liquor circle. Yet Jiangxiaobai's consumers just don't care and drink it. I often check Jiangxiaobai's official account comments and find that indeed some fans feel very good about it. This is a typical "divided masses." Even with Moutai, in the mainstream liquor circle, no one dares to say it's not good. But I've seen some post-90s who don't buy it, and many deny it. Long-term mass consumption has cultivated a habit in many people: what I don't accept must have no market. In the mass consumption era, that was indeed true. In the niche and segmented market era, "not judging others by yourself" must be the basic mindset. Don't seek majority consensus; find the preference of the minority. Becoming the first choice of a minority is more important than being the second or third choice of the majority. Niche and segmented markets are inevitable as demand differentiates after entering a middle-class society. To some extent, the demand in a middle-class society is mainly spiritual, satisfying social values. Japan and Taiwan have precedents. The difference is that the emergence of communities has stratified consumers. Traditional offline has strong ties, but interaction frequency is low. The strong interaction capability of communities in virtual space strengthens the consumption values of niche and segmented markets within circles. However, during the transition from mass to segmented and niche markets, I am already different, but I haven't psychologically prepared for "others being different from me." Thus, the "differentiated masses" that originally didn't affect each other become "divided masses." The commercial popularization of mini-programs has become a push channel for low-density consumption demands like niche and segmented markets. Strong community interaction and strong mini-program push will boost niche and segmented markets. Source: Teacher Liu's Forum (liuchunxiong1964) -END- Good article! Don't forget to click "Wow"