A sudden outbreak has given business operators a very special start to the year, with anxiety levels rising and panic spreading. Everyone knows the epidemic will eventually pass, but where does the lingering unease come from?

On February 16, Zhenhe Island, Baidu, Sina Finance, Entrepreneur Black Horse, 36Kr, Shanghai Jiao Tong University Antai EMBA, CEIBS CMO Club, and HKU SPACE Enterprise Institute jointly launched a special live broadcast course on epidemic response.

Jiang Nanchun, founder and chairman of Focus Media, along with Chen Xiaohua, founder and CEO of 58 Daojia; Chai Xiu, chairman of Miaokelanduo; Sun Laichun, founder and chairman of Lin Qingxuan; and Lin Xiaoxian, founder of Xiaoxiandun Fresh Stewed Bird's Nest, among other leaders of leading enterprises in sub-sectors, participated in the sharing, discussing experience, responses, and future outlook from multiple dimensions to help enterprises and operators fight back.

-01- Brand power is the true immunity of an enterprise

What is the primary challenge in 2020? The answer is not just the sudden pneumonia outbreak.

Jiang Nanchun, founder and chairman of Focus Media, believes that in 2019, the demographic dividend and traffic dividend have ended, and the era of stock competition has arrived. "This era has two characteristics: first, innovation continues, but imitation never stops, so the window period brought by innovation becomes very short—three months, six months, at most no more than a year. Thus, homogenization is inevitable, especially in the consumer market.

Stock competition lacks increment, and increasing homogenization leads to the second characteristic: most enterprises are killing both volume and price. Many originally thought they could take the lead in cutting prices to gain volume, but the result is that everyone rushes to cut prices as if infected. Price wars and traffic wars have led to thinner profits or even large-scale losses, becoming an epidemic in the business world."

Only when the brand is deeply rooted in people's hearts can it become a continuous free traffic source; brand power can improve traffic conversion rates, and brand momentum can bring product premium capability. The core to breaking out of homogenized competition lies in product innovation and brand building. After product innovation, there will be many imitators, turning the blue ocean into a red ocean. Therefore, it is crucial to build a moat by seizing consumer cognitive advantages through brand building.

"Many entrepreneurs are haunted by the fear of performance collapse due to heavy losses, but I also see that in this era, the strong get stronger, and those who consistently outperform the industry in revenue and profit are always the big brands. Many people think that building a brand is ineffective and increases costs because they haven't found the switch in consumer minds. A good brand strategy not only reflects the product's advantages but also differentiates significantly from competitors and addresses consumer pain points, thus attracting attention and resonating with consumers. If you don't have a brand perception in consumers' minds that distinguishes you from competitors, then falling into price wars, promotion wars, and traffic wars is only a matter of time."

"Many people claim that traffic is the essence of all business," Jiang Nanchun said, "but in fact, winning people's hearts with the brand is the foundation of business; traffic is just the result of the brand winning people's hearts." Last year, Qiaqia's small yellow bag advertised daily nuts on Focus Media, seizing a mental switch: "When buying nuts, freshness is most important; if freshness is not maintained, there will be a stale taste," which immediately attracted attention.

Qiaqia advertised "With key freshness technology and the National Science and Technology Progress Award, so when buying daily nuts, choose Qiaqia." This ad was heavily placed only on Focus Media, and after airing, daily nut sales surged within one or two months. Meanwhile, Liumeimei repositioned itself in October last year as "Eat Liumeimei when you want something sour, containing natural organic acids," and began saturated attacks on Focus elevator ads, leading to a significant sales increase and even supply shortages before the Spring Festival.

"Many also think that building a brand is less effective than promotions and grabbing traffic. Indeed, brand advertising has a turning point from quantitative to qualitative change, sometimes one or two months, sometimes up to six months to a year."

Jiang Nanchun cited Bosideng down jackets as an example. In 2018, Bosideng repositioned itself as the globally popular down jacket expert—"Focusing on down jackets for 42 years, selling well in 72 countries." In the first month of the new ad, Baidu Index rose but sales did not; in the second month, sales improved; in the third month, it was unstoppable, breaking 10 billion in five months.

But many brands don't take effect as quickly, "because the turning point from quantitative to qualitative change is different. Before reaching the turning point, there is often an increase in awareness but not obvious sales; after continuous investment reaches the turning point, there is a clear spillover effect on sales."

Feihe milk powder repositioned itself as "more suitable for Chinese baby constitution," reflecting its unique advantage of focusing on developing milk powder based on Chinese baby constitution for over 50 years, establishing core differentiation from international brands, and triggering user attention and resonance. But this ad only showed results after eight months of continuous placement; sales increased slightly in the first year, then grew from over 4 billion to 7.9 billion and 11.2 billion over the next three years. By 2019, Feihe had become the leading brand in the Chinese milk powder market.

After this epidemic test, more and more enterprises will find that brand power is the true immunity of an enterprise; branding can lead enterprises to win in this counterattack. Brand is an asset, but intangible assets are often overlooked in daily situations. Through the epidemic, we can see that brand is insurance, and at critical moments it can even determine life or death.

-02- Digitalization is the key anti-fragility capability of enterprises

The SARS outbreak in 2003 promoted the development of online shopping. This epidemic has once again greatly accelerated e-commerce development. Fresh e-commerce platforms like Suning Caichang, Miss Fresh, Dingdong Maicai, and Hema Fresh saw a surge in popularity overnight. Online medical platforms like Haodf.com, Ping An Good Doctor, and WeDoctor Internet Hospital experienced explosive growth. Online education represented by Yuanfudao and Xueersi Online School also grew exponentially.

Online and digitalization have become an inevitable trend in all walks of life in China. This epidemic has made us deeply understand IBM's ad from 20 years ago: Either e-commerce or no business.

Since 2015, China's media market has undergone fundamental changes. From 2015 to 2018, traditional media continued to decline, while Focus elevator media and the internet continued to rise. Focus Media covers hundreds of thousands of office buildings and community apartment buildings, reaching 310 million urban mainstream people with spending power and trendsetting value every day, forming high-frequency mandatory exposure in the closed elevator scenes they pass daily. But this is the advantage of Focus's original model. How to use the internet and big data, how to achieve online distribution, data return, effect evaluation, and precise placement?

Jiang Nanchun introduced that in 2018, after Alibaba invested 15 billion yuan in Focus Media, Focus began its digital transformation and exploration for the future, becoming the world's leading digital offline media company.

"Focus has evolved from the earliest card playback to cloud-based online push. So during this epidemic, when many communities were closed, Focus could still ensure normal screen operation through cloud ad push. Moreover, last year we connected most screens to the Internet of Things, allowing remote online monitoring of playback status, ensuring uninterrupted ad playback."

At the same time, Focus's smart screens have achieved from city-wide broadcasting to thousand-screen placement based on big data analysis of each building.

"For example, in first-tier cities, BMW 7 Series can choose properties priced above 100,000 yuan per square meter, BMW 5 Series can choose 70,000-100,000 yuan properties, and BMW 3 Series can choose 40,000-70,000 yuan properties. Decoration companies, building materials, and home appliance companies can choose buildings based on building age, such as newly delivered or over 8 years old, and can also select buildings around terminal outlets. During the epidemic, we precisely placed ads around 200+ Xibei stores that could deliver, within 3 kilometers, telling people to order Xibei delivery without going out."

"Through search data and e-commerce data, Focus can also analyze which buildings are interested in which product categories, such as which buildings have high interest in tourism, which have high interest in wealth management and car purchases. We have over 200 dimensions of interest tags."

Jiang Nanchun said that because of the integration with Alibaba's backend, Focus has achieved data return. Therefore, unlike other offline media, every placement on Focus is not just a placement but also returns to Tmall Data Bank, accumulating the client's brand digital assets—something no other offline media has.

"We need to be prepared. If one day we encounter another black swan event, and clients cannot go to office buildings or work, they can still place ads on Focus from home. The environment is always uncertain, but what is certain is your own competitiveness and adaptability."

-03- Where will enterprises and consumers go after the epidemic?

Jiang Nanchun believes that after the epidemic, most leading enterprises and head brands will not only not brake but will accelerate.

"On the surface, the epidemic has brought a huge impact on most enterprises, with many facing survival issues, but excellent head enterprises are all holding their breath to rebound and expand market share. In fact, returning to common sense, China is the world's largest consumer market. Will this consumption scale change because of the epidemic? Obviously not. The market size is there. The key is whether you outperform the market or are eliminated, and whether your market share expands or declines."

The epidemic affects enterprises differently, and the competitive landscape may change, as will strategic rhythm. "Head enterprises want to widen the gap with the second tier in one go, to seize the market space vacated by uncompetitive competitors exiting. Meanwhile, the second-tier players with innovation capability, differentiated value, and sufficient cash flow are quietly thinking about how to overtake on the curve. In all industries, small companies will fully exit, head companies will invest heavily to expand share, and brand concentration will rise significantly."

Two-level accelerated differentiation will become the new trend of consumers after the epidemic.

On the consumer side, after this epidemic, consumption structure and tendencies will change. Small enterprises are struggling, and the disposable income of ordinary people will decline. Ordinary people will be more cautious in consumption, spending money on products that are more stable, certain, and trustworthy.

Meanwhile, capable white-collar backbone elites, the 300 million urban mainstream middle class, will see consumption rebound, but consumption will show characteristics of loving beauty, fun, health, fearing aging, death, loneliness, and seeking mood and excitement. Products must not only provide function but also soothe the soul and emotions.

"Crisis is always an opportunity for the ambitious. Every crisis is a chance to change the market landscape. Future successful brands must firmly lock onto and influence this urban mainstream consumer group. They are opinion leaders and word-of-mouth champions, the trendsetters of China's consumer market. They define brands and lead trends," Jiang Nanchun believes.

Case 1: 58 Daojia: The power of brand during the epidemic

As a leading home service company in China, 58 Daojia initially chose the home service industry for an important reason: the industry had no brands. Chen Xiaohua, founder and CEO of 58 Daojia, said: "At that time, there were 700,000 home service companies in China, but no brand in consumers' minds. We thought this was a once-in-a-lifetime opportunity."

Therefore, attention to brand has run through 58 Daojia's entire development. Just over half a year after the company was established, in the second half of 2015, it invited Huang Xiaoming and Angelababy as spokespersons and used Focus Media to quickly ignite the brand.

"From that time on, we have been the pioneer brand in this industry. Today, with the epidemic, we understand more deeply how important the number one brand is. Because you are the number one brand, the government sees you more and understands your difficulties more easily; because you are the number one brand, aunties and employers trust us more in times of crisis, and they are more willing to leave these transaction opportunities during the epidemic to us, and more willing to visit our platform to get first-hand reactions from the home service industry to the epidemic. So during the first week, our daily active users on the auntie side hit a historical high. I believe a large part of this is due to the power of the brand."

At the same time, 58 Daojia has been building the digital infrastructure of the home service industry. "Many people don't understand why a home service company needs to develop so many systems, such as insurance systems, physical examination systems, online contract signing systems, auntie resume systems, online interview systems, online salary payment systems, and a bunch of systems. We call it the digital infrastructure of the home service industry.

When this epidemic came, almost all home service companies in China stopped business, but 58 Daojia happened to have a complete set of end-to-end fully online infrastructure for the home service industry. We immediately launched online auntie selection, online contract signing, online interviews, and our training also achieved online registration, online classes, and online payment. Today, our training business actually hit a historical high during the epidemic."

Chen Xiaohua lamented that the epidemic will eventually end, and as long as your business is a rigid demand, the greater the impact of the epidemic on your business, the stronger your rebound will be after the epidemic. Truly excellent entrepreneurs and businesspeople will definitely find more opportunities from crisis to achieve a counterattack.

Case 2: Miaokelanduo: Turning crisis into opportunity, sustaining high growth

In 2019, Miaokelanduo, a leading Chinese cheese brand, reaped significant rewards. By focusing on the cheese industry, the children's market, and Focus elevator media, during the 618 shopping festival, Miaokelanduo won the double crown on JD.com and Tmall, with sales growth exceeding 300%; the number of outlets grew from 50,000 at the beginning of the year to 200,000.

By the end of 2019, Miaokelanduo's factories in Shanghai and Tianjin were operating at full capacity, and it launched plans for capacity expansion and equipment upgrades in 2020.

Chai Xiu, chairman of Miaokelanduo, said that Miaokelanduo regards "manufacturing flawless products" as its core competitive strategy. "We always do things with the mindset of making perfect products, constantly improving product quality from the consumer's perspective."

How did the sudden epidemic affect Miaokelanduo, and how did it overcome it? Chai Xiu said: "80% of Miaokelanduo's sales are offline, and 20% are online. Like many companies, we were also hit hard."

In such a crisis, is there an opportunity? Is there a way to turn crisis into opportunity? Miaokelanduo found a breakthrough through continuous analysis.

"From this epidemic, it was caused by humans eating wild animals, which is an unhealthy lifestyle. For a cheese company, we produce healthy food and advocate a healthy lifestyle. This is a huge opportunity after the epidemic. People's awareness of enhancing immunity has increased, and cheese happens to be a delicious food suitable for consumption."

Based on this, while others pressed the pause or slow button, Miaokelanduo continued to grow rapidly. In February, Miaokelanduo's popular product Mozzarella sold out, cheese sticks hit a historical high in community sales since 2019, and offline business also began to recover gradually.

Case 3: Lin Qingxuan: Survival against all odds—brand power and digital sales

Sun Laichun, founder and chairman of Lin Qingxuan, has recently been frequently exposed due to a long article titled "A Letter from the Darkest Moment." Sun Laichun said: "The past twenty-plus days have been very difficult. Lin Qingxuan operates offline stores, with 337 directly operated stores. Half were closed, and the open half had no customers. From the first to the seventh day of the Lunar New Year, I was extremely anxious and painful because every year during that period, offline store performance is very good. But this year, performance from the first to the seventh day plummeted by 90%. I felt that if this continued, Lin Qingxuan's cash reserves would be in trouble within two months."

"At that time, I also sent this letter to Jiang Nanchun, and he said we must persist. You need to analyze the current rational logic: what do you have and what don't you have? Lin Qingxuan has offline stores, employees, and goods, but offline customers are gone. What else? There is brand power. The Lin Qingxuan brand is real."

Sun Laichun introduced that in 2019, Lin Qingxuan placed ads on Focus Media with a listed price of 200 million yuan. "We selected high-end residential buildings for precise placement. The elevator posters had QR codes for free samples. After placement, we acquired 500,000 precise digital customers who claimed samples. Also, some consumers firmly remembered that to repair skin, make it glow, without sensitivity, redness, or fine lines, use Lin Qingxuan."

Starting February 1, Sun Laichun mobilized all offline employees to communicate with customers through Taobao, DingTalk, and other channels. "In the past few years, Lin Qingxuan accumulated 2.23 million precise fans on DingTalk, converting 1.62 million into digital fans. We have 1.8 million fans on WeChat official account, 2.8 million fans on Tmall flagship store, and over 2 million digital fans accumulated in offline stores. Let these sales guides use WeChat and DingTalk to contact customers, send coupons, and interact with consumers through Tmall live streaming, WeChat live streaming, and Douyin."

Sun Laichun revealed that as of now, Lin Qingxuan's national performance has increased by 40% compared to the same period last year, and some stores in Wuhan and Northeast China are actually twice that of last year.

Surviving against all odds, Sun Laichun summarized: "A stable triangle has three points to determine the current situation: first, strong brand power; second, strong digital customer communication methods; and third, confidence."

Case 4: Xiaoxiandun: Preparing for explosive consumption growth after the epidemic

Xiaoxiandun was founded in 2014, creating the new category of fresh stewed bird's nest.

With the epidemic hitting, during this Spring Festival, Xiaoxiandun's sales data actually increased 1.5 times year-on-year. Lin Xiaoxian, founder of Xiaoxiandun Fresh Stewed Bird's Nest, analyzed: "We believe first is strong product power, which is very important—to make products that are truly valuable to users. During the epidemic, many people buy bird's nest to enhance immunity."

"In the five years since founding, we have focused on how to stew a good bowl of bird's nest, and we are the undisputed expert brand in fresh stewed bird's nest. We believe that only by being professional can we win the trust of users and customers. The second very important thing is brand building. As the saying goes, 'Those who win the people's hearts win the world.' We created a new category and precisely solved user needs. How to let more people know and choose you?"

Lin Xiaoxian introduced that Xiaoxiandun Fresh Stewed Bird's Nest is positioned as nourishment for middle and high-end groups, with users mostly living in high-end communities. Focus Media can precisely and efficiently find potential users, so in 2018, Xiaoxiandun quickly cooperated with Focus in Beijing, Shanghai, and Hangzhou.

"Now the effect is that many users can say 'Eat fresh stewed bird's nest, find Xiaoxiandun' at the first moment. We found that Focus elevator media has the characteristics of high frequency, necessity, and low interference, and is a very efficient way to reach users, helping us triple sales in 2019."

Converting product advantages into mental advantages can maximize brand value. Lin Xiaoxian said that the epidemic will eventually pass, and we must be prepared to welcome the explosive consumption growth and industry reshuffle after the epidemic, and win in competition.

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