---
title: "Le Chun Breaks Out of the Red Sea by Upgrading These 5 Concepts"
description: "Two years ago, few believed Le Chun could survive in the fiercely competitive yogurt market. The company's founder shares insights on five key concepts—brand, design, food, operations, and supply chain—that have driven its success and innovation in China's FMCG industry."
author: "Denny"
publisher: "New Distribution"
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published: "2017-06-12"
language: "en"
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# Le Chun Breaks Out of the Red Sea by Upgrading These 5 Concepts

> Two years ago, few believed Le Chun could survive in the fiercely competitive yogurt market. The company's founder shares insights on five key concepts—brand, design, food, operations, and supply chain—that have driven its success and innovation in China's FMCG industry.

Click the image for details
- Text | Denny -
- Source | Official account "Le Chun's Partners" -
Two years ago, when we started Le Chun, no one thought we could survive. Especially considering that yogurt is a red ocean category competing against many financially powerful super food giants both domestically and internationally.
Many people believe the consumer goods market is a vast red ocean. But over the past two years, we've increasingly realized that not just food, but the entire Chinese FMCG market is still in an era of barrenness, with countless opportunities for innovation and efficiency improvement that are exciting.
Some say the biggest difference between people is cognition. Skill differences can be quantified, but cognitive differences are essential and unquantifiable. So today we want to focus on sharing Le Chun's understanding of several key concepts: brand, design, food, operations, and supply chain.
**◆**** ◆ ◆**
**Understanding of Doing 'Brand' Well**
Let's start with brand, because almost everyone's work is closely related to brand—from customer service to development engineers, from supply chain to event planning, from personal brand to corporate brand, our lives and work environments are surrounded by brands.
But brand often feels like something mysterious.
Through years of practice, we've distilled three insights about brand from complex to simple—basically, any novice can remember these three points and always understand and return to the essence of brand.
**Insight One: The 'Two Constants' of Brand**
A brand has exactly two values:
The first value is 'Quality Assurance,' meaning a brand represents 'a repeatedly verified quality promise.'
The second value is 'Image,' meaning a brand must provide users with 'identity and status recognition,' another way to say it is 'value expression.'
Interestingly, because in the first 20 years of China's consumer market, qualified products were scarce, a brand only needed to deliver the first value, Quality Assurance, in its category to stand out—so we see in advertisements 'national sales遥遥领先,' 'for every X cans of herbal tea sold, Y cans are XXX,' 'the milk tea sold each year circles the earth twice,' all aimed at leaving an impression of 'repeatedly verified quality promise' in consumers' minds.
From the extension of Quality Assurance value cognition, many 'tactics' about how to build a brand emerged, including the widely acclaimed 'Positioning' theory, which is one of them: its core idea is that if a brand can strongly associate with a category, especially establishing the first position in the category, it can create unshakable competitiveness—the underlying assumption is that consumers default to that brand as the most quality-assured.
However, any 'tactic' will inevitably face continuous iteration and replacement. For example, the category positioning viewpoint in positioning theory is still applicable to most low-frequency consumption, but it is no longer suitable for some high-frequency consumer goods categories, which I won't elaborate on here.
But as product quality in certain categories improves and basic quality needs are met, brands must begin to compete and differentiate on the second value, 'image and identity recognition.' This is what is currently happening with the so-called consumption upgrade.
So in our understanding, a brand has exactly two components: 'product + content.' For example, GoPro is 'action camera + extreme sports and people,' and Muji is 'home products + design and people.'
Products focus on the first brand value, Quality Assurance, while content focuses on the second value, Image. The flaw of most traditional brands is that they lack content, or the content is weakly related to the product, merely treating content as a way to ride on traffic—but please don't deceive yourself: if a young idol holds a bottle of mineral water, the ultimate winner is the idol, not the mineral water.
We believe that truly high-quality content, like good products, can create value for users. And content covers a wide range: articles, images, videos, events, and the product itself are all content. At Le Chun, we started by producing valuable content for users ourselves—sharing the recipe and ingredient list of each product, 'Le Chun Kitchen,' 'Breakfast Plan,' etc.—and now we collaborate with excellent content creators, such as creating 'Le Chun Kitchen' with many food enthusiasts, and upcoming comprehensive cooperation with the 'Midnight Diner' IP. We believe the best state of content is to merge with the product, delivering a touching experience to users.
On these two core values, Quality Assurance and Image, some brands have always done well, while others have been insufficient. But they are not new things. A brand has exactly these two core values—even in the emerging market environment. Any behavior unrelated to consolidating these two core values is not brand building. This is the first conclusion.
**Insight Two: The 'One Change' of Brand**
Behind the two constant values of brand, there is now an important change.
In the past, brand people often understood brands as perfect, consistent, and long-term unchanged. As a result, some brand messages were deceptive, profiting from information asymmetry. This includes not only traditional FMCG, cosmetics, and daily necessities brands with exaggerated claims that we know domestically, but also the shaping methods of some famous traditional foreign brands.
But due to the accelerated flow of information and the empowerment of self-media tools, the survival space for deceptive brands will become smaller and smaller—especially considering that we are in an era where even my grandmother forwards articles on WeChat Moments like 'These 10 health supplements actually don't have the claimed effects!'
More importantly, seemingly perfect brands are becoming increasingly 'fragile.'
Brands must sincerely know themselves: What am I? What am I not? Where are my imperfections? What efforts am I making to improve? A brand without this self-awareness is fragile.
Note that the word used here is not 'weak' but 'fragile.' Because a perfectly packaged brand may seem powerful at a specific point, but it is very susceptible to the impact of rapidly changing environments. So we use the word 'fragile' as repeatedly used by Nassim Taleb in his book 'Antifragile.'
Think about recent successful and failed brands.
'I am imperfect, but I must be sincere'—this is an important change regarding brand, and we believe it is a necessary attribute for future viable brands. This is the second conclusion.
**Insight Three: The Highest Level of Brand**
The accelerated flow of information makes brand companies increasingly need to be 'consistent internally and externally.' This is a great aspect of this era.
The ultimate result of 'internal and external consistency' is that a brand's external value proposition must also be its internal value proposition for the organization. Whether each person in the brand organization can repeatedly fulfill Quality Assurance in daily internal work determines whether the brand can repeatedly fulfill its quality promise externally.
The identity recognition of each person within the brand organization determines the identity recognition the brand conveys externally.
Therefore, the 'mission, vision, and values' of a brand organization are the highest level of brand. This is the third conclusion.
Brands are made by people. Brands are also reflected in every detail of what people do. Therefore, brands cannot be faked—this is the biggest change of this era.
Standing on the shoulders of these three insights, all other brand work is like sailing with the wind.
Under these three insights, there are many 'tactics' for brand building, and many good books worth recommending. From the 'Positioning' theory, which is regarded as a classic in China, to 'How Brands Grow,' which has overturned foreign brand cognition in the past two years. But any 'tactic' will inevitably be iterated and updated, so it is more important to grasp the essence of brand at any time. These books contain a wealth of detailed knowledge; you can buy them and read.
**◆**** ◆ ◆**
**Understanding of Doing 'Design' Well**
After brand, we talk about design, because design is also a skill closely related to everyone's work and life.
**What Design Really Is**
When we talk about design, we first clarify that we are not discussing skills like #aesthetics, vision, writing#. Because design is not just presenting something in a beautiful way, nor is it a rhetorical device.
Design is everywhere. On the website of the world-renowned design company IDEO, they define their design work to include system design, business model design, architecture design, communication design, content design, graphic design, brand design, spatial design, architectural design, industrial design, interaction design, user experience design, and so on.
Design differs from art in that art is more about self-expression, while all design is aimed at helping users solve problems.
In our understanding, the essence of design is the thinking and handling of relationships—for example, for graphic design, it is thinking about and handling the relationship between points, lines, and planes, and the relationship between main title and subtitle; for organizational structure design, it is thinking about and handling the relationships between people, teams, and strategy and execution division.
A good design can arrange the relationships among all elements. Therefore, if doing 'beautiful design' is HARD mode, then doing 'beautiful design that fits specific scenarios, has commercial value, and meets user needs' is HELL mode.
**How to Do Design**
In the widely circulated article 'How to Create Touching Designs from Scratch,' we shared four design cases from Le Chun to illustrate our mindset of 'designing a thing, not an object.' Visually, the designs in these cases may not meet Le Chun's current visual aesthetic standards, but the way of thinking is still used today.
Looking at the designed thing from different angles and thinking about its essence—this is Le Chun's philosophy.
So every day at Le Chun, there are hundreds of design inspirations in our minds at all times. This stems from the way we look at things around us daily. Only a few can eventually be implemented because the difficulty of design lies in handling the relationships among all elements.
So before we do each design, there is a 'Le Chun Design Seven Questions' that business departments must fill out, which is both loved and hated. A few days ago, 'Everyone is a Product Manager' published an article titled 'How to Create Creative Operational Activities? Just Look at These 7 PPTs,' and upon opening it, it was almost a replica of Le Chun's Design Seven Questions.
'Le Chun Design Seven Questions' is actually a specific framework for the mindset of 'designing a thing, not an object'—the application of this framework can also be seen in a case I wrote three years ago that Marketers liked: 'Using PM Thinking for Marketing, Achieving 22.3% Amazing Conversion Rate with Ground Promotion Flyers.'
We believe that good design does not necessarily require inspiration from the sky, but rather relies more on thinking and insight. As long as you fully diverge in thinking before design, calmly analyze, and follow the order—user, scenario, purpose, strategy, form—you can create innovative and good design.
With the mindset and framework, what is finally needed is the correct attitude—no design is small. A small flyer can have a huge impact, and the way of thinking can extend to designing an interaction, a user experience, an operational activity, and its essence is the same.
**Understanding of Doing 'Food' Well**
On social media, we often see many 'Le Chun testimonials that truly touch users.'
Because the starting point for designing every food product is to create a comprehensive sensory enjoyment, and its ultimate purpose is to create a touching user experience.
In our understanding, food is the most unique existence among all consumer goods. Because it is the only product that can simultaneously bring color, aroma, taste, sound, and texture to the user experience.
Besides satisfying hunger, food is more like a collection of oil painting + fragrance + seasoning + an artwork with rich texture. Through 'eyes, ears, nose, tongue, body,' it can create rich 'color, sound, aroma, taste, touch.'
So in the process of designing food, the layering of the five senses is the most important.
Additionally, we like to use a lot of natural ingredients, but we do not believe that human nature necessarily prefers additive-free things—otherwise, you cannot explain why strongly synthetic foods like cola soda and bubble gum were so popular when they first appeared.
It's just that human taste preferences have obvious cycles. After eating too much simple food, people seek more artificial stimulation; after artificial stimulation numbs, people hope to return to simplicity and authenticity in food. At this time, natural ingredients can better touch taste buds tired of flavorings. And we happen to be at this stage of the cycle.
On how to use natural ingredients to touch taste buds, we draw inspiration from a large number of Michelin-starred and molecular gastronomy dishes from around the world.
So, almost all flavors launched by Le Chun—coconut rose, Uji matcha, vanilla hazelnut, D24 durian, green and yellow lemon, jasmine, quinoa oat—are rare in the yogurt industry, but you can find innovative inspiration in other types of food and cuisine. Including our new brand 'Xiao Buji' series of healthy snacks launched this year, which also have unique flavors not found on the market.
At the same time, for each Le Chun product, we benchmark against similar products worldwide. For example, for strained yogurt, the most popular worldwide are Fage, Chobani, and Noosa; we bought them one by one to taste, and set our standard to surpass all of them. When making Xiao Buji snacks, we also conducted large-scale evaluations of snacks from Europe, America, Japan, Korea, and Southeast Asia, and innovated on their basis.
If you haven't tried Le Chun products because you're in a small or medium city, good news: starting this month, our 'Xiao Buji' snacks have added delivery to 199 new cities. Users in these 199 cities who previously couldn't buy any Le Chun products can click this entrance to directly purchase 'Xiao Buji' snacks. Partners who could already buy Le Chun can just order directly in the mall.
Here, for friends interested in food, we recommend 7 documentaries that have inspired us and touched us: 'For Grace,' 'Spinning Plates,' 'Chef's Table,' 'Ants on a Shrimp,' 'The World's Best Restaurants,' 'Kings of Pastry.'
In fact, there is a simple secret to making good food. As long as you can evaluate and polish the most ordinary foods—yogurt, buns, noodles, biscuits—like red wine, you can create products that touch people's hearts.
**◆**** ◆ ◆**
**Understanding of Doing 'Operations' Well**
In 2017, Coca-Cola announced the end of its traditional marketing system, abolishing the CMO (Chief Marketing Officer) position, replaced by the Chief Growth Officer. The Le Chun team has been quietly practicing user operations led by Silicon Valley's Growth Hacking and AARRR (Acquisition, Activation, Retention, Revenue, Refer) since 2015, and has never set up a traditional consumer goods brand marketing department.
More than a year ago, Le Chun was often asked by investors: 'You do so well online, why go offline?' From this, it can be seen that channel operations thinking has indeed influenced an entire generation.
In our understanding, the core logic for future FMCG brands is to operate users, not channels.
But this means that large companies need to bid farewell to the traditional channel-centric organizational structure and change to a user-centric organizational structure—no matter how traditional FMCG giants claim to be 'user-centric'; and small companies need to expand their user operations system to all channels.
At the same time, the data dimensions that operators focus on are also very important. Only when operators pay enough attention to LTV (Life Time Value) and CAC (Cost of Acquired Customer) can they truly focus on each individual user.
We often talk about 'strategy, organization, KPI.' No matter how good the strategy, it can only achieve successful results when combined with the correct organization and correct business metrics.
In the industrial era, the channel-centric operations system first solved the problem of ensuring everyone could have a meal. The essence of this process was to allocate limited resources to 'distribution,' naturally sacrificing product quality and user experience. So when we talk about 'user experience' and 'user-centric' today, it is not a new concept, but a necessary cyclical trend when history advances to 'oversupply of ordinary products.' The continuous transformation of the operations system is to adapt to this powerful trend.
Finally, a deep feeling: operations is a capability where practice is far more important than understanding the principles. So whether for individuals or organizations, operations is a capability that requires long-term accumulation and precipitation, continuous transformation and iteration of oneself, to cultivate competitiveness, but it is also the most solid skill. This is Le Chun's understanding of operations.
**◆**** ◆ ◆**
**Understanding of Doing 'Supply Chain' and 'Big Data' Well**
It has been a year and a half since Professor Zeng Ming, Chief Strategy Officer of Alibaba, first approached Le Chun to discuss how to specifically implement the C2B operations system. In fact, this is a year and a half of continuous improvement in our understanding of the supply chain.
Even on a whiteboard in my home, there is a line written: 'Future brand companies will all be supply chain management companies.'
Starting from a user-centric operations system, you will find that the entire traditional supply chain system naturally needs to be changed—when a brand has the ability to communicate with users in real time and quickly acquire user needs, the real challenge is how the supply side meets user needs.
So, in the entire C2B operations system, the biggest bottleneck and constraint is the supply chain. This is not the traditional large-scale industrial manufacturing supply chain, but a supply chain system with rapid response, rapid iteration, and plug-and-play capabilities.
In fact, there is a very successful company in this field: Japan's 7-ELEVEn.
Due to the length of the content, I won't expand further, but I want to share a good book: 'Manufacturing Retail 7-ELEVEn's Service Upgrade.' This is currently the most practical Chinese book on 7-ELEVEn's supply chain and big data experience. The author, Usui Makoto, was the head of 7-ELEVEn's system headquarters, and from 1978 to 2004, he promoted 7-ELEVEn's integrated system reform in SCM (Supply Chain Management) and DCM (Demand Chain Management) in all areas.
The complete digitization of users will drive the comprehensive digitization of the supply chain system, and ultimately enable real-time financial data, achieving true Amoeba management. User data, supply chain data, and financial data—these three data lines are the lifelines of future brand operations.
**◆**** ◆ ◆**
**Understanding of Doing 'Le Chun' Well**
Two years ago, in the WeChat article that unveiled the Le Chun brand, 'Start Ordering! Sanlitun Now Has a Weird Food Company' with over a million views, we said:
'China's food industry needs a company to do products and operations in an 'open, transparent, and participatory' way. This is the greatest significance of doing Le Chun.
Because even if it achieves a little success, it will have a great impact on China's food industry.'
In these two years, when Mengniu, Yili, Guangming, Master Kong, Wahaha, New Hope, etc., successively approached us to 'exchange,' we knew we were indeed leveraging the transformation of the entire food industry.
But the real power behind this is not any individual, but the organization.
A while ago, Huang Youcan, author of the bestseller 'The Light of Operations,' invited Le Chun to his program to share: 'Why is Le Chun's user operations so good?' I replied to him on WeChat: 'Actually, it's mainly because the team is excellent...' He said: 'That's a good answer. I'll throw out the question above, Denny uses this answer, and then play 59 minutes of music, perfect ending.'
Actually, it's not a joke. It's true. And it's not just the user operations team—Le Chun's offline team, big supply chain team, technical team, and R&D team are all challenging things that no one in this industry has done before.
In these two years, I have met many innovative individuals, but an individual's capability is limited. Only organizations can infinitely amplify the capabilities of people and achieve truly sustained innovation—but this places unique requirements on the organization's genes, culture, and structure. Most great FMCG companies were born in the industrial era before the internet, and their genes and structures prevent innovative individuals from fully developing.
This is the meaning of Le Chun's existence.
We know this team has the ability to create the world's most innovative and touching FMCG brand.
The Le Chun team insists on rethinking the essence of things in every corner and detail of daily operations—from organizational structure to challenging all the traditional FMCG companies' unchanged operational routines over the past 20 years. In this process, we force ourselves to innovate at a speed unprecedented in the industry.
But this is also why working in the Le Chun team is a particularly demanding thing.
We scrutinize every detail to bring users the best products and experiences. Behind delivering every new product, new design, and new content are many nights of overtime, debates, struggles, and repeated polishing, and finally delivering a stunning finished product with courage.
The design teams we collaborate with also go through a lot of pain and challenges.
In the first quarter of this year, we collaborated with Guangyu and Nod Yang, two recognized top graphic designers in China, to design Le Chun's new brand visual, which you will gradually appreciate starting this month. Last year, we designed Le Chun's new product packaging with BETC, the packaging design team for Louis Vuitton. But even these top teams experienced Le Chun's torment. Because designing something beautiful is already difficult, but to balance beauty, user experience, brand positioning, and consumption scenarios, it requires relentless investment.
But behind these demanding requirements for innovation and user experience is a belief of Le Chun:
We believe Le Chun will become the Whampoa Military Academy of the next generation of FMCG industry. In the future, the group of people in China who best understand FMCG will come from Le Chun.
In the new consumer market environment, there are already enough good books sharing the 'tactics' of how a new company should operate. Everyone knows the principles. It depends on who can persist in executing them. And this execution process depends on whether the team has the soil, including the cognition level of the Leader and the team, and the other is the painful, tangled, and repeated polishing process mentioned above. It's not about talent, but who is more durable and can endure hardship.
But it's not to say that just poaching a few people can replicate all this. The key is whether the organization behind the brand has such soil. Many things that can be done at Le Chun do not have the soil for development in other companies.
But back to the starting point, we haven't done very well yet, and the market ahead is still barren. Compared to many innovative European, American, and Japanese FMCG companies, we have too many areas for innovation and optimization. So we can set our sights further, and resources from around the world can be discovered and utilized.
Le Chun has achieved a certain scale of influence in a very short time. But we are still a startup, and we hope we will always be a new company in a startup state. We know that continuous innovation and polishing is the right path, and the only path.
Finally, one experience I want to share with everyone is: insist on sharing.
Welcome to share these insights and experiences of Le Chun with more friends around you.
Any shared experience may have omissions or flaws. But insisting on open and transparent sharing can bring more possibilities to yourself and bring more unexpected innovations to the world.
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