---
title: "Le Chun CEO's 10,000-Word Insight | Why Coca-Cola Chose Le Chun, and What We Did Right"
description: "This article is an open letter from Denny Liu, CEO of Le Chun, systematically sharing his insights on branding and the current state of the FMCG industry. It explains why Coca-Cola invested in Le Chun, highlighting the brand's unique characteristics and the lessons learned from their innovative practices."
author: "刘丹尼"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-06-03"
language: "en"
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# Le Chun CEO's 10,000-Word Insight | Why Coca-Cola Chose Le Chun, and What We Did Right

> This article is an open letter from Denny Liu, CEO of Le Chun, systematically sharing his insights on branding and the current state of the FMCG industry. It explains why Coca-Cola invested in Le Chun, highlighting the brand's unique characteristics and the lessons learned from their innovative practices.

Click 'Read Original' for details.
Introduction
Today's reposted article is an open letter from Denny Liu, CEO of Le Chun, which systematically elaborates on his perceptions of the current state of the brand and FMCG industry. Last year, Le Chun accepted investment from the Coca-Cola Group. Many FMCG professionals have sought to explore: Why did Coca-Cola choose Le Chun? Compared to other 'internet-famous' brands, what 'personality traits' does Le Chun have? Or is it just a matter of 'luck'? These questions may find 'clues' in this article.
Hi, it's been a long time since I wrote in the first person. I'm Denny, CEO of Le Chun.
We want to share with you the experiences, lessons, and thoughts we've accumulated through repeated innovative practices over the more than two years since Le Chun's founding.
Previously, when we started Le Chun, no one thought we could survive, especially considering that the yogurt red ocean competes with many financially powerful super food giants both domestically and internationally.
Fortunately, we've grown to our current scale. Besides millions of online Le Chun users, you can find Le Chun in top hotels including The Peninsula, Park Hyatt, and Waldorf Astoria, as well as in thousands of convenience stores and supermarkets like 7-Eleven, FamilyMart, and Lawson. For a new brand without backing or background, this proves we've done at least some things right.
So in this article, we want to share Le Chun's most valuable lessons from these years with more people.
## Many believe the consumer goods market is a big red ocean. But over these two years, we've increasingly realized that not just food, but the entire Chinese FMCG market is still in a barren era, with so many opportunities for innovation and efficiency improvement that it's 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 cognition on several keywords: **Brand, Design, Food, Operations, Supply Chain.**
Among Le Chun's millions of users, there are consumers who love food, design, and interesting brands; professionals who want to learn how to do products, brands, and operations better; and staff from traditional consumer goods giants who want to transform but don't know how.
Whatever type of Le Chun user you are, I believe this article can bring new inspiration to your work and life—reshaping part of your cognition.
**Brand**
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 also feels like something particularly mysterious.
In these years of practice, we've summarized three cognitions about brand from complex to simple—basically, any novice can understand and return to the essence of brand by remembering these three points.
**Cognition One: The 'Two Constants' of Brand**
> A brand has one and only two values:
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> The first value is called 'Quality Assurance,' meaning a brand represents 'a repeatedly verified promise of quality.'
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> The second value is called 'Image,' meaning a brand must bring users 'identity and status recognition,' another way to say it is 'value output.'
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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, within its category to stand out—so we see in ads 'Nationwide sales far ahead,' 'For every X cans of herbal tea sold, Y cans are XXX,' 'Milk tea sold each year can circle the earth twice,' all aimed at leaving the impression of 'repeatedly verified quality promise' in consumers' minds.
From the extension of this Quality Assurance value cognition, many 'tactics' on how to build a brand have emerged, including the widely acclaimed 'Positioning' theory: 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 an unshakable competitive advantage—the underlying assumption is that consumers default to the brand as the most quality-assured.
However, all 'tactics' face continuous iteration and replacement. For example, the category positioning view in positioning theory is still applicable to most low-frequency consumption, but not to some high-frequency consumer goods categories; I won't elaborate 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 in the so-called consumption upgrade.
So in our cognition, a brand has one and only two components: 'Product + Content.' For example, GoPro is 'action camera + extreme sports and people,' Muji is 'home products + design and people.'
Product focuses on the first value, Quality Assurance; content focuses on the second value, Image. Most traditional brands' flaw is lacking content, or content weakly related to the product, merely seeing content as a way to ride on traffic—but don't fool yourself: if a young idol holds a bottle of mineral water, the ultimate winner is the idol, not the mineral water.
We believe truly quality content, like good products, can create value for users. Content covers a wide range: articles, images, videos, events, and the product itself are all content. At Le Chun, from the earliest days we produced valuable content for users—sharing recipes and ingredient lists for each product, 'Le Chun Kitchen,' 'Breakfast Plan,' etc.—to now collaborating 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 integrate with the product, bringing users a touching experience.
On these two core values, Quality Assurance and Image, some brands have always done well, some insufficiently. But they are not new things. A brand has one and only 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.
**Cognition 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 unchanging. Consequently, some brand messages were deceptive, profiting from information asymmetry. This includes not only traditional FMCG, cosmetics, and daily necessities brands with exaggerated claims domestically, but also the branding 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 increasingly smaller—especially considering this is an era where even my grandmother forwards on WeChat Moments articles like 'These 10 health supplements don't have the claimed effects!'
More importantly, seemingly perfect brands will become 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?
Brands without this self-awareness are fragile.
Note, 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 shocks from a rapidly changing environment. So I use the word 'fragile' as Nassim Taleb repeatedly uses in his book 'Antifragile.'
Think about recent successful and failed brands.
'I am imperfect, but I must be sincere'—this is an important change about brand, and also a necessary attribute for future viable brands. This is the second conclusion.
**Cognition Three: The Highest Level of Brand**
The accelerated flow of information forces brand companies to become increasingly 'consistent internally and externally.' This is a great aspect of this era.
The ultimate result of 'internal-external consistency' is that a brand's external value proposition must also be its organization's internal value proposition. Whether each person in the brand organization can repeatedly deliver Quality Assurance in daily internal work determines whether the brand can repeatedly deliver its quality promise externally.
Each person's identity recognition within the brand organization determines the identity recognition the brand conveys externally.
Therefore, a brand organization's 'mission, vision, and values' are the highest level of brand. This is the third conclusion.
Brand is made by people. Brand is also reflected in every detail made by people. Therefore, brand cannot be faked—this is the biggest change of this era.
Standing on the shoulders of these three cognitions, all other brand work is like sailing with the wind.
Under these three cognitions, there are many 'tactics' on how to build a brand, and many good books worth recommending. From the 'Positioning' mentioned earlier, which is regarded as a classic in China, to 'How Brands Grow,' which has overturned foreign brand cognition in the past two years. But all 'tactics' will inevitably be iterated and updated, so grasping the essence of brand at any time is more important. These books contain many wonderful detailed knowledge; you can buy and read them.
**Design**
After brand, I talk about design, because design is also a skill closely related to everyone's work and life.
**What exactly is design?**
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, etc.
The difference between design and art is that art is more for self-expression, while all design is to help users solve problems.
In our cognition, the essence of design is the thinking and handling of relationships—for example, for graphic design, it's thinking about and handling the relationship between points, lines, and planes, the relationship between main title and subtitle; for organizational structure design, it's thinking about and handling the relationships between people, teams, strategy, and execution division.
A good design can arrange the relationships among all elements well. 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 thinking of 'designing a thing, not an object.' Visually, those designs no longer meet Le Chun's current visual aesthetic standards, but the thinking method is still used today.
Looking at the designed thing from different angles, thinking about its essence—this is Le Chun's philosophy.
So every day at Le Chun, there are hundreds of design inspirations in my mind at all times. This stems from how we view surrounding things daily. Only a few can be implemented into reality, 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 thinking of 'designing a thing, not an object'—this framework can also be seen in a case I wrote three years ago that Marketers liked: 'Using PM Thinking for Marketing, 22.3% Amazing Conversion Rate for Ground Promotion Flyers.'
We believe good design doesn't necessarily require inspiration from the sky, but 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 good design.
With the thinking method and framework, the final need is the right attitude—no design is small. A small flyer can have a huge impact, and the thinking within can extend to designing an interaction, a user experience, an operational activity; the essence is the same.
**Food**
On social media, we occasionally see many 'Le Chun word-of-mouth that truly moved users.'
Because the starting point for designing each food is to create a comprehensive sensory enjoyment, with the ultimate goal of creating a touching user experience.
In our cognition, 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 + richly textured artwork. 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 most important.
Additionally, we like to use a lot of natural ingredients, but we don't think humans naturally prefer additive-free things—otherwise you can't explain why cola soda, bubble gum, and other heavily synthetic foods 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 simple 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 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 can find innovative inspiration in other types of food and cuisine. Including our new brand 'Xiao Bu Ji' 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, Noosa; we bought them one by one to taste, and set our standard to surpass all these products. When making Xiao Bu Ji snacks, we also conducted large-scale evaluations of snacks from Europe, America, Japan, Korea, and Southeast Asia, innovating on their basis.
Here, for friends interested in food, I recommend 7 documentaries that inspired us and moved 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 touching products.
**Operations**
In 2017, Coca-Cola announced the end of its traditional marketing system, abolishing the CMO (Chief Marketing Officer) position, replaced by Chief Growth Officer. The Le Chun team, however, has been 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 FMCG 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's clear that channel operation thinking has indeed influenced an entire generation.
In our cognition, **the core logic for future FMCG brands is to operate users, not channels.**
But this means large companies need to bid farewell to the traditional channel-centric organizational structure and change to a user-centric one—no matter how traditional FMCG giants claim to be 'user-centric'; small companies need to expand their user operation systems to all channels.
At the same time, the data dimensions 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 unit 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 operation system first solved the problem of letting everyone have a meal. The essence of this process is tilting limited resources toward 'distribution,' naturally sacrificing product quality and user experience. So when we talk about 'user experience' and 'user-centric' today, it's not a new concept, but a necessary cyclical trend as history advances to 'oversupply of ordinary products.' The continuous transformation of the operation 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 principle. So whether for individuals or organizations, operations is a capability that requires long-term accumulation and sedimentation, continuous transformation and iteration, to cultivate competitiveness, but it is also the most solid skill. This is Le Chun's cognition of operations.
**Supply Chain**
From when Professor Zeng Ming, Chief Strategy Officer of Alibaba, first approached Le Chun to discuss how to implement the C2B operation system specifically, to today, it has been three and a half years of continuous improvement in our supply chain cognition.
Even on a whiteboard in my home, there is always a line written—'Future brand companies will all be supply chain management companies.'
Starting from a user-centric operation system, you'll 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 operation system, the biggest bottleneck and limitation is the supply chain. Here, it's not about 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 content, I won't expand here, but I want to share a good book: 'Service Upgrade of Manufacturing Retail 7-ELEVEn.' This is currently the most substantive Chinese version book on 7-ELEVEn's supply chain and big data experience. The author, Usui Makoto, was the head of 7-ELEVEn's system headquarters, promoting integrated system reform in SCM (Supply Chain Management) and DCM (Demand Chain Management) from 1978 to 2004.
The complete digitization of users will drive the comprehensive digitization of the supply chain system, ultimately enabling real-time financial data and achieving true amoeba management. User data, supply chain data, and financial data—these three data lines are the lifelines of future brand operations.
**Organization and Sharing**
Because China's food industry needs a company to do product 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, Bright, Master Kong, Wahaha, New Hope, etc., successively came to 'exchange,' we knew we were indeed leveraging change in 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 on WeChat: 'Actually, it's mainly because the team is excellent...' He said: 'That's a good answer. I'll throw out this question, Denny answers with this, 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 no one has done in this industry.
In these two years, I've met many innovative individuals, but an individual's capability is limited; only organizations can infinitely amplify people's abilities, achieving 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 reason for 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 operational routines that traditional FMCG companies have kept unchanged for 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 at Le Chun is a particularly demanding thing.
We scrutinize every detail to bring users the best products and experiences. Behind delivering each new product, design, and content are many nights of overtime, debates, entanglements, and repeated polishing, ultimately 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 worked with BETC, Louis Vuitton's exclusive packaging design team, to design Le Chun's new product packaging. But even these top teams experienced Le Chun's torment. Because designing something beautiful is already difficult, but balancing beauty, user experience, brand positioning, and consumption scenarios requires relentless investment.
But behind these demanding requirements for innovation and user experience is a belief at Le Chun:
We believe Le Chun will become the Whampoa Military Academy of the next generation FMCG industry. The future 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 execution. And this execution process depends on whether the team has the soil, including the cognition of the Leader and the team, and the other is the painful, entangled, repeated polishing process mentioned above. It's not about talent, but who is more wear-resistant and can endure hardship.
But it's not to say that 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 cannot be done in other companies due to lack of soil for capability development.
But back to the starting point, we haven't done well yet, and in front of us is still a barren market. Compared to many innovative European, American, and Japanese FMCG companies, we have too many places to innovate and optimize. So we can set our sights further, and resources worldwide can be discovered and utilized.
Finally, one experience I want to share with everyone is: **Persist in sharing.**
Any shared experience may have flaws or defects. But persisting in open and transparent sharing can bring more possibilities to yourself and bring more unexpected innovations to the world.
Source: Le Chun CEO Denny Liu


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