"If I have seen further, it is by standing on the shoulders of giants." But in recent years, in the business world, we have seen more and more former giants silently retreating under the waves of trends, some without making a sound. Meanwhile, new consumption, accompanied by the rapid development of the internet era, has become the most dazzling trendsetter in the business sea by adopting methods more acceptable to current consumers, through model or technological innovation. From their inception, they have been conquering markets with full force. Not only have they attracted waves of consumer check-ins, but they have also drawn the attention of numerous VCs. In the second half of the year, new consumer brands like Heytea, Sexy Tea, Wenheyou, and Mojibake Dessert Bureau successively reported price cuts, layoffs, and even store closures. Conversely, old consumer brands like Country Style Cooking, Laoxiangji, Laoniangjiu, and Yang Guofu, whose names seem far from "new," have surged to file for IPOs. This stark contrast has led to reflection: while new consumption breaks existing models and quickly embraces capital with creativity and initiative, its foundation is unstable. Capital support cannot fully solve operational problems; instead, it may be akin to "pulling up seedlings to help them grow," which is why "internet-famous" brands rarely become "evergreen." Old consumer brands experienced similar scripts in their youth. Those that have survived for decades have, through their own lessons of blood and tears, solidified their foundations, built strong brand moats, and gained the ability to traverse long historical cycles. Learning from each other's strengths, how to learn from old consumption has become an urgent topic for many emerging enterprises. Let's take the following famous old consumer brands as examples to observe their operations in turning adversity around and breaking through bottlenecks, hoping to provide some ideas for the sustainable operation of emerging enterprises.

The Iterative Upgrade Path of Old Consumer Brands

1. Anta's Acquisition Journey At the recently concluded Winter Olympics, as the official sports apparel partner, Anta sponsored 12 national teams. China ranked third in the medal table with 9 gold, 4 silver, and 2 bronze medals, all of which were born in events sponsored by the Anta Group. At the same time, with signed athletes like Gu Ailing and the Winter Olympics licensed "national flag sportswear," Anta effectively boosted the popularity of local sports brands, gaining significant market attention and firmly holding the position of the number one domestic sports footwear and apparel brand. Global sports footwear and apparel market share in 2020 (data from Guotai Junan) In 2005, with an 8-year sponsorship contract with CBA, Anta achieved an average annual revenue growth of 90%. Subsequently, in 2010, signing Kevin Garnett and launching the Garnett battle shoe, with powerful celebrity endorsement and a shocking price, pushed the brand to a new height through cost-effectiveness. In 2011, it surpassed Li-Ning to become the largest local brand. Although Anta, focusing on high cost-effectiveness, was popular and sold well, the difficulty in raising product prices to form brand premium was an obstacle that many old consumer brands found hard to cross. How to inject vitality into revenue without affecting the basic market and break the bottleneck? Anta's answer was to acquire the operating rights of the Italian brand FILA in China for 300 million RMB in 2009, positioning FILA's century-old foreign brand culture in the domestic mid-to-high-end market. The high gross margin advantage made Anta Group stand out in performance, and this successful acquisition opened Anta's multi-brand acquisition path. FILA gross margin and market share (Guotai Junan) FILA, which developed rapidly from 2016, alone achieved total revenue of 17.45 billion yuan in 2020, accounting for 49.1% of total revenue, with both gross margin and market share advantageous, expanding to over 2,000 stores, becoming the undisputed main profit engine of Anta Group. Using FILA as a reference, Anta Group, based on differences in sports categories, brand positioning, and price ranges, successively acquired and merged ski brand DESCENTE, tennis brand WILSON, fitness brand PRECOR, trail running and ski brand SALOMON, and the top outdoor brand ARCTERYX, known as the "Hermès of outdoor," building a brand matrix spanning professional sports, fashion sports, and outdoor sports. Anta Group brand matrix (Guotai Junan) For a company to grow from big to strong, besides focusing on its own revenue system, it must find a "second growth curve" to help the brand reach the top. The purpose of multi-branding is to meet different consumer groups through different price ranges and usage scenarios. Acquiring existing brands and leveraging their advantages in their respective industries to enter multiple segmented sports scenarios is undoubtedly the most efficient way.

2. Li-Ning's Brand Upgrade Speaking of Li-Ning, as the leader of national trend sports brands alongside Anta, they are like rivals in the market. In our minds, it is more about its imaginative, unconventional design style that, combined with national sentiment, has established a new image of domestic products. Few still remember that founder Li Ning, along with Jordan, was selected as one of the best athletes of the 20th century in 1999, the only Chinese person to be so honored. Founded in 1990, Li-Ning took advantage of the 2008 Olympics to achieve its peak annual revenue of nearly 10 billion yuan. In 2010, on the occasion of the company's 20th anniversary, Li-Ning attempted a brand upgrade through the "Post-90s Li-Ning" campaign, aiming to transform into a younger brand. However, blindly changing the target group without proper consideration led the brand upgrade path into a deadlock. User maintenance was inadequate; old users felt abandoned and disrespected by the brand. The post-90s users they tried to please were in their early twenties with limited spending power, and the products at that time were neither cool nor fashionable, leaving the target consumer group completely indifferent. After three consecutive years of losses, the brand began clearing inventory and sorting out categories while reflecting. Finally, starting in 2015, while maintaining good relationships with old users, they boldly hired young brand designers, combining trendy designs with Chinese elements to firmly grasp the preferences of young consumers, and simultaneously innovated and upgraded product design and store display layouts. (Image source: Internet) Themed products like "Shao Bu Ru Chuan," "Chang'an Youth," and "Huangcheng Yanyun" were well-received by the new generation of consumers with cultural confidence. At the same time, the brand frequently appeared on major social platforms where young people gather, not only continuously promoting the brand through frequent interactions but also indirectly collecting the interests and needs of young groups, accumulating data for the next generation of product iteration. With celebrity endorsements, cross-border collaborations, and leveraging the fan economy to boost revenue, and occasionally showcasing the beauty of national trends at international fashion weeks, supplemented by tracking and fermentation on Weibo, WeChat, and Douyin, the brand continuously enhanced its awareness and influence, establishing consumer brand identity. (Image source: Internet) Li-Ning finally completely shed the old "unromantic" label, combining Chinese cultural connotations with brand values, actively guiding consumer behavior with brand values, making trend and fashion synonymous with the brand, achieving high-quality growth and successful brand upgrade. A brand upgrade is not just shooting a promotional video, simply changing a logo or slogan; it is not a one-time action, but a continuous process of change based on product innovation and changes in consumption scenarios, allowing everyone to accept the new brand image.

3. Deepening Channels, Brand Matrix, Expanding Overseas At the end of the 20th century, Pan Gang, then assistant to the president of Yili, did not expect that the core strategy of liquid milk he formulated would last for decades and eventually become the king of liquid milk consumption in China. As of 2021Q3, the liquid milk segment, represented by Classic and Ambrosial, achieved revenue of 64.716 billion yuan, accounting for 76.13% of Yili's revenue, making it Yili's main source of income. At the same time, with the changing times, Yili kept pace with the times, seizing opportunities and making admirable changes in industry, products, and channels. (Image source: Yili official website) In terms of industry, Yili not only continuously laid out industrial cluster projects nationwide to build world-class high-end dairy industry bases, but also relied on domestic and overseas base markets in Oceania and Southeast Asia to steadily promote overseas business, connecting developed dairy regions in Asia, Europe, the Americas, and Oceania, building a network integrating global dairy resource systems and market systems, leading the digital and intelligent transformation of the entire industry chain, and accelerating the internationalization process. Its star products, including Ambrosial yogurt, ice cream, U Best yogurt drink, and Muen butter, have been launched in 21 countries and regions. According to the "2021 Asia Brand Footprint Report," Yili's brand penetration rate reached 92.2%, winning the love and recognition of hundreds of millions of consumers. In terms of products, Yili actively innovates based on in-depth insight into consumer needs, successively launching "Ambrosial" cheese bubble ball ambient yogurt, "Jindian" low-temperature milk, "Changqing" fiber yogurt, "QQ Star" children's growth formula milk powder, "Yili" Xinhua sugar-free meal replacement adult nutrition, "Yili" suckable children's cheese, "Miaozhi" pocket cheese adult cheese sticks, "Yiran" milk mineral sparkling water, and "Zhixuan" high-protein plant milk, a series of products deeply loved by consumers. The company's gross margin increased from 29.28% in 2011 to 36.81% in 21Q3, reflecting the correct implementation of the company's high-end product strategy and scale effects. (Image source: Yili official website) On March 3, Yili's comprehensive tender offer for Ausnutria, with their combined share in the infant formula market reaching 12.5%, quickly surpassed Danone to become the second in the industry. Subsequently, the two will complement each other in categories (milk powder vs. goat milk powder), supply chain (domestic vs. imported), and channels (90,000 maternal and child stores vs. refined management), entering a new era of strategic deep synergy. Through its own brand Jilinguan and Ausnutria-related brands, it will attack the mid-to-high-end and ultra-high-end infant formula markets respectively, making a strong breakthrough in the milk powder market, changing the competitive landscape of the largest sub-category of dairy products, and moving closer to the goal of becoming the industry leader. In terms of channels, Yili, in view of the weakness of channel control in the later stage of Mengniu's large distributor system, adopted a deep distribution model that requires large upfront investment and time but provides stronger terminal control. On this basis, it continues to deepen the omni-channel strategic layout, actively expanding new retail models such as "member marketing," "community marketing," "cross-border marketing," "hot IP co-branded customization," and "O2O to home," enriching marketing scenarios while seizing township development opportunities through channel sinking, cooperating with e-commerce platforms, driving rapid business growth, and initially establishing omni-channel control advantages, making liquid milk penetration reach an astonishing 85%. Yili has built a brand moat through leading innovation capabilities, control of upstream resources, and omni-channel strategic layout, accelerating its path to becoming the king of the global dairy industry.

4. Dongpeng Special Drink Speaking of Dongpeng Special Drink, this brand, which followed shortly after Red Bull entered China in 1995, copying the shape, efficacy, and even the slogan "Tired, sleepy, drink XX," has finally, with its first annual report after listing, made people sigh with only one sentence: Always imitating, finally surpassing. From around 1995, when Red Bull had just entered China for about two years, Dongpeng Beverage, eager to escape the meager profits of soft drinks, invited Lin Muqin, then the factory manager of Red Bull's OEM factory, to help with transformation, and launched the same type of functional drink, Dongpeng Special Drink. In the second year after launching, Dongpeng Special Drink won the best product award in Guangdong Province. Six years later, when Red Bull became the NBA's first partner in China in 2003 and became famous nationwide through CCTV broadcasts, Dongpeng Beverage, determined to change its fate, started high but fell low, approaching bankruptcy due to poor management, and was eventually taken over by "Father of Dongpeng" Lin Muqin, who raised funds through debt. Now, on February 28, Dongpeng Beverage released a surprising report in its 2021 annual report, with both revenue and net profit increasing during the reporting period. The company's operating revenue was 6.978 billion yuan, a year-on-year increase of 40.72%; net profit attributable to shareholders of the listed company was 1.193 billion yuan, a year-on-year increase of 46.90%. (Image source: Dongpeng official website) Of Dongpeng Beverage's nearly 7 billion yuan in revenue last year, Dongpeng Special Drink contributed over 90% of the income. However, in terms of energy drink sales volume, Dongpeng Special Drink's market share in China's energy drink market rose from 27.00% to 31.70%, surpassing Red Bull to become the highest-selling energy drink in China. The "imitator" counterattacked to become king, relying on the following points. Precise positioning: Based on existing "driving groups" such as self-driving car owners and truck drivers, "blue-collar groups" such as delivery riders and couriers, and "white-collar consumers" such as medical professionals and IT programmers, extending to "sports groups," "student groups," "entertainment groups," "overtime groups," and "groups needing good state," creating precise plans. Industrial strategy: Build a group-wide supply chain management organization, promote supply chain production-sales synergy model, achieving integrated production, sales, and inventory management from supply end to business end; The company will add new product lines in the South China base, Anhui base, Chongqing base, and Zengcheng base, continue to advance the construction of Changsha base and Quzhou base, and steadily promote site selection, land acquisition, and land bidding, auction, and listing for Shenzhen base and Shanwei base, providing solid guarantees for the consolidation and development of the South China, Central China, East China, and Southwest regional markets, reducing long-distance logistics transportation costs. (Image source: Brand prospectus) Market strategy: From the perspective of regional revenue structure, the East China and Southwest regions saw significant revenue growth. Last year, Dongpeng Beverage achieved sales revenue of 772 million yuan in the East China region, a year-on-year increase of 79.07%; the Southwest region achieved sales revenue of 432 million yuan, a year-on-year increase of 65.37%. Obviously, Dongpeng is gradually reducing its dependence on Guangdong, its birthplace, while accelerating its national layout. In terms of channels, compared with Red Bull's 4 million terminal outlets, Dongpeng still has room for outlet expansion. Strengthening terminal outlet development and subdividing channels in existing markets remain sustainable expansion strategies. Brand strategy: Continue to carry out mass brand communication through celebrity endorsements, film and TV variety show advertising placements, and new media matrix joint reports. Deepen the functional value education of the company's products, firmly holding onto the slogan "Tired, sleepy, drink XX," which was inexplicably abandoned by Red Bull in 2013, integrating brand, scene, and demand, making Dongpeng Special Drink the first choice for "tired and sleepy" states. Product strategy: Focus on the beverage track and deeply explore the "tired and sleepy" consumption scenario. When encountering difficulties in the early operation, it promptly turned around and adopted PET bottle packaging, different from Red Bull's cans, effectively reducing costs while avoiding direct collision with the industry giant. The cost-effective price of 3.5 yuan per bottle attracted user groups such as "driving groups" and "blue-collar groups." In 2021, to enrich product types, Dongpeng Beverage, based on users' needs for taste and function, successively launched "Dongpeng 0 Sugar Special Drink," "Dongpeng Daka" shake latte, and "Ta Neng" fruit juice energy drink mainly for female consumers. In 2022, it plans to continue with Dongpeng Special Drink as the core, launching light-flavored energy drinks for sports scenarios like "Dongpeng Sports Special Drink," "Dongpeng Bubble Special Drink" with classic original flavor, "250ml New Gold Can," and "335ml Slim Can" to meet consumers' drinking needs in different scenarios, building a "Dongpeng Energy+" product matrix. From the perspective of market development, Red Bull's overly fixed marketing model has gradually lost its brand influence compared to the aggressive Dongpeng. With the maturity of national sales channels and the enrichment of product structure, Dongpeng is about to be crowned the new king in the near future.

Returning to Business Essence, Learning from History Not all consumption can be redone with internet models. Between the ebb and flow, there is no distinction between old and new, nor is there a fixed universal formula. Different brands often choose the most suitable way to develop and survive, with no right or wrong. But as long as business activities exist, some fundamental things will not change, such as what pain points and needs the product solves for users, what the business model is, the current industry barriers and core competitiveness of the enterprise, and the future business scalability. These are necessary conditions for building a corporate moat to break through industry barriers or development bottlenecks. Capital can add icing on the cake, but only the precipitation of time can cross cycles. Respect the essence of business to achieve lasting success. Source: Consumption Circle (ID: xiaofeijie316) Author: Shen Nanfeng -END-