In 2020, I wrote an article titled "New Logic for Investing in China: Insights from the Focus Media Curve," in which I proposed a basic logic: China's economy has entered an innovation-driven stage of high-quality development, where business models and brands with category innovation value will be fully recognized by the market. Investors should make choices based on innovation intensity, time window length, and mind-share solidification. I also suggested that to judge whether a company has benefited from innovation dividends, one can use a phenomenon as an observation window, namely the "Focus Media Curve." Why use Focus Media as the curve? Because Focus Media, as one of the few innovative media facilities in China with central ignition capability, has not only participated in the brand ignition of many important innovative companies but has also become the core platform for innovative brand groups to influence the lifestyle of urban mainstream groups. What kind of group is the "Focus Media Curve constituent stocks"? It is a brand group that, over the past decade, has emerged, survived, and solidified in consumers' minds after undergoing consumption model innovation, technological innovation, and fierce competition under the law of the jungle. A standard action of this group is to intensively advertise on Focus Media at a critical time when the brand develops from growth to ignition, in order to ignite the brand. Why continue to discuss this "Focus Media Curve" this year? Because in the past year, I have found a more specific field than the concept of "innovation" to test the "Focus Media Curve," namely the new consumption field and lifestyle transformation field. In these fields, Focus Media's "oscilloscope effect" is particularly evident. Of course, this does not mean that Focus Media is a strict investment tool, but rather that companies with intensive advertising on Focus Media have a significantly higher probability of being in an explosive cycle. In other words, not every company that chooses Focus Media succeeds, but most successful brands have chosen Focus Media. -01- The Crystal Ball of Industry Development When I last researched this topic, China's economy was in a period of high uncertainty after the peak of the pandemic. At that time, I pointed out that from Focus Media's interim report to the Q3 months, we saw strong revenue recovery. Simply put, if the macro economy is depressed and entrepreneurship and innovation are weak, it will likely be reflected in Focus Media—often manifested as a decline in corporate marketing budgets and ignition demand. Conversely, even if the environment is severe and complex, as long as Focus Media's revenue growth is strong, it indicates that in the economy, especially in the new economy, corporate business activities are active and proactive, with frequent business wars and continuous innovation. From this perspective, the Focus Media curve can undoubtedly be seen as a vitality index for Chinese innovative enterprises! Currently, although China's anti-epidemic situation faces seasonal challenges again, it is incomparable to last year's hasty response. After more than half a year of recovery, social production is orderly, the high-level determination to promote economic and social development remains unchanged, deeply stimulating domestic demand consumption has become a top-level strategy, and innovation opportunities brought by new infrastructure are increasing. If you want specific examples, you can look at the market value (valuation) performance of some typical companies that advertised on Focus Media from 2019 to 2020, which can prove my point. Genki Forest is a typical "Focus Media Curve constituent stock," as it has textbook-like achieved "brand ignition trilogy" in its four years of development, namely **the first wave of concept innovation, the second wave of large-scale online testing and seeding, and the third wave of intensive ignition on Focus Media." △Genki Forest With this almost standardized action, in October 2019, with the addition of well-known investment institutions such as GSR Ventures, Genki Forest's valuation jumped to 4 billion yuan; in 2020, after intensive advertising on Focus Media to achieve brand ignition, it set sales records of 200 million, 300 million, and 400 million in consecutive months, and then news of investment from Sequoia Capital China and YUANSHENG Capital emerged, with valuation jumping to 14 billion yuan; and according to some exclusive sources of mine, Genki Forest's valuation is expected to exceed 30 billion yuan, making it a "blue chip stock" among the "Focus Media Curve constituent stocks." Xiaoxiandun Fresh Stewed Bird's Nest, created by Lin Xiaoxian, a national first-level health manager and executive vice chairman of the National Bird's Nest Committee, was founded in 2014. It is also a typical innovative enterprise that opened a new track by proposing five standards for fresh stewed bird's nest. In 2019, after igniting in some cities through Focus Media, annual sales surged. In 2020, it launched testimonial ads with investors Zhang Ziyi and Chen Shu on Focus Media, with Double 11 sales exceeding 400 million, and its valuation soared. △Xiaoxiandun Fresh Stewed Bird's Nest If the former two are still stars running fast on the new consumption track, with certain volatility in valuation, then the market value changes of old "Focus Media Curve constituent stocks" like Bosideng, Feihe, and Qiaqia demonstrate the "crystal ball" effect of Focus Media more clearly. Since upgrading from "old national brand" to "high-end down jacket expert selling globally," Bosideng has continuously increased its advertising on Focus Media and has developed some unique tactics—such as using Focus Media ads in combination with e-commerce festival traffic purchase peaks like Double 11 and Double 12, and intensively igniting on Focus Media before the severe winter season. Bosideng not only relies on Focus Media to continuously enhance brand power but also gradually discovers some operational rules of "brand and effect synergy," which has allowed Bosideng's performance this year to rise against the trend despite the overall decline in the textile and apparel industry due to the pandemic. △Bosideng On January 5, Bosideng's Hong Kong stock announcement stated that in the first nine months of the 2020/21 fiscal year, the group's cumulative retail sales of brand down jackets increased by more than 25% compared with the same period in 2019/20, and the cumulative retail sales of other brands under the brand down jacket business increased by more than 40% compared with the same period in 2019/20. Some say that overly intensive brand marketing will dilute profits. In the short term, this is true, but in the long term, it is the opposite—brand ignition has a lag effect, but once brand momentum truly grows, it will inevitably achieve better premiums. Bosideng data shows that in the first half of 2020, net profit attributable to the parent company was 486 million yuan, a year-on-year increase of 41.8%, and the core down jacket business performed well, with a gross margin of 47.8%, which is exactly proof of the above viewpoint. Feihe is also such a case. With five consecutive years of high-density advertising on Focus Media combined with 530,000 ground promotions annually, it has captured the number one position in China's milk powder market. Since listing on the Hong Kong Stock Exchange, China Feihe has been shorted multiple times, but due to strong performance, its market value has risen from 66 billion to 180 billion. In 2021, there was even a "miracle" of the stock rising for three consecutive days, with a cumulative increase of 19.77%. △Feihe Milk Powder Qiaqia's cross-category battle also verifies the rationality of the Focus Media curve. In 2019, Qiaqia launched the Little Yellow Bag Daily Nuts, with the core of mastering key fresh-keeping technology, and ignited it on Focus Media, selling 820 million in one year. In 2020, it continued saturated attacks on Focus Media, and revenue grew rapidly. In two years, Qiaqia completed the transformation from sunflower seeds to nuts, with market value rising from 8 billion to over 30 billion. △Qiaqia Little Yellow Bag -02- The Weather Vane of Lifestyle Focus Media is not only a reference system for stock market fluctuations but also a weather vane recording people's lifestyles. Recently, when I participated in 36Kr's annual "New Economy King" conference, I inadvertently discovered a very interesting phenomenon—all iconic new economy companies from 2010 to 2020 have chosen to advertise on Focus Media—it was also hard for the organizer to be so patient. 36Kr found every video of these iconic companies advertising on Focus Media over the past decade, and through a small screen, it showed the changes in the lifestyle of urban mainstream groups over the decade. △36Kr's annual "New Economy King" conference From 2010 to 2013, it was the beginning of a historical cycle where mobile internet gradually replaced consumer internet. So we saw intensive advertising from various mainstream players in the "thousand-group buying war." This PK continued until 2015 when Meituan completed its final ignition with "Meituan once, beautiful once," acquiring Dianping, completing a historical process of reconnecting people with local life services through the internet. △Meituan once, beautiful once In 2011, JD.com began to actively challenge the Taobao system, marked by stopping the use of Alipay, starting the historical PK of the two e-commerce festivals, 6.18 and Double 11. In each of these ten years, passing these two days became iconic events with the two systems and mainstream brands on the platforms intensively competing for Focus Media resources during the festivals. △JD 618 In 2012, Xiaomi became famous with one battle and succeeded again. In 2013, BAT successively obtained tickets to the mobile internet, which were also recorded in history on Focus Media. △Xiaomi After that, ride-hailing began to surpass traditional taxis, completely subverting the travel industry. The symbol was the large-scale experiential subsidy campaign on Focus Media: "No money for taxis on Monday, we are all living Lei Feng." Ele.me launched a sniper war against Meituan, which attempted to invade the food delivery field, with intensive nationwide advertising and the "10,000 Buildings Action" in Shanghai, delivering free food delivery to white-collar workers in 10,000 office buildings. VIPkid, Yuanfudao, TAL, and Xuebajun launched rounds of online education wars, with the main battlefield also on Focus Media. In 2020, the vegetable shopping battlefield, with the opening of each new city, was also accompanied by Focus Media elevator ads. △Didi For those studying new consumption, or those who hope to invest in the new consumption field, if you want to understand what new business methods, new consumption experiences, and new consumption trends are currently popular among urban mainstream groups, it is often more real than searching the internet to stand in front of the elevators in office buildings and apartment buildings where you commute, because it displays year-round, truthfully and without falsehood, the momentum, flow, and values of the advertising budgets of the most active new economy participants. It is both a witness to lifestyle and a witness to brand growth. -03- The Decisive Factor in Brand Wars Another key significance of Focus Media as an investment weather vane is that it is often the decisive factor in brand wars, where the winner takes all is very obvious. I have exchanged views with some friends in the investment circle on how to express the essence of Focus Media in the most accurate language. The result is that it is by no means "advertising," but "weapon," which we call "nuclear weapon of business war." Focus Media is by no means just the display screen above your head that reminds you which companies are in business war. Those who can read Focus Media and understand its game rules will not be too weak in investment. The water here is too deep. I will only popularize a few basic concepts—lethality, timing, and scale. Lethality is the competitive ability of a company's advertising slogan. You might say this is the business of professional institutions. That's right. Most advertising slogans that become popular on Focus Media are not the result of entrepreneurs working behind closed doors. Among them, the best advertising ideas come from top positioning consulting firms, with starting prices exceeding 30 million yuan. Yes, for one sentence. A good advertising slogan is not as simple as "buy it, buy it, buy it." It tests two dimensions of ability—how to most vividly summarize your core competitiveness, and leave no room for opponents to upgrade their advertising positioning. Yang Haoyong, the founder of Guazi Used Cars, promoted such a typical case. His first use of Focus Media was in the war with 58 Ganji. Since the two sides were basically equal in creativity, the final merger was actually driven by capital—this might be a negative result of not having sufficiently superior creativity. So when he came on stage again in 2016, Yang Haoyong came up with the slogan "No middleman to earn the price difference" through Trout & Partners, and took the lead in advertising on Focus Media. △Guazi Used Cars In fact, Guazi's opponents reacted very quickly. In terms of endorsers, Guazi tied up with Sun Honglei as the image spokesperson; Renrenche hired Huang Bo, and Youxin heavily hired Leonardo DiCaprio; in terms of advertising budgets, all three also reached the billion range. But in comparison, Guazi still had the best effect. This still comes back to Guazi's advertising creativity achieving the greatest differentiation. Yang Haoyong's evaluation of this sentence: "This sentence clearly differentiated us from our opponents. Mind-share is not a virtual thing; it can be quantified. In our research, without prompting, when mentioning used cars, 6 out of 10 people said they would go to Guazi to take a look. This is a very large moat and also a very large, hard-to-replace wealth." This is the war creed of the one-sword-throat-cutter. In the online education war, Yuanfudao's strategy was exactly the same. It also hired the most professional institutions and came up with "Yuanfudao used by 400 million people." This data is real, establishes users' sense of security, and leaves opponents no room to upgrade. Because if they upgrade further, no one will believe them. So Yuanfudao also achieved a one-sword-throat in creativity. △Yuanfudao Therefore, the suggestive role of advertising positioning is not the artistic conception itself, but whether the war participant has made sufficient preparations—a company that hires the best institution to create a mind-share breakthrough, and a company whose marketing department collectively brainstorms to come up with a slogan, are already distinguished before the battle. The second dimension of the "Focus Media Curve" is the timing of advertising. In fact, we tend to favor the first advertiser as the winner, because after all, this is a "nuclear weapon." But there are always some countries in the world with the ability to launch a second nuclear counterattack, and business wars are the same. So fine analysis of advertising timing mainly depends on the actual control ability of the operator. Simply put, there are two types of advertising timing that deserve the most attention. The first is when a relatively weak party attacks a relatively strong party, then speed is key. Yuanfudao attacking TAL, and Ele.me attacking Meituan, are both this route. On the contrary, for some enterprises that advance gradually and seek steady victory, they often use intensive advertising as the last move to "stop the war with war." A very typical case is the aforementioned Meituan. Advertising is the result, and the result is the final battle. The grasp of these two timings tests the entrepreneur's ability to control the situation. The third dimension is scale. New economy wars often have three stages:
1. Scale solidification—occupy the most market space in limited time;
2. Capital solidification—strive for the most capital alignment in limited time;
3. Mind-share solidification—occupy consumers' minds in limited time; These three are actually mutually causal, and it is difficult to give a fixed formula. But there is no doubt that scale solidification and capital solidification both depend on mind-share solidification, and the main role of Focus Media is mind-share solidification. Therefore, when a company creates a new category and new characteristics, and tries to seize the timing window to launch saturated attacks on the brand to solidify mind-share, it means that significant changes or major thrusts have occurred in scale or financing. So the tricks in Focus Media ads are truly numerous. Insiders and outsiders see them completely differently, and there are many people who gain more insights the more they look. Of course, I by no means regard whether to advertise or the intensity of advertising as a necessary condition for investment logic. A good enterprise must first have a foundation to have the possibility of being solidified, and these foundations include: First, there is sufficient differentiated value and brand awareness, ready to hit the differentiated value into users' minds; Second, there is vitality and innovation, with an urgent business plan to ignite the brand and open up the situation in the core market; Third, there is sufficient confidence and strength. After all, the threshold for advertising on Focus Media is also an objective test standard and competitive barrier. Five years ago, there was a famous saying in the investment circle: "If you want to know who is a unicorn, look at Focus Media; if you want to know who will become a unicorn, also look at Focus Media." From this perspective, Focus Media is a crystal ball and also an oscilloscope and weather vane for China's new economy and new consumption. From 2020 to 2021, you can check whether this logic is correct. Tips will be paid 400-2000 yuan once the tip is adopted.