Introduction: Whoever creates consumer awareness gets the brand premium. Profits come from more sales volume or higher premiums. When growth peaks, premium capability becomes the core of business. Brand premiums belong to manufacturers (brand owners), while white-label premiums belong to distributors or retailers. Going white-label instead of branded reflects a new game between manufacturers (brand owners) and merchants. Business ideas have positions. "Going white-label instead of branded" is a business view applicable to distributors and retailers, not manufacturers (brand owners).

White-label vs. Generic Brands When discussing white-label with people, some blurt out: Isn't that just generic brands? White-label and generic brands are both non-well-known brands. However, the contexts are different. Generic brands are non-well-known brands in immature market environments. Therefore, generic brands have negative connotations, only a line away from counterfeit and shoddy products. White-label is a non-well-known brand in a mature market environment. Therefore, white-label is a neutral concept. In fact, the term "brand" has different contexts in different eras. According to Kotler's definition in "Marketing Management," a brand is to "identify" the brand owner and "differentiate" from competitors. This is also a neutral definition, from which other brand values derive. For example, consumer "traceability" function, "protecting brand owners," brand value, etc. In immature markets, "traceability" is a very important function for consumers. When buying unsuitable products, traceability through the brand ensures consumer interests. Now that the legal system is complete and the market is mature, especially with e-commerce platforms' no-reason returns and exchanges, the traceability function of brands is gradually disappearing. Both branded and white-label products can be traced. As business matures, consumers are protected by two layers. Brand owners are one layer, allowing traceability to the brand owner. Retailers (platforms) are the second layer, allowing traceability to the retailer (platform). Tracing to the retailer (platform) is more efficient than tracing to the manufacturer. Therefore, distributors and retailers (platforms) must complete a quality screening. In a mature market environment, whether branded or non-well-known, quality is basically reliable. Individual exceptions exist. This is the environmental basis for discussing white-label. With the rise of e-commerce platforms, many emerging brands appear on platforms. However, due to the "7-day no-reason return" and user review mechanisms, white-label products are prevalent. It can be said that the "long tail" of e-commerce is the largest white-label market.

Global Rise of White-label When discussing brands, it usually refers to manufacturer brands or brand owner brands. With the rise of retail giants, retailer brands have emerged. They produce private label products through OEM. This phenomenon is called "brand coverage", meaning retailer brands "cover" manufacturer brands. This is a major trend in the global retail industry and one of the main ways retailers obtain profits. The so-called brand coverage means that trust in the retailer extends to trust in all products sold by the retailer, a typical "love me, love my dog" phenomenon. As the "world's factory," China has received private label orders from foreign retail giants, which is one of the driving forces behind the rapid development of China's manufacturing industry. Pangdonglai, a viral retail store in Xuchang, Henan, began focusing on "self-purchased" products around 2010. Due to the huge profit contribution of "self-purchased" products, it can pay employees about double the industry average salary, ensuring the implementation of Pangdonglai's corporate culture. Now, Ant Financial Union, which has over 100 members with annual sales exceeding 200 million yuan, can provide customized private label products to member companies. In China, there is also a form of white-label where distributors customize products from well-known or unknown manufacturers for exclusive sales, which can also be considered quasi-white-label. This was once popular in the liquor industry. A brand is a consumer perception. Whoever makes the brand is responsible for completing consumer awareness. Manufacturer brands are naturally completed by the manufacturer, while retailer private labels are completed by the retailer. Retailers completing consumer awareness requires scale and cognitive methods. With the rise of retail giants, scale is no longer a problem for private labels. Although Ant Financial Union's members are not large enough to customize individually, as a member platform, Ant Financial Union has scale. Awareness leads to transactions, which is the advantage of brands over non-well-known brands. However, retailer private labels have many categories, and the cognitive method must differ from brand owners. Fortunately, retailers directly face consumers, and the store is the best cognitive battlefield.

Brand Premium Marketing expert Jin Huanmin said: A brand either sells more or sells more expensively. Whether more or more expensive, it generates a brand premium. In the era of high growth, more emphasis is placed on "selling more"; in the era of sales peaking, only "selling more expensively" is pursued. Can distributors and retailers earn more profit by selling well-known brands? When "selling more," they certainly earn more; in the era of "selling more expensively," they cannot earn more. Distributors and retailers earn the price difference (gross margin). A higher selling price does not mean more profit from the difference. Who gets the brand premium? Whoever creates consumer awareness gets the brand premium. For well-known manufacturer brands, the brand premium naturally belongs to the manufacturer. What does it have to do with distributors and retailers? In the past, brand owners mainly did brand awareness. If distributors and retailers sell white-label, they need to do brand awareness. Brands require long-term investment, and brand investment generates returns. Whoever invests, whoever benefits. This is an unchanging truth. When distributors and retailers are just channel players, they naturally cannot enjoy the brand premium. Even more so, the more well-known the brand, the higher the price transparency, and the lower the gross margin. The prevalence of white-label indicates a change in the role of distributors and retailers. They are no longer just channel movers but must become brand awareness creators to obtain brand premiums. Without brand premium, in a low-growth era, enterprises cannot develop.

White-label Awareness Is there any difference between retailers, distributors, and manufacturers doing brand awareness? Huge difference. Traditional marketing has two major driving systems: brand-driven and channel-driven. Traditional brand awareness mainly reaches the C-end through mass media, using the "loudspeaker shouting" method to make the brand widely known. There are two basic points: First, choose a "loudspeaker", i.e., influential mass media; Second, "shout hard", i.e., long-term heavy investment, repeat, repeat, and repeat. As for the various popular brand theories, they are basically assumptions about consumer information cognitive models, positioning theory, conflict theory, USP theory, etc. The traditional channel model, from 2003 to the present, mainly in FMCG, is deep distribution, where products "flow down" through channels controlled by manufacturers to reach millions of terminals. This is the traditional marketing system of "strong C-end awareness + efficient B-end channels". So, when distributors and retailers do white-label, is the above marketing system still effective? White-label products usually do not involve added value, mostly cost-effective products. For cost-effective products, prices are transparent, and the key is performance (quality). Awareness of performance and quality is much easier than awareness of added value. Therefore, discussing white-label products also has boundaries and cannot be extended indefinitely. Directly appealing to the C-end to complete awareness and transaction integration. This is the characteristic of white-label business awareness. Brand awareness requires density. Only when density is formed can the B-end sustain. The density of manufacturer brands is relatively large because mass media has a wide reach. The formation of white-label awareness also requires density, but the boundaries of density are different. It can be as small as a community, or even a "group leader" (store manager)'s business circle. Because of this characteristic, white-label products only need to form density in a specific small business circle to stabilize the B-end. This also forms the characteristics of the 2C organization mentioned later, i.e., fighting mobile warfare.

Community Group Buying White-label Breakthrough Community group buying gained attention in 2017 due to Xing Sheng You Xuan, and became popular with the intervention of capital groups. Duoduo Maicai, Meituan Youxuan, and other capital groups are typical community e-commerce models, while local groups are typical community group buying models. The most prominent phenomenon of community group buying is the extremely successful promotion of white-label, creating a phenomenon of large-scale white-label promotion. Why do community group buying promote white-label? Because white-label has high profits. Not only do "group leaders" require high profits, but platform merchants also have high profits. Why can white-label promotion succeed? White-label sales certainly have difficulties, but due to the strong relationship between "group leaders" and users in the business circle, based on "group leader trust + experience + KOC recommendation," the user awareness process for white-label is completed. Community group buying promoting white-label perfectly demonstrates the process of channel merchants completing 2C user awareness. This process is extremely important for the promotion of localized private labels (white-label) in China. Foreign private labels mainly apply to large retailers. In China, promoting white-label is not only applicable to KA stores but also to small retail stores, such as street-side stores and mom-and-pop stores. Although Chinese mom-and-pop stores are small, they have special survival characteristics. Mainly, the living radius overlaps with the business radius. Acquaintances when meeting, regulars when entering the store. High trust, high success rate for white-label promotion. Especially in low-tier markets. Therefore, if well-known brands are "customer's first choice," white-label is "store owner's first recommendation."

Rapid Awareness Model for White-label Doing white-label is not the goal; making white-label generate premium is the goal. The operating entity of white-label is not the manufacturer but distributors and retailers. How do they do brand awareness? Retailers doing white-label have no channel issues; they are the terminal of the channel. The so-called terminal is the scenario that directly reaches the C-end. Distributors doing white-label also must have stable terminals as a prerequisite. With terminals reaching the C-end, distributors and retailers doing white-label awareness is completely different from manufacturers. Because the most effective means of brand awareness is reaching the C-end. And distributors and retailers have this advantage. Why do manufacturers use mass media for branding? Mainly because they lack the conditions for large-scale C-end reach. How to complete white-label awareness at the terminal? There are two basic methods: scenario-based and experience. Experience is the most effective method for rapid awareness in the short term. The characteristic of experience is "seeing is believing." If experience is done well, such as immersive experience, it can achieve "one-time awareness, lifelong effectiveness" effect. Therefore, experience marketing has recently become very popular. Scenario-based is different from traditional terminal vividness. Vividness is mainly visual effects. The core of scenario-based is emotion, i.e., the emotion in the sales scenario and traditional consumption scenario. Empathy leads to resonance, resonance leads to vibration. Empathy, resonance, vibration; empathy is the prerequisite. When I visited Pangdonglai in 2010, I found that Pangdonglai had put a lot of effort into scenario-based experience. However, Pangdonglai's communication focus is on culture, while self-purchased (private label), experience, and scenario are kept secret.

White-label 2C Organization Distributors and retailers doing white-label need to solve three major problems: supply chain, scenario-based experience, and 2C organization.

1. White-label Supply Chain

Not all non-well-known brands are white-label. Brands that manufacturers failed to promote are not white-label. The white-label supply chain must meet three conditions: First, directly find manufacturers, i.e., producers who do not do marketing. As long as manufacturers do marketing, there are two results: one is marketing expenses, which increase supply costs; the other is that if manufacturers do marketing, there is a possibility of channel crossing, and the higher the premium, the more severe the crossing. Second, it is best to find professional OEM manufacturers. China has many professional OEM manufacturers. Even if white-label promotion succeeds, they will not enter the market. Third, supply prices should stay away from the critical point. Different prices have different qualities. Overly pursuing low supply prices may cause quality to slide toward the problem critical point. Critical point prices may also have good quality, but quality is unstable.

2. Scenario-based Experience

Scenario-based experience is the main method for white-label awareness. Scenario-based experience is now very professional. Making scenario-based experience into an awareness model is not easy and requires repeated experimentation by distributors and retailers. Now, many people go to Pangdonglai to learn every day, but few grasp the essence of Pangdonglai; many are misled.

3. 2C Organization

The traditional deep distribution system is built around brand owners, mainly completing channel dredging. Although sales guides also reach the C-end at the terminal, they are sales-oriented and occasionally use experience methods. Therefore, the traditional organization of channel merchants does not undertake product awareness functions. The new organization for white-label promotion mainly undertakes white-label promotion functions. The best way to promote white-label is bC integration. Without facing 2C, user awareness cannot be formed; without facing the b-end, awareness efficiency is low. Community group buying promotes white-label effectively, which is a typical bC integration model. The b-end is the "group leader," and the C-end grasps KOCs (usually playing the role of experiencers). 2C is different from 2B organizations. 2B organizations are fixed organizations, fighting positional warfare; 2C organizations are agile organizations, fighting mobile warfare. Promote a white-label, if successful, hand it over to the 2B organization, then promote a new white-label. After successful promotion at one b-end, hand it over to the 2B organization, then promote at another b-end. Now brand owners also have 2C organizations, but they are high-end 2C organizations, operating similarly to white-label 2C organizations. Their operating methods can be seen from their "flying team" naming.

Going White-label Instead of Branded In 1995, I wrote a popular article "Not Famous Brands Also Sell Well." In 1998, Teacher Jin Huanmin and Teacher Wang Rongyao also wrote a popular article "Not Doing Brands, Doing Sales." Later, Teacher Jin and I published a book "Sales as King." Absolute sales volume is absolute brand. This is McKinsey's concept. More than 20 years ago, China's traditional channels, especially low-tier channels, indeed had the characteristics of the trinity of awareness, transaction, and relationship. Because of the strong relationship between the b-end and C-end, the process of relationship turning into awareness and awareness turning into transaction was completed. This is a characteristic of traditional Chinese stores. China's community stores still have this characteristic today. Mass media intervention in brand communication compressed the living space of non-well-known brands, and the FMCG industry became increasingly concentrated. The formation of scenario-based experience theory and content-based self-media communication based on emotion have once again given white-label products a chance to sell well. If the opportunity of "not doing brands, doing sales" was for small brand owners, then the new opportunity of "not doing brands, doing white-label" is for distributors and retailers. In the era of pursuing growth, distributors and retailers leveraged the power of manufacturer brands to grow rapidly. As long as they made money, there was profit, which was natural. In the era of stock competition, without sales growth, they still need to pursue profit growth, so they can only pursue premium capability. Same sales volume, higher premium. Whoever does awareness enjoys the premium. Manufacturers do branding, and the premium is with the manufacturer. If distributors and retailers successfully promote white-label, the premium is with distributors and retailers. Of course, promoting white-label is also a technical task and not easy.

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