---
title: "Niche Products in Vogue: Are Big Brands Doomed?"
description: "As more beverage and snack companies launch personalized products, some industry insiders claim that the future FMCG market will be dominated by niche products, signaling the end of the big-brand era. However, Chen Siting, founder of Wanchaobang, argues that big-brand strategy remains key to success, and that all niche products either grow into big brands or die."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-06-16"
language: "en"
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---

# Niche Products in Vogue: Are Big Brands Doomed?

> As more beverage and snack companies launch personalized products, some industry insiders claim that the future FMCG market will be dominated by niche products, signaling the end of the big-brand era. However, Chen Siting, founder of Wanchaobang, argues that big-brand strategy remains key to success, and that all niche products either grow into big brands or die.

"
**Introduction:** Nowadays, more and more beverage manufacturers are launching personalized products, and more and more snack foods are featuring personality quotes...
Industry insiders claim that once people's basic needs for clothing, food, housing, and transportation are met, the future product trend will definitely be personalized. The future FMCG market will be a market where 'niche products rule,' and the era of big brands is about to leave the stage.
Their reasons are: consumption upgrade, the rise of the middle class, the internet solving information asymmetry, the arrival of the consumer sovereignty era, and consumer demand becoming diversified, personalized, differentiated, and even customized.
It seems that the trend of product personalization has become common sense that we don't need to discuss.
**However, is that the truth?**
"
In the era of consumption upgrade, will the future FMCG market no longer need big brands? On this topic, Chen Siting, founder of Wanchaobang, holds a different view.
Chen Siting believes that in the past two years, there has been a trend of overcorrection in the industry. It seems that if a product is not novel or different, it is considered backward and not keeping up with the times. Therefore, many companies are launching so-called 'innovative' products for the sake of differentiation and personalization. These innovative products, apart from having small sales volumes, fail to achieve any other goals.
01
**Big Brand Strategy Remains the Key to Winning**
Personalized voices are increasing and strengthening, seemingly with solid evidence, but this is likely an illusion caused by insufficient observation time or depth. The decline in sales of big brands is not related to the big brand strategy adopted by enterprises, but rather because consumers have more choices and the market is more segmented. Even in segmented markets, big brands still win, and it has nothing to do with personalized products.
Chen Siting told New Distribution, 'Many people say that big brands will no longer be mainstream and the market will become diversified and personalized. This is nonsense. The future mainstream FMCG market will still be the era of big brands, and big brand strategy remains the key to winning. We can analyze this from three aspects.'
**First, from the perspective of production and manufacturing**
Most of our daily FMCG products are industrially produced. The basic principle of industrial production is that the larger the scale, the lower the cost. The supporting molds, production technology, and production line facilities required for production dictate that products must be big brands. Only big brands can achieve lower production costs. Lower costs mean stronger market competitiveness. So-called personalized products do not have a competitive advantage in production costs and cannot compete with big brands for market share under the same quality.
**Second, from the perspective of channel distribution**
Similarly, only big brands are most efficient in channel distribution. For example, when a distributor pays for goods, a big brand can fill half a truck, distribute to outlets, and quickly sell through and turn over; a niche product fills a van, distributes to outlets, and has a long sales cycle. From the perspective of channel circulation, big brands definitely have lower distribution costs, faster circulation, higher turnover, and higher capital utilization for distributors. The essence of business is efficiency.
**Third, from the perspective of consumer demand**
Many industry insiders advocate product personalization trends mostly from the perspective of consumer demand.
First, let's look at it in reverse: why do consumers need big brands? Because every time a consumer buys a product, it is a choice, and every choice means paying a cost and taking a risk. Choosing a big brand is the same as choosing a brand.
Why choose a brand? Because only branded products are trustworthy, and trust brings a sense of security. This is also why consumers need big brands. Every consumer does not want to be a guinea pig. 80% of consumers seek security when purchasing and hope to make a wise choice. Therefore, for consumers, big brands have the lowest choice cost.
Many people say that in the context of consumption upgrade, consumers seek novelty and difference, which is not wrong. But whether it is the diversification of functional choices or the injection of more diverse emotional factors, personalized needs are clearly overestimated.
In the view of New Distribution, emphasizing product personalization actually assumes that the diverse needs of function and emotion are unlimited, and thus consumers' demand for products is personalized. However, we must face another constraint: the pursuit of uniqueness and imitation always go hand in hand. For example, if a person buys a very personalized drink, it will always be imitated by friends around them, triggering word-of-mouth, expanding the consumer group, and the personalized product will gradually become a mass product for a certain segment.
In summary, from the perspectives of production, circulation, and consumers, the FMCG field needs big brands. Of course, from a social perspective, it is also needed. Scale is the most intensive for society. 'Society' will not want every bottle of our drinks to be delivered to consumers by express delivery in the future.
02
**The Ultimate Goal of Personalized Products: Either Become a Big Brand or Be Eliminated**
Chen Siting believes that any brand or enterprise cannot rely on so-called niche or personalized products to support its future development. There are no truly small or personalized products. Their fate has only two paths: first, successfully grow into a big brand; second, 'die.'
What we now call personalized products is only limited to the present. If we extend the observation time, enterprises hope to profit from the sales growth of personalized products. Niche products, as early consumers' personalized needs for novelty are satisfied, gradually expand sales through media, social, and other forms of communication, and eventually the product is no longer strictly a niche product.
Chen Siting gave New Distribution a real example. The current hot-selling Tongyi (Uni-President) Tang Daren instant noodles were actually launched in 2008. In the first year, only 10,000 units were sold. This was definitely a niche and personalized product, but Uni-President persisted, patiently cultivating the market step by step. In 2017, this single product contributed 500 million yuan in profit to the group, with sales exceeding 2 billion yuan.
Jiang Xiaobai was once seen as a personalized liquor, but now it has grown into a big brand with a scale of 1 billion yuan;
Le Chun is an internet-famous yogurt. In the early stages of market development, it was only sold online. Recently, with Coca-Cola's investment, it is actively considering offline layout. If Jiang Xiaobai and Le Chun cannot successfully become big brands, the enterprises will not develop, and giants will eliminate them.
In Chen Siting's view, there cannot be eternal personalized or niche products in this world, especially in the FMCG field. Although the world is diverse, the Pareto principle is reflected in a diversified environment. There cannot be small but beautiful enterprises or products in the world. Even if there are, it is because no strong players have emerged in that segmented market, or all enterprises are weak. Therefore, the claim that in the future FMCG market, big brands will fail and small brands will defeat big brands is a false proposition.
A set of data shows: In 2014, Nielsen tracked 15,000 new products launched. By 2015, only 50 were found on the market. Nielsen's statistics: In 2017, the number of new products launched in China's consumer goods market reached 25,473, a 15% increase from 2015. But most of these new products became short-cycle products, with 70% of new products surviving less than 18 months. Many new products that 'survived' by luck were just a flash in the pan.
These thousands of new products were definitely personalized and differentiated at the design stage, and they met or catered to some consumers' needs. But why did they die? Because they could not provide sustained profits for the enterprise: small volume, high production costs, and high distribution costs.
Uni-President has the largest food research institute in Asia. In the nearly 10 years since 2008, the institute has developed over 1,000 products, with over 600 products launched for trial sales. Now, only about 7-8 new products have succeeded. These past personalized and differentiated products eventually became big brands, supporting over 70% of the group's profits and 50% of its revenue.
Most industries, especially the FMCG field, will eventually show the Matthew effect. It is impossible that just because of the internet and consumption upgrade, the rules change. From the perspective of social evolution, only the big can survive, only the big have market dominance, and only the big have a future. All small products have the dream of becoming big brands. If the dream is not to become a big brand, small products are doomed.
Chen Siting told New Distribution, 'In the snack food field, many people, in order to cater to consumers' visual experience or emotional appeals, put a fun slogan or fashionable packaging and then expect consumers to pay continuously. This lacks reverence for industrial manufacturing.'
From the online perspective, the 'Taobao brands' that Alibaba's Tmall nurtured have faced an overall decline in the past two years, while traditional offline brands have come from behind. Why? Because Taobao brands do not have a solid foundation in industrial manufacturing. For example, in the home textile industry, in the 2017 Double 11 sales ranking, the top positions were occupied by Mercury Home Textiles, Luolai Home Textiles, etc. They have been deeply involved in the industry for decades, mastering the true core technology of the industry: which origin's cotton is good, what process is used to make it, and consumers feel comfortable when covered. These require time to accumulate. The so-called Taobao brands study what consumers like to see and hear every day, but they are actually picking up sesame seeds and losing the watermelon.
In China, when doing business, we usually say 'bigger and stronger' rather than 'stronger and bigger,' because without being big, you cannot be strong. Chen Siting believes that in the FMCG field, big brands are still the main role in the market. However, it is undeniable that with the emergence and popularization of the internet, consumers have upgraded from basic consumption needs to segmented and diversified needs. The process and methods of building big brands have changed, and the scale of big brands has also changed.
03
**What Changes Have the Internet and Consumption Upgrade Brought to Enterprises?**
In the past, the way FMCG companies built big brands was: the product R&D department, based on trend reports from relevant research institutions, or market feedback from the marketing department, and consumer research, developed many innovative products from multiple dimensions, then conducted market verification, trial sales in small regional markets, and the marketing and sales departments cooperated in store distribution and vivid display. It was like throwing a seed into the market, survival of the fittest. If it sold well, it was slowly supported; if it sold poorly, it was gradually wound down and eventually died. Or some products, because of the decision-makers' unique strategic vision, persisted and eventually became big brands.
Now, with the emergence of the internet, the way to build big brands has changed. Teacher Liu Chunxiong once expressed that the current logic of making products is to first gather a group of seed users who have a unique preference for this product category and are relatively authoritative. Users have sufficient judgment on the product. Through feedback from seed users, iterative optimization is carried out. Products recognized by these users at least prove that the product itself has no major problems and has the potential to become a big brand. Finally, with the influence of seed users, a fission effect is generated, and it becomes a big brand. Ultimately, the probability of success for this product will greatly increase.
In addition, the scale of big brands will change. Chen Siting told New Distribution, 'The original big brands might have been tens of billions in scale, but in the future, the standard for a big brand is 1 billion.' There are two reasons for this change:
First, consumers have more choices, and brands have more options, so the sales volume spread across each big brand will not be as large as before.
Second, the life cycle of big brands will shorten. For example, the past big brand, iced black tea, had a life cycle of 15 years. But now, with the acceleration of the times and information flow, consumer taste preferences are changing faster. A product that could 'be popular' for 15 years may now only survive for 5 years. Products may be born and die quickly.
In the past, companies had the opportunity to push a big brand to 10 billion or even 20 billion. But now the consumption environment changes too fast. Even a very good product may reach 5 billion in sales and enter a bottleneck period, with consumption weakening and consumers being diluted by new flavors and products that emerge. The speed of consumer change is accelerating.
**Final Thoughts**
The above are Chen Siting's views on big brands and personalized products. In summary, two points: First, there are no truly small products in the market. The mission of all personalized products is to become big brands. Personalized products that cannot become big brands will definitely die. The so-called phenomenon of 'personalized products ruling and big brands failing' will not occur due to changes in the times. Second, changes in the times have brought about changes in the way big brands are built, shortened product life cycles, and accelerated the speed at which consumers tire of old products and embrace new ones.
**What do you think about the views on big brands and personalized products? Welcome to vote and leave a comment, and tell us your thoughts!**
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