Before the Spring Festival, it won the Tmall 2020 Potential New Star Brand Award; after the festival, the co-branded 'Warm Heart Chicken Soup Noodles' with 999 Ganmaoling also gained a wave of reposts, comments, and likes. At the beginning of the year, Ramen Talk founder Yao Qidi said her goal was to exceed 600 million in 2020. Under the pandemic, demand for instant food is strong, and Ramen Talk's momentum is powerful; it's estimated that this goal will rise, perhaps to 1 billion. From 3 people to over 100, from initial monthly sales of tens of thousands to 250 million in 2019, how did the Japanese-style instant food brand 'Ramen Talk' with one product and multiple flavors grow? What inspirations does 'Ramen Talk' offer to entrepreneurs in the consumer sector? -01- The Situation Is Stronger Than the Person I have a friend who initially started a business related to 'pigs' and worked hard but still struggled. In 2018, he resolutely changed categories, and as a result, his thinking changed, the world broadened, and growth was rapid, with hopes of breaking 100 million. His biggest sentiment was these five words: the situation is stronger than the person. Instant food brands like ramen and river snail rice noodles broke through when traditional instant noodles were declining. This is definitely not a contrarian move as some articles claim, but exactly a consumption upgrade under 'favorable timing, geographical advantage, and human harmony.' According to the '2020 Tmall Food Consumption Trend Report' jointly released by CBNData and Tmall Food, the instant food category is growing rapidly, but I think the growth is definitely not in traditional instant noodles, but in river snail rice noodles, ramen, instant hot pot, and the like. Another report jointly released by Taobao Foodies and CBNData shows that in 2018, online senior foodies reached nearly 300 million, with both purchasing power and frequency rising. The report also summarized eight keywords for foodies' daily life: staying up late, lazy people, regional characteristics, cooking, time-honored brands, appearance, internet-famous, and small portions. River snail rice noodles certainly hit all of them, but it seems that in the river snail rice noodle sector, there were no giants to benchmark against in the past. In the new trend, in 2019, sales of 'eating alone' products on Tmall increased by 30% year-on-year. According to data from the Ministry of Civil Affairs, in 2018, China's single population exceeded 200 million, with 77 million adults living alone. Ramen Talk, with the packaging message 'When you're alone, be good to yourself,' not only follows the 'eating alone' consumption trend but also has an 'imaginary enemy': PK instant noodles and take away part of their market share. How big is this share? In 2018, Master Kong's instant noodle business achieved revenue of 23.9 billion yuan. This is considered a large enough market! As for the prospects of 'Japanese-style ramen,' you can look at the restaurant industry's 'Ajisen Ramen,' which was listed in Hong Kong in 2007. When I first tasted Ramen Talk, I thought, isn't this the e-commerce version of 'Ajisen Ramen'? The classic bone broth, authentic Japanese ramen, conveys an attitude and a belief in gourmet food. For Chinese people pursuing a high-quality life and high-end dining enjoyment, when the tip of the tongue touches the bone broth, they can feel the sincerity conveyed by Ajisen Ramen. Reading this introduction to Ajisen Ramen, paired with Ramen Talk's images, is it not seamless? Image/Ramen Talk flagship store However, times have changed. The restaurant industry, currently affected by the pandemic, is not easily transitioning to e-commerce platforms. Restaurants often consider location, decoration, display, and franchising for chains, but e-commerce is more about selling images, copywriting, content, finding traffic, doing live streams, and creating socially delightful new flavors. Although they can be analogized, the experience is ultimately different. Additionally, restaurant companies often do e-commerce as a side business, and if it doesn't work out, they still have stores. But consumer e-commerce entrepreneurship is all-in, fighting to survive. Also in 2016, also in Shanghai, also making pre-packaged ramen, Ajisen Ramen's Tmall flagship store currently has fewer than 36,000 followers. But 'Ramen Talk,' which continuously invests in new media, has over 1.41 million followers on its Tmall flagship store. Of course, fresh noodles have long been sold in offline supermarkets and retail, but they are too fragmented to form a climate. Brands like Ramen Talk instead use online momentum to penetrate offline and engage in new retail. However, there are also concerns: If Master Kong makes instant ramen, with money and channels, could it easily overturn 'Ramen Talk'? Conversely, has Perfect Diary been overturned by Mac lipsticks? Has Three Squirrels been overturned by Nestlé? Genki Forest and Ramen Talk's investor 'Challenger Capital' actually favors challengers: If your product has already attracted a small group of loyal and fanatical fans, and you face confrontation with giants, welcome to ask Challenger for help. Challenger firmly believes that under giants, opportunities are greater; we believe in the power of word-of-mouth momentum and compound growth... Perhaps the value of giants is to be challenged by young people. -02- The Fierce 'Second Sister' The entrepreneur challenging instant noodles is Yao Qidi, a post-90s Guizhou girl. In 2015, she graduated from the University of Manchester in the UK and, with two other co-founders, founded 'Mom's Chicken Soup.' They found that chicken soup is not a staple food and seems dispensable in life. After this failure, they quickly iterated, shifted to staple food, and founded Ramen Talk. Perhaps due to her sharp style, she is called 'Second Sister.' Young but called sister, she must have considerable presence. But if you ask, 'Second Sister, your Ramen Talk is doing well; can you share your growth experience with us?' She will definitely humbly say: We haven't done enough; we're still optimizing, still learning... Moreover, although two of Ramen Talk's three founders have appeared on Forbes, there are not many detailed reports about the three. They seem to rarely give speeches, teach, or shout through the media. An entrepreneur who has met Second Sister said that she indeed has style, with maturity not matching her age, 'feels like someone who can accomplish great things, with presence,' and 'has a very good brand sense.' Wang Fan, a reporter from Tianxia Wangshang, described Second Sister like this: This post-90s Guizhou girl, with a fierce spirit, leads an average 26-year-old team, running at full speed, carving out a path in the instant food industry dominated by big players. The reason I mention people rather than products here is that the founder's traits are largely reflected in the brand's strategy and become the brand's DNA. We are embarrassed to gossip about whether the founders are single, but Ramen Talk's copy 'When you're alone, be good to yourself' indeed strikes a chord. -03- Benchmarking Instant Noodles According to positioning theory, positioning is not about creating something new and different, but about manipulating existing perceptions in the mind and reorganizing existing associated cognitions. As a market challenger, the more common approach is to concentrate firepower, through differentiation, micro-innovation, and new channels, to create your own characteristics. You are oatmeal; I am oatmeal with freeze-dried fruit; that's Wangbaobao Oatmeal. You are bird's nest, dried bird's nest; I am fresh stewed bird's nest; that's Xiaoxian Dun. You are braised chicken feet, tiger skin chicken feet; I am tiger skin chicken feet that are fried then braised for better taste; that's Wang Xiaolu. You are instant coffee; I am Three Squirrels and Eagle Coffee with three-second solubility... You are instant noodles, semi-dry fresh noodles; I am ramen with meat and ingredients; I am Ramen Talk and Fanniyu. Ramen Talk occupies the positioning of the two characters '拉面' (ramen). It doesn't PK the fresh noodle market, which is still immature and fragmented, but the huge instant noodle market. Ramen Talk is highly bound to the word 'ramen,' becoming a sharp needle to pierce the market. So much so that on Taobao, the 'ramen' category almost equals 'Ramen Talk,' and even unverified data suggests that the search traffic for the keyword 'Ramen Talk' is higher than 'ramen.' Image/Ramen Talk flagship store The market is large enough, but the Matthew effect will make the strong stronger. Jiang Xiaoyu, a Tsinghua graduate, founded 'Fanniyu,' initially making fish cake, then also Japanese-style ramen. He adheres to food safety, has good consumer reputation, and has appeared on Hunan TV, but his sales scale is far behind Ramen Talk. In his article 'Accepting Helplessness, Admitting Failure,' he reflects on his mistakes: not valuing design, not valuing promotion, and not actively seeking financing. This may be related to the team's DNA; Second Sister's team seems more playful and internet-savvy, while Jiang Xiaoyu seems more straightforward. Similarly for discount sales, 'Ramen Talk' starts and ends like this: April 19 is Ramen Talk's one-and-a-half-year birthday. Our Taobao, Tmall, JD, Youzan, and mini-program stores are all cleaned up and waiting for you~ Fanniyu is like this: There are still 6,000 packs in total, selling until January 10, 2019. If not sold out, they won't be sent out again and will be scrapped directly. One is the playful and cute 'Second Sister' of the jianghu, the other is a steel straight man emphasizing food safety. One e-commerce detail page benchmarks instant noodles, highlighting the 'fragrant and crispy' experience. The other detail page emphasizes the consistency between images and actual product, highlighting the raw material 'Danish imported cartilage.' Fanniyu has become somewhat disappointed with e-commerce platforms, but Ramen Talk seems to be advancing triumphantly. -04- Rapid Iteration, Rapid Decision-Making Ramen Talk seems more successful in market scale, but in terms of product experience itself, some complain about the taste. But the replies in the comments are also interesting: some say it's terrible, some say I think Tom Yum is super delicious, and others say Tom Yum is not good, but Hell's Spicy and Sichuan Pepper Chicken are okay... After all, taste is subjective; food entrepreneurs are probably often criticized. But it's visible that 'Ramen Talk' values testing; I've seen their staff post recruitment forms on WeChat Moments multiple times: Second Sister once told the media, she organized an internal testing team of 2,000 people to discuss product taste and packaging design, overturning and rebuilding again and again. Their product iteration speed is indeed surprising, like their Sichuan Pepper Mixed Noodles—from brainstorming, project team flying to Sichuan and Xi'an for research, supply chain R&D, procurement, quality control, design, to final launch, it took only 46 days. Too fast! This product development and iteration capability, reflected on e-commerce platforms, means richer product flavors. Moreover, it's said that the co-branding between Ramen Talk and 999 Ganmaoling was also very rapid. Unlike traditional companies that prepare for half a year or months for co-branding, their co-branding with 999 Ganmaoling was only started after the pandemic broke out. Market response speed is too fast! Moreover, when consumers express dissatisfaction with Ramen Talk and post on Weibo: Ramen Talk's response is roughly: 'Sorry for not giving you a good experience. Ramen Talk's products are constantly updated and iterated. Welcome to provide valuable opinions and suggestions. We will collect feedback and pass it to colleagues. We will take your issues with packaging and crispy meat seriously. Thank you again for your criticism and correction. Wishing you a happy life.' 'We have arranged for iteration. This batch of packaging will be replaced after use. We will pay more attention. Thank you.' Afterwards, this consumer posted a response, indirectly praising Ramen Talk's crisis response. These details actually constitute the final consumption experience of the entire consumption scenario. But rapid iteration, rapid response, and rapid decision-making are my deepest impressions of the Ramen Talk team. -05- Investment, Investment, Investment Behind financing, financing, financing, besides creating new products, Ramen Talk's greater energy is definitely investment, investment, investment. Data source: Baidu Credit - Enterprise Credit From WeChat official account distribution to Weibo, Bilibili, Xiaohongshu, and Douyin seeding and带货, they haven't missed a step. Let's casually look at their situation on various social media platforms: Searching for Ramen Talk in WeChat articles, besides the co-branding with 999 Ganmaoling, most high-readership articles are from 2017/2018 official accounts, mostly involving content distribution. Weibo historical data is hard to dig up, but I recall there was an investment peak in 2018, then it was relatively flat. Recently, Weibo voice has been relatively high. Let's pull Weibo data from February 10 to March 10 this year: Data support: Xigua Data - Weibo version Among them, news/humor/emotion/beauty/blue-V bloggers are the majority. Except for obvious ads from some big accounts, most content is not ads. Among them, the topic '#感冒灵拉面#' has 100 million reads and 48,000 discussions. It can be said that this cross-border operation between Ramen Talk and 999 Ganmaoling is sexy enough. Of course, besides Weibo and WeChat official accounts, Bilibili is not to be missed; these are channels Ramen Talk has been promoting. Data support: Huoshaoyun Data It's worth noting that in the past month, according to Feigua Data monitoring: on Douyin, there are 13 bloggers with over 1 million followers mentioning Ramen Talk. Among them, most videos with associated products are Char Siu Pork Bone Ramen. Douyin and Xiaohongshu both have content accumulation, but when you open the content, you can see Li Jiaqi's presence. Compared to the equally internet-famous Wangbaobao Oatmeal, Ramen Talk's voice on Douyin and Xiaohongshu is still a distance behind. But on Taobao Live, it's definitely more fierce than Wangbaobao Oatmeal. In my view, Ramen Talk's investment in WeChat official accounts, Weibo, Xiaohongshu, Douyin, and Bilibili is basically the daily routine of a new consumer brand, but its investment in Taobao Live can be described in four words: overwhelming! -06- Crazy Live Streaming Sales In 30 days, 1,854 live streams, 456 associated bloggers; this is unique among emerging brands. Data support: Zhigua Data According to Zhigua Data monitoring: Wangbaobao Oatmeal, considered a model of investment in the industry, after Liu Tao's endorsement, grew rapidly, with Douyin investment far exceeding Ramen Talk, but the number of associated Taobao Live streams was only 1,169. Ramen Talk truly entered the public eye and grew on a larger scale, perhaps starting with Li Jiaqi and Taobao Live. This is also the hottest channel last year: Taobao Live Image/April 7, 2019 Ramen Talk official Weibo On April 7, 2019, Ramen Talk appeared in Li Jiaqi's live stream. According to Second Sister's interview with Tianxia Wangshang at the beginning of this year: Ramen Talk's seventh cooperation with Li Jiaqi sold 2.8 million yuan in one second, and customer service crashed. It can be said that Li Jiaqi has been instrumental to Ramen Talk, but besides Li Jiaqi, Ramen Talk is also looking for a second traffic landing point. After all, Li Jiaqi can cooperate with Ramen Talk and also with brands like Single Grain. In any case, no brand should rely too much on one channel. **From last month's situation, Ramen Talk not only cooperates with Li Jiaqi, but also with bloggers from millions of followers like Xue Li, Lin Shanshan, Chen Jie, to hundreds of thousands like Li Jing, Bee Sister, and even tens of thousands like Tang Xiao, all live streaming Ramen Talk. ...... For Second Sister, in 2019 they got Taobao Live right. 2019 should also be their fastest-growing year.Second Sister told Tianxia Wangshang reporter Wang Fan: Ramen Talk's 2019 sales were 250 million, and next year they hope to break 600 million. Perhaps in 2020, this goal will rise further. -07- Live Streaming Concerns A brand founder with annual sales over 100 million is not optimistic about using Taobao Live to build a brand: 'ROI is low, sustainability is not strong, after all, profit is the core supporting advertising investment.' 'Live streaming must be restrained. People who bought at low prices during live streams won't buy anything at regular or promotional prices.' A food entrepreneur from a new consumer brand lamented that if the brand's price system is broken, the impact on the brand is significant. Moreover, Li Jiaqi not only cooperates frequently with Ramen Talk, but he can also cooperate with any other merchant; a brand cannot become a 'Li Jiaqi brand.' For example, also noodles, Single Grain had 75 cumulative reviews but showed monthly sales of 55,000. Also with Li Jiaqi's help. Data support: Zhigua Data Also Japanese-style ramen 'Fanniyu' stopped doing live streams after a few sessions. Fanniyu founder Jiang Xiaoyu told Ashangshu (ID: ashangshu), 'He found someone to do a live stream, sold 10,000 copies, and lost 200,000.' Besides losing money, in his view, not only did it not bring word-of-mouth, but Taobao live streamers also brought two troubles:
1) The traffic brought by live streamers is very poor, causing the platform to match very poor traffic to this link. The link's natural traffic originally had several thousand visitors, but after the live stream, it dropped to a few hundred; the link is definitely ruined.
2) Suddenly increasing 10,000 orders puts supply chain under tension.
Instant ramen is a product with low gross margin; in Jiang Xiaoyu's view, it's not suitable for live streaming. Products with high gross margins like beauty and alcohol might be more suitable. In his view, it's easy for offline to go online, but hard for online to go offline. China's consumption trends can be seen in Japan, but Japan's Nissin Ramen currently mostly does co-branded products with offline noodle shops, because Nissin's distribution is very common, but its presence is not prominent. Following this idea, Jiang Xiaoyu is determined to go offline and is currently looking for a storefront in Shanghai. Online, he will focus on communities and won't do live streaming. Moreover, he is not optimistic about current online instant food, because no brand has true pricing power; once traffic is lost, it immediately disappears. Unless you have unique advantages, buying from anyone is the same. After talking with Jiang Xiaoyu, he is somewhat pessimistic about e-commerce brands. But it's undeniable that the internet improves efficiency, and of course, with it comes the Matthew effect: giants become bigger, and the living space for the weak is severely squeezed. People will take out business参谋 (business advisor), look at store traffic, transactions, conversion, and even dig into more detailed data through data banks. For example, according to data provided by Jieshu Consulting for Ramen Talk's business advisor, the Tmall flagship store's transaction amount is around 120 million. But besides the flagship store, data from Tmall Supermarket and specialty stores should not be underestimated. Taking October as an example, Ramen Talk's Tmall flagship store transaction amount was about 14.79 million, but the overall Taobao system transaction scale reached 26.25 million. According to this calculation, besides the flagship store, the transaction amount is also around 12 million. 'There's no way; e-commerce is the Matthew effect. The smaller the scale, the smaller the data volume, the easier it is to be surpassed. Spending money to build scale is like buying the future.' An e-commerce entrepreneur said that from another perspective, live streaming actually brings consumers closer to the factory. Whether it can become a brand doesn't overly focus on the awareness covered by advertising and channels, but on the reputation and loyalty brought by the product itself. That is, build the brand through the product, not through the market. Of course, if product strength is insufficient, it will definitely 'die miserably.' Finding Li Jiaqi and Viya for live streaming, they have strong negotiation skills and press prices low, but for small and medium live streams, although volume is small, prices are controllable and basically profitable. Even some people have made money through these giant live streams; it depends on the negotiation method, 'after all, China is a society of relationships.' Some worry that Ramen Talk is growing wildly under the pandemic, but will shrink after the pandemic. However, a food entrepreneur believes that Ramen Talk is not specifically for hunger resistance; compared to instant noodles, it's actually light luxury instant food: 'I think after the pandemic, sales won't be significantly affected; instead, they may continue to grow.' In his view, doing many live streams also shows strong supply chain: 'If I suddenly get tens of thousands of orders, I can't handle it, but Ramen Talk does so many live streams and can still withstand it, which shows the supply chain is mature.' -08- My Takeaways Whether Taobao Live can foster a brand is subjective, but from a learning perspective, I think new consumer brands cannot do without these three points: 1. Have a core team with rapid response and iteration. Traditional enterprises set up a small team, but the boss still points fingers from behind; generally, they can't build a new brand. Without full delegation, it's hard to have an all-in team. 2. Have sensitivity to social media communication. Currently, for most new consumer brands, the core of 'new' is still 'new' traffic, occupying the mindshare of that category in advance on new media platforms, influencing this group. At the same time, risks on social media are also greater; one wrong word can lead to a collapse. Of course, returns can also be greater, such as going viral on recommended traffic platforms, leading to supply shortages. Sumu, who operates AKOKO cookies, said that brands should have 'Douyin faith,' which essentially means social sensitivity. Even when creating products, they should be social, even timely social. This brings us to the third point. 3. Have faster product development and iteration capabilities. Under new media, product iteration accelerates; you launch a new product, and competitors quickly follow. For example, Three Squirrels Coffee, considered to enjoy aesthetic dividends, had Eagle Coffee quickly follow half a year after launch. The latter has multiple offline stores in Shanghai and, after launching the same cup-style 3-second instant coffee, grew rapidly. It's foreseeable that the pandemic's impact on offline industries will lead to more new brands and new consumer brands in 2020. Source: Ashangshu (ID: ashangshu) Author: Shang Shu