A P&G alumnus who once served as senior vice president of Daphne, China's top women's shoe brand, started a high-end handmade custom leather shoe project, mainly classic men's formal shoes priced at several thousand yuan per pair. After little response on social media, this senior alumnus focused on investment. A few years ago, another P&G alumnus, former Google China CMO and Babytree founder, launched a new venture, still selling shoes—'Xiangwu' shoes targeting the pre-elderly. The business has remained relatively stable, visible on major e-commerce and live-streaming platforms, with the founder actively developing P&G alumni as customers, building a high-value private domain. Xiangwu shoes, initially priced at an average of 500 yuan, have now dropped to 200 yuan. Perfect Diary and RELX e-cigarettes were once miracles of P&G alumni entrepreneurship in the consumer goods track. Perfect Diary's parent company, Yixian E-commerce, set two records in China's beauty industry: 1. It successfully listed on the New York Stock Exchange in just 4 years, becoming the fastest-listed company in China's cosmetics industry, a record still unbroken. 2. Yixian E-commerce's market value once exceeded 100 billion yuan, becoming the first domestic cosmetics company to do so. At its peak, RELX's founder also topped China's female rich list. Currently, both US-listed new consumer companies have seen their market values fall to about 5% of their peaks. PMPM, a pioneer in ingredient-focused beauty brands, HFP, Wonderlab (once the top meal replacement brand, now the top probiotic brand), Xiyuan (the fastest and most frequent in beauty financing), Usmile (China's top electric toothbrush brand), and new snack brand 'Luwei Juexing'—all these new consumer brand founders are P&G alumni. Additionally, many P&G alumni hold key positions in hundreds of new consumer brands, mainly in brand, marketing, market, or sales. At the annual P&G alumni meeting, Jiang Nanchun, boss of Focus Media, actively participates (though not a P&G alumnus), knowing that Focus Media's clients are among this group—once they raise funds, they need to advertise on Focus Media to break into the market. P&G alumni master orthodox brand, market, and marketing theories, such as Brand Building Framework (BBF), Brand Equity (BE), Marketing and Strategy Plan, and Quarterly Promotion Plan, giving the impression of China's marketing Whampoa Military Academy. P&G entered the Chinese market in 1989. P&G alumni have experienced over 30 years of China's fastest economic growth, rapid consumer market expansion, and high market vitality. Everyone was accustomed to growth, double-digit growth, and leading global growth, even mocking Western Europe's 1% growth. They believed China had over 400 million new middle-class consumers, moms who spend recklessly on children, 'small-town wealthy women' with time and financial freedom, and various high-value segments with unmet needs. In 2023, China's consumer goods market shrank. A group of entrepreneurs accustomed to incremental markets now face a declining market, making survival a critical issue. A brand is a promise of functional and emotional value to target consumers. Brand mindshare, or emotional value, exploits five human weaknesses: greed, anger, ignorance, pride, and doubt, to influence and control target consumers. Whether the economy is up or down, human nature doesn't change, but the carriers do—carriers being products and channels. For example, girls love beauty and need lipstick. Initially, it was international brands like Chanel and Maybelline, then new consumer 'big-brand alternatives' like Perfect Diary, and now factory white-label products in Douyin live streams, with prices dropping from over 150 yuan to tens of yuan to 10 yuan per piece. Perfect Diary stripped off the fancy coat of international brands, but factory white labels have stripped off Perfect Diary's underwear. China has the world's most mature beauty supply chain, and white labels may come from OEM factories of international brands. A 10-yuan white-label lipstick isn't much different in quality from a 100-yuan big-brand one. For young women, the joy from a 10-yuan lipstick now isn't significantly less than the 100-yuan one before. The 'lipstick effect' is the obsession of entrepreneurs sticking to the consumer goods track: no matter how bad the economy, consumers will still consume, right? Yes, they will, but they don't play by the rules—they downgrade two or three levels. In front of Pinduoduo and live-streaming e-commerce, brand premium is like the emperor's new clothes, already exposed. For new consumer brands, with weak brand foundations and initial success from online traffic dividends and betting on big single products, they are now in a dilemma: online traffic costs are soaring, and repeat purchase rates can't support profits. Not only P&G alumni are trapped in consumption downgrade; their old employer P&G is also seeing declining sales in China. In daily chemicals, domestic competitors are not inferior or even surpass P&G in functionality, so P&G's high premium must be maintained through continuous brand innovation and marketing value delivery. Unlike 10-20 years ago, when competing with Unilever, Nice, Liby, Slek, Fengying, and Bawang in traditional media and mainstream supermarkets, today P&G faces an army of factory brands and white labels it is not good at or even fears, which are eroding its market share via Pinduoduo and live-streaming e-commerce, leaving P&G helpless. Traditional e-commerce platforms like Tmall and JD.com often break prices, annoying big brands, and often invent fees to fool manufacturers, but they still hypocritically engage in annual joint business plans (JBP); both sides may curse each other behind their backs, but they still smile and shake hands. But Pinduoduo and live-streaming e-commerce truly castrate brand value and revolutionize brand owners. Pinduoduo, Douyin e-commerce, and Kuaishou e-commerce use technology and operations to maximize consumers' greed and ignorance, seizing the highest-premium emotional value from brand owners; at the same time, they squeeze out functional value through cold algorithms like ranking and lowest bidding. P&G finds that the 800 million lower-tier market consumers it once neglected will never be served again—Pinduoduo and live-streaming e-commerce perfectly connect these consumers with China's daily chemical supply chain, offering products at P&G's factory cost as retail price with free shipping, cutting off P&G's hopes. P&G alumni starting businesses in the consumer goods track all aspire to build their dream brands and achieve 'Building to Last.' In times of consumption upgrade and healthy market growth, with tools like BE, BBF, M&SP, and QPP, they have a higher chance of success. But facing consumption downgrade and market shrinkage, what methodology can sustain them? Finally, let me tell a story to cheer up P&G alumni. The story is from 'Same as Ever' by Morgan Housel. In 2009, Jim and Warren Buffett were strolling in Omaha, USA. The global economy was paralyzed, and Omaha was no exception—shops closed, factories shut. Jim asked Buffett, 'The situation is terrible now; how can the economy recover?' Buffett asked back, 'Jim, do you know which candy was the best-selling in 1962?' 'No.' 'Snickers,' Buffett said. 'Do you know which candy is best-selling now?' 'No.' 'Still Snickers,' Buffett said. Then they fell silent, and the conversation ended. Recommended Reading