Strategies for Emerging Brands to Break Through as Dark Horses in the Post-Consumption Era

In today's consumption era, how can brands find new growth?

From March 14 to 16, at the 9th China FMCG Innovation Conference & the 2nd China FMCG Hard Discount Conference & the 2nd China FMCG Distributors Conference held in Chengdu, Mr. Zhao Angxiong, founder of Squirrel Media, delivered an important speech titled "Strategies for Emerging Brands to Break Through as Dark Horses in the Post-Consumption Era".

New Distribution has compiled the essence of Mr. Zhao Angxiong's speech for our readers.

************China's consumer brands are at a crossroads of old and new

It is evident that business has become increasingly difficult in the past two years, primarily due to several key changes.

First, the shift from an incremental market to a stock market.

Second, changes in the media environment, as well as changes in new channels and new marketing environments.

Third, generational changes in consumer demographics, with younger consumers becoming the main force of consumption today.

We notice that many traditional established brands question why consumers are willing to buy products from emerging brands instead of theirs.

In reality, it's because the market is changing, and consumer demands are evolving. Many new products on the market today, if evaluated only with traditional thinking, may lead to doubts about their market prospects, concerns about inventory buildup, and such considerations can cause many missed opportunities. Internally, the organization and product teams may also begin to age.

In the past two years, we have observed the rise of many emerging brands, but also witnessed the fall of some. At the same time, many traditional brands are facing declining performance. Therefore, I believe the current Chinese consumer market is at a crossroads of old and new.

In this critical period, are there still some traditional brands that can maintain growth momentum? Which brands have existed in the Chinese market for over 20 years and still grow at a high rate of over 20% or even 30% annually? I believe such brands do exist.

Next, I will present a case study. This brand has been in the market for over 20 years, yet it consistently achieves high growth and rapid transformation. This brand is Yan Zhi Wu, a brand we have deeply accompanied and consulted in recent years.

In 2023, Yan Zhi Wu successfully listed on the Hong Kong Stock Exchange, becoming the first bird's nest stock. Why can Yan Zhi Wu maintain high growth every year when the overall tonic product market hasn't seen significant growth? What actions has Yan Zhi Wu taken? I hope the case of Yan Zhi Wu can bring you some new insights.

When we conducted consumer research, we found that bird's nest is a category strongly driven by brand.

Bird's nest, as a high-end nutritional food, has a relatively high price. In this context, a brand with quality, identity recognition, and visibility can gain more consumer trust. Moreover, the combined market share of Yan Zhi Wu and a certain fresh stewed bird's nest brand exceeds 50%, indicating a duopoly in the bird's nest market.

Our research found that Yan Zhi Wu has a rich product line, covering all categories of bird's nest—dried bird's nest, freshly stewed bird's nest, instant bird's nest, fresh stewed bird's nest, golden soup bird's nest, instant brewed bird's nest, and concentrated fresh bird's nest. Coupled with Yan Zhi Wu's refined operations over the past 25 years, it has initially established the category mindset of "bird's nest = Yan Zhi Wu" in consumers' minds.

However, the bird's nest industry suffers from severe homogenization. Merchants all tell stories around the same product, with highly similar expressions in brand image building, product concept packaging, and brand storytelling. Consumers are easily confused by merchant information, sometimes even needing to look at the spokesperson to distinguish specific brands.

But with the rise of the health economy and appearance economy, in recent years, the younger generation, represented by Gen Z, is becoming the backbone of bird's nest consumption. The "2019 China Bird's Nest Industry White Paper" shows that the main force of bird's nest-related tonics in recent years is the 24-40 age group, and even extends to the post-2000 generation.

We found that the rise of the new generation of consumers, coupled with the transformation of consumption concepts, is driving more diversified and segmented consumption trends in bird's nest, thereby promoting a new competitive landscape in the bird's nest market.

In the past, the single, traditional marketing methods of bird's nest brands have struggled to reach and resonate with younger groups. In the internet era, many emerging brands have already adopted omnichannel marketing models such as "celebrity marketing + social media marketing + short video live streaming," and through tactics like "targeting niche markets + strong marketing," they have successfully penetrated some competitors' users.

Therefore, we believe that at the crossroads of the Chinese consumer market, Yan Zhi Wu, as a first-tier bird's nest brand, needs to break through the category bottleneck and regain the initiative. It needs to redevelop its consumer communication strategy, establish a unique "style" and "culture," and create new touchpoints for emotional connection with consumers.

************Brand Strategy Offense and Defense: Height + Depth

How can a brand win over young people?

As a brand with over 20 years of history, Yan Zhi Wu faces the issue of brand aging and must do two things.

The first is defense: maintain the high-end mindset of the affluent female demographic accumulated over the past 20+ years, consolidate the category recognition of "bird's nest = Yan Zhi Wu" in consumers' minds, build high-potential brand power, and continue to lead the bird's nest industry.

The second is offense: pay attention to the trend of "birds of a feather flock together," innovate and optimize products based on the needs of specific target groups, then through refined operation of audience and brand content, stimulate a sense of community identity, and use product strength to drive word-of-mouth stickiness for Yan Zhi Wu.

Based on these market changes, Yan Zhi Wu has derived a new core business strategy—category strategy + audience tactics.

Yan Zhi Wu promotes the brand image of "If you eat bird's nest, eat Yan Zhi Wu," making consumers think of Yan Zhi Wu whenever they think of bird's nest, equating Yan Zhi Wu with bird's nest. In the bird's nest market, there are dried bird's nest, fresh stewed bird's nest, and instant bird's nest. Yan Zhi Wu's strategy is to become synonymous with bird's nest, making sub-category brands like fresh stewed bird's nest branches under its broad category.

However, as the market environment changes, our e-commerce and new marketing strategies also need to be adjusted accordingly to adapt to market demands and competitive dynamics.

Strategically, we recommend Yan Zhi Wu use super big single products to deeply penetrate core vertical niche markets, thereby increasing the stickiness of segmented user groups to Yan Zhi Wu, driving growth in designated purchase rates and market share.

That is, use audience strategy to guide product line planning, adopt a combination of offense and defense tactics. On the basis of consolidating advantageous product lines such as "dried bird's nest" and "gift giving," use super big single products like "Huayang," "Fresh Stewed," and "Concentrated Fresh" to penetrate product line awareness and win the favor of the broader young population.

We market to different groups and divide Yan Zhi Wu's product lines into three core categories:

1. Huayang Bird's Nest: Targeting Young People

This group mainly consists of young people new to the workforce. For them, bird's nest is not a necessity, so they mainly buy it for gifting. For this group, Yan Zhi Wu launched Huayang Bird's Nest, for which we extracted keywords like "girly, exquisite, fashionable, romantic" to reposition it as a new-generation social-sharing bird's nest. The marketing and messaging for this group is "Young people love to share" , without overemphasizing the taste or value of bird's nest, but focusing more on the core value of gifting and emotional value. Using content marketing close to young people's lives, we interpret the lifestyle behind the Yan Zhi Wu brand—pursuing a light, healthy, fresh, and joyful new life. Media platform influencer promotions also tend to favor emerging workplace experts, health bloggers, light outdoor bloggers, and female entrepreneurship bloggers.

2. New Generation Fresh Stewed Bird's Nest: Targeting Fashionable, Refined Middle Class

This core group has relatively higher income, has a habit of regularly purchasing bird's nest products, or is in the stage of preparing for pregnancy, pregnancy, or postpartum. They are not focused on gifting but more on what the value of bird's nest is. For this group, why choose you and what distinguishes you from other bird's nests is crucial. Bird's nest enthusiasts know that the most valuable component in bird's nest is sialic acid. The quality of a high-quality bottle of bird's nest mainly depends on its sialic acid content and the amount that can be absorbed by users. To meet this demand, in 2023 we amplified Yan Zhi Wu's super selling point: 1.8 times the digestibility of sialic acid. For pregnant women, seasoned middle class, and new white-collar workers, the focus is on the nutritional components of bird's nest, the nutritional value it brings me, and the difference from ordinary bird's nests. In marketing communication, we have consistently emphasized one thing: drinking one bottle of Yan Zhi Wu is equivalent to 1.8 bottles of ordinary fresh stewed bird's nest, and Yan Zhi Wu has been focusing on high-quality bird's nest for 25 years. Media promotion for this group also tends to favor seasoned workplace experts, including silver-haired fashion bloggers, female growth bloggers, and healing and wellness bloggers.

3. Concentrated Fresh Bird's Nest: Creating High-End Gifting Attributes

The target group is mostly luxury-level or those who give bird's nest as gifts. The feeling presented to consumers may involve family social occasions, and their life stage is different. We hope this group can experience a high-end feeling when purchasing the product. Yan Zhi Wu's Concentrated Fresh Bird's Nest is thick and rich, with 2.2g of ingredients and 90% solids, providing consumers with a satisfying and nourishing eating experience. It also uses a 115°C high-temperature fine stewing process, achieving more thorough sterilization and safety, and can maintain freshness at room temperature for 45 days. The combination of multiple advantages such as high nutrition, traceability, and room-temperature freshness preservation makes Yan Zhi Wu's Concentrated Fresh Bird's Nest a high-value product, also establishing its positioning as more suitable for gifting. We believe Yan Zhi Wu should leverage its rich product value to break the original single tonic and health scenario of bird's nest. In social media marketing, it should start from gifting scenarios such as workplace, friends, and family, highlighting the social currency value of Yan Zhi Wu's high-quality bird's nest. In summary, when we implement category strategy and audience tactics, offline evaluation may not be possible. But in the online consumption environment, we must maximize the value of a single product or increase conversion rates. After completing the overall business strategy layout for Yan Zhi Wu, we found that the efficiency of each product line improved significantly.

Strategies for Achieving New Brand Growth From a product perspective, the three different audience products and presentations are very well matched. In the current market situation, it is essential to have matching different products with different audiences, different audiences with different presentations, and different audiences with different marketing. These together form the audience strategy, which we call "category strategy + audience tactics." Around these three core points, I summarize what I believe are the three most important things for building a brand today.

1. Brand height.

Brand height needs to be continuously elevated. For example, the cosmetics brand Florasis has deliberately slowed down its pursuit of brand traffic in recent years, focusing on internal strength, opening stores around the world, representing the East to the world, and conveying Eastern culture. Continuously raising brand height makes Chinese national brands more valuable.

2. Audience depth.

When deeply considering brand business, we need to carefully explore the depth corresponding to each target audience and the scenarios they are in, and assess whether we have achieved sufficient penetration in these aspects. At the same time, we should reflect on which audience depths remain to be tapped in brand operations, or which aspects we have not done thoroughly enough.

3. System breadth.

Currently, online channels are divided into shelf e-commerce and content e-commerce, and system breadth is very important. Whether we face online or offline channels, we must consider whether our product system, visual system, and marketing system are clearly planned.

These are the three cores I believe are essential for building new brand growth. Every time I meet a brand, I ask myself and the other party whether there is further room for exploration in these three aspects, because these matters are crucial for the sustainable development of the brand and deserve in-depth research and discussion.