In 2020, we witnessed many new milestones: Genki Forest, founded only 4 years ago, succeeded with sparkling water, its valuation soaring by 10 billion yuan to 14 billion yuan in a year; Domestic fruit tea brand CHALI secured successive funding rounds, while legacy tea bag brand Lipton was divested from Unilever due to brand aging; Protein bar brand ffit8 surpassed 100 million yuan in sales in its first year; During promotions like Double 11, Wangbaobao overtook Quaker and Saturnbird defeated Nestlé, revealing a new competitive landscape; Reports on new brands were overwhelming, with many media and investors offering optimistic forecasts. Under the halo of new brands, it seems that old brands are beginning to dim. But looking back at 2020, we saw many highlight moments for traditional brands: Nongfu Spring went public in September, and its boss Zhong Shanshan became China's richest man; Haitian became the "Moutai of condiments," with a market value exceeding 600 billion yuan; Yili advanced into the world's top five dairy companies, with sales possibly breaking the 100 billion yuan mark; During the pandemic, Want Want's net profit in the first half of the year increased by 20.9% year-on-year, and Want Want Hospital's assistance to Wuhan was widely praised;... In fact, innovative brands and old brands do not exist independently; they both compete and depend on each other. Today, we hope to analyze the current survival situation of innovative brands and traditional brands. **-01-**Innovative Brands: Brand Upgrades Targeting Pain Points Over the past few years, we have witnessed the success of many new brands. Just counting on our fingers: Genki Forest, CHALI, Saturnbird, Zhong Xue Gao, ffit8, Wangbaobao, WonderLab, and so on. These brands are often called "internet-famous" brands. They are based on segmented category markets, have distinct brand personalities, and often leverage new media like Xiaohongshu and Douyin to quickly form social topics, generating word-of-mouth, planting, and show-off behaviors, further driving sales conversion. Whenever a new "internet-famous" brand rises, many people say: It's all hype; let's see if it can survive three years. Indeed, in recent years we have seen many failed internet-famous brands, such as Answer Tea, Bubble Mask, and Huang Taiji Jianbing, but many brands still remain strong. You may not know that Genki Forest was born in 2016, CHALI is already 5 years old, and Heytea is already an 8-year-old "elementary school student." Why can these brands continue to gain valuation growth after being tested? We found that successful innovative brands have answered the following questions well. Does the new product solve the pain points that users care about? Consumers have some pain points in using existing products that are not solved, such as too many calories, too many additives, inconvenient use, high prices, single taste, etc. Brands should be based on user insights, find consumer pain points, and provide solutions. When a new brand can solve a single or multiple pain points that users care about, it has the potential to replace the current product market. For example, Genki Forest addresses the pain point of people enjoying the stimulation of carbonated drinks but fearing high sugar, using erythritol instead of white sugar to maintain taste while being low in calories, avoiding the inner unease from high sugar intake. Similarly, Saturnbird coffee solves the pain point of users wanting a good cup of coffee quickly. Traditional instant coffee loses flavor and has many additives, while freshly ground coffee is limited by location and less convenient. Saturnbird achieves a balance between taste and convenience, solving user pain points; CHALI solves the pain point of young people needing a bagged tea that meets their requirements, making tea drinking fashionable; WonderLab solves the pain point of meal replacement powders being unpalatable, creating a milk-tea-like texture that is easier to accept. Therefore, the first step of innovation is to discover the pain points users have with existing products in the market, and then propose solutions to those pain points. It can be an upgrade of existing products, such as lower sugar, higher fiber, or more convenience; Or break the existing model to reshape the market. For example, ffit8 breaks the perception that protein bars are gym-exclusive, not tasty, and inconvenient, creating protein bars that are delicious, convenient, and suitable for a broad audience, reshaping the protein bar category with innovative flavors like salted egg yolk, beef, and rose walnut. Of course, while solving pain points, taste must be ensured. Taking zero-sugar products as an example, fearing high sugar is a rational thought, while good taste is an emotional thought, but when it comes to eating, rationality often yields to emotion. In fact, zero sugar is not a new concept; Coca-Cola has had sugar-free products for a long time, but the drawback is that flavor is lost when sugar is removed. Genki Forest, while maintaining rationality, also satisfies emotional needs, so it is naturally recognized. Is the category market favorable for innovative brands? Category selection directly determines the future sales ceiling of the brand. First, choosing a category with a large user base gives the brand more opportunity to go further and last longer. From the current situation, brands like Saturnbird, Genki Forest, CHALI, and Zhong Xue Gao are all upgrading in existing large categories, solving user pain points in areas that traditional brands have not yet penetrated. Second, this category gives new brands room to survive and grow. We have hardly seen innovative pure water brands because product differences in this category are not obvious, and the operational space for enterprises is too small. In categories like yogurt, coffee, ice cream, and meal replacements, brands can develop new products suitable for different scenarios based on demand. Taking meal replacements as an example, you can make more convenient and tastier products in the meal replacement powder market, or provide package solutions based on user needs. To find a favorable category, you need to pay attention to changes in consumption trends and transform trends into product strength. Is the founding team operating in a way that builds a brand or creates hit products? If the founder just wants to attract attention, then they will continuously create hit products, expose them on multiple platforms, and make quick money. In this case, the founder does not need to consider brand tone or continuity, just chase hot topics, with marketing outweighing R&D. The consequence is that once users' freshness fades, the brand basically dies. Teams that build brands hope to establish a brand position in users' minds. Truly brand-conscious founding teams conduct relatively thorough research on industry trends, brand positioning, and target audiences from the beginning. In product development, guide R&D from a user perspective. In communication, they focus more on conveying brand value, building brand trust and reputation; in the supply chain, they build a moat, seek high-quality raw materials upstream, emphasize R&D, optimize processes, and establish product competitiveness. It can be seen that successful innovative brands like Genki Forest are more in-depth in brand building, continuously conveying brand images of health and fashion, gradually strengthening supply chain construction, and focusing on sustainable brand development. Of course, these new brands are not without disadvantages. For example, most brands use OEM processing, have low brand R&D investment, and face severe homogenization competition. At the same time, brands overly rely on online channels. When online traffic peaks, it is difficult to replicate new growth curves; they only improve the status quo by increasing marketing investment, which further reduces brand profits and is not conducive to long-term development. The disadvantages of new brands may be opportunities for traditional brands. Traditional brands are rapidly adapting to new competitive situations, new channels, and new communication, and using their advantages to counterattack. **-02-**Traditional Brands' Counterattack: Accelerating Product and Communication Channel Innovation Although innovative brands are commendable in brand marketing and product development, in terms of sales volume, sales channels, or brand power, most brands still lag behind mature traditional brands. It's just that the new concepts and products of innovative brands bring topic focus and attract user attention. In fact, many big brands are the ones making money quietly. Taking beverages as an example, Genki Forest's estimated sales in 2020 were about 2 billion yuan, but Nongfu Spring's sales in the tea category alone were about 3.1 billion yuan in 2019. Although Genki Forest has repeatedly been the top performer in online promotions like 618 and Double 11, for beverages, offline is the real track. If Genki Forest wants to achieve its 2021 sales target of 7.5 billion yuan, offline is still an unavoidable hurdle. Traditional brands, after years of development, have mature channel resources offline, which has become a powerful weapon for traditional brands to challenge innovative brands. As traditional brands change their mindset, significant changes have occurred in their company operating models, product R&D, and promotion. Traditional enterprises are entering new retail and accelerating innovation-driven growth. Enterprises are starting to adopt more flexible innovation mechanisms, accelerating sub-market research, and launching new products to compete with innovative brands by studying new trends and dynamics. Companies like Mondelez have stated at public forums: They adopt more flexible cooperation models for internal innovation teams, using project team models, leveraging consumer big data to find innovation, quickly trying, and shortening new product launch time. Traditional brands' R&D capabilities give them differentiated competitive advantages. Innovative brands mostly choose categories where traditional brands have not yet focused, seizing first-mover advantages; but traditional brands' R&D capabilities often allow them to replicate and upgrade faster. With strong R&D capabilities, brands can find advantages that differentiate them from innovative brands under hot trends. Taking daily nuts as an example, under giants like Three Squirrels and Beicaowei, Qiaqia seized the "fresh" benefit point, focusing on promoting "mastering key freshness preservation technology," creating a fresh small yellow bag image. After self-heating hotpot successfully emerged, Uni-President grasped the trend of self-heating food and launched a differentiated self-heating rice brand, Kaixiaozao, running out a new leading product in the high-end convenient food track. Valuing new media, traditional brands also want to become "internet-famous." New media like Xiaohongshu, Douyin, and live streaming are important battlegrounds for innovative brand communication. KOL, KOC, and other word-of-mouth marketing, national trend, and cross-border co-branding are important means for brands to build "personas." But building new media is not exclusive to innovative brands. As traditional brands gradually master new media operations, they can also create brands with communication power. Yili Zhennong milk, in July this year, leveraged the hot topic of street-stall economy and joined hands with Douyin to create the "717 Food Festival" activity. The brand started from young people's insights about "eating," using the internet-famous night market model to convey the life atmosphere of human fireworks, triggering emotional resonance among young people. Teaming up with brands like Zhou Hei Ya and Haohuanluo, they launched a series of dark internet-famous food co-branded products to satisfy young people's psychology of "fun and cool." Want Want is also a "middle-aged internet-famous" that has become popular in the past two years. In recent years, through launching national-themed cans, PLUS version of condensed milk and rice crackers, playing packaging blind boxes, and cross-border launching sofas, clothing, and beauty products, it has repeatedly broken consumer imagination and created surprises. In 2020, Want Want adopted the popular blind box model and launched professional-themed packaging. By dividing professions into regular and hidden styles, including common professions like programmers and nurses, as well as niche professions like e-sports players and rappers, it interacts with more users with an open, inclusive, and diverse mindset. During the pandemic, Want Want, unlike other brands that donated money and goods, brought doctors from Want Want Hospital to Wuhan, refreshing consumers' perception of the brand in a unique way, making Want Want the "coolest kid." These actions are changing the aging brand image in users' minds, gradually making the brand younger and more vibrant. **-03-**Innovative Brands and Traditional Brands Develop Together As innovative brands grow further, they also need to shed the "internet-famous" image. If innovative brands want to become stronger and bigger, online channels alone are not enough. Genki Forest, CHALI, Zhong Xue Gao, and other brands are all laying out offline. CHALI's goal for the second half of 2020 was 5,000 convenience stores, and it has already opened several offline flagship stores to attract user attention to the CHALI brand and enhance brand image. Genki Forest set a big goal of 7.5 billion yuan for 2021, proposing to triple R&D investment to enhance the brand's technical barriers. At the same time, it is building factories in multiple locations, entering an asset-heavy model. In September 2020, Genki Forest's first phase factory in Chuzhou was completed and put into operation. In communication, it has started using building media and sponsoring TV activities, gradually moving closer to traditional brand models. It can be seen that Genki Forest is striving to cross the internet-famous stage and build an influential beverage brand. Traditional enterprises are continuously incubating products that imitate innovative brands, also promoting them through new media and new retail channels. For example, Quaker launched bottled meal replacement powder, Coca-Cola launched Zunxuan 28 Sleep Wake, Nestlé launched the sub-brand Sense Café with hanging coffee and independent packaged premium instant coffee products. The boundaries between traditional and innovative enterprises are gradually blurring. The co-prosperity of traditional and innovative brands is also reflected in their joint actions. Wangbaobao and Zhennong launched the "Zhennong Baobao Bath" gift box, Wahaha and Zhong Xue Gao launched the "Underage" ice cream, and Heytea and Yakult launched a giant Yakult. These leverage the shell of innovative brands and the core of traditional brands, with both sides contributing their respective advantages for clever collaboration. Summary: As innovative brands grow in sales step by step, they gradually move from online to offline, from light operations to asset-heavy, from focusing on fast consumption chains to focusing on brand asset building. There is still much to learn from traditional brands on the road ahead. Traditional brands, to shed their aging brand image, also need to continuously optimize products, pay attention to new media operations, open new channels, and engage in all-round dialogue with users. Traditional and innovative are only relative; in the future, they will inevitably continue to integrate and develop together. Editor | Asher Proofreader | Chen Feng Tips will be paid 400-2000 yuan once adopted.