---
title: "These 20,000 Words Explain the Eight Business Trends of 2020"
description: "Our original intention is to broaden the frontiers of business cognition as much as possible, not to tell everyone a definite and accurate thing, because in this era nothing is absolutely certain. The cooperation with Kuaishou is also because it is a national-level platform, and there is a real China in Kuaishou. Much of the data in this article comes from Kuaishou's big data, and we thank them here."
author: "沈帅波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-12-18"
categories: "Industry Trends"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/these-20-000-words-explain-the-eight-business-trends-of-2020-979590aa/"
markdown: "https://xinjignxiao.com/en/articles/these-20-000-words-explain-the-eight-business-trends-of-2020-979590aa.md"
original_source: "https://mp.weixin.qq.com/s/R3UXasar-ml0n2FHUhuOog"
translation: "https://xinjignxiao.com/zh/articles/%E8%BF%99%E4%B8%A4%E4%B8%87%E5%AD%97%E8%AE%B2%E9%80%8F%E4%BA%862020%E5%B9%B4%E7%9A%84%E5%85%AB%E4%B8%AA%E5%95%86%E4%B8%9A%E8%B6%8B%E5%8A%BF-979590aa.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/these-20-000-words-explain-the-eight-business-trends-of-2020-979590aa/"
citation: "沈帅波. “These 20,000 Words Explain the Eight Business Trends of 2020.” New Distribution, 2019-12-18. https://xinjignxiao.com/en/articles/these-20-000-words-explain-the-eight-business-trends-of-2020-979590aa/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# These 20,000 Words Explain the Eight Business Trends of 2020

> Our original intention is to broaden the frontiers of business cognition as much as possible, not to tell everyone a definite and accurate thing, because in this era nothing is absolutely certain. The cooperation with Kuaishou is also because it is a national-level platform, and there is a real China in Kuaishou. Much of the data in this article comes from Kuaishou's big data, and we thank them here.

Our original intention is to broaden the frontiers of business cognition as much as possible, not to tell everyone a definite and accurate thing, because in this era nothing is absolutely certain.
The cooperation with Kuaishou is also because it is a national-level platform, and there is a real China in Kuaishou. Much of the data in this article comes from Kuaishou's big data, and we thank them here.
**-01-****The General Trend and Cognitive Bias**
**1\. Cognitive Bias**
**(1) Who is the number one milk tea shop in the sinking market? Which hotel has the fastest growth in the sinking market this year?**
Heytea, Yidiandian, or COCO?
None of them. It's called Mixue Bingcheng, which has more than 7,000 stores in China.
If it's just a simple change of signboard, it's OYO. But if it's a holistic and standardized renovation franchise, it's Thank U You, which added 1,200 hotels.
**(2) Why can the high-speed rail from Shanghai to South China never exceed the Beijing-Shanghai line?**
When we open the annual Spring Festival travel map, we find that there is no particularly large-scale movement from the Yangtze River Delta to the Pearl River Delta. That is to say, the connection between the Yangtze River Delta and the Pearl River Delta is not as dense as we imagined.
The high-speed rail from Shanghai to Beijing is very fast, but the connection between Guangzhou and Shanghai, and Shanghai and Shenzhen is not so fast. Mainly from the perspective of China's grassroots, labor-intensive mobility between these two regions is not strong.
**(3) Who is the king of sinking brands?**
It is Postal Savings Bank of China.
It is the organization with the densest network in China, no exception.
**(4) When Chinese people buy Canada Goose, what are foreigners buying?**
I know you want to say Bosideng.
But actually, it's not. It's a brand called OROLAY, the best-selling down jacket item on Amazon.
OROLAY's reviews in the Western world say, "It looks exactly like Canada Goose, but the price is only one-eighth of Canada Goose."
This is a case of a purely domestic unknown national brand rising on overseas e-commerce.
**(5) Which province's liquor market is the hardest to do?**
Henan Province.
Because Henan does not have the strongest local leading brand, so all national brands take it as the first stop when going out of the province, making it the hardest province to fight. This is a deviation in results caused by a certain cognition after "behavioral stacking."
**(6) Has Nokia, which is constantly complained about, gone bankrupt now?**
No, it's doing well. If you're interested, you can check its financial reports. So don't believe so many jokes on the internet.
**(7) Why can't you understand the social software used by today's young people?**
We always think that WeChat has monopolized the social platform, and theoretically, social relationship chains have a "Matthew effect." Why do today's young people use social platforms, interest-based dating sites, apps, and communities that you don't understand?
Because "people with wealth and status" have also monopolized China's social resources.
We always think that the accumulation of wealth is bad, but in fact, the accumulation of wealth is a result; it is often because the concentration of social resources, information, wisdom, and brainpower brings about the concentration of wealth. The monopoly of social resources is more terrifying than the accumulation of wealth.
We surveyed a lot of post-00s and post-05s, both male and female. We found that post-00s believe that today's social resources are monopolized. For example, successful people don't want to know a young person without a title or status, but they have a strong need to know more people.
In the mainstream context of successful people, everything needs to be exchanged. Young people don't have these worldly things to exchange, so they use interests and hobbies to make friends.
**2\. The General Trend of the Times**
**(1) China's New Infrastructure Era**
We need to base on the seemingly unrelated cognitions and some knowledge points just now, and enter the overarching knowledge point - China has entered the new infrastructure era. This is a great opportunity for Chinese enterprises to overtake on the curve. The above is also based on this.
Traditional infrastructure is what we know as railways, highways, and airports. Mr. Liu Erhai of Joy Capital proposed China's new infrastructure. I think calling it the new infrastructure era makes it easier for old fellows and everyone to understand.
What is today's China's new infrastructure?
**It is based on mobile payment, developed logistics, excellent cold chain, Chinese manufacturing, and cloud computing as the underlying foundation, allowing for huge innovation space.**
This is why China's milk tea shops can open 7,000 stores, because there is better logistics + cold chain. And Chinese manufacturing makes Chinese decoration modular and simple. Chain hotels can open more than 4,000 stores because **cloud computing and mobile payment make data, information, and cash flow management more efficient.**
This is also the macro logic of Luckin Coffee's success. **Using mobile payment to efficiently replace traditional payment, improve efficiency, leave data, use cloud computing to make marketing more efficient, lower supply chain and management costs, and more.** All this would not have happened in the past. Ten years ago, you couldn't imagine such convenience, so no matter how good the live broadcast was, it was hard to receive tips because there was no way to pay, but today it's possible.
Based on the improvement of logistics, the possibility of regional brands going national is rapidly expanding.
Based on Chinese manufacturing, China has seen many global brands. We used to think that Chinese manufacturing is low-end manufacturing, but that statement is actually wrong.
China is a major terminal manufacturing country.
China is one of the very few countries in the world with full-category industrial production capacity. In a village or town in China, you can find and produce thousands of parts of a product within two days. That is Chinese manufacturing.
A few months ago, I went to France, and a brand owner told us that they dare not put the latest things in China now, because as long as the sample is sent to Dongguan, it becomes a hundred yuan within a month. They would rather choose a more expensive place to transfer manufacturing.
That is to say, Chinese manufacturing has super strong capabilities and extremely high cost performance.
Now many people say on the internet that China's human resources are expensive, Southeast Asia is cheap, and Africa is cheaper. But everyone's accounting is wrong - they forgot to calculate the comprehensive cost. Even if the labor cost is only one-eighth of yours, the comprehensive cost is not cheaper than China. You pay a month's salary and a month's rent, but you only get 10 days of actual production capacity, either water outage, power outage, road paralysis, or employees go out to play and disappear. This is absolutely impossible in China.
Finally, based on China's cloud computing, we have seen many new models. So it has changed many things.
In the past, we thought Kuaishou had some very cheesy videos, but today, 100 million people watch education live broadcasts on Kuaishou every day, directly sinking educational resources.
One of China's scarcest resources is education, which is concentrated in the hands of first- and second-tier cities. Today, excellent teachers use Kuaishou to do live broadcasts, directly reaching people in small towns. This is China's opportunity.
In Yiwu, there is a live-streaming village called Jiangbei Xiazhu Village. In 99 buildings, there are more than 1,000 brands and more than 5,000 influencers, mainly doing Kuaishou live-streaming sales.
From the perspective of international competition, China's new infrastructure has shaped a great advantage.
If you have been to Europe, you will find that credit cards are highly popular throughout Europe. At a gas station in Europe, you can swipe your credit card and leave directly. This is actually the underlying logic of the previous era.
In China, not everyone can get a credit card, but smartphones are very popular and cheap, so even the sweet potato seller can use WeChat to scan codes to collect money.
Therefore, China's mobile payment has overtaken Europe on the curve. Europeans don't have high expectations for mobile payment because credit cards make them feel convenient. Correspondingly, the back-end application innovation brought by mobile payment has completely fallen behind. Europe has lagged behind in e-commerce and mobile internet.
This is the logic of China's new infrastructure bringing about overtaking on the curve at the level of international competition.
**(2) Aging should be viewed dynamically**
In recent months, there has been a rhetoric on the internet that aging is extremely serious, so China's competitiveness is not good. I think this view is static. For example, if you compare your physical strength now with yourself twenty years ago, you are always weaker than twenty years ago.
But the fact that people around the world have aged twenty years in the past twenty years is the law of nature.
Let's look at this chart.
The brightest points represent the ages of these major countries in 1980.
**In 1980, the average age of Chinese society was about twenty years old. By 2015, it was forty years old. So people pessimistically predicted that by 2050, Chinese people would be approaching fifty years old.**
Today, Germany's average social age is 48 years old, which is 8 years older than China's average age. You can still "beat" people who are eight years older than you, right?
People around the world are aging. Many comments are static, as if people around the world are not aging, only Chinese people are aging. In business competition, it's more often about being smarter. You just need to do a little better than your competitors to win, not better than yourself twenty years ago.
Think about when you started your business twenty years ago, did you know these things? Not at all. You just needed to be a little smarter than the people you started with, and you might win. From this perspective, I don't think our competitiveness is rapidly declining. I think we need to think dynamically.
Based on China's huge stock, we can see that even if the new population this year is less than two-thirds of Denmark's population compared to last year, it still equals adding two Denmarks. Can you imagine suddenly stuffing 10 million Chinese people into the Little Mermaid Square in Denmark?
So, based on the huge stock, even if the relative rate is decreasing, our comprehensive strength is stronger than others.
Regarding population, we can't say pessimistic, can't say optimistic, but absolutely should not be pessimistic.
**(3) Two-dimensional culture is the mainstream culture affecting the younger generation**
**According to data provided by Tencent, in 2018, China's two-dimensional user scale reached 370 million, of which core users were 100 million, and pan-two-dimensional users were 270 million.**
This has sounded an alarm for all elites. When you think you are studying the world's most cutting-edge non-mainstream, you have actually been marginalized.
Two-dimensional culture is the mainstream culture affecting young people. What elites care about is about to become non-mainstream.
The proportion of post-95s paying for anime is 10% higher than pre-95s, meaning that 95 is barely considered young.
I think the essence of entering the Z generation's circle and culture lies in recognition and identification.
When you study them with the mentality of studying a bunch of aliens and thinking these people are strange, you can't enter their world. For example, one of the main short video platforms I browse every day is Kuaishou. I watch what the old fellows are watching and what they care about every day. I find that this is completely different from what I know through lectures and many peripheral understandings.
Today's young people are using QQ again. The reason is the same as when you used WeChat and thought a group of old school people were using QQ.
At the same time, they have a special app category, star-chasing apps. You subscribe to your favorite star, and when your star posts a video or Weibo on any platform, it immediately pops up to notify you.
Today's young people's TOP1 concern is anime and comics. Note that stars and artists are at the bottom. The era of national idols is over.
Here we need to mention one thing: what is the essence of the rise of national trend?
**The essence of the rise of national trend is only one: today's young people sincerely believe that China is a powerful country.**
According to Tencent Social Advertising's big data, post-00s scored 9.4 points on national pride, while post-60s scored 8.9 points.
Because they were born after 1995, around 2000, our motherland has entered a stage of comprehensive strength.
But in the minds of middle-aged and elderly people, there is still a poor era. You think we are counterattacking and reviving, but young people think it's innate pride. This is the difference when we look at domestic brands.
Older people think they use domestic brands reluctantly, but today's young people think domestic products are cost-effective. This is the main logic that we are talking about the same topic but not the same thing in our brains.
**(4) Local prosperity and survivor bias**
This year, I put forward two important viewpoints. These theories have existed before, but I have re-supplemented and elaborated on them. One is called "local prosperity." Every category is in local prosperity. For example, many coffee shops have fallen, mainly knocked down by Luckin and others; many car factories can't continue, but recently there is an advertisement for "BAW is expensive," have you seen it? It's being heavily promoted.
Another is called "survivor bias." Those who survive always think they survived because of diligence, hard work, and effort, but it's not necessarily true. Many brands think they survived for a bunch of reasons, but actually none of them are true. We need to re-understand ourselves from an objective perspective.
**In the era of local prosperity, finding that "local" is more important than finding the "whole."**
Today's business has entered the Warring States era.
How are Spring and Autumn and Warring States divided? My understanding is that the Warring States was a new type of empire based on serving war and aiming to unify the world. The rise of Qin was entirely because it changed the entire empire into a country born for battle in organizational logic, forming the will of the whole people, thus achieving the unification of the Central Plains.
Today, we will find that brands in every category are shrinking and concentrating towards the top, just like the Spring and Autumn period turned into the Warring States period, concentrating on the Seven Heroes. Those brands that are offensive are often more likely to break through than conservative enterprises.
Why didn't I talk about a bunch of macro data in the first part? Because economists did not include resilience and endurance in their predictions. In academic research, it is considered a cliff-like decline if a person earns 3,000 yuan less this year than last year.
But for every Chinese person, earning less money may cause short-term anxiety, but Chinese people's endurance and resilience are particularly strong, and they will adjust themselves. Every year at the end of the year, there is a collapse theory, but it has never collapsed.
My logic is not to just look at macro data. I think it's called "the direction is roughly correct, and the road is adjusted in real time." The first half of the sentence was said by Ren Zhengfei.
Many people, once they have high IQ, high culture, and high standards, always pursue an extremely certain thing. They think if the thing is not done completely, it can't be done well. I think that's wrong.
We must determine the general direction, and then adjust at any time without problem.
Experts think China's urbanization has ended. Personally, I don't think so. The current urbanization rate is less than 60%. I think there is still ten years of growth space, and China's urbanization can reach 70%.
Looking at the chart on the right, we will find that China's urbanization rate is lower than all the top ten GDP countries except India. At the same time, the difference between China's urbanization and global urbanization is that China demolished rural areas and built small counties that are a bit better than rural areas, calling it urbanization. In fact, it hasn't truly urbanized.
We all say that people in first-tier cities desire success. This is a prejudice. Today, through JD Books data, we find that non-first-tier cities buy more inspirational and success books, even exceeding 83%.
Anything you don't understand is because of arrogance and prejudice, not because the times are old. Because the times have never aged, it's just that you are no longer young.
**-02-****Brand Reconstruction and New Rich**
Among the two words brand reconstruction and new rich, the latter word is important. New rich means that you can no longer make money with the methods of the older generation, because they have failed, or require very strong resources. So we need to change a logic called new rich.
**1\. New Rich**
We visited many people and found that the new rich have three characteristics:
> **First, most people can't understand what they do.**
>
>
>
>
> **Second, giants look down on it.**
>
>
>
>
> **Third, it is highly vertical and has a certain degree of secrecy.**
If you do a business that Tencent, Baidu, and Alibaba all want to do, you will probably not be able to beat them. You need to find a business that is highly vertical and has a certain degree of secrecy, and then you can really make money.
For example, we shared earlier that a hot topic this year is doing pet economy. The first thing that comes to mind is pet care, buying and selling, grooming, and it ends at grooming. In fact, pet medical care is more profitable. It is said that pet medical care is now like the Putian system before. They will say your dog has high blood pressure and make the condition sound very serious. But your dog can't tell you it doesn't have high blood pressure.
There is also a more secretive pet funeral. Many commercial residential buildings in first-tier cities are sold to others, and each one has pet ashes. If it's around Qingming Festival, and suddenly many people appear next door, it might be for this reason.
Many people say that person is unorthodox. The subtext is that they consider themselves orthodox. The most heartbreaking thing is that most of the time, when you look down on unorthodox people, you are not orthodox yourself. **In fact, you are between unorthodox and orthodox, becoming a wandering bandit.**
**2\. Brand Reconstruction**
**Brand reconstruction should return to an origin point of thinking.**
A few days ago, I went to Africa. When I got there, I found that I couldn't understand the text. When you go to eat, you prefer the logos you are familiar with. This is the origin of a brand.
**Many times, we fall into an expert misunderstanding. Whenever we talk about brands, we have to talk about differentiation, stratification, and various fancy methods. In fact, the first round solves the problem of basic trust and choice cost.**
In Africa, I only felt that KFC and McDonald's were safe to eat. Their local fast-food chains, I didn't feel safe and reliable. This is not because I think McDonald's is high-end, but because it solves the problem of basic trust and choice cost.
So when a new category and new brand are born, the first round solves this problem, not jumping directly to the last link of the brand - differentiation. This is the most basic and essential thinking problem we solve when we think about brand reconstruction.
**(1) Kuaishou is also a social platform**
I recently had a brand new insight, and after the insight, I felt very uneasy. I think my understanding of this matter came a step late. We have always defined Kuaishou as a short video platform, but in fact, it's not.
It is a social platform.
Text creation and deep creation are literary creations carried out by a small group of people, but most people have their desire for expression. Although not everyone can produce satisfactory text, it doesn't mean they don't have other talents.
So they need short video platforms to perform themselves. At the same time, if we are both in a village or a town, we like each other's posts, double-tap, and send gifts to each other. This represents a kind of social interaction, roughly equivalent to me sending you a red envelope and you sending me a red envelope, and me liking your post and you liking my post.
Kuaishou is a social currency and a social platform in China's sinking market and the broader market.
**Old fellows have the social need to know more old fellows on Kuaishou. So one difference from other short video platforms is that some short video platforms are just for watching videos, but Kuaishou has formed a certain socialization.**
**(2) Heytea**
We will find that in recent years, there are many rapidly rising brands in China's catering industry, such as Heytea and Banu Maodu Hotpot.
A few days ago, I wrote an article called "You Were Fooled by Heytea." This article talked about one point: valuable companies find the best path between replicability and non-replicability. (The full text is more than 5,000 words, read it yourself if interested.)
Heytea's founder Neo shared a viewpoint with me: coffee has become highly replicable, so theoretically, as long as you buy an automatic coffee machine, the coffee produced will probably taste similar. So Starbucks gave Luckin a time window and opportunity to rise quickly.
When your industry has no barriers, as long as you have money, theoretically you can invest heavily. Although you can replicate, one of your barriers disappears.
Why does Heytea do a lot of work and produce many drinks that are complex, with a long production process? It is actually deliberately maintaining a certain degree of non-replicability, that is, finding your own barrier between replicable and non-replicable to prevent others from quickly copying. This is the point we share about Heytea today.
**(3) Banu Maodu Hotpot**
We need to think about a question: why is Haidilao's valuation so high today? Is this reasonable? This is an origin-point thinking.
First, I think Haidilao is an enterprise worth learning from for all of us, but its valuation is not entirely due to itself, but because the secondary market and capital market recognize Chinese catering. It seems that in the short term, there is no other stock to trade besides Haidilao, so Haidilao has become the choice for this category in the secondary market, thus obtaining a category premium.
This means that Haidilao's stock price is theoretically not linked to fundamentals. Of course, part is linked and part is not. The unlinked part is that after China's second-tier catering enterprises come out to list, become large-scale, branded, and have barriers, the secondary market will have more choices.
The huge size of the Chinese market determines that it can accommodate the second, third, and fourth Haidilao. And after the last round of expansion, Haidilao only has more than 500 stores. China can definitely accommodate it.
My very good friend Du Zhongbing founded Banu, which focuses on maodu hotpot. What are some of its characteristics?
  * First, all direct-operated.
Even in the early days, Banu did franchise stores, but later cut all franchise stores, experiencing a round of shrinkage. Cutting them was to control and do direct operation.
  * Second, cut dog products.
In the second stage, they also cut dog products. Products that need to be purchased every day but don't sell much, or sell every day but don't make much money, and it seems a pity not to sell, must be resolutely optimized out.
I also opened a catering company before, which later collapsed, and I changed careers. At that time, I found that you always think these things can be sold, but in fact, you can't sell them. If you can't sell them, you can't form centralized procurement scale, so you can't control your supply chain.
If you can't solve whether what he gives you is good, the best, the cheapest, or prioritized supply, your company has no competitiveness.
We need to ask: why can Chaoshan beef hotpot not be popularized in China? Because the supply of yellow cattle cannot be popularized, only in specific places can they be bred and produced. But Inner Mongolia sheep and Ningxia sheep can be supplied on a large scale, which determines that Chaoshan beef hotpot cannot be popularized in China.
  * Third, the storefront.
If your storefront is very high-end and elegant, like a Nordic street store, the probability of closing within three months in China is as high as 90%. Your storefront must be very eye-catching, and your possibility of continuing in China increases by 50%.
  * Fourth, wolf pack tactics.
What is wolf pack tactics? You must concentrate superior forces in one area to first form an absolute advantage, and surround your competitors to kill them first. A group of wolves kills other little sheep or other wolves. Instead of first laying out points nationwide, with Shanghai, Guangzhou, and Beijing, but not being able to take care of them.
Wolves appear in a certain range, besieging points and reinforcing. It's called: concentrate superior forces to fight a war of annihilation.
  * Fifth, productism.
Today, a large number of middle class, a large number of people with life pursuits, and all people, everyone has a desire for a better life and a desire for better food. So Haidilao's average per capita is 120 yuan, but Banu in Shanghai should have already reached 170 yuan.
In fact, for the vast majority of people who go to eat Banu Maodu Hotpot, spending an extra 50 yuan per capita has no impact, but if you make them feel it's worth it, it becomes better.
**In the past, my logic of cutting costs, I think, is wrong in today's era of oversupply. Now it may be the era of adding necessary costs to obtain premiums.**
In the past, many merchants used caustic soda to process maodu. Later, Banu, in collaboration with Southwest University, developed the "papain" tenderization technology to make maodu healthier. Banu was the first to use this processing technology to start a green revolution in the maodu industry, and it was quite difficult when it came out. For this, they independently developed a maodu swelling production line equipment.
The "wild mushroom soup" boiled over a big fire, for hotpot, whether to boil the soup or not, this is a trade-off. Many hotpot restaurants no longer boil it because boiling soup is prone to problems, but Banu has insisted on boiling it fresh for 18 years.
**This is the new productism we understand. Users are willing to pay for good things.**
**(4) Monalisa Tiles**
Most of us don't pay attention to these enterprises at all, or in the past, we didn't care what brand a tile was. But now we have known through many mainstream platforms that there are head brands like Monalisa.
This industry is highly fragmented. Last year, China's tile industry was about 420 billion yuan, but the current category leader only did 8 billion. There are a large number of tile factories concentrated between 500 million and 1 billion, and countless between 100 million and 200 million in China. This is a depression for brand building. Monalisa did more than 6 billion last year. In the past, we thought tiles didn't need research and development, but today it's not.
For example, Monalisa has invested more than 3% for 15 consecutive years, similar to or even more than many so-called high-tech enterprises.
Their executives told me that because when tiles get bigger, it's hard to do. When your tile exceeds one square meter, it will break during transportation. You will find that the tiles on your wall need to be grouted, and it costs a lot of money.
There is a pain point: many fine-decorated houses and good houses need to install large whole tiles. Monalisa launched a 3.6m x 1.6m large tile.
What I found interesting at the time was that in this category we think is the least important and no one cares about, it has already become the same as fast-moving consumer goods. That means our pace must be faster.
**(5) Streamers have become a profession and are highly subdivided.**
In fact, streamers have become a traditional profession. Among streamers, there is a category called deaf-mute live streaming, because there are many deaf-mute people in China who also need entertainment, watch live broadcasts, and shop. Live streaming specifically for deaf-mute people can also bring goods and sell cars. This has already appeared on Kuaishou.
There are also rural live streaming, Taobao live streaming, game live streaming, and eating live streaming, where one eats ten pounds of fat a day. I saw the most awesome person with one account doing weight loss live streaming and another doing eating live streaming, eating for half a day and losing weight for half a day, receiving tips on both sides. In finance, this is called hedging.
The wisdom of the people is great. All high-end theories can find corresponding confirmation among the masses.
What is the difference between Taobao live streaming and other live streaming? Taobao live streaming is a super shopping guide. When you come in, you are buying things. Head Taobao live streaming has become a channel. What you say is not very important.
**In the future, brands that do not have the ability to directly dialogue with consumers will die, stars that do not have the ability to directly create topics are already outdated, and platforms that do not have the ability to self-circulate have systemic risks.**
  * First, brands that do not have the ability to directly dialogue with consumers will die.
Not having the ability to dialogue with consumers means you don't know who bought your things, and you don't know where your things are sold. If you go through a pure dealer model, your product iteration and brand rejuvenation are very crisis-prone.
  * Second, stars that do not have the ability to directly create topics are already outdated.
In the past, we always said that stars, artists, and influencers are different. Today, we actually find that they have begun to converge. At the same time, we are desperate to find that many so-called head stars have run to live-streaming influencer platforms to interact, and no one pays attention to those stars. Everyone still tips influencers and streamers.
This is mainly because they do not have the ability to directly communicate with consumers and fans. They rely on the entire team in the past, the team that creates content, to complete it. These people may be eliminated in the future.
  * Third, platforms that do not have the ability to self-circulate have systemic risks.
What does it mean to not have the ability to self-circulate? It means that not all platforms with bilateral matching will necessarily succeed. A system must form a cycle.
For example, Alibaba. When you have more merchants, you have more SKUs. With more SKUs, you have more buyers. With more buyers, you can drive more merchants. At the same time, based on merchants, you can form a set of back-end logic: financial supply chain, logistics. This is called self-circulation.
But why can't many platforms succeed? It's a one-dimensional simple bilateral logic. That is to say, theoretically, as long as I have enough money, I can kill you. Investing in such platforms has huge risks.
**(6) Three dimensions of brand**
Speaking of brands, I think brands are divided into three dimensions (of course, there are many ways to distinguish).
Many times, when we discuss brands, it's chaotic. The so-called chaos means you don't know what you want. You just think you want to be famous. Many people define a brand as being known by many people, and that's a brand.
Many bosses say they want to build a brand, but behind that sentence is "I want to make money." Look closely, they just want to spend 100,000 yuan to build a brand.
In fact, bosses who can build a brand have an obsession. They can insist on not making money for several years and unswervingly brand.
**Brands are divided into consumer goods brands, channel brands, and pseudo-consumer goods brands with channels as the core.**
> **Consumer goods brands mainly focus on occupying the user's mind.**
>
>
>
>
> **Walmart and Sephora are channel brands, which are driven by operations.**
>
>
>
>
> **Platform enterprises like Tmall, Pinduoduo, and Kuaishou will do a lot of promotional activities and new user activities, and all activities oriented by operations.**
>
>
>
>
> **What is a pseudo-consumer goods brand with channels as the core?**
>
>
>
>
> **It's those brands placed in a few hundred square meters at the entrance of Walmart, with unknown brands. In fact, their market occupation mainly relies on channels.**
>
>
>
>
> **People are after cheapness and channel convenience, not the brand.**
>
>
>
>
> **So each has its own way of living, and each can make money. But the latter earns profit money, while the former earns capital brand premium money. This is different.**
You will also find that traditional brand people, when discussing these issues, think promotions are wrong and promotions hurt the brand. The essential logic is that you are not doing the same brand category.
But when we mix them together for discussion, your basic context is not the same context. If you occupy the mind with your brand, your ground forces must not be disconnected. Once disconnected, your advertising is in vain, and your brand is in vain. You still need a strong ground force.
For brands driven by operations, the most terrible thing is to be wary of the inevitable failure of operational technology and the shift of brand centrality.
Why have traditional supermarkets been particularly bleak in the past two years? The main reason is that seafood and vegetables have been cut away by fresh food stores, daily small commodities have been cut away by MINISO. Large items like laundry detergent have been cut away by online e-commerce, because you don't want to carry them back yourself.
In the past, the basic core functions that operations relied on have been cut away by different people in different ways, so they are very miserable.
You need to be wary that operational capabilities must keep up with the times, but it doesn't mean this path is unworkable.
**Brands with channels as the core must do brand upgrades at key nodes, otherwise you will definitely be eliminated.**
In the past, there was a brand in the small household category called Sanfu, which was once larger than MINISO. But it didn't do brand upgrades at key nodes, so it went down.
Another operation-driven one is domestic cosmetics. For example, Proya made a bubble mask and invested 200 million yuan in advertising budget in four months to promote this product (you can check the specific numbers, there may be some discrepancies).
But international groups like P&G and L'Oreal use positional warfare plus guerrilla warfare, plus various methods you are good at, to catch up. This is the most terrible thing in today's entrepreneurial era - what you know, others know; what you don't have, others have. This is the most terrible.
When we discuss brands and success, we easily fall into an absolute context, saying this is right, so that is wrong.
Many people see one method as right, as if other methods can't survive.
**Share three methods. This is not new in the e-commerce industry, but when I talk to people in other industries, they think it's very novel.**
The first model is the store group model.
Midea opened hundreds of specialty stores, and has dozens of flagship stores to occupy search traffic and occupy your page, forming a huge matrix.
The second model is the label-selling model.
Nanji Ren.
In the past, our understanding of Nanji Ren was selling thermal underwear. Today, Nanji Ren sells everything, mainly selling labels, because there is an operational rule on Tmall that you must have a brand to open a store.
Many merchants buy the Nanji Ren brand to sell other things. You might be able to buy a pair of Nanji Ren stockings on Tmall. Every time a pair of stockings is sold, the stocking factory gives Nanji Ren a fixed commission, similar to the Disney model.
The third model is the sinking matrix model.
There is also a company called Semir, which has a children's clothing brand called Balabala, but it also has some brands between 80 million and 100 million. It's hard to create a billion-level enterprise, but when you have channel resources, operational capabilities, team, and funds, making ten brands of 100 million each is a bit simpler than making one of 1 billion. This is Semir's matrix logic. They made a large number of matrix brands, each reaching a scale of about 100 million, piecing together one of the most profitable clothing companies.
The more desperate thing is that when these methods are told to you by me, you have no chance. That is to say, others have already run through, but we provide a thinking path. If you use this method today, you can't beat others.
**(7) Mediocre brand strategy is not even as good as a spare tire**
The standard methods of the past enclosure era are not replicable today. Why? Because in the past, when everyone started, they didn't know anything. But today, the terrible thing is that the chairman in his fifties doesn't want to retire. So the difficulty of entrepreneurship for young people has increased, not that entrepreneurial opportunities have disappeared. So they need to seek another path.
What is the most terrible thing in brand communication? When your brand wants to scale, you still need to do mass communication. And when doing mass communication, you must forget all the ideas and language systems of the elite. Only then can you truly understand what the masses care about.
If what you make is something you are very excited about, then this thing will definitely not sell.
**The most terrible thing in this era is that when most brands are spare tires, most brands are not even as good as spare tires, belonging to the category of jacks.**
If your strategy is mediocre, your fate is destined to be a spare tire. Even if your strategy is not mediocre, you may still be a spare tire.
Brands always think he is my loyal fan, he is my only fan, he only loves me. But it's not like that.
Every time a brand enters, it is a brand that is turned over. The person in charge of the brand must first accept the fact that when he chooses you, he also chooses others.
The ultimate ceiling for most consumer entrepreneurs is 100 million US dollars. Because there are many hidden costs, and when you expand to a certain range, if there is no external force intervention, your past resources will theoretically be consumed clean. You will hit a ceiling.
**(8) New opportunities brought by aesthetic improvement**
Branding and de-branding go hand in hand. With logos and without logos go hand in hand.
Some people have already enjoyed many foreign brands, so today they like no logos. Some people bought fakes, so today they like logos. Today, in Chinese luxury stores, both with logos and without logos sell well.
In our entire consumer goods innovation, I think aesthetic improvement is a huge space.
In the past, the bed sheets in Chinese homes, the bed sheet on your wedding day must have a dragon and a phoenix. You stock up more than 20 sets, change one every two years, and the remaining 40 years of your life are enough.
Once, liquor was all red packaging, like Moutai and Luzhou Laojiao. Later, a brand appeared, Dream Blue, Sky Blue, Sea Blue, which are cool-toned. And now there are innovative brands with huge aesthetic improvement like Kaishan.
Today, the liquor market is the ballast stone in China's big consumption, and its scale is quite huge.
Pull out the stocks of the liquor market, and they must lead the entire Chinese A-shares. There is a stock, Kweichow Moutai, whose market value once exceeded the GDP of Guizhou Province.
In the past, everyone made Jiangxiaobai, but I think Jiangxiaobai is not classified in the liquor market as I understand it. The underlying logic of Jiangxiaobai, I think, is classified in the beverage fast-moving consumer goods market. **Liquor is still the essence of circles and social currency.**
**The era of consumers turning over brands has come. The most important assessment point in the future market is user growth and mind occupation. For user growth, find Tencent and Kuaishou; for mind occupation, find Paidong Influence.**
**(9) Beware of business chicken soup, the complex logic behind success**
Highly simplified business chicken soup is wrong. This is also something I must reflect on every day: that boss sits there talking eloquently, as if very sincere, but whether what he tells you is right, whether what you summarize is right, maybe some are wrong.
For example, many people say that this round of Bosideng's success mainly relies on fashion and advertising, and holding a press conference in France. This is a highly simplified chicken soup for the soul.
Let's review Bosideng's history. Around the 1990s, Bosideng was a fashionable brand in the public world. It was the first to discover a pain point - in the past, Chinese down jackets were all chicken feathers, so it began to take the lead in promoting that down jackets can also be slim-fitting. Bosideng was also the first brand to adopt off-season promotions. Because one year their clothes didn't sell, and they stocked more than 300,000 pieces in winter, and they were about to die that summer. So Bosideng's chairman invented a method - off-season big promotion, clearing all inventory in one go. So later, you will find that a large number of brands do off-season promotions.
Brand aging is inevitable for the vast majority of brands. You can only fight against it. Nirvana rebirth has hidden costs. It's not that if you have money to hold a press conference in France, you will succeed. Behind it is a complete and complex logic that conforms to business logic.
The chain of reaching sales is rapidly shortening. In the past, to sell a car, you had to spend billions on advertising, open a 4S store costing tens of millions, and then slowly sell cars. But today, on Kuaishou, there is a person called Er Ge. He joined Kuaishou in May 2015. This year, he started Kuaishou group buying to sell cars, and in the first month, sales exceeded 100 units. In one group buying, he sold 288 cars in six consecutive sessions. Note that from last year to now, Er Ge has sold more than 1,000 cars through live streaming, meaning one person has beaten several 4S stores. This is the most terrible thing today.
BAW recently started marketing. I don't think its exploration and innovation are limited to the marketing sector. Next year, I will personally pay attention to BAW's new retail dynamics. Because BAW is controlled by Shenzhou Youche Group, it can achieve 90-day returns. Currently, no car manufacturer can return a car after 90 days of sale, because returning it makes it a second-hand car, not worth much. But Shenzhou Youche can take it back for chauffeured cars and rentals. This is an industry chain.
At the same time, they can also drive low-frequency with high-frequency. Except for a few rich people, for most people, buying a car is a low-frequency event. How to change? Combine with car maintenance and care, and it becomes high-frequency. At present, we haven't seen those combination punches appear, but I think it's worth looking forward to.
Finally, the logic derived from a single-point conclusion is not certain. You should also reflect on whether I said something wrong, and tell me. Because I may also be fooled by myself, fooled by a phenomenon at a certain node.
**-03-****Physical Counterattack and Edge Entrepreneurship**
**1\. Will you become the king of small towns?**
Here are five points that I think are very important. These five points are not the organization, framework, strategy, etc. that business schools tell you, but based on my years of understanding of Thank U You's Ma Yingyao, following his enterprise development, and discovering his past.
Thank U You, which we mentioned earlier, is the largest chain hotel in China's sinking market, with 4,300 stores. This year, it added as many as 1,200 stores.
**First, establish a base.**
When you start a business, you often don't have a base, so you must establish your base. This is very important. Without a base, nothing works.
When establishing the base, Brother Ma did something that I still think is full of creativity. That is, from the first store, he franchised. He persuaded an individual hotel owner to hang the Thank U You sign on the hotel.
We often think that you need to open a store first. But at that time, after Brother Ma's factory went bankrupt, he didn't have much money. This is the same dilemma most of us face. And most people give up here.
But he found a single hotel owner in Qingdao city, who was attracted by the "cooperation policy" provided by Brother Ma, and changed the hotel to Thank U You.
He told the owner, I'll help you operate, but you don't need to pay me a franchise fee. I guarantee to help you increase your turnover. You just need to hang my sign, and give me a room in the basement as an office.
In the first round of breaking the situation, the most important thing is to establish a base. As for how to establish a base, tactics, etc., it should not be the same as a big company, because you don't have its resources. So you should learn from Brother Ma.
And often many people, because they have a little money, mess up their business.
**Second, intelligence warfare.**
How do we know the occupancy rate of a hotel in a county? If you are a standard employee of a large enterprise, you will find a research company to do research, but it's useless.
Brother Ma first dressed up as a tour guide. When night fell in the county town and it was around 11 or 12 at night, he appeared at the door of the hotel, saying, "I am a tour guide from a certain travel agency. I have ten people who need to stay. Do you have rooms?"
The front desk seriously calculated, "There are still eight rooms, not enough." He knew the hotel still had eight rooms empty. Then he asked, "If not this time, next time. How many rooms are there in total for a full booking?" She said forty. So he calculated the occupancy rate for that day.
Brother Ma went to the next hotel and did another round. After a few hours, he knew the real occupancy rate of the entire county, without spending a penny.
If you want to understand market share and many sales methods, you don't need to spend a lot of money. Just use your brain.
Many years ago, there was a joke. Because of soap production, on the assembly line, every ten minutes or so, there was an empty soap box. A large enterprise spent 10 million to invent a system that could automatically sense and identify which one was empty. But a Chinese private enterprise just put an electric fan, because the empty soap box would be blown away by the fan, costing only 100 yuan.
**Third, choices at key nodes.**
When Thank U You entered its third year, Brother Ma organized all executives for a meeting on Lushan Mountain, and everyone opposed. He believed the next stage was the franchise chain model, not self-operated hotels. At that time, their team all thought they should have their own properties and do their own hotels. But Brother Ma overruled everyone. So, everyone who finally made it out has experienced several choices at key nodes. There is business acumen, and also an indescribable element of fate.
**Fourth, expand the results.**
When your mentality is "small wealth is safe," you really can't make big money. At key nodes, you must increase volume and expand results.
Because your mentality will ultimately affect your actions and decisions. For example, I see many people who claim to want to do big business. But in fact, with a little money in their pocket, they think doing big business is risky, so maybe forget it. This is typical inconsistency between knowledge and action.
All bosses and enterprises that finally became big have had a stage where they could have taken the money and run, but they chose to bet all their winning chips again. If they win, they go all in; if they lose, they start from scratch.
**Fifth, build your barriers.**
The profit model of a hotel in a county town may be similar in formula to first- and second-tier cities, but in actual structure, it is completely different. So you must adjust your barriers according to this structure.
Why did Thank U You run out? This is a cross I drew.
First, you need to establish scale. The core of the sinking market is to have scale. With scale, you can do a certain degree of multi-branding. Because Brother Ma has many franchisees who follow him to open stores all the way.
Previously, I researched one of his franchisees who opened stores in Shandong Province. His logic for opening stores was to open along the highways with the most people and traffic in the province. He said it must be profitable. So he opened eight along the highway. This is the logic of franchisees.
After making money, you might want to open a more upscale hotel. This is a process of multi-branding within an ecosystem.
With multi-brand, we need to do globalization. In April this year, I went to Africa and visited Brother Ma's hotel headquarters in Africa. There, an economy hotel is roughly equivalent to a high-end hotel in China, and that market is currently zero. They have already localized operations and also expanded in Southeast Asia.
Another important thing is dataization. China has more than 200 million middle class, of which 80 million are in county towns. These people need to stay in chain hotels. In many areas, they prefer Thank U You, so Thank U You's membership system has accumulated the most small-town middle class.
And multi-scenario, that is, opening KTV and retail, is to connect your membership system and data, thus becoming a model. But the basis of all this is that you first need to scale and complete the construction of your underlying team.
**2\. Luckin Blitzkrieg**
Here are a few points. In the Chinese market, everyone thinks Luckin's benchmark is Starbucks, but in fact, Luckin's initial idea came from Tim Hortons in Canada. It is a Canadian national coffee. In Canada, a country with a per capita GDP of $46,000, a cup of coffee is roughly equivalent to 10 yuan RMB.
Chinese elites think coffee is getting more and more expensive, but globally, this is not necessarily right. Second, this Canadian brand focuses on affordable and fast, and coffee returns to functional needs.
I think Starbucks and Luckin have a highly overlapping user base. Many people choose Starbucks when they have third space needs, gifting needs, and face needs, but they drink Luckin when drinking by themselves. And the vast majority of people don't think there is a difference in taste between Luckin and Starbucks.
Another important point is that Starbucks' coffee bean roasting method once educated our first batch of Starbucks users. But Starbucks' roasting method does not mean all coffee in the world is roasted this way, and all coffee in the world does not mean it all tastes like this.
Simply comparing Starbucks' taste with Luckin's taste is just a cognition of a group of people. In the world of more people, as I once said, 90% of people have never drunk Starbucks.
In essence, Luckin's blitzkrieg success is based on data-driven + extreme cost performance + strong offline expansion capability + platform thinking. Or he is not a coffee logic. He is a data company.
**3\. Rapid Scaling**
Let's talk about this year's annual brand, MINISO.
**The most important thing in the first stage of physical business is called rapid scaling.**
Mr. Ye Guofu is the founder of MINISO. Among the first ten stores Mr. Ye tested, basically none made money, but he was not in a hurry. He tested ten versions, that is, ten different store formats, ten different locations, and different structural adjustments. After that, he found the truly good model.
So in one year, he opened several hundred stores in the Pearl River Delta in one go, and established a certain scale advantage, forming centralized procurement advantages, scale effects, and network effects. In this way, he could immediately leave potential copycats several streets behind. Speed is extremely important for any physical enterprise.
**In the second stage, because scale is achieved, cost performance can be achieved.**
In MINISO, there is a mascara that sold 100 million units in three years, 10 yuan each.
There are a large number of ordinary Chinese workers who need extreme cost performance and good quality. This mascara is made for them.
At the same time, because every large cosmetics group does not regard mascara as an important category, but only an auxiliary category, MINISO can establish a voice in the supply chain.
That is to say, this is called flanking. First, control the categories that big factories don't pay attention to and achieve rapid scaling, thus achieving extreme cost performance.
Just now we mentioned that there was a large chain store called Sanfu. Now its voice is much worse than MINISO, because when it became an excellent channel, it didn't build a brand, so it couldn't get capital and brand premiums.
**In the third stage, form brand awareness.**
You might say I want to go to Hang Lung Plaza to buy Hermès, but in the past, few people said they go to Global Harbor to buy MINISO. So what makes you is the channel, and what limits you is still the channel. At key nodes, you must brand at all costs. So we saw MINISO's series of big moves this year.
Recently, I did research and found that many people told me that all the socks, dispensers, and small daily necessities they buy today are from MINISO. They go to MINISO to buy these things.
**In the fourth stage, the domestic market should be globalized.**
At present, MINISO globally, especially in Asia, Africa, and Latin America, has the same status as MUJI. The conditions for obtaining mall properties are at the same level as Starbucks.
Last time I went to Egypt for inspection, I saw that the middle and high-income groups there are the main shoppers of MINISO. This year, MINISO's global business should have exceeded 20 billion, and the overseas business volume has risen sharply, equivalent to recreating a MINISO.
Here, we define a brand's growth flywheel. At each stage, you need to do what you should do, but you must have strategic height. If Mr. Ye Guofu didn't have strategic height, he couldn't have planned the third stage, and might have stayed at the second stage.
But if there is only strategic height without the team's execution and organizational coordination, it can't be done. So this is our understanding of growth.
**4\. Understand the Industry**
Question: Why can't Haidilao replicate McDonald's management model? And why can't McDonald's do Haidilao's work?
Because they are essentially not the same thing. McDonald's staff contact with you is only half a minute, you take it and leave, unless you have some special things, you won't find their staff. But hotpot and Chinese food formats require employees to constantly contact customers. This means that although you are all called the catering industry, you are actually not the same industry.
So standardized management is suitable for one type of catering enterprise, but another type of catering enterprise needs to customize an organizational management model for itself.
The so-called organizational management must be a model customized according to your own organization. It's wrong to think that Alibaba is very awesome, so I need to learn Alibaba's model.
**The so-called strategy is the whole set of methods that best suits you, called strategy.** What is the biggest difference between Huawei and Alibaba and Tencent? It is that all of Huawei's R&D is a certain thing with a cycle of several years. The thing we want to do is certain.
I concentrate all people's experience and ability to do this thing. But Alibaba and Tencent are not like this. The work next year may not be the same as this year, so internal products have to compete. At the same time, they may make ten products on the same track, and whoever runs out wins.
**5\. Employee Management**
Question: How do foot bath shops recruit?
Last time I went to a foot massage shop to find out how they recruit. The master told me, "Our boss is very good to me. On my first day in Shanghai, the company had someone holding a sign to pick me up at the train station." - This is called playing the sincerity card.
He continued, "The money I earn now is not just salary, because I also introduced two fellow villagers to our boss." - That is to say, the referrer's commission is linked to the referrer, which means recruitment can be endogenous.
But this is not the most awesome, because most enterprises have internal referrals. What is the most awesome? It is from buying the train ticket to picking up in Shanghai, to learning and interning at the store. All expenses of this employee during the entire cycle are paid by the company. But if he leaves after a few days, it will be deducted from the referrer's salary.
This means that the referrer will definitely guard against the fellow villager running away after learning. If he runs away after learning, he will definitely "take a knife to cut you." And when this organization forms a certain group, it evolves into the boss buying everyone train tickets home at the end of the year, sending everyone to the station, and everyone goes back to their hometown together.
The main purpose is to supervise each other not to slip away. When returning to work in spring, buy everyone tickets, and at the village entrance, someone is responsible for counting heads. If anyone doesn't come to work, they will rush to their home to catch them.
Based on this organizational system, a successful model for a large number of chain foot bath stores in China has been formed. It is completely different from what we understand as modern feeling, foreign enterprise management, or Alibaba model. So you must combine your industry's format and your own situation to study how your organization recruits.
**6\. Industry + Finance**
Most shoes in China are produced in Jinjiang.
The same is true for the Jinjiang system. Jinjiang is the largest shoe production place in China, and it has also created a large number of brands, such as various XX birds, all from Jinjiang. But only one enterprise has achieved a particularly large scale and achieved a counterattack. It is called Anta. It acquired a large number of overseas brands and combined channel advantages to grow in China.
You need to use financial leverage, but still take industry as the foundation.
There is a largest overseas capital focused on food enterprise mergers and acquisitions, called 3G Capital. They have a lot of business cooperation with Buffett. Buffett once focused on the things these old gentlemen did at the annual meeting.
3G Capital acquired Anheuser-Busch InBev, Burger King, Heinz, Tim Hortons, SABMiller, etc. Its control is to acquire high-quality brands on tracks it highly understands and knows, and at the most favorable prices, while simultaneously carrying out organizational management and channel innovation.
All restaurants and all food channels are the same channel, and upstream supply chain integration can be carried out, making personnel less redundant.
There is a functional drink on the market called Lehu, which is from Daliyuan. In the first half of 2019, Lehu's sales were 700 million cans, meaning one in two Chinese people has drunk it.
The data in the table above is accurate. It can be seen that the market size in 2019 was 48.3 billion, and Lehu found an innovative opportunity, or market opportunity, in it.
Red Bull, although it only sells for five or six yuan, is still expensive for most people. And a large number of truck drivers and long-distance drivers need functional drinks to stay awake, so my price is set at three yuan. At the same time, because Red Bull is canned, and canned things are easy to spill while driving, and many truck drivers can't finish it at once, and it's inconvenient to drive, it will be wasted. So Lehu was the first to change to bottled. This is part of the Daliyuan model. Here we summarize one of the important models of Daliyuan's success - copying products that have been recognized by the market, so you don't need to bear trial and error costs.
Copying what P&G has made successful has a higher chance of success than thinking you've discovered a huge blue ocean that P&G missed. Through large-scale production and procurement, achieve lower prices; through nearby production, reduce transportation costs; when people don't have brand awareness, occupy the market through channel and price advantages; cooperate with brainwashing advertising for high-altitude operations; bind dealers to your ship.
**-04-****Regional Rise and County Economy**
**1\. Sinking Market**
In the middle of the year, I wrote an article about Suning. I said: "This year, two blitzkriegs occurred in the Chinese market. One was in first- and second-tier cities, Luckin Coffee, which opened 3,700 stores in a year; the other was a sinking blitzkrieg, Suning opened 3,500 stores in a year." Less than half a year after writing this article, the data was updated to 4,654 stores. We can imagine the speed of its transformation.
Here we need to mention a core point: the sinking market is not completely without business, but its model and business philosophy are relatively backward. Therefore, theoretically, we need to find a universal model, use what you are good at to solve what it is not good at, and at the same time achieve scale.
Stock transformation is more than ten times more efficient than rebuilding from scratch. How to transform? Empowerment.
Everyone can say the word empowerment, but it's not important. What's important is how to empower. In June this year, I went to a Suning retail cloud store. The boss told me he has 50 stores in Suzhou and was the largest agent of China Mobile in Suzhou. Now mobile stores are not making money, but the only thing I know how to do in my life is open stores. I used to sell phones and phone cards. Now I can't do high-end things. I think the best thing to do is sell home appliances.
But selling home appliances requires stocking up yourself, decorating yourself, and may cost millions. This is not cost-effective. How to carry rice in an empty sack and find someone to pay for it? Suning solves it. But Suning doesn't pay for it itself. Instead, it supplies goods through its network advantages. Consumers order online, and it is delivered to their home tomorrow. The store only needs to display samples.
The on-site decoration is often provided by brand owners, such as Skyworth. Based on Suning's network, Skyworth is willing to subsidize the store's decoration costs. Originally, decorating a store would cost 3 million, but in the end, it only cost less than 300,000, and the cost was transferred.
Why would the person being transferred pay? It's about creating value. For Skyworth, a better decoration can indeed sell a few more TVs, so they are willing to help decorate. So this chain is connected. Therefore, the boss who switched to opening a home appliance store doesn't need to stock appliances, and doesn't need many brands to string the store together. This is what Suning does.
There used to be a large number of 3C stores and specialty stores that only sold one product, but this kind of store has no great future in the sinking market and must be improved. **At the same time, ordering through the APP, plus friend interaction for private domain traffic, this is the innovation we see in Suning. This is called model innovation.**
**With model innovation as the main body, empowerment as the lever, and capital advantages and brand advantages for rapid attack, it has formed one of the most successful sinking blitzkriegs this year, in my opinion.**
**2\. Hidden Champions**
Regional rise and county economy are important enough because there is a huge connection between the two, called hidden champions, that is, those unknown enterprises with market leadership.
After a series of analyses and data research on hundreds of hidden champions and industries globally, we found that hidden champions often meet four characteristics, mainly high-tech industries, focus, entrepreneurship, and small and medium-sized enterprises.
Champion means to seize market leadership, so the share often exceeds 50%.
In the early stage, the strategic purpose of the "champion" occupying a leading position is far higher than market share, so it is necessary to take the leadership position at all costs.
We believe that in a relatively narrow market range, focusing on a specific product or market and seizing leadership is the main method to become a hidden champion in the past. This is also mentioned in Simon's book "Hidden Champions": "We should provide complete services for specific markets as much as possible."
Especially for 2B, because you need to increase your service depth to tie down your customers, so you need to provide "customized" services to customers, that is, improve your services according to customer needs, so as to create irreplaceable value.
From another dimension, it is called precipitating into technical barriers, service quality, brand awareness, and customer relationships, so that it can be unbreakable.
This definition has huge implications for what we call industrial internet and 2B industry this year.
How to do it specifically?
First, in the past, all hidden champions were one that could stand for three, reacting very quickly. Once there is a certain demand in the market, you must respond immediately.
In this way, your closeness to customers must far exceed that of competitors, so that your customers can follow you for a long time. This sounds very correct.
What is a hidden champion in the Chinese context? I think it is a category leader that does not rely on first-line advertising or media exposure, is not within the elite's cognitive range, and deeply cultivates the market. This is called a new hidden champion in the Chinese context.
At the beginning, we mentioned that the largest milk tea shop in China is Mixue Bingcheng, with more than 7,000 stores nationwide; Thank U You has 4,300 hotels; Wallace has 12,000 stores; Zhengxin Chicken Steak has 4,000 stores...
What does this mean? China has 2,863 county-level administrative regions, meaning one county has 1 Thank U You, 2-3 Mixue Bingcheng, and 5 Zhengxin Chicken Steaks. This is what I think is a new hidden champion.
In the future, such hidden champions will emerge more. But all future presentations are because the past has already happened. Therefore, it cannot be deduced that you can go to a county town and open a hotel and become Thank U You.
Thank U You opened 1,200 stores this year, an average of 3 per day, of course with lag. So its decoration team is more controlled than others, because Thank U You needs to constantly decorate, so Thank U You directly acquired a decoration company.
Behind every wealthy county town, there is a regional characteristic industry supporting it. Our past understanding of many regions is not entirely correct.
For example, we think Ningxia is relatively northwest, so it is relatively "rough," but Ningxia is rich in "knowing sister" (a term for a type of emotional support person); Hubei is the city with the most e-sports youth; Shandong people are the most studious. These are all obtained through Kuaishou big data.
Even if a person's IQ is already high, they will make many mistakes because they don't understand that thing and haven't experienced it.
60% of the world's wigs are produced in Xuchang, Henan, mainly sold to Africa, because African people's hair stops growing after a little bit, which is caused by genes.
However, Africans like to wear long wigs, so wigs naturally have a market.
80% of the country's activity golden eggs come from Shuihu Village, Shandong Province, the kind of golden eggs smashed on the ground. Data shows that 150 million golden eggs are sold a year, 2 yuan each, with an output value of 300 million. The village has a total of 2,600 people, and almost everyone is engaged in the production of golden eggs.
In fact, every county has a unique industry. It is these unique industries that support the foundation of China's economy.
**3\. Regional Rise**
Why is China a market with particularly serious regionalization? Because it is big enough. This is a very simple logic. The culture, customs, personalities, tastes, and habits of each region are completely different, so several independent markets are formed.
Based on these markets, we will find many cognitive biases, and even some strange things, called regional brands are not necessarily weaker than national brands.
Many times, for brands with solid competitive advantages in regional markets, you simply can't break in.
So, rich enterprises can only enter by acquiring local regional enterprises.
Among China's TOP10 convenience stores, at least five are regional brands.
**The first is Sinopec's Easy Joy with 25,775 stores, the second is PetroChina's Kunlun Haoke with 19,000 stores, and the third is Meiyijia. The top three basically crush the total of the next ten combined.**
This is one of our cognitive biases: we always think that regional brands are definitely weaker than national brands in terms of scale, performance, or sales.
Once, at a high-speed rail station in Ningbo, Zhejiang, I saw a convenience store with a total of 2,003 stores. At that time, I wondered why there were still individual convenience stores. Later, I found out I was ignorant. It turned out that a provincial chain had more than 2,000 stores.
For many brand owners, don't think that solving a certain channel means your channel is complete. In fact, you need these individual channels.
Lehu drove large sales at gas stations. What else sells well at gas stations? Windshield washer fluid and boxed mineral water are all based on scenario sales.
So, can the things you make be improved based on a long-distance migration scenario? Instead of thinking about disruptive innovation all day.
For most people, you don't have the resources for disruption and innovation. What you need to do is micro-innovation.
Some brands you think are national are actually just regional brands because they appear frequently in your life range.
For example, COCO. People in first-tier cities, especially in the south, always think COCO is a national brand; Mixue Bingcheng, when it had 7,178 stores, was a regional brand in Henan, Shandong, Hebei, Shaanxi, and Sichuan; Shuyi Shaoxianxian deeply cultivates Sichuan and Hunan markets and can reach 2,700 stores.
There is also a brand called Chayanyuese, which only opens in Changsha. Two stores face each other on the same street, and the same block uses the same ice warehouse. This means the infrastructure cost is shared.
I don't think everyone can go back and make a big deal or succeed after listening to my talk today.
First, the so-called "asking the way to 2020" is actually still under your feet;
Second, I am not an expert in every category, nor an absolute master of business. I am just a practitioner and observer. I share my cognition of business, which does not mean it must go in this direction.
But no matter what, my personal mantra is always to believe in the Chinese market, believe in its stock, believe in its resilience, believe in its depth, and believe that China has the most people in the world who desire to change their destiny.
The reason I firmly believe in the future is that I believe in the eyes of future people. She has eyelashes that brush away the dust of history, and pupils that see through the chapters of time.
Becoming a person who can always prove himself right but lives poorly is meaningless.
There will always be a lot of information in the market to support your viewpoint, but as the saying goes, pessimists are often right, but optimists often succeed.
Source: Jinjibo Finance (ID: jinbubo)
Tips will be paid 400-2000 yuan once the report is adopted.


---

## Citation metadata

- Publisher: New Distribution
- Author: 沈帅波
- Published: 2019-12-18
- Canonical: https://xinjignxiao.com/en/articles/these-20-000-words-explain-the-eight-business-trends-of-2020-979590aa/
- Original source: https://mp.weixin.qq.com/s/R3UXasar-ml0n2FHUhuOog

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671