---
title: "Thoughts on Livestream Commerce, Brand-Effect Integration, and the Relationship Between Brand and Private Domain"
description: "Online distribution traffic is becoming increasingly fragmented, a reality all FMCG professionals have felt over the past two years. Channel fragmentation essentially results from the continuous redistribution of traffic, with numerous new business models intercepting traffic upfront. This leads to reduced channel traffic and declining ROI, forcing brands to seek growth through squeezing competition. In this environment, growth inevitably comes from price cuts or grabbing market share, driven by oversupply, scarce attention, and weak brand power."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-06-15"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/cIi5PTe43U_e2arFCIdo1A"
translation: "https://xinjignxiao.com/zh/articles/%E5%AF%B9%E5%B8%A6%E8%B4%A7-%E5%93%81%E6%95%88%E5%90%88%E4%B8%80%E4%B8%8E%E5%93%81%E7%89%8C%E5%92%8C%E7%A7%81%E5%9F%9F%E4%B9%8B%E9%97%B4%E5%85%B3%E7%B3%BB%E7%9A%84%E6%80%9D%E8%80%83-212de375.md"
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---

# Thoughts on Livestream Commerce, Brand-Effect Integration, and the Relationship Between Brand and Private Domain

> Online distribution traffic is becoming increasingly fragmented, a reality all FMCG professionals have felt over the past two years. Channel fragmentation essentially results from the continuous redistribution of traffic, with numerous new business models intercepting traffic upfront. This leads to reduced channel traffic and declining ROI, forcing brands to seek growth through squeezing competition. In this environment, growth inevitably comes from price cuts or grabbing market share, driven by oversupply, scarce attention, and weak brand power.

**Online Distribution**
Traffic is becoming increasingly fragmented—this is the sentiment of all FMCG professionals over the past two years.
What is channel fragmentation? Essentially, it is the consequence of continuous traffic redistribution, as numerous new business models intercept traffic upfront.
Various forms of interception, segmentation, and subdivision of traffic lead to a continuous decline in original channel traffic, reducing corporate ROI.
This leaves many brand owners in a bind: increasing or decreasing investment both seem problematic, placing higher demands on business operations.
In such an environment, growth is inevitably squeezed growth—sales increases come either from price cuts or from grabbing market share from competitors.
Essentially, this results from oversupply to consumers, scarce attention, and insufficient brand power.
There's no way around it—it's all due to reduced traffic.

**Brand-Effect Integration**
Companies are forced to engage in various low-price promotions when working with top livestream hosts, which is frustrating.
This has led managers to focus on brand-effect integration.
So-called brand-effect integration means that for every dollar invested, you get a measurable return, with precise data and effective feedback.
The core reason for emphasizing brand-effect integration to leadership is that today's traffic is extremely fragmented, consumer attention is scarce, and consumers have far more choices than before.
If a brand cannot quickly secure a transaction, it loses that consumer.
This forces companies to become utilitarian and short-sighted, as it's difficult to build relationships with users through the old mass-advertising approach.
On another level, internet platform rules make transactions between strangers easier; consumers no longer need brand endorsement to judge product quality or authenticity.
Consumers only need to trust the platform's algorithms and rules, as well as livestream shopping experts like Li Jiaqi or Luo Yonghao.
However, the drawback of this model is that **products struggle to command a premium.**
Because attention is scarce, supply is abundant, and traffic is controlled by platforms, brands lack control over traffic distribution and have no opportunity to engage consumers before the transaction.
Thus, product premiums are eroded by platform algorithms and KOLs.
Yet what we see today is: **if a brand cannot sell at a premium, it cannot be called a brand—it is merely a commodity.**
With online recognition enabling transactions and shorter transaction chains, people prefer quick, direct methods for success, neglecting brand building.
Overemphasizing direct conversion while ignoring brand mind-share education has severe consequences.
Therefore, **any transaction model justified by brand-effect integration is promotion, not advertising.**
Thus, the only way to make consumers choose a product without price sensitivity is through brand.
But brand premium requires building a consensus of mind-share value with consumers.
How to build a brand?
Start by seeding 100,000 Xiaohongshu influencers? Create 10,000 short videos? Or seek top livestreamers like Li Jiaqi?
Are these ways to build a brand?
Hard to say. I think if the following issues aren't clarified, the more actions you take, the faster you'll fail.
How to build a brand?
First, we must know what a brand is not: a brand is not a logo, nor is it CIS (Corporate Identity System). A brand is the value consensus about a product among consumers and their social circles.
**Consensus is essential for a brand. To build this consensus, the first step is to establish a trust relationship with consumers based on some understanding (facts), and from that trust, build word-of-mouth.**
Products are for exchange with consumers; brands are for communication with consumers. Facts and emotions are equally important. **Facts are the product; emotions are the philosophy.**
Brands are born from social relationships; a brand must share common values with a sufficient number of users. A charismatic brand transcends race and time, connecting with universal values that all people rely on, such as happiness, wisdom, strength, success, comfort, style, love, imagination...
Note: The more universal the value, the more likely we are to gain consumer recognition. In a sense, a brand is a value consensus of a community, not a universal social consensus.
A value that can attract followers is built on the emotions reflected in consumers' identity or confusion under the current social and cultural context.
  * I don't want vs. I want
  * I am not vs. I am
  * I don't want to vs. I want to
  * I can't vs. I can
You see, a good brand not only has values but also attitudes; it makes users willing to follow you and aspire to become like you.
A good new brand is a pioneer, a revolutionary, a leader, with the ability to overthrow the old world.
A brand is the collective feeling consumers have about a product, encompassing the product, packaging, communicated information, and consumer experience. People's perception of a brand is built on three elements: **texture, aesthetics, and emotion.**
Product: A product with texture has three levels. First, what problems it solves and its true value to consumers. Second, the product serves as both a carrier and a communicator of value. Third, its premium capability—what extra value and surprises it can bring to consumers.
Thus, a product with texture must have five elements:
  * Function—solves problems
  * Value—benefits
  * Pleasure—experience
  * Recognition—memory and awareness
  * Word-of-mouth—social proof
Packaging: Packaging is more about recognition and information transmission. Packaging must have five functions:
  * Recognition—what I am
  * Information—who I am
  * Feeling—how excellent I am
  * Persuasion—why choose me
  * Differentiation—how unique I am
Emotion is the core element of top brands; people reconstruct their identity by purchasing such products. Today, for a product to become a brand, it must co-create consumption meaning with consumers, allowing them to gain a unique lifestyle and behavioral cognition through the product.
A brand must be either better or different; powerful brands are both good and unique.
A good product, even with its trademark and packaging hidden, will still be recognized; a good brand is like a brick—stick a logo on it, and its value multiplies a hundredfold.
Whether a brand is valuable can be seen from the cost-to-price ratio. In Coca-Cola's market cap, half is beverage, half is brand; Moutai's cost is almost negligible. This shows how much premium a brand can bring to a company.
Today's brands must occupy a unique cognitive bandwidth in consumers' scarce mind-share and attention resources.
This cognitive bandwidth includes functional, social, and emotional factors.
Advertising is a crucial way to build consumer mind-share value consensus. To build a brand, finding target users in a complex communication environment is indeed very difficult.
Communication forms vary, but the values conveyed must not change.
Only by building value consensus can there be brand premium potential.
In the past, you needed awareness first, then reputation, and finally loyalty.
Today, all traffic is priced; you must first build loyalty among limited users, then reputation, and finally awareness.
Private domain is not operated; it is a relationship, constructed.
It is about giving others experiences and surprises that exceed expectations, making users like, resonate, appreciate, and follow.
Thus, a great brand is a leader of values, not a pleaser of consumers.
Should we please all consumers?
Not to mention whether we should—it's simply impossible.
There is too much external noise, and our resources and energy are limited.
What we can do is find consumers who share our values, appreciate our products, and are willing to interact with us, and build a relationship with them.
This relationship can be established through communities, BBS, or fan forms.
We can call this connection a private domain.
Yes.
In fact, **the greatest value of private domain today is not selling products, but building brand value consensus with users.**
If the purpose of building a private domain is merely to sell, that's not a private domain—it's a promotion group.
That would be a waste of such resources.

**Summary:**
With fragmented traffic across the internet, it's fine for companies to pursue brand-effect integration for ROI balance, but the problem is that without a brand-based approach, any promotion is merely a tactic.
Today, whether for startups or big brands, building a private domain based on market environment and product, and co-creating brand consensus with consumers, has become a core strategy that all brand owners must adopt.
How to do private domain well? How are various brand owners doing it?
Come to the New Distribution conference to find out.
New Distribution is hosting a forum on private domain topics at the (7th) China FMCG Channel Innovation Conference in Chengdu from July 12-14. Interested friends should not miss it.
**Are you "watching" me?**


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