---
title: "Times Have Changed: Small Brands Innovate, Big Brands Imitate?"
description: "The rise of Jiang Xiaobai sparked a trend of small-bottle liquor among traditional liquor companies. After self-heating hot pot became popular, convenience food giants followed with 'everything can be self-heating'. A few years ago, craft beer emerged in China, and soon major industrial beer giants entered the market in various forms. There are many similar cases, even outside the FMCG industry. When Xiaomi started in the power strip industry, it nearly disrupted the market with superior design and cost-effectiveness, but the leading brand Bull quickly launched a product strikingly similar to Xiaomi's."
author: "何年"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-06-22"
language: "en"
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# Times Have Changed: Small Brands Innovate, Big Brands Imitate?

> The rise of Jiang Xiaobai sparked a trend of small-bottle liquor among traditional liquor companies. After self-heating hot pot became popular, convenience food giants followed with 'everything can be self-heating'. A few years ago, craft beer emerged in China, and soon major industrial beer giants entered the market in various forms. There are many similar cases, even outside the FMCG industry. When Xiaomi started in the power strip industry, it nearly disrupted the market with superior design and cost-effectiveness, but the leading brand Bull quickly launched a product strikingly similar to Xiaomi's.

The rise of Jiang Xiaobai sparked a trend of small-bottle liquor among traditional liquor companies.
After self-heating hot pot became popular, convenience food giants followed with 'everything can be self-heating'.
A few years ago, craft beer emerged in China, and soon major industrial beer giants entered the market in various forms.
**There are many similar cases, even outside the FMCG industry.** When Xiaomi started in the power strip industry, it nearly disrupted the market with superior design and cost-effectiveness, but fortunately, Bull, the leading brand, held an emergency meeting overnight to formulate a plan, and then launched a product that was a 'pixel-level' imitation of Xiaomi's power strip.
The above cases all confirm that it seems small brands are constantly exploring new categories, creating new consumption scenarios, and digging into new consumer demands, bustling with innovation. Big brands, on the other hand, have almost no innovation; they just follow small brands and imitate.
But is that really the case? **In fact, the innovation logic of small brands and big brands is fundamentally different, and the logic of corporate innovation depends on the logic of its growth.**
**-01-**
**The Growth Logic of Small Brands**
Mr. Zhao Bo, founder of New Distribution, once shared in a training session, **'The innovation logic of small brands follows the 3N strategy: New Product * New Traffic * New Channel.'**
Simply put, it means creating a product with unique value through innovation, leveraging traffic dividends on new traffic sources to quickly educate consumers, and then generating transactions on new channels.
**1\. New Products: Emotion, Addiction, Social, Health**
In the past, small brands could survive by following the big trends and trailing behind big brands. But that era is over. In a stock market, or in an era where everyone is fighting for a piece of the cake, big brands themselves are like hungry wolves. If small brands continue to follow behind big brands, they have no chance of survival or overtaking on a curve.
**The most appropriate way for small brands to rise is to combine insights into new consumer demands, innovate differentiated products, and distinguish themselves from big brands.**
It's easy to see that the successful innovative brands on the market today all have unique core competitiveness in packaging, raw materials, and taste.
The innovation playbook for small brands is complex; for example, emotions can be divided into efficiency and self-pleasure.
What is efficiency? Self-heating hot pot satisfies cravings instantly, and self-heating food serves as a meal replacement when gaming or busy with work. That's efficiency.
What is self-pleasure? Most young people today may not afford luxury goods costing thousands, but they can afford 180-yuan cookies, averaging 3-5 yuan per piece, gone in one bite, but it's to reward themselves and experience a self-pleasing lifestyle.
Furthermore, by creating scarcity, uniqueness, and differentiated taste memories that form addiction. For example, Li Ziqi's luosifen (rice noodles) is very popular now; it's a typical taste memory—a special flavor not encountered before, unforgettable, naturally associated with the category, and gaining consumer brand crowdfunding.
As for health, it goes without saying. In this era of wolfberries in thermos cups, any product, whether mass or niche, will make a big deal about health. This is also the most common breakthrough point for small brands.
Then, whether it's efficiency, self-pleasure, health, or addiction, these attributes become elements of social interaction.
**2\. New Traffic and New Channels: Social E-commerce, Influencers, Livestream Selling**
**In the new environment, media is fragmented, and user transaction scenarios are highly fragmented.**
During users' fragmented daily time, through mobile internet, they are often guided to place orders during online socializing and entertainment. Social e-commerce, video e-commerce, community e-commerce, and similar platforms have already taken a share of traffic.
After online shopping habits, the remaining traffic is further divided by comprehensive 2C e-commerce, and only the last bit reaches offline.
**The strategy for small brands is: go where the traffic is, and firmly grasp the traffic dividend.**
As for how to effectively capture the dividend brought by traffic, it depends on how innovative brands create new play in new channels. On traffic sources that big brands haven't discovered or are just emerging, use the lowest possible cost and leverage platform traffic to achieve rapid rise.
The entire process of small brand growth logic is essentially seizing the traffic logic and then doing consumption upgrades, thereby achieving growth. So small brands inherently have a strong motivation to innovate, and they enjoy the 'small achievements' of innovation more than big brands.
**In innovation, small brands are like a sports car speeding forward with full throttle, while big brands are like an 'old car' hooked to the rear wing of the car ahead.**
**-02-**
**The Growth Logic of Big Brands**
**Big brands are often passive innovators in the face of the times, and this lagging response leads to poor iteration capability.**
This is because the business model of big brands achieves scale effects through the HBG (Big Brand * Big Media * Big Channel) model. Frankly, the FMCG industry is extremely heavy on goods, extremely low on profit, and extremely high on frequency. If you can't achieve ultra-large-scale efficiency, it's hard to make money in this industry.
**When facing a new track, big brands first consider whether the 'fish pond' is big enough to feed them and allow them to 'swim' normally.**
With the arrival of the new environment, the traffic logic has fundamentally changed. At this point, companies lose the tool for large-scale communication, and the growth problems big brands face are:
> **1\. Further coverage of channel blind spots;**
>
> **2\. Further efficiency of category combinations;**
>
> **3\. Further improvement of per-capita output;**
It can be seen here that **in the growth logic of big brands, they are always centered on 'growth' and cannot return to innovation.** Small brands develop and innovate products around users; big brands often have a product first, then extract selling points, and then do brand promotion and market sales.
Such genes determine that the company's development is firmly locked within the existing value network, making it difficult to enter a completely new incremental market, because new markets often require a new value network. It is very difficult for big brands to achieve a new value network while satisfying vested interests.
**The fundamental reason here is: breakthrough innovative products often cannot meet the needs of mainstream users, and the so-called 'mainstream users' are the loyal customers of big brands.**
Since customers are the most important asset of big brands, they rarely allocate resources to products and technologies that are of little significance to existing users and are breakthrough innovations.
In a mature traffic environment, big brands dominate, but in innovative traffic, it's not their opportunity.
Christensen once wrote a book called 'Judo Strategy', which mentions that **when a sumo wrestler and a judo wrestler stand on the same stage, their fighting logic is different.** Just like fish at different water levels, the ecological niches of big and small brands are inherently different.
**-03-**
**Summary**
So, it's not the surface phenomenon we see—small companies innovating while big companies are complacent. **In general, when a company grows large, it inevitably faces the 'big company disease', and at this time, small companies have more of a 'barefoot not afraid of wearing shoes' spirit.**
**So, with different innovation logics, how should big and small brands face new traffic and new tracks?**
Big brands have advantages in R&D funding and teams that small companies can't match, and they have at least a decade of market exploration and deep cultivation.
There's no need to rush into the track of small brands; wait until small brands have grown the track, educated the entire category's users, and then enter, leveraging strong supply chain advantages to lower prices and harvest.
Small brands must know that they are not just making a viral product that rises and falls quickly, but building a brand. Only then can they build their own moat.
Also, note that when you are an ant, the elephant will ignore you; when you grow into a small lion, the elephant will step on you without hesitation. When a small fish is still small, learn to hide behind corals to avoid being eaten by big fish, and eventually have the chance to eat the big fish!
In short, **in the current era, small brands can only survive and develop through innovation. For big brands, facing a broad market, refined operations and more efficient growth are also the inevitable best choice!**
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