Source: 浪潮新消费 (ID:lcxinxiaofei)
Brand involution is the keyword for the consumer industry in the second half of the year. This means it's no longer possible to quickly charge ahead based on external dividends; deeper strategic trade-offs and refined operations become crucial.
But whether it's repositioning, KOL combinations, judgments on traffic platforms, or the emphasis on online vs. offline, every step forward for a brand will face many unknown challenges and choices.
Where should brands go next, and how can they grow their own vitality without relying on capital? Grassroots experience and wisdom are now more worth absorbing, and stories of self-reliance are constantly being told.
At a recent New Wave Brand Club event, a dozen brand founders shared their value trade-offs and new judgments on the above issues.
After desensitization, here are some good thoughts to share with you:
KOL Current Value and Traffic Channel Selection
- This year, traffic is three times more expensive than last year, and KOLs also bid up prices among themselves. Even so, many KOLs still need a reason to promote your new product when they bring it: why should they push your new product?
For example, whether there is R&D or tech background, or the product's uniqueness in the industry, everyone still hopes to add brilliance to the present splendor, not provide fuel in snowy weather.
- Brands should currently look for traffic depressions, such as Xiaohongshu, which is not particularly sensitive to price bands and is a completely suitable place for seeding.
Also consider Kuaishou. Some people think Kuaishou is low-end, but Kuaishou is currently the best for data stability, especially among its tail influencers. Relatively speaking, small bloggers on Bilibili are particularly expensive.
The Order of Building a Brand and Trade-offs in Traffic
- When building a brand, don't focus on so-called big traffic; instead, do it in a way that elevates dimensions, learning to spread efficiently through niche circles.
Similarly, when seeding on Xiaohongshu, doing KOC amateurs doesn't require traffic, only a certain level of search volume. Then find top bloggers. With the bottom layer plus the top layer, the middle tier will naturally come to you, allowing you to turn passivity into initiative and select mid-tier partners.
2. Building a new brand requires at least 3-6 months of settling period. Many brands now change the soup but not the medicine, lacking understanding of market demand and product formulas. They are just doing business, not making products.
In some sub-categories, some Chinese R&D institutions actually use better raw materials than foreign big brands. They just lack exposure opportunities. You can spend more time packaging Chinese doctors and Chinese patents, also helping these R&D institutions realize their market value.
- Overall, when building a brand, insist on product first, market traffic second. For example, create products through user co-creation, impress consumers through professional consumer education, and let consumers spontaneously organize and expand. This may be more sustainable and healthy.
In fact, when you focus on specific platforms around the target profile, the conversion rate will be much better than public domain placement. The product ultimately needs to match your segmented audience.
Positioning as a Brand or Selling Goods: Strategies Will Differ Greatly
The most important thing is to return to the positioning of the product: are you building a brand or selling goods? Based on the positioning result, match channels suitable for yourself and consider your ROI. Brands can lose money to build data, but the bottom line for factory sales is not to lose money.
When selling goods, you definitely consider how to increase the average order value, boost overall sales, and compress supply chain costs to the extreme. Only then do you have enough gross margin to support marketing expenses, and what you show to streamers is your marketing expenses.
Industry Involution:
Offline is More Profitable Than Online, and More Efficient
When shifting from e-commerce to offline and running the financial model, you'll find that offline is more profitable, while online may continue to lose money. Investors now also value offline more; if it's just online data running, there's no need to talk. The industry is entering a more involutionary stage.
Now XX stores are popular for simultaneous live streaming and offline services. You'll find offline average order value is particularly high. Previously, offline was for browsing; now people browse online and buy offline. The traffic that actually comes to the store is very precise, and the conversion rate of store traffic is much higher than online.
For example, Sam's Club has good business because it targets the middle class and above, so there's no need to compete on price. Consumers are also stratified; there's no need to serve everyone well. You must level your position and then charge forward; doing your own part well is enough.
Self-built traffic was previously impossible, but today shopping malls can also do content and manage their own user lifecycle, copying the platform's user acquisition, activation, and retention methods to the brand. Real business is not traffic, but the insight into human nature behind it.
The Underlying Differences Between Douyin E-commerce and Tmall
Traditional e-commerce has demand upfront: I want to buy something, and I've already formed an image of the platform in my mind. What is interest e-commerce? It's demand post-positioned: I browse first, then monetize traffic. The logic of these two platforms is fundamentally different.
Comparing Douyin to the previous Tmall is not appropriate. Tmall is an e-commerce platform; Douyin is a content platform. Douyin has never successfully built social features. This means it can't accumulate private domain traffic. And whether from the perspective of individual influencers or business, not being able to accumulate your own users makes everyone insecure.
Tmall now encompasses your entire shopping existence: from seeding, to wanting to buy, price comparison, and repurchase, all are accumulated on Tmall.
Who can do e-commerce in the future? Those with camera presence. Do you empower them to do sales, or do salespeople get camera presence training? Obviously, it's the former, and most will be the former.
Young People's National Confidence and New Purchase Decisions
- Today's Generation Z has very distinct characteristics. They grew up in an era with highly developed internet and are more adept at using multiple platform apps. They may know to search for hot topics on Weibo from a young age, rather than watching official news. They may also check information and products on Douyin and Xiaohongshu and directly place orders there. This is their mainstream behavior.
On another level, Generation Z has been constantly encountering major events like the Olympics that showcase national strength since birth. So this group is less dependent on foreign big brands; they have more natural national confidence and are more willing to trust Chinese brands.
Big brands don't need seeding; they have brand attributes and come with ROI. What is seeded on Douyin and Xiaohongshu is mostly domestic emerging brands. And young people, based on national confidence, will directly buy these brands on Douyin and Xiaohongshu, not caring much about big brands, nor will they specifically search for those brands on Tmall.
As for the final results we see, the cause may not only be consumer behavior; at some level, it's also national confidence. But this point doesn't mean their behavior has absolute or complete preference; in fact, these are two different influencing factors.
If all brands are worth redoing today, the first to be redone must be those that improve young users' needs the most, have the strongest emotional needs from young users, and can show the most intuitive effects after use. And this must be related to beauty and appearance.
Is the Brand Represented by Traffic,
or Does the Brand Use Traffic Well?
- When you have a shopping need, the first thing you think of is the brand image, which is also the core goal of building a brand. But there will inevitably be a game between brand and traffic: is the brand represented by traffic, or does the brand use traffic well?
How should a brand use traffic well? You need to think clearly about several traffic themes: when to use e-commerce traffic and when to use content traffic.
- People actually don't pay much attention to products. China's factories and supply chains are not as strong as we imagine. It's common to run through factories of all sizes and not find a truly suitable supply chain.
Many so-called brands now are actually marketing companies; their products are OEM'd by factories, so they can't research products as deeply as I do. It's inevitable that they don't delve into the product itself.
- It's interesting that many brand people now run to make products, which is great. But you'll find that people are overly obsessed with product innovation. Many products they make may have no buyers in the market. You should think: if no one buys this, there might be a reason from another angle.
To some extent, a brand may be a distant shore that you can never reach. You think it's your aspiration, thinking that high tone is a brand, but it's not. To put it bluntly, whether you build a brand, do business, or work for others, it's just a dojo you build for yourself.
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