Click the image for details. Your new consumption—what kind of people does it study? I sell tea on my Moments; does that count as new consumption? I run a factory with a pile of goods; I think I'm building a brand—can I create a new domestic brand? I have great channel resources; can I build a good brand? Can I make a new consumer brand, especially one like Coca-Cola? I say no. You all have delusions—coveting what doesn't belong to you. The biggest illusion of this era is: Everyone thinks they can succeed; everyone believes they can succeed. But the truth is, only a very few succeed, especially in building a brand like Coca-Cola. However, you may not truly understand why you are just selling goods, not building a brand. Why is selling goods not building a brand? I recently met some new friends who told me their business is very troubled. The trouble is that they feel controlled by others; they've made some money but without a sense of security. This friend sells a product—let's call him A. Over the past few years, A has distributed products through a WeChat business model. The market has been good, and with the growth of WeChat's dividend, annual shipments have climbed steadily. He sells a product that is 20% more expensive than similar ones, but thanks to good product reputation, sales have exceeded ten million. But this friend still lacks security. On one hand, the traffic doesn't belong to him; all his traffic channels rely on Moments and official accounts to sell goods. He doesn't have his own private domain traffic; all traffic and sales require purchasing. On the other hand, most of their products are OEM, with a small portion from their own small factory capacity. So, from a business model perspective, it's hard to say what they really do. From his confusion, on one hand, the pipeline doesn't belong to him, and unlike traditional consumer brands where distributors are allies, these cooperative traffic pools are mostly external. On the other hand, he has no pricing power over the supply chain; he's just a middleman, and the value chain is too low. Will his kind of intermediary be replaced by e-commerce platforms in the future? If platforms cooperate directly with factories, will middlemen like him still have value? There are many product sellers like A. Besides A, there's B, who runs a traffic platform and feels insecure. B is also troubled and anxious about finding good products to sell. As an e-commerce platform, finding more valuable sources of goods is fundamental, but many factory products are becoming homogeneous. Often, the products they get are very similar or nearly identical, with little differentiation. So, as they sell, products with stories and personality become scarce. So, in the end, e-commerce platforms feel they are gradually becoming mere selling platforms, where products compete only on price. Thus, traffic platforms are also troubled by finding a good brand. After all, a good brand is good content. Without good brands emerging from the platform, the platform's value diminishes greatly, as Taobao's rise was driven by the emergence of a batch of Taobao brands. What's the use of a brand that requires heavy investment? The two simple examples above illustrate many issues. To this day, China has few true product brands; most products are just goods. What are the differences between goods and brands, or what separates a product from a true brand? To clarify this, we must first understand what is not brand building. Here are several misconceptions: 1. Selling goods is building a brand? Wrong. Selling goods is selling goods; building a brand is building a brand. There is no substantive connection between the two. Selling goods is just a means to build a brand, or the purpose of sales. So, don't tell me that selling 20 million means you've built a brand; you've just sold 20 million worth of goods. 2. Opening a factory is building a brand? Wrong. You've just opened a factory, given it a random name, and distributed goods to a few fixed distributors or manufacturers. So, you haven't built a brand; you're still in manufacturing. 3. A channel with traffic puts its own label on products—is that a brand? Wrong. Not all channels can build brands, just as it's unrealistic for a public account platform to produce its own content. You'll find that channels rarely succeed in building brands because channels and brands have different needs. Channels seek to maximize product variety, while products need more channels. This trait determines that channels cannot build brands. So, you rarely see traffic channels successfully building brands. 4. Hiring an OEM and designing new packaging as a designer is building a brand? Wrong. This is another self-deceptive idea. Many people find an OEM, take some goods, or rent a supply chain, and think they're building a brand. That's wrong; it's not brand building. At best, they are just a middleman, or a supply chain intermediary, not a true brand builder. After listing these four misconceptions, I want to discuss why China hasn't produced truly strong brands or high-quality franchise brands. I used to think it was because the franchise standard system was poor, but later I realized the real reason is: franchisees of a brand, once the brand is franchised, stop investing. Without continuous investment, a true brand cannot be built. In reality, most brand owners underinvest in continuous brand building. So, the real reasons China lacks brand owners are: 1. Lack of sustained investment in brand building. Many people believe in a theory of building a brand without spending money. In fact, brand building is a high-investment, high-premium endeavor. Brand owners naturally need to ensure sufficient profits. They also need to invest more to reach users, manage them, and conduct consumer insights. Many don't understand the return on investment, fantasizing that just selling goods will naturally create brand awareness. In reality, it's very difficult. Because a brand is the embodiment of user mindshare, user management, user insights, and user value propositions. A brand is not a product. A brand connects consumers, factories, supply chains, and value propositions. It sits at the top of the entire chain, the crown of all business forms. So, without investment, a true brand is impossible. 2. Lack of a suitable channel environment for brand incubation. In the past, the relationship between channels and brand owners (product owners) was one of gamesmanship and love-hate. Due to high costs, channels' main profits came not from product price differences but from exploiting slotting fees and marketing fees. This led to a situation where truly good products couldn't stand out; products with marketing capabilities got better positions. In the future, after the new retail system transforms the supply-retail relationship, good products will speak for themselves. Only then will a batch of brands emerge that consumers truly vote for with their feet. Especially with the rise of new social media traffic, consumer word-of-mouth is increasingly important. 3. A selling mindset hinders brand building. The biggest difference between a selling mindset and brand building is the relationship between input and output. If you pursue short-term efficiency, squeeze channels, and sell as much as possible, that's a selling mindset. Under the brand effect, you need to slowly cultivate your user pool and user content. Brand building is slow work; selling goods is fast work. Although once a brand is well-managed, selling goods is important, selling goods does not equal brand building. So, using a short-term selling mindset is not brand building. No matter how many goods you sell, the brand won't accumulate. To accumulate a brand, you must sell goods, but selling goods doesn't require brand building. A pure selling mindset often hinders brand building. How to build a brand in this era? Now that we understand how to build a brand in this era, let's discuss how. Today's new brands have changed in channel relationships, user relationships, and media relationships. A good brand is a new type of interest entity built on non-zero-sum games: 1. Channel relationships should tend toward profit-sharing The two sides are no longer in a life-or-death struggle but a mutually supportive relationship. In the past, traditional channel terminals, besides changes in sales numbers, basically didn't participate in product improvement or use any new digital or technological means to provide guidance for product production at any terminal. With the new supply-retail relationship, the idea of getting rich by exploiting brand owners should exit the stage. Although channels no longer participate in building their own brands, they can deeply manage users, serve them, and feed back user data and digital feedback to product brand owners. Today's new retailer Hema is doing this. Although I've never had the chance to meet Mr. Hou Yi, I deeply agree with Hema's approach to transforming the supply-retail relationship. In the old relationship, the two sides weren't partners but thought about how to extract more profit from each other. After changing the mindset, channels should rely on managing brands and deeply participating in brand transformation to gain brand premium and amplify their value chain. More importantly, they should create a choice that allows excellent products to be offered to consumers. 2. Brand-user relationships shift from influence and persuasion to a community of values In traditional brand-user relationships, the brand's role was to persuade customers to believe in it. This communication chain was still a top-down choice, a relationship distanced from consumers. Today, consumers or users want to become new product manufacturers. In the early stages of a product or brand, they deeply participate in brand building because good products serve consumers and represent consumer attributes. The relationship between brand owners and users should become a community of values, a relationship of mutual inclusion, not one of persuasion. Users become the initiators of brand values and providers of persuasive content. 3. Brand-media relationships become content co-creation Brand owners must produce their own content and gradually become large content producers, rather than media producing content and media becoming just channels for content dissemination. In the self-media era, many brand owners still haven't learned what content creation is. So, Disney, as a brand company, is also the largest content producer. A good brand company must be a user manager plus a large content producer. The relationship between brand owners and media companies has changed; it's no longer just a general brand-media relationship. In the future, everyone will co-create content. 4. Media gradually becomes branded, and brands gradually become media. Epilogue? In the next five years, the biggest opportunity is definitely product entrepreneurship, or new consumer brand entrepreneurship. New Consumption Insider will also bet on new consumer brand services in the next five years. A consumer brand founder needs to learn how to build a brand and be with other brand entrepreneurs. So, at the end of this article, I will issue a call for new brands. Whether you already have a product and are struggling to brand it, you can talk to us. We are happy to see brands in food, pets, home, beauty, fashion jewelry, tea drinks, clothing, and other product forms contact us. We will launch China's first new consumer product alliance, joining forces with new channels, new traffic, new influencers, and new technology service providers to protect and support new product brands, connecting resources and services. If you are a new product entrepreneur, or you have channels to find these new product entrepreneurs, or you want to empower these new consumer product entrepreneurs, you can apply to join. Click the original link to fill out the application form, and we will connect you with one-on-one services. Product brands or service providers can add the original link to cooperate with us. Source: New Consumption Insider (ID: cychuangye) New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar and Wine Fair from March 15-18. This conference will focus on the topic "Breaking the Game" , with in-depth discussions among brand owners, supply chain service providers, distributors, retailers, and others. Compared to previous conferences, this summit will be fully upgraded. In addition to original topics like channel innovation, city logistics, and distributor transformation , it adds new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail as parallel forums. Through three days of ten high-density, high-quality expert sharing sessions, we believe every brand owner and distributor can learn the latest business models, expert insights, and practical methods, finding new tools and approaches to break the game in 2019 and return to high-speed growth. Review of Previous Conferences -END-