---
title: "Why Don't New Consumer Brands Get Repeat Purchases?"
description: "The article argues that the pursuit of making the ultimate product is a false concept, as exemplified by craft beer's failure in China due to high costs. It emphasizes that FMCG success lies in creating classic products that meet unchanging consumer needs, and that marketing and channel building are more critical than R&D for new consumer brands."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-03-02"
language: "en"
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# Why Don't New Consumer Brands Get Repeat Purchases?

> The article argues that the pursuit of making the ultimate product is a false concept, as exemplified by craft beer's failure in China due to high costs. It emphasizes that FMCG success lies in creating classic products that meet unchanging consumer needs, and that marketing and channel building are more critical than R&D for new consumer brands.

**Why is it a false concept to make the ultimate good product?**
Why do new consumer entrepreneurs say that making the world's most ultimate good product is a false concept? We often hear bosses of XX new consumer brands on stage saying that consumers have been deceived by big brands, which sell inferior products at high prices, and they want to make the best products in the world for consumers. Many entrepreneurs get excited after hearing this, feeling that the industry is full of gold and big brands are all fools, so they spare no cost or effort to create a product.
The most typical example is craft beer. We see many craft beer makers claiming their products are the best in China, but the question is: why hasn't such good craft beer succeeded in the Chinese market so far?
Let's illustrate with a case: If you drink a glass of craft beer at a bar, it costs about 40-50 yuan. What does that mean? You can drink a bottle of Tsingtao Pure Draft at a nice restaurant for only 15 yuan. That is, one glass of craft beer costs about the same as three bottles of Pure Draft. Chinese socializing and business mostly happen at the dinner table, where a meal involves at least three to five bottles, or even cases of beer. This culture of drinking freely means that for two or three people, the cost of craft beer might exceed the cost of the food. How many consumers can afford that?
**So it's not that big brands can't make good craft beer; it's that good craft beer is too expensive, and too few people can afford it.** The return on investment is simply not high.
**Why is continuous innovation not a good business?**
A couple of days ago, I discussed a topic with a friend and suddenly realized that in consumer goods, innovation is not necessarily a good business. Why? My friend proposed that **consumer goods can be divided into those with limited functional improvement and those with unlimited functional improvement.** For example, smartphones are consumer goods with unlimited functional improvement. Cola is a typical consumer good with limited functional improvement.
This gave me insight: For unlimited functional improvement, the selling point can be innovation; for limited functional improvement, where is the selling point? Later, I figured it out: For products with limited functional improvement, the selling point is not novelty. Products that can be repeatedly sold must be those that consumers perceive as timeless and distinctive. I think this trait, abstracted, could be called "classic."
So, the best business in FMCG is not about constantly seeking change and innovation, but about being classic enough. Only classics have the possibility of repeat use.
Therefore, **as an entrepreneur, you should not study changes in consumer needs every day, but rather discover which unchanging needs have not yet been tapped.**
**Advertising expenses for consumer goods actually far exceed R&D**
Let me give you a counterintuitive example: Mercedes-Benz and BMW—do you think their R&D expenses or marketing expenses are higher? Many people think R&D is higher, but they're wrong; marketing is higher, even by a factor of 10. Why do Mercedes-Benz and BMW, with such good products, spend heavily on advertising rather than investing in R&D? I saw a very professional automotive blogger on Douyin make a great point: Developing a world-class engine costs 10 billion, but to make people know it's the world's best engine costs 100 billion annually, and it takes ten years for the world to believe it's the best.
What I want to say is that R&D is important, but making your good product known to others may require 10 times or even 100 times more effort than your R&D investment. Good wine also needs a bush; even the best drum needs someone to strike it to make a sound.
**My purpose in saying this is to tell entrepreneurs of new consumer brands: don't put too much energy into product R&D. Product differentiation is not that significant. For new consumer brands, the real barrier is how to build the brand and lay out channels.** The cost you invest in building the brand and channels may be 100,000 times higher than R&D costs. How to be chosen among homogeneous products is the real skill.
**Only big ponds raise big fish**
Many entrepreneurs habitually choose niche categories when selecting product categories, citing consumption upgrades and differentiated needs among consumers. Not that niche categories are wrong, but such niche products often have very small market capacity and narrow application scenarios, and can only be sold through large traffic platforms like Tmall and Taobao. Moreover, once a very small category gains sales, it will be hijacked by channel brands like Three Squirrels. Because traffic is not in the brand itself, and consumer goods have no technical barriers, brands with brand and traffic advantages will basically crush them.
**Consumer goods must be a big market raising big fish; in a small pond, even shrimp won't survive.** So **consumer goods entrepreneurship must focus on differentiated products in the mass market, not niche categories in small markets.**
**Without advertising, how can we make consumers remember?**
The core of FMCG marketing is being remembered by consumers. Today, without centralized media and with an oversupply of information and products, making consumers remember is indeed very difficult.
Let's first give a few examples, then discuss theory: For an untrained consumer, what is the first reaction to evaluating beers of the same price? Freshness! Yes, the first value perception of a product is freshness; the fresher, the better. But there are already many beers on the market that emphasize freshness, such as draft beer in summer, Yanjing's bottled fresh beer, etc. So how can we make consumers remember my fresh beer? Taishan Original Pulp's solution is: the first domestic bottled beer with a 7-day shelf life. Bottled, avoiding the low perceived value of draft beer; 7-day shelf life proves that other bottled fresh beers are inferior. How to make consumers feel it's good? Original pulp! Fresh beer original liquid!
Brown bottle, 720mL large capacity, 7-day shelf life, original pulp beer. You see, Taishan Beer doesn't directly tell consumers it's fresh and good, but uses all product language to let consumers feel it's a great beer. But this selling point wasn't developed overnight. When Taishan Beer's marketing department first promoted this product, they spent a long time telling consumers the selling points: first time, contains yeast, all malt, unfiltered. But consumers couldn't remember; they only remembered 7 days, and different places called it different names: 7-day fresh, 7-day fresh, 7 fresh, big 7...
Let's take another example in the baijiu sector: For an untrained consumer, at the same price point, what baijiu is considered good? Yes, consumers' first perception of baijiu is the opposite of beer: the older, the more valuable. Hangu Commune's pulling the wine thread to see the wine flower, Sishijiu Fang's celebrity/acquaintance endorsement, Tan Jiu's daring to label true vintage, Li Du's Yuan Dynasty ancient cellar—all topics are saying one thing: this is old wine.
**So don't try to educate consumers; instead, point all product information to the core value point of the category in consumers' minds.**
**Value point marketing**
People often say a brand should have awareness, reputation, and loyalty. Frankly, I think this is nonsense; it can only describe a brand, not serve as a method for building a brand. **I think a brand cannot do without three things: quality, brand, and taste. Quality is the premise of product consumption, brand is the premise of cognition, and taste is the premise of identification.** For a company, it should refine value points that consumers remember around function, selling points, and values. Only when the value points of the three align with consumers' cognition of the category's core value points can consumers remember.
But remembering is not enough; **only when product, crowd, and scenario are consistent can the product sell.** It must also be ubiquitous, readily available, and worth the money...
**Summary:** Brand, in a sense, is consumers' recognition of product quality, value consensus, and value identification. **FMCG can only create value through repeat purchases.** Many brands try to gain consumer attention and shopping experience through Xiaohongshu seeding or Li Jiaqi's live streaming. But such attention rarely leads to repeat purchases. Without repeat purchases, traffic becomes expensive. So, for an innovative brand, all marketing efforts should be directed toward one goal: retention. **Only retention can create repeat purchases.** To retain, without advertising, you must first make consumers remember, build value points, and market and communicate around those value points to penetrate the consumer forest and complete word-of-mouth construction.
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