Entering the food industry, I have a strong feeling, which I've shared with many peers: why is selling goods getting harder? This question is raised not only by traditional distributors and offline brand friends, but also by those mainly doing e-commerce online. Everyone has this sentiment: it seems that in recent years, especially since last year, selling goods has become increasingly difficult.

I propose that the food industry, unlike the internet or other high-tech enterprises, is essentially a zero-sum game.

A zero-sum game means one person's gain is another's loss. If you earn more, others must earn less. If others are at +5, you are at -5, adding up to zero. Why is the market a zero-sum game? I often say don't use internet thinking to analyze this market. The human stomach's capacity is not infinite; it's limited. If someone eats your yam chips, they can't eat someone else's chicken feet. The phenomenon of zero-sum game is that the number of sellers, platforms, brands, categories, and service agencies has increased. This is the basic phenomenon: more participants in the competition.

The proliferation of service agencies has greatly helped lower entry barriers and improve service efficiency, but remember, the total capacity of consumers' stomachs is limited, so everyone is engaged in a zero-sum game.

What hasn't changed? The essential innovation of products hasn't changed. Although innovation has been touted for years, from idea to germination to actual implementation takes time. What do we see in the market? Packaging innovation, copywriting innovation, structural innovation, but you'll find that the product itself rarely innovates. No matter how fancy the packaging, inside it might still be the same thing. Consumption upgrade doesn't mean everyone can eat twice as much; the total stomach capacity remains the same.

The gross margin of goods hasn't changed; it might even be lower. Once e-commerce had a dividend, people said gross margins were high, higher than offline. But now e-commerce costs are also high. Society is like a connected vessel; eventually it levels out, so total gross profit space is similar.

What should enterprises do? Our solutions, following normal logic, are only three: First, sell more. Find ways to sell more. This involves brand influence; the greater the influence, the more resources you occupy, the thicker the thigh you hold onto in channels, and the more goods you sell.

Second, sell at a higher price. Because our essence is to make money, you need to measure the net profit after all costs. If you can't increase volume, can you increase the price per unit? The stomach capacity hasn't changed, but you can sell more expensively. Price is also an important function of brand. Brand pricing power: eating the same thing, previously two carrots for two yuan filled you up; now I give you one carrot for two hundred yuan, and the stomach capacity hasn't changed.

What kind of brand is a good brand? Recently, I communicated with some investor friends, and we reached a consensus: what is a good brand? In one sentence, a good brand is one that has the power to raise prices. If you dare to raise prices, that's a good brand. You can talk about various brand concepts, but if you dare to raise prices, that's a good brand.

What is a bad brand? Or even if you haven't formed a brand? You sell at the same price as your peers; if they lower prices, you must lower yours. You don't dare to raise prices even by a cent, because if you do, consumers won't buy. So, selling more expensively involves brand pricing power.

Third, sell new things. I completely stop playing the same game with the same products; I create a new category and sell new things. This involves innovation in R&D and sales methods. Your method was offline sales; now you switch to WeChat sales; that's method innovation. R&D is the same: while others sell one thing, you sell something different, and you can price it freely. For example, the recent hot convenient hot pot products had pricing power as soon as they appeared.

So there are only these three solutions: either sell more (brand influence), sell more expensively (brand pricing power), or sell new things (innovation in R&D and product form).

In the early days, food companies built brands through supply scarcity. Why are there many nostalgic foods for the post-80s now? Actually, it's not that those brands were great back then, but because that era was scarce, supply scarcity created brands. At that time, occupying core communication channels was key; the only information carrier was TV. Apart from TV, there were almost no other carriers. Whatever TV said, you had to remember. Many subconscious ads kept brainwashing, like "This year, no gifts, only..." constantly reminding you. Subconscious ads played a big role in the past monopolistic media. Back then, advertising was building the brand; monopolizing channels was building the brand. Your supply was scarce, and your channels were scarce.

But why doesn't advertising work now? Because now you need how much money to advertise? Channels are fragmented: not just CCTV, but Weibo, WeChat, subscription accounts, Douyin, Kuaishou, and many other carriers. People also have a scarcity of time; their eyes are either on Douyin or Kuaishou, or Weibo, or WeChat. These carriers invisibly disperse people's attention. At this time, blasting ads to let everyone know you is too costly.

You don't have the good times of the previous generation of food people, when you could precisely target one channel. Now you can't. If you use the old advertising and traffic thinking, it won't work. You need to change your mindset and consider solutions.

Changing your mindset means insight and service. You need to understand where consumers are and how to serve them. That's the key to solving the problem. You've mentioned many difficulties, but why do so many peers emerge, and those internet-famous brands that I both love and hate appear? "Love" because the industry still has hope; "hate" because it's not you, which is uncomfortable.

Let's look at these so-called internet-famous brands that have survived. What did they do right? In my logic, I've sorted this out. When everyone sells goods, they focus on money, money, money. The first consideration is pricing. After I entered the food industry, I met many traditional distributor bosses. I learned that they are extremely sensitive to prices; they can tell you the cost just by looking at the selling price. I thought it was amazing. How do they do it?

Actually, when selling goods, everyone focuses on money. First, pricing: how much should I sell for? Everyone has a formula for calculating cost and gross profit margin.

Second, profit: how much profit do I make? Third, cost control: people often try to lower costs desperately. I once fell into a misconception that the food industry can't make good products. Later, I realized I was arrogant. It's not that they can't make good products, but they don't want to. Why? Because they need to control costs, so they can't make good products.

Why are there so many internet-famous brands now? What model do they follow? They sell services. They care about three things: people, people, people.

First, people's needs: they don't consider how much it costs or if it can be made; they first consider if there's a need for good products. Second, experience. Third, how I feel after receiving the product.

So you'll find that in the service-selling model, all considerations are about people's feelings, not prioritizing money.

At this point, some traditional businessmen might attack me: what you say below doesn't hold; eventually, you'll have to come to the above route. I admit that because my own startup went completely the below route, not considering costs, following needs. But I found that these two routes are not completely incompatible. Because if you follow the service route, you might make something that sells at a higher price, and you have more bargaining chips. Many platforms will actively invite you. So when you have good service awareness, many platforms will make concessions, lower the middle space, and let you earn more. All this depends on you having created service value.

What does it mean to not respect consumer needs? You might feel wronged; you've hired new copywriters and designers, following the internet-famous product path. I see a lot of self-congratulatory awkward copy, a lot of imitation of X and Y, pretending to be cute, a lot of incomprehensible weak IPs, and a lot of low-quality cartoon-like design packaging.

Because your awkward copy is just drawing a tiger, copying the appearance. How do you play with copy? You don't know; you just think it's good and use it. But when you copy it, it becomes distorted. When people mention IP, they think of cartoons. Chinese people always understand IP as cartoons, which confuses me. This generation of consumers cares a lot about inner feelings; they have rich inner dramas. Have you truly considered consumers? Does your team really understand them and write high-level content? Consumers have keen senses; these behaviors show a lack of insight into real consumer behavior. The masses have sharp eyes; they see that you're not really serving them but are too eager to make money.

I once visited a snack food company. The boss was enthusiastic and said he wanted to build a brand because his own brand would have higher pricing power. His requirement was to completely imitate a competitor, directly copy one. I was stunned. I could only say, after copying, how can we sell better? I didn't know how to continue the conversation. I couldn't tell him from scratch, but I could only tell him that channels can no longer be a 100% decisive factor.

More, more expensive, newer—these three points can truly be driven by insight into consumers. Does "insight" just mean meticulous observation? That's vague. I think it also includes unique observation: your understanding of this matter differs from competitors, peers, and vertical categories. That's the definition of insight. Sometimes we say something feels off, but we go along with it because others do it. We conform to the industry, but the industry might all be wrong because successful companies are few. You need to have this mindset.

Next, I'll share some entry points for insight. First, insight from trends. Second, insight from categories and products. Third, insight from consumers themselves. Fourth, insight from brand marketing.

Regarding methods of insight, first, insist on field insight. Let me share a small story. When we were doing food, I got information: "No one eats puffed food anymore." This was the conclusion from many predecessors and data research reports when I first entered the industry. Young people or people of this era no longer eat puffed food. I was desperate about puffed food, but I did one thing: there was a 7-Eleven downstairs from my house. Every night, I squatted across from 7-Eleven and noted what consumers bought when they came out. A young man in his 20s, late at night, carried cola in his left hand and potato chips in his right. Then a girl bought a bunch of things, and from one corner, I could see it was also a bag of chips. So I was surprised: aren't many people still eating puffed food?

The health trend: the person who made the health trend report is probably about my age or older. But you can't judge the market by your own preferences. Those teenagers and people in their 20s are still eating puffed food like crazy because they haven't realized health issues. Because you're not young, you think young people have no demands. I think that's not valid. If you really want to do it, go back to the consumption scene and see if those young people still eat it.

Second, practical insight. Our copywriters must sell goods on the street, including myself. We sell in parks, night markets, and food fairs. This helps you connect face-to-face with consumers. Why? Because you'll never experience this in the office. This is insight from practice. When we sell at parks and offline markets, we find a following effect. When we have a very conspicuous dog food bag of food, someone asks, "Where did you buy that?" Gradually, you see everyone carrying that big yellow dog food bag.

Third, attentive insight. There was a beef jerky that was very expensive and needed to target a specific group. When a girl likes to buy such an expensive product at the supermarket, what other characteristics does she have? Our final research result was exciting: girls who like manicures especially love buying this. That's insight. It's not telling me about 18-35-year-old young female white-collar workers, but a girl who gets a manicure once a week is likely to buy this.

Fourth, reverent insight. An 11-year-old child gave me a loud slap. When I was doing insight, he reminded me: "If you do insight as an observer, never think you understand anyone. It's better to let the child speak for himself." That child liked anime and cosplay. This person is a consumer himself; that's important. Since then, our team has done one thing: whenever we develop a product and decide who to sell it to, we find an actual user from the team. They must be that user, not a group of us speculating and imagining that others might like this. So you need to revere insight because no matter how much you insight, you can't insight into their own thoughts.

Finally, think about insight. I've said a lot; some are constantly overturned and rethought. It might not be like that. You need to meet many people, talk a lot, meet industry experts, and maybe the conclusion will be overturned again. I want to say that unique judgment and choice are the weapons of competition.

There's an important law in this world: the 80/20 rule. 20% of people earn 80% of the world's wealth. That means those who do the right thing are only a few. When everyone in the market is doing something, that thing must be wrong. So unique judgment and choice are the weapons of competition.

First, insight into trends is in life and data, not just in reports. I mentioned puffed food; it's not in data, it's in real life.

Second, trends in industry research reports can be done, but trends that are not favored in industry reports are also worth doing. Some trends you haven't seen, or aren't in reports, or even not favored, can be firmly done as long as you use differentiated thinking.

Third, never understand trends from your own preferences, nor from a single position. Finally, the food industry cannot be directly compared with other industries; it has its own particularities. This is what I found after doing it myself: the food industry is different from other industries. For example, I said at the beginning it's different from the internet. The essence of the food industry is still product and supply chain, based on a zero-sum game. So industries are different; you can't copy other industries. This industry has its own trends.

For industry analysis and investment, there are large and small categories, but for individual enterprises, only category advantages matter. In the food field, large categories are good, but being first in a small category is also great. For example, spicy strips: before Weilong came out, did you know spicy strips were a good category? If it's a small category, can you be first? Recently, a friend who runs a factory in Beijing told me something that moved me. He said, "My business is getting better this year." I said, "Isn't Beijing driving factories away? Aren't you all closed? Isn't it hard?" He said, "I didn't leave; I gritted my teeth and held on to the end, so my business is the best." So regardless of large or small categories, you must stand out in that category.

Second, in category and product selection, either quickly follow trends or go against them with differentiation.

If you follow quickly, there's a dividend to grab. For example, when convenient hot pot came out, you found it on Taobao, and I made one in a week. That's fast trend. But if it's been popular for two years and you just react, you've missed the dividend. You can consider another trend: the reverse.

Third, truly good products will sell well. If they don't, it's because the product isn't good enough to speak for itself. This is what I often discuss: is product or marketing more important? The conclusion is: if it's not selling well, it's because your product isn't good enough to speak for itself. If this thing isn't so good that you want to run and tell everyone, then it's not a good product yet; it still needs marketing intervention.

Finally, good products are not just about taste; they also include good service and products that understand consumers. It's hard to make hugely differentiated products in the food industry, so you also need good service. Three Squirrels added an opener and garbage bag, so they have pricing power over other brands.

On the consumer side. First, consumption is increasingly personalized, so the original segmentation methods need to change. For example, segmentation by income, occupation, age, gender, etc., is changing. Look at spending rather than income, and habits rather than occupation. Instead of looking at occupation, look at habits. As I mentioned, manicures are interesting. Girls who get manicures span various occupations but belong to one type. But if you look at their occupation (banking, finance), you see nothing. Better to look at lifestyle habits. So this is a change.

Second, consumers are not numbers or heads; they are living people. Start with one potential user around you, not half the country.

Third, we ourselves are also consumers. Ask about your own consumption details and feelings, and summarize them. When you look at others, you haven't spent effort studying or learning. These are my three points about consumers and trends.

Finally, about brand marketing. First, good marketing notes are completed in the store, not in the office. I've made this mistake before. Good marketing notes are in the store: who's on the shelf, who's off the shelf. That's first.

Second, evaluate marketing by ROI and persistence, not just by the buzz. Some young friends often tell me, "I saw a great brand; it's amazing; they're everywhere lately." I say, "Don't look at how much noise they make; first ask how much they spent." Someone can spend 1 billion to create 500 million in influence, but someone else can spend 50 yuan to create 100 yuan in influence. The latter is more impressive. So don't just look at the commotion; look at cost-effectiveness. Then look at persistence: how long can this last?

Third, distribution and marketing are a push-pull relationship; both are indispensable.

Fourth, from the first contact with consumers to before the next contact, every step should have marketing thinking. Many people think marketing thinking appears in product production itself. Wrong. In customer service, returns, and exchanges, every step should have marketing thinking.

Finally, the key to marketing is not to shout loudly, but to understand what the other party needs. That's my insight on brand marketing, shared with you.

The above content is from Ms. Li Qian, founder of Youqing Food, at the "FDIC 2018 · China FMCG Digital Innovation Conference," sharing "Brand Consumption Insight—The Next Explosive Path for Food Enterprises," edited by New Distribution for readers.

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