At the 2021 (4th) China FMCG Conference hosted by New Distribution on September 23, 2021, Zhang Yipeng, General Manager of Kuaishou E-commerce's SKA Brand Operations Center, delivered a keynote speech titled "The Trillion-Yuan Blue Ocean Market for Consumer Brands." Mr. Zhang Yipeng is actually a veteran in the FMCG industry, having worked in the sector for many years, with deep industry insights and marketing experience. The theme of this conference, based on his past experience and knowledge in the FMCG industry, revolves around the new channel—Kuaishou E-commerce—and its trillion-yuan market. Mr. Zhang Yipeng believes that the rise of new consumption and new brands today actually began a decade ago. Since then, the growth of old brands has slowed, while the growth of new brands has begun to show signs. With social development, brands will inevitably move toward decentralization, as a single brand cannot meet the personalized needs of all consumer segments. This background gives Kuaishou, a new channel created by new live-stream shopping scenarios, the opportunity to help brands be reborn, grow, and reshape the competitive landscape of categories. Three Key Drivers of Successful Brands In the consumer goods industry, there is a methodology called the three critical moments of truth: first, making consumers aware of and understand the brand; second, creating purchase desire when consumers shop; and third, generating repurchase when they use the product. This essentially corresponds to three key factors for a successful consumer brand: consumption power, channel power, and product power. So, in the Kuaishou E-commerce ecosystem, what are these three forces? 1. Consumption Power In the Kuaishou E-commerce ecosystem, who are the users? One point that breaks conventional wisdom is that Kuaishou users are actually very young, and user growth in first- and second-tier cities is faster. In fact, the proportion of post-90s users on Kuaishou is the highest in the short-video industry, with post-00s user growth even more pronounced. Today, Kuaishou has 500 million monthly active users, a massive number that is hard to measure with a single label. The biggest challenge in online marketing is the fragmentation of data between endpoints and the dispersion of user behavior, making it impossible to obtain full-funnel data on each user's behavior trajectory. What Kuaishou E-commerce can do is use museum-level content to keep users immersed on the platform for 99 minutes a day, thereby using rich content tags to form links to users' shopping intentions. For example, if users enjoy watching maternal and child content, Kuaishou can establish a logic from content to users' shopping intentions for purchasing maternal and child products. Through the Kuaishou Store's people-goods-field solutions, brands can now achieve a full-funnel marketing approach from seeding, nurturing, to harvesting on a single platform, something that was impossible in the past. 2. Channel Power In fact, short-video live streaming is no longer just an industry; it has become infrastructure. Looking at all netizens nationwide, the track with the longest per-capita consumption time is short-video live streaming, even surpassing WeChat. As the entry point where netizens spend the most time online, short-video live streaming's penetration of user behavior represents a future live-commerce market scale of six trillion yuan. Users are increasingly willing to spend money in live rooms, which is very important for brands. It signifies the birth of a massive new channel, and six trillion yuan is enough to make it a crucial channel for all brands. The transformation of China's marketing channels, from the CCTV era, to the Walmart and Carrefour era, to the e-commerce era, to the live-streaming era, shows that when a brand can embrace each channel transformation, it can change its strategic position within its category. 3. Product Power Roughly 1.14 billion to 1.16 billion Chinese netizens are counted by device, and online dividends have become extremely scarce nowadays. Traffic acquisition has become a bidding logic. When new users can no longer be easily acquired, Kuaishou, as a content platform, offers brands a solution: use time spent and conversion efficiency to turn public traffic into private traffic. In the future, when the number of public traffic users stops growing, brands that can capture the longest user time and achieve higher harvesting efficiency will dominate. Those who own private traffic will own the market. Compared to traditional e-commerce, short-video live streaming has greatly improved in content, time spent, user count, stickiness, and repurchase rate. What does this mean for product power? In the past, a major challenge for brand owners was the high failure rate of new products, reaching as high as 90%. The main reasons behind this are: 1. Brands understand consumers through market research, but such understanding is often insufficient. 2. Data obtained by brand owners through first-, second-, and third-tier distributors is inflated. Now, when a brand launches a new product, it can get multi-dimensional, real-time feedback from frontline users in the live room, helping the brand understand the real needs and market feedback for new product development. Additionally, through the relationship between fans and anchors, brands can build user stickiness similar to Xiaomi's, helping brands achieve explosive new product launches. How Should Brands Play on Kuaishou? When brands face short-video live-commerce and don't know what to do, Kuaishou proposes an operational methodology called STEPS. Brand self-broadcasting, public-domain traffic investment, influencer distribution cooperation, private-domain repurchase, and brand channel exclusive products—these five elements are key factors for brand operations on Kuaishou. First, for a new brand, the most important thing is to test products. The essence of all e-commerce is people-goods-field, and live rooms cannot escape the essence of retail. From the perspective of product, price, and service, brands first need to understand what products sell well in the content community they need to build, what the target audience is like, and after accumulating such data, they need to do a certain degree of cold start with the product mix and audience package. Once there is a basic product mix and commercialization foundation, and an audience package foundation, brands will enter store self-broadcasting and commercial traffic investment. The fans and users accumulated through store self-broadcasting belong to the brand, or to the distributor, or to the store, while distribution is just the anchor's turnover, just the brand's turnover. At this point, more attention should be paid to the GPM of brand self-broadcasting. GMV per thousand plays can roughly equal conversion rate. Second, continuously increase followers, which can bring more private-domain repurchase. Third, when a certain scale is reached, brands can do self-broadcasting, distribution, and brand linkage, and at this point they may become a KA brand or an SKA brand, i.e., a top-tier brand. Let's look at a few cases. 1. Yalu In July, Yalu started broadcasting from zero followers and achieved 20 million yuan in GMV in one month. What did it do right? First, it had a high-quality product mix, using seasonal, essential, low-priced, and versatile products to create bestsellers. Five best-selling SKUs accounted for 60% of the live room's GMV, a typical bestseller logic. So today, when doing cold start on Kuaishou E-commerce, bestsellers are the top priority. Second, the team. Instead of cultivating a new anchor, Yalu moved its entire live-streaming team from elsewhere to Kuaishou, because in live rooms, order prompting, pressure selling, and scripts are very nuanced, and a mature team is needed to handle it. Third, aggressive traffic investment, using bestsellers to leverage natural traffic. Finally, retaining people in the live room through scripts and interaction. Why did Yalu choose Kuaishou live streaming? The brand believes that only businesses with repurchase are potentially profitable. Today, Kuaishou's biggest feature is that it is a content community with stronger content genes, and the repurchase of fans here is actually the key to optimizing the store's overall ROI in the future. 2. Warrior Warrior followed the same methodology as Yalu, using just one best-selling short video to sell 100,000 pairs of shoes, generating 20 million yuan in GMV. The point to share here is that Warrior's short video was actually unremarkable; it was the brand's product power and bestseller power that were the real keys to its survival in live-commerce. Short-video commerce has a very high ROI. Warrior's overall store ROI can reach 1:6, and short videos can achieve 1:10, a gameplay with huge potential. 3. China Jewelry In addition to the bestseller logic and live-room logic mentioned earlier, China Jewelry's key was embracing a persona. If brands want to operate sustainably on Kuaishou, viewing it as a long-term battlefield, they can try building a persona. A persona helps bring them closer to their "old iron" (followers), leading to higher conversion rates and repurchase. China Jewelry actually invited "President Wang" to play the boss persona, using a style of selling with emotion and giving discounts, which indeed yielded very good results. 4. Florasis: Integrated Marketing Approach Florasis continuously engages in activities closely tied to the platform, such as Super Brand Day, following the classic AIPL methodology. It treats Kuaishou as its potential customers, reaching users through content. Once a user is reached 6 to 9 times, they move to the next stage of the funnel, deepening the relationship with the user, somewhat like a data bank logic. In conclusion, Zhang Yipeng summarized his views in three sentences. First, the new generation of consumers, new channels, and new media represented by Kuaishou are destined to create a large number of new brands. Kuaishou welcomes every brand to redo its business on Kuaishou E-commerce. Second, regarding how brands should operate on Kuaishou E-commerce, whether it's from new store breaking zero to store climbing, to the growth of KA, Kuaishou has a methodology to guide brand growth. Third, if we talk about the difference between Kuaishou E-commerce and competitors, there is one similarity and one difference. The logic of bestsellers plus traffic investment during cold start is the same for brands. The difference is that Kuaishou encourages brands, after the mid-stage of development, to use store groups and matrix accounts to build personas. If brands are willing to embrace some persona accounts, they can reap a very large and profitable market space on Kuaishou. I hope all brands can achieve great commercial success on Kuaishou E-commerce. Note: This article is from Mr. Zhang Yipeng's keynote speech at the 2021 (4th) China FMCG Conference, organized and released after his review and authorization. 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