This article is from the WeChat public account “Xianfengchuang” (ID: xianfengk2vc), reprinted with permission from the Tiger Sniff platform, the title picture comes from: Vision China< /p>
The popularity of the domestic consumer track in 2020 has also brought out a wave of consumer goods going overseas.
On the one hand, more and more Chinese Internet native brands have begun to pay attention to overseas markets and have tried to establish their own independent stations overseas; on the other hand, a large number of entrepreneurs with overseas backgrounds have also turned their attention to more subdivided categories , And try to capture overseas high-end markets with better designs and higher premium capabilities.
Based on this background, “Xianfeng K2VC” and “42 Chapters” held a small closed-door salon in Beijing . At the event, Gu Zhenyu, the founder and CEO of Vesta Sleep, shared his insights with the topic “From 0 to 1 of the overseas brand”.
Gu Zhenyu, founder and CEO of “Vesta Sleep”
Core viewpoint:
(1) Product differentiation is the core value of lightweight consumer products
(2) Consumer products can be constructed with the idea of technology projects
(3) Brand building needs to truly reach the cultural system of the target country
(4) For the new DTC brand, the crowdfunding platform may be a good start
(5) The key from 0 to 1 is to manage seed users well
(6) Brand premium is a protracted battle, spend money on creative
The following is the content of the speech. I hope it will be helpful to entrepreneurs who are going overseas. I also look forward to more partners joining the community to chat and exchange experiences.
1. Product differentiation: the core value of lightweight consumer products
At present, there are two main types of Chinese consumer goods going overseas. The first type may be what many people have been doing in the past 10 years, which is how to maximize the cost advantage of China’s supply chain. For example, first find a sub-category, then get the goods, OEM, start the quantity, and then do research and development to build the brand slowly, This is the most common kind of manufacturer logic Manufacturers are mainly thinking about how to expand their cost advantages. Design and R&D are all around this goal to serve.
The direction we chose is the second category, that is, brand differentiation + high premium model (refer to Xianfeng’s previous article“Another type of consumer goods going overseas Future: Selling Made in China at a high premium” ). We often say that there are three kinds of people with the best spending power in the United States-code farmers in the west, academics in the middle, and finance in the east. To impress these middle and upper-class consumers, brand tone and differentiation are very important. . This differentiation essentially depends on China’s supply chain, but we will think more about how to use the location advantage and R&D advantage of China’s supply chain to develop what kind of single products to better serve consumers .
Everyone has been talking about “being different” in recent years, but it is still difficult to truly innovate from the underlying logic. For example, we are focusing on the field of sleep technology, which is a very Traditional categories, the product form has been very fixed, and the user’s usage habits are formed during tens of thousands of years of human evolution; the traditional manufacturer thinking may be that I have to make a product first, and then market>In short, there are a lot of micro-innovations like this. My previous job was in a robotics company in Silicon Valley. So I might prefer to use technology projects to build consumer products: technology companies The logic is to first obtain user needs, then optimize the user experience of the product a little bit, and finally make a completely different new product.
2. Brand building: the bottom cultural system that truly reaches users
In terms of brand tonality building, many Chinese overseas manufacturers may still stay at a relatively basic level. For example, their descriptions of products are often “this thing is slippery, comfortable, and breathable”, but in fact, no manufacturer will say that their products are uncomfortable and not slippery, right, and for silk, they are comfortable The concepts of breathability actually do not require market education. There is a saying in American slang called smooth as silk, which means “smooth as silk”. So in essence, to build a brand overseas is to find a language that is more vivid and closer to the understanding and needs of the locals.
I think it’s very important for consumer products to go overseas. Don’t use your head to determine the features of your products. You must make the decision through advertising. We spent a lot of effort to find a local PR company to do a complete set of words, including about 50 terms, and then take each of them for placement test, let them be carried out in Google Ads In the knockout, see which wording technique can run a better ROI, and finally found a word called Thermoregulating.
This word is actually not commonly used in the American language system, but the test result is that the upper middle class in the United States likes the function and brand-level meaning of this word very much. So around Thermoregulating, we have done a series of words, for example, we never say that people sleep better, because “sleep well” is a vague and subjective concept, we only say that this product can make your sleep temperature From 34 degrees to 32 degrees, this quilt is more suitable for you to sleep naked. We solve the problem of two degrees.
Another example is the concept of environmental protection. For European and American users, this is a point that needs special attention. We received more than 300,000 U.S. dollars in orders in the first month of launching our first SKU, but we also received about 1,000 emails askingTime’s self-built site; in addition, it is also a community itself, like DTC, the users above can have very in-depth communication with the brand, and they will sincerely advise you: for example, how the product can be improved, why would he buy this thing. In the cold start phase of the project, crowdfunding can bring you the first batch of seed users, so in fact, I prefer to call it pre-sale.
The disadvantage of crowdfunding is that the conversion rate will be lower. For example, kickstarter pays for two months before receiving the goods. In addition, it also needs to register an ID and bind a credit card. Some consumers may give up the purchase because of this. Xiang said, this is actually a good product test. Your first wave of user feedback does not need to wait until they receive the goods. If the pre-sale is not good, you can slowly improve it. For those early brands with annual revenue of several hundred thousand dollars, crowdfunding is a very good transition platform from 0 to 1.
Four, should DTC become Amazon?
In fact, many DTCs will encounter this problem: After your first sales are released, do you want to become Amazon? My experience is If you want to build a differentiated, high-premium brand, don’t go to Amazon. There are probably three reasons:
First of all, the changes of platform users. Amazon itself is also changing. I remember when I first went to the United States 10 years ago, I would buy everything I needed on Amazon, but now I only buy some of the most basic daily necessities; and those are slightly adjusted. For sex products, I would choose to go directly to the DTC website to buy. This is actually a common change among American consumers in recent years. The middle class in the United States is a very large group, with an annual income ranging from US$30,000 to US$130,000. However, there may be more middle-class people under US$80,000 on Amazon. These people are not actually DTC. Target user group.
Good enough, if there is no premium at the beginning, it may be difficult to make it even if you spend more money and time after starting the volume.
V. Views of other guests
“The logic of product selection: choice is greater than effort”
Qin Xiao@险峰长青:
Consumer products going overseas are still consumer products, and they must follow the rules of the game for consumer products. A good selection is equal to more than half of success. Some people like to use logic to choose the track from the top down, and some people like to choose products from the bottom up based on intuition and aesthetics, but I want to say that these are not important, the right choice is important, the right choice It is the purpose.
At the strategic level, a good overseas product category may need to meet the following key points:
First, there must be local demand. For example, China’s supply chain is best at cost-effective, cutting off middlemen, which is equivalent to meeting local consumers’ demand for “good” and “province”; or DTC brands like Outer, Vesta, and Casper. Personalization and differentiation meet the needs of consumers for diversified SKUs; and in some emerging market countries, there are also some uncovered, more vertical and more accurate people between local brands and big names in Europe and the United States. The demand for mid-range products has not been met, and there may be opportunities for new brands.
The second point is that China’s supply chain must have advantages. Made in China is indeed very strong, but not in every field. There are two strong points in China’s supply chain, one is flexibility, and the other is cost: Flexibility is very important. In the past, a large number of trading companies died on the billing period and inventory, but in the past few years, many Chinese manufacturers in many categories have been able to achieve “quick return of small orders”. This is especially important for startups, and there is no need to press goods; in terms of cost Is China the most upstream source of raw materials, and some categories require advanced exports, and then export after processing. Compared with Vietnam and Turkey, its advantages may not be obvious enough.
A more common combination is to start with Facebook in the early stage and Google to keep up in the later stage. Of course, it also depends on the specific country and the product itself. For example, the distribution logic of the rigid demand category and the impulse purchase category are different, but as long as the product is good enough, there is no need to do too much drainage. Your organic traffic ratio Will get bigger and bigger.
VI. Postscript
In 2020, both consumption and going to sea are hot spots, and the combination of the two has produced many interesting subdivision tracks. With the emergence of entrepreneurial groups of overseas returnees across backgrounds and the continuous enhancement of China’s supply chain, capital’s attention to consumption overseas has also begun to move from traditional platforms and channels to the traffic and brand side. This trend may continue. In this regard, Xianfeng will continue to pay attention and discuss, and look forward to your participation next time.
public channel number from the micro herein: steep peak record (ID: xianfengk2vc), of: creating steep peak