The greatest consumer companies must be new species of brands, channels, data, consumers and content.
The visionary is steady, and the steady is far away. On September 17-18, the 2019 China Investor Future Summit was held in Shenzhen, and the heads and entrepreneurial leaders of nearly 100 mainstream investment institutions were invited to focus on the development opportunities of the top ten potential tracks, from the front end of the industry to the gold market. Exploring the adjustment period of the Internet midfield, and quickly breaking through the core track and enterprises, how to use capital to open up new markets and build a moat.
On September 18th, at the “2019 Chinese Investors Future Summit”, Zhang Qiong, founding partner of “Asian Capital” and president of Asia Business Group, delivered a keynote speech “The Next Golden Age, Belonging to Innovative Consumer Brands”.
Zhang Qiong said that the real golden age of China’s innovative consumption is coming. The birth of a group of young new consumer groups will create the possibility of a company that surrounds them and meets their needs. In order to become a national or even world-class consumer brand, we must first do a good job in product and quality, and at the same time, to do D2C, omni-channel operation and its own content construction, we must also use big data to improve consumer satisfaction. And loyalty. The greatest consumer companies must be new species that combine brands, channels, data, consumers, and content.
The following is the wonderful sharing of Zhang Qiong, the founding partner of Asia Business Capital and the president of Asia Business Group, at this summit:
Two very interesting phenomenal events have occurred recently. First, a few weeks ago, Costco opened its first store in China in Shanghai. The Shangchao system has been in China for many years. Why does Costco still cause a mad rush? Because of its brand, because it gives consumers a very competitive product and experience.
Another one, I chatted with the president of the P&G Alumni Association a few days ago. As the world’s largest consumer goods company, P&G first entered China and brought many products to everyone. However, many people in P&G have left recently. They are all starting a business. As long as they are P&G, reliable and experienced, there will be many investors chasing you to vote for you.
These events all indicate that the real golden age of China’s innovative consumption is coming.
This is the best time, tooA worst era. For many traditional consumer companies, they are facing very big challenges and pressures. Carrefour sold its Chinese business. Many of P&G’s brands have been weak. There are still a lot of difficulties in attracting business. It can only introduce various new modes such as experience, parenting, and catering to adjust the space and attract people.
But now is also the best time to spend. In the past ten years, China has created a lot of new consumer companies, and there are platforms, such as social e-commerce, such as gathering and multi-tasking. There are also brands, such as Mary’s beauty in the beauty, perfect diary, all quickly rushed in a year or two. Several hundred million in sales.
Why is there such a change?
I think the core element of consumption is the consumer, but when a group of young new consumer groups are born, there will be the possibility that the enterprises surrounding them and satisfying their needs will be born. With the development of technology, any new technology generation or technology-driven new application will bring about a new consumption model and the resulting new consumer enterprises.
I will show you a piece of data first. Last year, the China Yearbook mentioned that there are 280 million consumer groups in China after 90 years. They have graduated from college, have been in society, and have worked for a few years. They are becoming the dominant and spending power of their own consumption. Do not underestimate. If you add 00, the entire population has reached 400 million, they are the biggest treasure in the field of innovative consumption, waiting for all new companies to explore.
It is also very interesting that these new consumers are rising. What is their outlook on life, their values, and their perception of the brand?
A research report mentions that almost two-thirds of young consumers like a safe, healthy, and positive lifestyle. The most interesting thing is their perception of the brand. In the 1990s, due to the lack of local Chinese brands, many consumers have a feeling of worshipping foreigners. Everyone feels that foreign brands are better than China. They want to go to Japan to buy toilet seats because they are looking for them in China. Not such a good product. But now, young consumers’ perceptions of the brand have changed a lot. In addition to some durable consumer goods, as well as areas of high quality and technical requirements, in most daily life scenes, people have more than 50% recognition and love of Chinese brands. Especially in the field of fast-moving and catering, the birth of a new brand like Xicha proves that young consumers are less interested in where the brand comes from. They value quality, price and cost-effectiveness. What is the interaction between the brand and me? Can you bring me the ultimate experience I like?
Also, these young consumers are very diverse, they like personality, like to be different, do not like the same. The former guest also said that in the past, a single brand could be sold nationwide or even sold globally. I believe that in the future, such a phenomenon-level brand will become more and more difficult for young consumers.
Asian businessmen are veterans in the investment industry, and we have been paying attention to the Chinese consumer market very early. We have an idea that investing in the consumption needs of China’s more than one billion people in food, clothing, housing and transportation is certainly not wrong. Therefore, the earliest investment we made was a group of leading enterprises in the consumer goods category, which used one type of products to eat the market.
As the consumer market has changed, we have invested in many new consumer brands in the past few years. For example, we invested in a brand that focuses on women’s health sports. It wants to provide more suitable clothing for Asian women. The company has been established for almost three years and has maintained a 300% annual growth. It brings to the female consumers the fashion, the high value, the comfortable wearing, the ability to express themselves, and make me a better self. This is its brand culture.
For the sports category, we also invested in another company called Sports, which focuses on basketball. Although this basketball World Cup, the Chinese team is very disappointing, but it is undeniable that basketball is a very large market in China. It is not the same as football. It has less requirements for the venue. Several friends can form a team, and then one time can go to play a ball. Small games are also very convenient. The founder of the brand is a professional basketball player and he is still a college basketball coach. The brand was created because he felt that there is currently no independent brand in the basketball market. In the beginning, he used the WeChat subscription number to interact with basketball fans to promote brand growth. In less than five years this year, he maintained a tens of percent growth every year. Self-built flexible supply chain, rapid production in small batches. Around the basketball culture and basketball products, each independent and small basketball team has its own uniform, which is its brand culture.
I came to Shenzhen yesterday to see a company I had previously co-founded, Platinum Hotel Group. In 2005, Platinum’s predecessor was born in Guangzhou for seven days. I barely managed too much, mainly Zheng Nanyan said. We said at the time to be a budget hotel chain, but 15 years ago to today, Platinum has become a brand house.
The guest just said that it is difficult for a single brand to dominate the world. This is indeed the case. There are already more than a dozen brands under Platinum. There are four-star hotels and brands for women. In the end, it has become a brand house. Because Jinjiang Group has always been a five-star hotel, it lacks the brand of mass consumers and Samsung’s four-star economy. So Jinjiang Group chose to acquire Platinum three years ago.
There are many brands now, but the mortality rate is also very high. I have seen oneAccording to a research report, among all consumer brands, 6% of new brands contribute 20% of the market growth, and the growth of emerging brands is very fast. But the challenge is that almost every third of the brands are invisible every five years; and every five years, one third is a new brand.
The frequency of the birth and death of the brand is very fast. It is really not easy to become a long-term and valuable brand.
In the United States, most of the American brands we are familiar with are born after World War II. In World War II, the United States was very fortunate that the war did not happen in the mainland. Only Pearl Harbor was bombed by the Japanese, and it did not really participate in the war. Therefore, after the Second World War, the United States entered a very high-speed growth period, and it also ushered in a baby boom. Now these big brands were born at that time. It seems that these traditional brands – GAP, NIKE, P&G – were innovative brands at the time and innovated a lot of models.
Today, how can you produce national or even world-class consumer brands in China like P&G, like Nike?
I think I have to do these things. First is product and quality, but these are not enough, you must do D2C. Starting now, any new brand is born, must face the consumer directly, remove all kinds of intermediate channels, and directly reach consumers with the fastest speed. Then it must be operated omni-channel, online and offline, all kinds of social, various scenes, various activities must appear; and the brand must also produce content, not to say that a product, then through the channel and media To promote sales, you have to do consumer interaction on social media. The brand is a self-media, and only such a company can grow into a great company.
There are data, the future enterprise has two core assets, one is the brand, the brand is always the most valuable asset of the enterprise; the second is the data, which is the analysis of consumer big data, which should be used to increase consumption. Satisfaction and loyalty.
Last back to the Costco I just talked about, it is a channel itself, and there is a very powerful private label called Kirkland, the largest health brand in the United States. As a channel, Costco’s own performance is also challenging, but Kirkland can contribute almost a third of the profits to Costco each year.
So I believe that whether you start from the channel or start from the brand, the future must be the same. The greatest consumer companies must be new species of brands, channels, data, consumers and content. thank you all.