Cover from Visual China


1/5, the more you have, the more you want to have

New clothes require new skirts, new skirts require new shoes, new shoes require new backpacks, new backpacks require new scarves, new scarves require new earrings, new earrings require new watches, new watches require new fragrances…

There is a point in Good and Evil Economics: Consumers buy a certain item, and in theory, the total number of items he needs should be reduced by one. The reality is just the opposite. As the total number of items in possession increases, the total number of items he wants to have is also expanding.

The more you have, the more you want to have. This is the magic of consumption.

Why do home appliances, air conditioners have the best growth, and the two giants of home appliances are just two giants of air conditioners? Because you only have to stay in an air-conditioned room once, there is no way to endure a room without air conditioning. As long as you have the first air conditioner in your home, you must want the second and third.

Washing machines and refrigerators are functional goods. They can be used on the line. They can be used without any change. Air conditioners are products of desire. Consumers care more about quality, noise is small, refrigeration is fast, temperature is not good, and small couples are easy to quarrel.

People have been redefined as consumption by various classes, and consumption is the ultimate ideology of the world.

The Nobel Prize-winning economist in his book Poverty Economics believes that the poor will use limited money to buy snacks, tobacco, alcohol, beverages, junk food, which are expensive and nutritious. But the food tastes good. why? Because the poor also have the desires of others. Moreover, just because their lives are too desperate, they need junk food and a short entertainment time to relax.

We think that mustard is a civilian food, but mustard is also a scorn chain – the packaging despise the bulk, the brand despise the brand. The largest part of Fuling mustard is from the working groups in the first and second tier cities. The mustard has a taste and strength, which can soothe the body of a day of physical labor. The brand of “Fuling” can also comfort them in the extremely rich and poor state. The bottom layer is easy to hurt the mind.

This is why Fuling mustard is more expensive than bulk mustard and still sell well.

And there is a social scene in China’s consumption, or a consumer scorn chain. This is also the reason why I am very optimistic about the sinking of the Fuling mustard channel. This is not only a war for brand enterprises to regain market share from the “Kang Shuai Fu”. The migrant workers’ return to the homeland has also brought profound benefits to their hometowns. Consumption change: The value of brand consumption of Fuling mustard is not only different from the hometown people who still eat bulk mustard, but also the brand imprint of their past big city life memories.

The family in the city is a personal bastion, family consumption is self-satisfaction; rural household consumption takes on more social functions.

Contacting melon seeds to launch “Daily Nuts” in the white-collar workers who shop online is not to be seen, because in the unfamiliar world, the more popular is the “three squirrels”. Young brand. Qiaqiaguazi finally found confidence in the market that he is most familiar with, and launched an upgraded version of the more expensive blue bag, which is very good.

The best consumer goods companies must constantly provide the emotional comfort of “the more you have, the more you want to have” in the market that you are most familiar with.

But the capital market is never satisfied. If you don’t add new consumers, where does your growth come from?

The answer is: consumer carnival.

2/5, consumer carnival and phenomenon level explosions

The more you have, the more you want to have – when the consumer is discovered by many brands, the meaning of consumption is completely different.

The phone broke down. Everyone thought 20 years ago, “Damn, I have to buy a mobile phone again.” Today, everyone’s idea is “very good, finally you can change a mobile phone, I want 5G, I want 4 cameras, 100 million pixels, all the latest features, I want to…”

Nokia’s failure, except that I didn’t see the smartphoneIn addition to the big trend, there is another important reason. It does not mean that the mobile phone has changed from the traditional “durable consumer goods” to the “trend consumer electronics products” – a leather mobile phone will only make you sin when you change the machine. sense.

Every time you meet a demand, it will trigger another new demand. Let us speed up the elimination of the old ones and the new ones. Consumption will become an anesthetic to escape the cruel reality.

So from the perspective of investment, the consumer goods industry has some fundamental differences from the industrial goods industry:

Industrial products are driven by orders and are purely profitable. Growth is rational and requires you to always maintain the best price/performance ratio. When you show the best, the customer will not be invited, and once you are young, the customer will not hesitate to abandon you.

To make matters worse, super customers like Apple will consciously cultivate “prepared tires”. It is best to have more than two suppliers for each spare part to maintain bargaining power.

The consumer goods are driven by desires and have complex emotional factors. Its growth depends on human nature. It obeys the laws of sociology, that is, the herding effect and the Matthew effect. Brands will only become less and less, as in “The Uighurs”. :

“The group has the ability to automatically magnify irrational impulses, and the implied role will play a similar role for everyone in the group. This role will become stronger as the group’s emotional chain passes, until the breakthrough person The imagination of the mind will still not stop.”

Therefore, consumer goods brands must constantly create a “consumer carnival mass movement”, especially in the field of consumer goods, most typically in the snack food and beverage industry, which will periodically appear “phenometic explosions”. paragraph”.

Investing in the industrial goods industry, paying attention to the good harvest, the bonus is only a hundred days, because the barriers are not high, the technology is either copied by others, or eliminated by the times, or need to continuously invest capital, expand the scale, reduce costs. Maintaining an advantage, as an outside investor who cannot participate in the business, the risk is too high.

Consumer products also have a cycle