When the traffic bonus disappears, how does the brand gain customers?
Editor’s note: This article comes from the WeChat public account “Inspur New Consumption” (ID: lcxinxiaofei) , Author Huang Hai.
From the fast-moving B-site Xiaohongshu to today’s live broadcast, “bonus” has been the key word of the consumer goods industry for the past two years.
“I was not fully aware at that time that the rise of content platforms, especially video content, in the past two years would actually bring such a large growth momentum to the entire consumer industry.” Huang Hai, executive director of Fengrui Capital, recalled in 2018 Said in the state.
However, with the familiarity of various brands on gameplay, the bonus depression has gradually been filled. What new changes will happen in 2020? What are the new growth keywords for consumer companies?
Huang Hai, executive director of Fengrui Capital
Recently, in the member activities of Inspur New Consumer, Huang Rui, executive director of Fengrui Capital, combined with the case of Perfect Diary, Li Ning, China and Santon and half, etc., focusing on the generation of traffic dividends in the past two years and the new path of 2020 consumer goods entrepreneurship Share and interact for more than an hour.
Huanghai focuses on investment in the consumer and retail sectors, leading and participating in club factory, three and a half, vphoto and other projects. There are very in-depth studies on the start-up, scale-up of consumer goods, and the evolution of content dividends.
In his view, in 2020, consumer goods entrepreneurship will enter an era in which multiple drivers work simultaneously. The content bonus gives the brand a chance to rise from zero to one, but the overall closed-loop efficiency of customers, products, and supply chains in the future is the decisive factor for the brand’s long-term success.
The following excerpts are some of the wonderful content, shared with consumer entrepreneurs.
Hello everyone, this is Fengrui Capital Huanghai, we have been one since 2015I have been investing in new consumption, of which consumer brand is my main research direction.
At that time, there were not so many organizations in the market that focused on early investment opportunities in consumption. But in the past year, the entire consumer industry has continued to heat up. New consumption this year has become the mainstream direction of many funds.
What has changed in recent years? It has been five years since the establishment of Fengrui Capital. It has invested in a number of projects and has witnessed the development of the entire consumer industry. So today I am particularly happy to be able to cooperate with Inspur New Consumer to share with you:
What do we think of the consumer industry? Especially what happened in 2018 and 2019, leading to more opportunities for the entire industry? And in 2020, will such opportunities continue to magnify, or has it reached the stage of harvest?
1. Where is the opportunity for counterattack in the consumer goods industry?
Consumer products industry, in fact, was not the direction that mainstream VC paid special attention to, because consumer products have always been a strong and strong industry. What do you mean?
P & G has been established for nearly 150 years, Coca-Cola has been in existence for more than 100 years, and Nike has a history of 50 years. Starbucks is the youngest among the hundreds of billions of dollars in consumer clubs in the United States.
These companies are constantly snowballing in a long snowy road, and they have the market value of hundreds of billions of dollars today.
They have already surpassed the primary market and entered the scope of secondary market investment, so a large proportion of investment masters like Buffett have also invested in consumer products.
This is an industry where the strong and the strong are strong, because on such a long snowy road, the snowball will roll more and more. But VC is looking for disruptors. Where are the opportunities for counterattack?
The answer we think about is this:
There are various upstream and downstream links and variables in the consumer goods industry. In this system, if some variables change suddenly, it usually gives some latecomers the opportunity to quickly counterattack and develop. If these changes do not exist or are very slow, then the original giant will become bigger and bigger.
Taking a most typical example, if you are just starting to look at the consumer industry, it is estimated that many people will share their views with you that as long as you control the offline channels, you can be successful in making consumer products. This view is still correct today, because offline still accounts for more than 70% of China’s total social retail sales.
but backAt first glance, where is the increase in recent years? Is online. If the online increment is fast enough, there will be opportunities for latecomers to counterattack and grow up.
When did the first wave of this happen? From 2013 to 2015, this process is what we call the channel dividend. If you look at P & G’s financial report, you will find that P & G’s growth was weak in 2014 and 2015, because at that time, with the rise of Tmall, many emerging brands began to rise from the Internet.
The three squirrels including Feng Ruitou also caught the last wave of dividends from 2013 to 2015-the rise of Tmall, which has become a sales of more than 10 billion and a market value of more than 30 billion s company.
But the pure channel change, that is, the rise of the Tmall platform, was already a thing of the year. What exactly is this wave of variables starting in 2018? It is Douyin, Kuaishou, Xiaohongshu, the rise of these content platforms.
If you push the time forward two years, not many people know who is Li Jiaqi, but if you push it forward half a year, Li Jiaqi has become an IP that is well-known throughout China.
All this happened very quickly. In fact, in 2018, the whole industry was not so hot.
I was not fully aware at that time that the rise of the content platform in the past two years would actually bring such a large growth momentum to the entire consumer industry, creating a very large dividend period in a short time.
This dividend period is the second wave of new brand companies that are very suitable for consumption since the channel dividend brought by the rise of Tmall in 2013 and 2014, and the driving factor for the rise in the short term.
We will also pay attention to the development of various variables at the same time, such as channels, supply chains, changes in user needs, the growth of the category itself, etc. But there is no doubt that in 2018 and 2019, the biggest driving force for the entire industry is the rise of content platforms.
2. The essence of dividends is a wave of efficiency upgrades
What help does it bring to the entire consumer industry?
The first must be the traffic dividend. Small brands may not have so many fans and can’t afford such expensive KOLs, but Douyin is a particularly good “megaphone” because its spread potential can not be directly proportional to the number of fans.
If it was a TV commercial in the past, whoever has more money will be able to influence more people. It is impossible for a small brand to cast TV ads more than P & G. Your budget is not on the same level as him, so your influence will not be on the same level as him.
But the rise of content platforms has given consumer brands a new opportunity. Even if you do n’t have a lot of budget, it ’s possible that it ’s going to fire because of an explosive content, which is a very important change in the entire ecosystem.
Second, in terms of decision-making, some products are very fast from spread to purchase. For example, the most suitable thing to sell on Douyin is 50 to 80 yuan, because you do n’t need to spend too much energy to think. As long as you watch the video and find it interesting, you can buy it with your eyes closed. What you see is what you get, and the closed-loop efficiency is extremely high.
But there are some products. In addition to dissemination, users need to do some search and decision to buy. Before Xiaohongshu, how do we make decisions, we may ask people and read reports.
Of course, Xiaohongshu also has a lot of advertising posts, but it is undeniable that its more UGC content can greatly improve the user’s decision-making efficiency.
That’s why, although Xiaohongshu’s e-commerce is not tepid, it is a company worth billions of dollars just because the community content can be very closely related to consumer decisions.
Third, sometimes, in addition to communication and decision-making, someone like a cabinet sister needs to share this with you. You do n’t necessarily want to buy, but you may be more interested in listening, and the live broadcast atmosphere is particularly lively. When everyone is buying, you can also be easily guided.
None of the best people in China to do live broadcasts are from internet celebrities. Li Jiaqi used to sell lipstick on the front line of the counter, so he knows about lipstick 100 times more than ordinary net red. Weiya has been opening offline stores since a few years. She started to be a Taobao store in 2011 and 2012. She also knows well about the goods she sells.
So the live broadcast is essentially an online shopping guide. The live broadcast content platform actually gives people like Li Jiaqi and Wei Ya, who have the professional ability of shopping guides, a space to display their talents, from serving a few people to serving consumers across the country. .
I watched “Thirteen Invitations” Xu Zhiyuan interviewed Weiya. One sentence was particularly impressive. Xu Zhiyuan said to Weiya: In fact, there are many capable people in the world, but your luckiest part is that your ability is just right. Combined with the needs of the times, it has achieved such great success.
In fact, communication, decision-making, and shopping guides are all links that have existed in the consumer shopping process. The counter sister has always existed, and the shopping yellow pages have always existed. It’s just that the appearance of Douyin, Xiaohongshu and the live broadcast platform has improved the efficiency of these links.
In this wave of efficiency upgrades, the response and speed of new companies will be faster than that of large companies, so there is a chance for new brands to rise.
3. The rise of Douyin, these two or three yearsWho is the most beneficial consumer company?
I will spend 1/3 of the time today on how the bonus is generated, and then 2/3 of the time will talk about the post-dividend era, which is how to go next.
I will finish the production of bonuses first. In fact, every platform will have a bonus of rising fans. If you do a WeChat public account in 2015 and 2016, you can increase a lot of fans by writing articles. By 2017, everyone’s fans have risen almost the same. If there is a demand for monetization, it will become a bonus for the launch.
So the bonus will be slightly later than the bonus of rising powder. When was the rising pink profit of Douyin? Probably in the first half of 2018 and 2019. However, because this platform is very large, and there are new ways to live broadcast and bring goods in 2020, the latter part of the dividend still exists.
The dividend is like a depression. You can swim in it comfortably when everyone does n’t know yet, but when everyone comes in to swim, it will become very crowded and the bonus will slowly disappear. .
The rise of every content platform will go through such a development stage. With the rise of Douyin, who is the external company that has benefited the most in the past two or three years?
In fact, Douyin has a certain competitive relationship with all major Chinese Internet companies. It is not an exaggeration to say that Douyin and BAT are fighting at the same time. But there are some companies that will benefit from Douyin. What is the answer to this question?
My answer is a perfect diary. Perfect Diary was still an angel round company in 2016. Four years later, it is already a unicorn that has just completed financing of 2.5 billion US dollars.
Not only is it a perfect diary, in fact, 2018 to 2019 is also the two years of the entire cosmetics industry, especially the makeup industry. A lot of MCNs, anchors, and brand owners were born in the middle chain, including the platform itself.
Why is the cosmetics industry? Because it is indeed the highest degree of combination with short video in category characteristics.
Through the comparison before and after makeup, the visual effect will be very significant, and the unit price of the customer is also very pleasant. A lipstick in the perfect diary can even be sold for 9 pieces of 9, which determines the best use of the cosmetics industry Short videos come up.
Also briefly mention the WeChat public account. In fact, this type of text-based, supplemented by pictures is more suitable for the function and composition, HFP used it to achieve rapid growth. But the dividend of the WeChat public account disappeared earlier.
In contrast, Xiaohongshu is mainly based on pictures and supplemented by words. Of course, nowCreate a positive closed loop.
I simply divided it into three links: customer acquisition, product and supply chain. Can you make some breakthrough innovations on these three points, which will become the key to building the systemic competitiveness of the entire enterprise.
So, today it will become a competition of comprehensive abilities. In fact, much of what I said earlier is related to customer acquisition. These things still exist and live streaming is still to be done, but now you can no longer think of it as your unique weapon, but as part of the system.
2. Customer Innovation vs Product Innovation
In such a system, the focus of different industries may be different. There are probably two types here:
One is an industry with a relatively mature supply chain, the most typical of which is the cosmetics mentioned above. Opportunities in this type of industry usually come from changes in the front office.
For example, if you go to Guangdong and the Pearl River Delta for a lap, you can basically find factories. There are no unique cheats in production. It is difficult to find opportunities from the middle and back office. In such industries, the supply chain has been platformized.
The changes at the front desk are very clear. More young girls like to wear makeup, and then add the customer-level bonus just mentioned, and the growth rate of this category is quickly released.
In contrast, the second category is industries where the supply chain is not yet mature, such as food and beverages. Let me take the simplest example. The venture of NFC juice started about six or seven years ago, but today, hey Juice has not been a particularly large brand.
The main reason is that the industry ’s supply chain is still immature, involving extractive preservation and cold chain logistics in the production process. Stable supply is not a universal resource that can be found casually, so companies have the opportunity to find exclusive and exclusive things in the background, such as product formulas, raw materials, and processes.
Although this exclusivity cannot be made like the Nobel Prize, something that others cannot study, but at least it can be your advantage within a certain period of time.
3. Three dimensions of product differentiation
I said a lot about customer acquisition. Let me focus on the products below. There are three dimensions of product differentiation:
First, find a blank price band. Take coffee as an example, Starbucks sells 30 yuan, Ruixing is 10 to 20 yuan, there are cheaper below, Nestle sells 1 yuan. Who can sell 5-8 yuan? This is the difference in the price band. Three and a half chops out a price band suitable for e-commerce.
The second is the differentiation of consumption scenarios. Starbucks is an attribute of business and space experience. The scene of Ruixing is more in the office building, so many of its stores close at six or seven.
Three and a half