Since the second half of 2021, there has been a saying in the market that "new consumer investment has cooled down", and the new consumer industry seems to be "idle".
At the other end, the new consumer brands that have run out are "busy". On March 27, Yuanqi Forest announced that the fifth self-built factory in Dujiangyan, Sichuan Province, has begun equipment commissioning and trial production. Also in March, Hua Xizi said that it would invest 1 billion yuan in 5 years to lay out product innovation and basic research, and Wang Xiaohao's Jiangsu Jingjiang Taizhou production base signed a contract to land...
Once, new products, new marketing, new channels are the weight of the rise of new consumer brands, and now, they are trying to make up for the "basic course" of new supply. In the process of changing from "light" to "heavy", what kind of changes will they bring to themselves, to the industry, and to the industry?
The new post-consumer era
New consumption is bidding farewell to the soaring, flooding and flooding, and entering the post-era.
This round of new consumption is generally considered to have begun after 2018. With the understanding of consumers, with new products, new channels, new marketing, in just a few years, food and beverage, clothing daily chemicals and other fields have risen a large number of new brands, catching up with the Little Red Book, Douyin live dividends, and finally ran out and became the head of their respective subdivision tracks.
For example, Perfect Diary, 2017 Heavy Warehouse Little Red Book, 2018, 2019 and caught up with the live broadcast dividend; Yuanqi Forest seized the "sugar-free drink" track in the early stage of the brand, cultivated the user's mind through the vertical professional circle layer that loves sports, and then realized the user's circle breaking the circle through hand-drawn, hand-account, wear and other cross-vertical mid-waist KOLs.
But countless cases have proven that the window of opportunity for new brands can be as short as a few months and as long as three or five years. For this wave of new consumer brands after 2018, with the stability of the traffic pattern, other new and old brands have joined the subdivision track, and the first dividend "window period" driven by the rise of new traffic and new channels is closing, and they have to find new increments from other places.
China has never lacked Internet celebrity brands, and whether this wave of Internet celebrity brands since 2018 can cross the "Internet celebrity" cycle of three or five years, enter the "long red" cycle, and achieve a breakthrough from 1 to 10 or even 100, it is now a critical stage.
New supply overhaul
In the past two years, when the "window period" opened by new traffic, new channels, and new categories has gradually closed, another "window period" driven by new supply is being opened.
At the end of March 2022, in a green forest, a factory in Dujiangyan, Sichuan Province, began equipment commissioning and prepared for trial production. The factory, with a total investment of 1 billion yuan and an annual production capacity of 1.2 billion bottles, signed a contract for investment on June 16, 2021, and the project was set up for less than a year to be put into operation.
As early as 2019, the new consumer company began to lay out the layout and build factories, from Anhui Chuzhou, Tianjin Xiqing, Guangdong Zhaoqing, Hubei Xianning to Xichuan Dujiangyan, Jiangsu Taicang, after the fifth factory trial production, it has begun to lay out the construction of the sixth factory.
In fact, in the field of new consumption, Yuanqi Forest's self-built factories are not unique. For example, in 2020, Perfect Diary began to try to cooperate with the foundry Kosmeshi to invest in the construction of makeup research and development and production base, and in 2021, Mi Xue Ice City built a second self-owned factory in Chengdu.
Entering 2022, new consumer brands are more frequent, and in the first quarter, in addition to Yuanqi Forest, Zhou Zero, Hua Xizi, Wang Xiaohao, etc. also announced relevant actions. Among them, in March 2022, Wang Xiaohao's production base settled in Jingjiang Economic and Technological Development Zone, Taizhou, Jiangsu Province, with a planned investment of 1 billion yuan, and it is expected to produce 35,000 tons of leisure foods such as tiger skin and claws per year.
If you look at the reasons for the rise of new consumption, mature supply chains are one of the main reasons. The accumulation of 40 years of "Made in China" has enabled new brands to quickly find high-quality production resources for OEM cooperation after product development and innovation, and no longer need to start factory construction from scratch like the previous brand.
In fact, the asset-light model prevails in the field of consumer goods. Abroad, Nike does not own a shoe factory, Philip does not have its own production line, Boeing only produces cockpits and wingtips; domestically, Metersbonwe, which began in 1995, adopts its own design and production outsourcing model, and Huawei and Xiaomi do not have their own factories.
In 1991, Roger Negel, a well-known American scholar, summarized this virtual design, production, finance and marketing functions as a form of operation that was compensated by external forces as a whole through various ways as "virtual operation".
For new consumer brands, this "virtual operation" model can help them complete the first stage of the jump, to achieve a rapid breakthrough from 0 to 1. "As long as the brand is diligent enough and integrates the supply chain resources, it can save a lot of things." Professional people do professional things, and there is a better chance of popping up. Some foundry manufacturers told the media.
But foundry and virtual operation are sometimes not optimal solutions. For mature brands, their supply chain management capabilities are strong, and they have cultivated a series of mature factories, which are enough to ensure product stability. But for new consumer brands, the existing supply chain is not enough to support them to move to the next stage: first, their own management level needs to be improved, and second, the existing supply chain level is insufficient.
For example, Beijing Tianchen Dairy, one of the foundry enterprises of the yogurt brand "Lechun", has been punished by the Beijing Shunyi District Market Supervision Bureau for many times for reasons such as technical prevention facilities not being set up in accordance with regulations; for example, Yuanqi Forest has developed a new product according to user needs, but the production line of the foundry cannot be directly put into production, and after proposing the demand for upgrading the production line, it was rejected by the other party.
In fact, many new consumer brands have encountered the Yuanqi Forest. The popular demand of traditional consumption is slow to iterate, and the upstream factory adapts to such a demand, while behind the rise of new consumption is the concentrated emergence of a large number of differentiated needs, the acceleration of product iteration, and the traditional manufacturing industry needs a long time to adapt to such changes.
However, the drastic changes in downstream demand and fierce industry competition have left new consumers with little time to wait for this change, and can only start to transform the supply chain from scratch. As Tang Binsen, founder of Yuanqi Forest, mentioned in an interview: "Don't be opportunistic in the face of the big era, from the freezer to the sales channel, to the factory, the supply chain can not be less." ”
Carry out the new supply transformation and dig deep into the moat in more "heavy" areas, so that new consumer brands can flow from 1 to 10 or even 100.
"Make-up lessons" to the giants
The "rise of domestic products" has long been an old topic. The rise of consumer brands in China is now the third round, the first round is a variety of local brands before the 21st century, most of them ended in the acquisition of foreign giants; the second round is the "Tao brand" that appeared after the rise of e-commerce, with the international giants to force e-commerce and weakened their competitiveness; the third round is the rise of this wave of new consumption after 2018.
Handu Clothing House, CrackEd Veil, Inman, Seven Grids, Imperial Mud Fang, Afu Essential Oil, Membrane Law Family... They are all familiar "Tao brands", and half of the top ten cat women's clothing sales in 2013 were Tao brands. In 2015, UNIQLO replaced Handu Clothing House as the first sales volume of Singles' Day, and since then, "Tao brands" have gradually withdrawn from the Double Eleven list and even consumer vision.
They were defeated by international big names such as Uniqlo, Zara, Procter & Gamble, Lancôme, and Estée Lauder. After the disappearance of the traffic dividend, the "Tao brands" did not find other support points, and they fell completely in research and development, products, and brand power. In summary, the first round of domestic brands lost to capital and products, and the second round lost to products and research and development, that is, "thickness".
Nowadays, the third round of local consumer brands are trying to make up for the "thickness", do research and development innovation on the top, and improve the supply chain in the bottom. In the first stage, some of them have obtained product support by relying on the "early adopters" of subdivision categories, and now what needs to be done is to continue the explosive power of products into staying power and shape brand power.
In the research report, Guotai Junan divided the construction of new brand competitiveness into three steps, the first step is to grab the market with large single products, the second step is to strengthen the construction of the back-end own supply chain to develop a rich product matrix, and the third step is to establish faith attributes by creating exclusive personnel. From this point of view, through the construction of self-built factories, new consumer brands are making up for the second "lesson".
The changes of this second "lesson" to new consumer enterprises will be comprehensive and in-depth. Integrating digitalization and intelligence into production and supply can not only improve their own production efficiency, improve product reputation and product repurchase rate, but also establish long-term brand competitiveness with faster consumer insight, research and development, and production, and gain an advantage in competition with international giants.
Taking the Yuanqi Forest, which has begun to lay out the sixth self-built factory, as an example, through the strategy of "super city cluster + self-built factory", its research and development and production can be more geographically targeted and quickly adapt to market changes; complete new product testing faster, complete a complete set of processes of supply, delivery and sale, and improve efficiency.
After having its own factory, Genki Forest will definitely give products a new and different experience in the process change of production and manufacturing. According to data, the self-built factory has reduced the production cycle of Yuanqi Forest from the original 14 days to 7 days, and the delivery efficiency has doubled.
In the competition between the old and the new, the only thing that the former can win is to be new enough and completely new. The reason why the "Tao brand" has fallen to the hands of international giants is that they are not new enough, so that they are too late to react when the traffic pattern and channel pattern change.
The core competitiveness of consumer enterprises lies in the ability to innovate products, the scientific and technological capabilities of the terminal supply chain, and the ability to premium channels. New consumption never refers to new products and new sales, but the sum of new ideas, new products, new marketing, new channels, new supplies, and new experiences. The new supply transformation of the Yuanqi forest has helped them achieve a new consumption closed loop.
epilogue
In the long run, "long-distance running champions" are more likely to appear in the field of consumer goods. According to Wharton Finance Professor Jeremy M. In Professor J. Siegel's The Future of Investors, 11 of the 20 stocks with the highest returns on the U.S. stock market from 1957 to 2003 came from the FMCG industry.
For a long time, local brands have been absent in the Chinese consumer market, and "sprinters" are scarce, not to mention "long-distance running champions". In the past, local brands were in the corners that could not be seen or looked at by international giants, and slowly took root in local products and ways. With the advent of the digital age, their advantage is not only to understand China better, but also to catch up with Chinese consumption.
The underlying research and development and supply, although the charging time is long, the stamina is more sufficient, which may break the ceiling of local brands and become a "long-distance running champion".