Source: Zeping Macro
At 22:30 on December 22, Ren Zeping's year-end show "Igniting Hope and Optimists Moving Forward - Top Ten Predictions of China's Economy in 2024" came to an end.
The following is the essence of Jiang Nanchun's speech on December 22 to ignite the hope year-end show:
I am very happy to participate in Mr. Ren's New Year's Eve speech, I think this theme is very good, and only those who are optimistic can move forward. Let me share a few of my thoughts.
The first point is to talk about how the market has changed and how users have changed. After opening today, consumption showed a momentum of recovery, but it was indeed under pressure as a whole, and the rebound was less than expected. Although the rebound has not been as expected, but in the past decade, a big river has been moving forward, China has formed 470 million people above the middle income, after they work hard, they need to compensate and self-reward, these 470 million middle-income people want to become a better version of themselves, I think this is the inexhaustible driving force of China's economy, upgrading.
I think the Chinese's yearning for a better life in the next 10 years is unchanged, love food, love beauty, love health, fear of old age, fear of tiredness, fear of loneliness, lack of love, lack of mood, lack of stimulation, three loves, three fears and three deficiencies to promote China's continuous consumption upgrade. In the past ten years, the consumption psychology of the mainstream population has also undergone great changes, low-priced things have been quality, brand, how to provide psychological satisfaction, just needed things have been aesthetic, interesting, self-labeled, I buy you brand represents what I am people, pragmatic things have been replaced by emotional, atmospheric scenes, necessary things are wanted, trendy goods not only provide function, the key is to soothe the soul and emotions.
In the past 10 years, the consumption upgrade has been from the logic of cost performance to the price ratio of appearance, the price ratio of appearance, and then to the price ratio of mood. At the same time, we also see that after the income is unstable, consumers want both cost-effective and cost-effective ratio, as well as cost-effective, face and brain. How do we deal with this trend? We see that our products are getting cooler and cooler, and we see the same Oreo in white, and we see the Oreo in poplar nectar, and we also see the same milk sold, and we can see that the packaging is getting cooler and cooler. If it's selling beer, for example, we can see snow beer, and the whole price ratio is getting higher and higher. The whole brave little blue bottle, Mars green bottle, including the brown bottle created by ingenuity, is actually getting better and better in appearance and appearance.
We look at the health needs are also constantly escalating, eat low-carb water for meals, drink 3 points of sugar for milk tea, the whole food industry is 5 plus: add protein, add calcium, add cheese, add dietary fiber, add probiotics, 5 minus: reduce sugar, reduce fat, reduce calories, reduce oil, reduce salt, we also see 5 no: 0 sucrose, 0 pigments, 0 flavors, 0 preservatives, 0 additives, we also see 5 pursuits: freshness, naturalness, lightweight, green, organic.
Second, we think that there is a right and a wrong side of growth. Let's see what's changing? The demographic dividend is peaking, the offline traffic is decreasing, and the online dividend is not there. Combined with consumer expectations and lack of confidence, the entire consumption is facing many challenges. But let's go back to the essence of the question, if the consumer wants you, loves you, and wants you, and you have to be, will he not be able to buy you? So the real competition is that you have a reason to choose you over others in the mind of consumption.
Traffic is very important, but traffic is not the foundation of business growth. So we think what is a real algorithm? It is very important to follow up the algorithm of the platform, but a real brand, only if you calculate the hearts of the people, the hearts of the people are a more advanced algorithm, and with the algorithm of the people, you are the lasting foundation of business growth. Therefore, we think that in today's disappearance of demographic dividend and traffic dividend, in the current uncertainty, only by building a high-quality brand can we go through the cycle.
Let's take a look at these famous companies around the world, these well-known profitable companies have a seven-three principle, 70% from the brand's named purchase, 30% from short-term promotions and traffic conversion. So we found that in the past ten years, a lot of our money has been invested in performance traffic, but performance advertising is a kind of user leasing, and the rent is constantly getting higher, and the money is stopped. Brand advertising is a kind of user investment, one year of growth, three years of compound interest, usually within a few months of the entire advertising effect traffic type of advertising than the return rate of brand advertising, but after seven or eight months, we see that the cumulative compound interest of brand advertising produces a higher value, 8 months later, look at the compound interest of brand advertising will bring better returns.
Research by the Global IPA shows that a 6:4 balance between brand advertising and effective advertising across the brand is needed to move through the cycle. Brand advertising should account for 60%, and the effect should account for 40%, so that the balance of quality and efficiency can pass through the cycle. What exactly is a brand? According to Kantar's research, the first part is meaningful, do you have meaningfulness, in terms of what functional or emotional needs do you meet for consumers? The second is different, whether it is different, and this difference can lead the trend. The third is prominence, just think of this category, and immediately think of you. So we can find that the whole growth is two types of growth, one is called tactical growth, we see that expanding products, doing promotions, buying traffic, this is called tactical growth, and the real growth is strategic growth.
The first thing in strategic growth is to improve your mind, you are not one of the best in the existing field, and after you have one of the best, you can expand products, scenarios, channels, people, and regions to expand the market. At the same time, we will create the second and third curves to expand the direction of future business. How does the brand break through? To put it simply, how do you become the first choice? You are either the first choice of a category, the first choice of which functional features, the first choice of which group of people, or the first choice of which scene. Only by becoming the first choice of a sub-category can you win high-quality development.
On the third point, I think the media has changed, and the style of play has changed. We can see the 2021 study of advertising attention of Chinese urban residents, and the highest reached is Internet advertising, followed by elevator advertising, and then TV advertising, which are the top three media in China. In the huge content of the Internet, in fact, consumers mainly watch the content and pay little attention to the advertisement.
Then we also see that in outdoor media, everyone passes by a lot of outdoor spaces every day, in fact, they rarely focus on advertising, only in a closed environment without choice, often consumers pay more attention to advertising. At the same time, we can also see that among the advertisements that can be recalled, there are about 3.29 elevator media memories, 2.48 social media memories, and 2.14 short video ads. Because it is a high-frequency media, there are relatively many advertisements that can be remembered, and the number is relatively high, so we feel that social grass planting has become a very important standard for marketing today, but the dividends of large-scale grass planting have also ended, and everyone is planting, and now it is a bit like planting grass on the grassland. Therefore, I think it is necessary to plant grass and trees, not only to expose the core central idea of the brand in a familiar way, but also to be able to diversify, multi-scene, multi-content, multi-KO diversified grass, the combination of the two forms the most effective method of communication.
I think there are three paths to brand communication in China, the first path is to integrate and create a major social event and a major social topic. For example, the sauce latte. The second is to integrate into the major entertainment of society, such as JDB China's Voice, Where Are Yili's Fathers, An Muxi Run, Brothers, Mengniu Super Girl, etc. The third is to integrate into the core living space and life scene of consumption, which is Focus, you always have to go home, you always have to go to work. So who doesn't want to bet on the most popular variety show of the year? In recent years, there have not been too many variety shows, and who doesn't want to become the most popular article and event of the year? But in fact, it is hard to find, so I think it is necessary to use a certain media logic to win the uncertain communication environment.
You can take a look at the research of ipsos, among our top ten popular advertising slogans in 2020, the main advertising slogans come from elevators, the Internet, TV, in 2020, zero calories, zero fat, zero sugar, Yuanqi Forest, Honey Snow Ice City, etc., where do these advertising slogans come from? elevators, the Internet, and TV; in 2022, we don't produce water, we are just nature porters, where do these come from? elevators, the Internet, Television: This advertising is like an investment, there must be certainty, and Focus is to form a definitive connection on the path that 400 million people must pass through every day.
In 2023, we feel that many industries have entered the cycle of stock games, which may be difficult today, but I believe that tomorrow will be better. Because our industry has entered a stock game cycle, competition is not only high-quality supply, every brand must answer a question in the brain of consumption, what is the reason for choosing you over others? In the past 20 years, channel traffic is king, so we see a hundred flowers blooming, and thousands of horses are galloping. In the next 10 years, brand is king, so the head brands will gather more and more.
Branding is the biggest Matthew effect in the business world.
In the long run, the top brands tend to suck up most of the industry's profits. The success of the enterprise is the final decision of the layout, the flow of it is only a temporary dividend, I believe that the brand has a lasting compound interest. Management is not to manage tomorrow's or next month's sales results, management is to manage cause and effect, your cause and effect must be right.
So today may be difficult, but tomorrow will be better, because the crisis and the cold winter will also sweep the market, and companies that are not competitive and do not have the ability to innovate will be eliminated. Today is the best time for ambitious and determined brands to move forward. Therefore, I believe that in the next 10 years, tens of billions and hundreds of billions of Chinese brands will continue to be born. What is uncertain is always the market environment, and what is determined is the great ambition of the rise of Chinese brands.