Produced by Tiger Sniff Commercial Consumer Group
Author: Qi Minqian
Edit | Miao Zhengqing
Header | Visual China
At a time when consumer goods have generally begun to focus on price reduction and drainage, and the pursuit of cost performance, the down jacket brand Gaofan has spent two years to increase the price of mainstream products from 100-300 yuan to 1000-2000 yuan.
Feigua data shows that Gao Fan's commodity price band analysis on the Douyin platform is as follows:
In 2021, products in the price range of 100 yuan to 300 yuan accounted for 48.5% of its sales; In 2022, products from 1,000 yuan to 2,000 yuan will account for 51.3% of sales; In 2023, products from 1,000 yuan to 2,000 yuan will account for 62.8% of sales.
Gaofan is an "old brand" that has been established for 16 years, but it has not suddenly become popular until recent years. The earliest time to "get out of the circle" was a special live broadcast with Kuaishou anchor "Super Dan" (with nearly 10 million fans at that time) in November 2020. The 12-hour live broadcast sold for 110 million yuan, and Gaofan became a popular case for the new e-commerce platform.
By 2023, Gaofan's single-channel GMV on Douyin will be close to 1.7 billion yuan, and "high-end" is an important way for brands to get out of the circle and grow their business:
In 2020, in the live broadcast special in cooperation with Super Dan, the price of Gaofan's best-selling down jacket is 139 yuan, and the price of the one that contributes the most to sales is 639 yuan; According to Feigua data, on the Douyin platform in 2023, the average price of Gao Fan has reached 1,548 yuan.
Compared with his peers, Gao Fan's "price increase" is more obvious. Taking the Douyin platform as an example, the GMV of Gaofan down jackets in 2023 will be close to 1.7 billion yuan, ranking fifth in the down jacket category. Compared with the top four brands, Gaofan not only has the highest average price, but also obviously chooses a different path: the prices of other brands are stable or even slightly reduced, and business growth is driven by sales; The unit price of Gaofan pieces increased by 85%, and the sales volume decreased slightly, which can be regarded as relying on "upgrading" to increase performance.
Data source: Feigua data Obtained from April 11 provided by the interviewee
In the current consumer environment, how does Gaofan rely on mid-to-high-end positioning, can Gaofan's methodology be applied to other brands, and what are the possible risk points behind this model?
Do the business of "senior middle class".
Wu Kunming, the founder of Gaofan, is a native of Jinjiang, Fujian, and he has been doing sales in local footwear and clothing companies since the 90s of the last century. Later, he worked as a distributor for international brands such as Pierre Cardin. The brand "Gaofan" is an "old brand" established by Wu Kunming in 2004.
According to Wu Kunming, at present, the "senior middle class" is the basic plate of Gaofan's goose down jacket, but this is not the case before 2020.
After 2023, he found that the penetration rate of Gaofan goose down jackets among light luxury consumer groups has also increased. His definition of "senior middle class" is a mature, working first- and second-tier urban family; The consumer group of the light luxury group is a single young person who is younger and has stronger spending power than the middle class, and the typical portrait is like the employee of the head factory.
"In the background of Douyin, users aged 31-40 account for about 37% of Gaofan's consumer group, much higher than other age groups. From the perspective of major consumption regions, Gaofan's consumers mainly come from first-tier or strong second-tier cities such as Beijing, Chengdu and Shanghai. Oliver Wyman Managing Partner Nan Xie said.
Positioning the middle and high-end, doing the business of the middle class, Gao Fan has been exploring for a long time. Although when it was first founded, Gao Fan also sold two or three thousand down jackets in offline high-end shopping malls, but with the first wave of e-commerce sweeping, in 2012, Wu Kunming resolutely shifted his business focus to online, and the price band was adjusted from thousands of yuan offline to less than 500 yuan.
The layout of the line has brought up the scale of Gaofan, but Wu Kunming began to think about "whether there is a future for low prices", and he always wanted to be a "quality brand".
The node of change occurred in 2020. From the perspective of the entire down jacket industry, Gao Fan was not the first, let alone the only one to do high-end, at that time. For example, Bosideng, the largest down jacket brand in China, increased its gross profit margin by nearly 14 percentage points from 2017 to 2021.
Industry insiders told Tiger Sniff that what directly ignited the high-end enthusiasm of domestic down jacket brands was the "adventure" of Canada Goose and Moncler in the Chinese market, and the second was the big wave of the rise of domestic products.
In 2018, Canada Goose, a high-end down jacket brand, began to deploy direct sales channels in the mainland, and then ushered in a performance explosion. Thanks to the rapid growth of the Chinese market, by fiscal year 2021, the Asia-Pacific region has become the largest market for Canada geese.
The popularity of international brands in the Chinese market has made domestic brands see the market space for high-end down jackets, and Gaofan is no exception. However, sorting out the crowd and price positioning is only the beginning, and what is more difficult than this is how to make money from high-end products to make "senior middle class" money. After all, this part of people with an economic base is not only more demanding, but also more selective.
People who are "buyers up".
Wu Kunming described Gao Fan's customer group as a "buyer upward" person, "They have been cut leeks by many brands when they were young, so now they want both good products and cost performance, it is useless to only tell this group of people too much emotional value, and it is necessary to clearly convey why the product is good and where it is good." ”
When it comes to down jackets, Wu Kunming found that the needs of many "senior middle class" are not fully met: Canada Goose and Moncler with a price of 10,000 yuan are kept warm, but many consumers will feel that the fashion is not enough; Further down is the down jacket of more than 1,000 yuan, the proportion of fashion brands and sports brands in the four seasons, and the number of professional down jackets is few, and the product quality and warmth are a problem.
This made Wu Kunming see the market opportunity, and he decided to focus on the price band of one or two thousand yuan, and at the same time make the warmth and fashion of the product better. In short, look for a blank space between the big international and domestic brands.
Goose down is the first "element" that Gao Fan found to increase the unit price.
Typically, down jackets are filled with duck down or goose down. Under the condition of the same quality and gram weight, the warmth of goose down is better than that of duck down, and the peculiar smell is smaller than that of duck down, so the price of goose down is much higher than that of duck down. According to data from China Down Information Network on May 10, the price of 90% white goose down is about twice the price of 90% white duck down.
Although more expensive, the recognition of goose down products has risen over the past few years as consumers increasingly value functionality.
In 2020, Gaofan launched the Black Gold Goose Down Jacket 1.0 and officially entered the mid-to-high-end market. This down jacket is filled with goose down and has a higher filling capacity. Although the price reached 1688 yuan, Wu Kunming himself and many industry insiders said in the exchange with Tiger Sniff that this product is actually quite cost-effective. One is because goose down is more expensive than duck down, and the other is that the filling amount of Gaofan is indeed a lot.
After the first hit, Wu Kunming chose a more accurate or "extreme" path in order to highlight the image of "high quality-price ratio": cut all the duck down products and keep only the goose down products; The products are mainly black; Emphasizing the brand's R&D and professional ...... in the dimensions of fabrics and other dimensions
In the view of a senior practitioner in the down jacket industry, Gao Fan's approach did hit the blank market of the industry at that time, "One or two thousand yuan, only goose down, such a positioning is basically only one of them." ”
In fact, whether it is emphasizing goose down filling or emphasizing the technology of fabrics, the essence of Gaofan is to emphasize the functionality of the product. Such a product design is not only in line with Wu Kunming's perception of the "upward purchasers" crowd, but also an important means for the current brand to achieve high-end.
According to Xie Nan's summary, there are three conventional paths for consumer brands to do high-end markets, namely, the fashion of basic products, the modernization of traditional categories, and the functionalization of simple products. In his opinion, Gao Fan belongs to the functionalization of the simple category of down jackets, "Of course, there is also a part of fashion." ”
In addition to supporting pricing and crowd strategy, such product planning is also more suitable for marketing on interest e-commerce platforms such as Douyin (Tiger Sniff Note: At present, Gaofan's main channel is still online, of which Douyin is the largest channel). "The way for interest e-commerce to attract purchases is more content attraction, which requires higher content capabilities of brands, and the refinement of product selling points should be more accurate and catchy." Said a consumer brand founder.
In terms of marketing, a KOL who has cooperated with Gao Fan told Tiger Sniff that Gao Fan is similar to other brands made on Douyin, and they all pay attention to streaming and marketing, but the difference is that "the stars and talents they like to cooperate with are relatively tall and have good appearance conditions." Cecilia Cheung, Mayer Musk (Musk's mother), and even members of the British royal family have all stood for Gofan. And these are also part of Gaofan's creation of a "luxury" image.
Using raw materials and technology to highlight the functionality of products and "high quality-price ratio", and highlighting the fashion and luxury attributes of products with celebrity endorsements, Gaofan goose down jackets have opened the wallets of many "senior middle class".
New challenges
From the repositioning in 2020 to the GMV of Douyin's single platform approaching 1.7 billion in 2023, Gaofan has completed a breakthrough from "0 to 1". But the next process from "1 to 10" may be the most challenging.
In Xie Nan's view, Gao Fan may have to think about the high-end ceiling next. "In Q1 of 2024, Gaofan's price increase in the Douyin channel will be 25%, and it will be close to 85% in 2023, which shows that Gaofan's price increase space is getting smaller."
In addition to the price ceiling, a number of industry insiders also told Tiger Sniff that whether the brand moat and high-end positioning can be maintained for a long time is also a challenge that Gaofan may face next.
The first is the problem of "moat", which is also a challenge for many brands that thrive in new e-commerce channels like Gaofan. The reason is that many of these brands adopt the OEM production model, and the products themselves, including marketing methods, are easy to imitate. "There are no secrets in many industries, a certain brand has a hit, and within a month, other brands, MCN institutions, etc. will produce similar products." Industry insiders said.
Behind Gao Fan, there are already many large and small brands that imitate the black gold series. Wu Kunming has thought about this problem, and he thinks that Gao Fan is not afraid of imitators, because Gao Fan has accumulated advantages in products and supply chains. "With the help of the platform, brands can quickly connect with each other, but the product and supply chain cannot, we have so much research and development every year, and the product is not so easy to be imitated."
In the eyes of industry insiders, whether the high-end image can stand, and it can stand for a long time, is also a point that Gao Fan needs to be vigilant about.
"For example, from the product point of view, Gaofan still has to continue to dig out the real function points, not only around the function of keeping warm to do superposition, but also need to have new function points." Industry insiders said. In his opinion, in the current environment, there are many high-end brands that have overturned, and how to effectively and skillfully communicate with consumers is also a big challenge for brands that emphasize high-end positioning.
Offline channels are another key point that Gaofan needs to continue to break through. At present, Gaofan mainly focuses on online channels, and in terms of offline channels, it just settled in Ruijin Shangpin (luxury buyer store) in December last year, and has not yet built its own offline channels. Wu Kunming once said frankly that the reason why he did not open an independent store was that he felt that the brand had not yet reached the standard of opening an independent store in terms of its ability to serve users.
For high-end brands, offline channels are a crucial part, and even this importance is constantly highlighted. Tiger Sniff visited the top outdoor sports brands and found that the brands that are positioned in the middle and high-end are building offline into a space for member experience and service.
Wu Kunming told Tiger Sniff that the brands he wanted to learn from were LV and Hermes. "Originally, when I was an agent, the domestic brands were all our dealers, and every time we ordered, we would pick up and send cars, and the standards were very high. But international brands are different, they just use the best to serve their consumers. ”
But he also understands that there is still a long way to go if he wants to learn from Hermès.
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