As if overnight, new consumption fell from the altar of stars and moon, and became the target of public criticism. Obviously the first second was still the sweet pastry that the investment circle was vying for, but the next second seemed to be a poison for everyone to avoid.
But fire and non-fire are just phenomena, and phenomena are never important: a thing will not become valuable because it is fired, and it will not lose value because it is not fired. What is really important is to understand the essence behind the phenomenon.
However, no matter before new consumption or capital's darling, or when the temperature is rapidly cooling down, the vast majority of people just revel in the hustle and bustle, and have never understood consumption at all.
The market is in a state of mystery: a group of analysts who do not understand consumption comment on a group of investors who do not understand consumption to invest in a startup company made by a group of entrepreneurs who do not understand consumption.
What’s even more shocking is that consumption is clearly an extremely old industry, occupying an extremely important position in hundreds of years of business history, with countless great companies as templates, but a lot of new consumer entrepreneurs and investors , But still showed great ignorance and arrogance.
Even in the recent analysis of why the temperature has dropped, few people can really explain what the problems of new consumption are. In fact, this has nothing to do with the disappearance of traffic dividends. It is not about the transition from traffic advertising to offline advertising, and it is not about switching from the public domain to the private domain, or even returning to deliberately making products and supply chains.
I tried to use this article to help everyone understand why the new consumption has come to this day? Where is the "illness" of new consumption? Why do I say that 99% of new consumer companies are wrong from the moment they are born?
The wave of new consumption has a high probability of being wrong from the moment it appears
When did the wave of new consumption start?
It may be difficult to have a precise time point. But what many people will most likely recognize is that in August 2019, Master Diao’s "Don't doubt it, "new consumption" is coming! "In this article, the classic "every consumer product is worth doing again" was almost repeatedly mentioned during the later wave of new consumption.
The formula of "new media (Tik Tok, Kuaishou, Xiaohongshu) + new channels (social/live e-commerce) + new products (extreme price-performance ratio) = new brand" proposed by the article has also become the standard for subsequent new consumer companies. The law of omnipotence.
But in fact, two days after Diaoye’s horn blowing article was published, Yu Ge, the former general manager of Harper’s Bazaar New Media, published an article on his personal public account, "Pour cold water" on the Internet. What new consumption? Let's tell the difference between the brand and the label." Although the reading volume of this article has reached 100,000+, obviously it has not attracted enough attention.
The content of Yu Ge's article is slightly emotional. The focus of the attack is more that according to the formula of Diaoye, there may be some brands that can be bigger, but there is still a huge gap between brands that can be bigger and great brands. One thousand Starbucks short.
However, Yu Ge was still a little too optimistic. Unexpectedly, not only did the new consumer companies not have time to be great, they were even far away from being successful.
In fact, regardless of whether the brand is great or not, the important thing is that trying to rely on the above set of formulas is destined to not make any successful consumer goods companies. Because this set of seemingly correct formulas has fundamental business flaws-it violates the essence of business and ignores the core of consumption.
And these new consumer entrepreneurs and investors on the market can easily buy in all of this: Xiaohongshu is perceptually planting grass, knowing the rational endorsement, Kuaishou, Douyin live broadcast, Tmall takes over the traffic. People who smelled the taste of wealth left the stage one after another and concocted a large number of so-called "new consumer" companies. Starting in 2020, more than 300 new consumer companies have received financing, with an average of one every day.
What needs to be understood is that neither new media, new channels nor the ultimate cost-effectiveness of products brought about by supply chain advantages are not the fundamental factors that determine the success of consumer companies. The huge opportunities in the consumer industry do not depend on these factors.
For any excellent consumer company in the world, whether it is new media, new channels, or the ultimate price-performance ratio of products brought about by the advantages of the new supply chain, it should be only a carrier of information dissemination, a carrier of product sales, and satisfaction. It's just the carrier of user needs.
Knowing how to do media placement, how to do channel sales, and how to do product production are just the most basic basic skills of an excellent consumer company.
If someone thinks that as long as a company does the above basic skills well and seizes these dividends, it means that the company can succeed, or even defeat the giants, it is equivalent to saying that as long as it is Procter & Gamble, Coca-Cola, Unilever, and L'Oreal, any product can be successful. , But this is obviously extremely absurd.
Because reality tells us that these excellent companies in the world that are best at marketing, channels, and products have used almost the same methodology that they have successfully made the most well-known brands. In the past hundreds of years, they have made too many failures. Products too.
Amazon founder Bezos once said that I think it is very valuable, and it is especially suitable here. He said this: "People often ask me what will be changed in the next 10 years. No one has ever asked me, In the next 10 years, nothing will change." What do
I mean by quoting this passage here?
Exploring those invariants is far more important than staring at those variables. If a consumer goods company feels that information channels ranging from TV commercials to video sites to short social media videos, and sales channels ranging from large supermarkets to convenience stores, integrated e-commerce to vertical e-commerce, social e-commerce, and live e-commerce, can shake it It must not be a qualified consumer goods company.
In other words, the reason why dividends such as new media and new channels are called dividends means that they have existed without distinction between the entire industry and the entire category from day one. Therefore, if the core competitiveness of any company comes from the use of external dividends, it is destined not to be a long-term successful company.
For a truly outstanding consumer goods company, its core competitiveness must come from its internal
There are countless business cases in the consumer goods sector in the global market, and almost none of them succeeded on dividends:
Lululemon , which has a market value of 50 billion + US dollars, has grown under giants such as Nike and Adidas. It does not rely on dividends;
Olaplex, which has a market value of 15 billion + US dollars, is in Procter & Gamble, L'Oréal, Henkel and other giants are not relying on dividends to grow;
White Claw, with sales of more than 3 billion U.S. dollars in 2020, grabs the market from Budweiser, Pernod Ricard and other giants, not to rely on dividends;
Even looking at the Chinese market, Blue Moon, which was established in 1992 and made laundry detergent in 2008, grabbed the market from Procter & Gamble and Unilever during the most prosperous period in China; Jiang Xiaobai, established in 2012, started from the market. The extremely stable liquor market came out without even relying on early Taobao dividends. It was an online fight. In 2006, Zhou Hei Ya and Liangpin Shop were the basic channels for its success from 0 to 1, 1 to 100.
However, very few Taobao brands that took advantage of the previous wave of bonuses have grown into successful brands today. Someone explained that this time is different, our supply chain is better, what do we have. But there has never been a consumer goods company in the world where the core of its success lies in a better supply chain. The supply chain is only a guarantee for success, not a driving force for success.
I saw the founder of a popular new consumer brand being interviewed and said: “The birth of all consumer products is accompanied by channel dividends. The rise of P&G back then was the dividend of Wal-Mart’s rise in the United States.”
But I want to say, as a global player. Representative of the most successful consumer product company, P&G’s success is by no means due to the rise of Wal-Mart.
To cite a few simplest figures:
In 1980, P&G's sales exceeded 11 billion U.S. dollars. At this time, Wal-Mart's retail sales just exceeded 1 billion U.S. dollars.
In 1993, Procter & Gamble's sales exceeded 30 billion U.S. dollars, and its international business accounted for more than 50%. It officially surpassed the United States and became one of the largest multinational companies in the United States. In 1994, Wal-Mart had just established its international business unit, and had just entered the Chinese market in 1996.
In 2004, only 8% of P&G's $51.4 billion in sales came from Wal-Mart. And this is the 17th year after the two parties reached a collaborative supply chain strategic management model.
Misunderstanding of common sense of business, lack of the most basic respect for the nature of business; trying to start with the speculative thinking of "grabbing dividends", with a superficial understanding of the nature of consumer goods, 99% of new consumer companies are doomed to be wrong from the moment they are born.
Don't put your vision on the "great changes" of 5-10 years, but think about it in hundreds of years of business. There is a saying Ma Yun said very well: "Looking back, almost 99.99% of the predictions about the future were wrong in the past." Thinking of grasping the "great changes" every day, he died very quickly; instead, it is easier to focus on those invariants. Navigate change.
However, I still think that the consumer industry has huge opportunities, so I may only agree with the conclusion of the sentence "every consumer product is worth doing again," but it is definitely not for any of the above reasons.
What is the reason I am optimistic?
First, in the past 20 years, the core of driving the development of China's entire Internet industry is the huge demographic dividend. So Google, Facebook, and Amazon are all global companies, but BAT basically eats up the dividends of the domestic 1.4 billion people and develops Become a behemoth. However, in the face of the same 1.4 billion consumers whose consumption power continues to increase, our consumer industry is almost lackluster, and there are only a handful of outstanding consumer brands.
Second, the logic of the entire consumer industry has undergone some fundamental changes at the global level, leading to one of the most important results: the possibility of the emergence of super-large brands has become extremely low, and this has allowed small brands to grow into large brands. The opportunity has improved a lot.
This is the fundamental reason why I think there are huge structural opportunities in the consumer industry.
How to seize opportunities in the consumer industry, and what is the key to the success of consumer companies? I will talk about it in the next issue, so stay tuned.
