How to use differentiated business strategies to become the top 1 and generalize new markets from old categories

Everyone should be familiar with the brand "Camel". How did this old domestic brand become a dark horse in the outdoor industry? Read this article to learn the core strategies of category competition.

I was shocked after seeing a set of data.

A domestic jacket brand can actually outperform outdoor giants like Arc'teryx, Columbia, and The North Face by 10 times, which aroused my curiosity.

Maybe it has something to do with my age. In my memory, domestic brands have always been disliked and have always played the role of followers.

So why was this brand able to make a comeback? What’s the reason?

In the public's impression, CAMEL is a company that sells outdoor shoes, and it is a somewhat rustic brand. But it is they who have turned a jacket into a fashionable item in the past two years.

There are only a few top players in the outdoor market, and the competition is very stable. It is very difficult for Camel to cut off a piece.

I really want to know the reason, so I did some research and share it with you.

Everyone knows that Arc'teryx is a low-end substitute, has great value for money, has a fashionable design, and is endorsed by Ding Zhen, so I won’t elaborate on these.

I’d like to just talk about one thing here: differentiated competition.

The core is to cut into new categories and generalize to new groups of people, new demands and new scenarios.

What does it mean?

In the past, outdoor jackets were designed for professionals, but Camel has discovered the pain points of a new group of people: they wear jackets but don’t actually go hiking or mountain climbing, they only wear them for daily wear.

Camel focuses on this new category: high-value + cost-effective jackets. The key point is that this category did not exist before, and it is a new category generalized from the old outdoor category .

Let me start with these three points:

1. Insight into hidden needs is the shortcut to creating a hit product

In fact, many new product categories are constantly emerging with economic development, consumer attitudes, and changes in population structure.

I found that there is a hidden shift in demand for warm clothing. What do young people aged 18-30 usually wear in winter?

It's either a cotton jacket or a down jacket. But down jackets are getting more and more expensive, and cotton jackets are too ugly, so young people don't like them, so the jacket has a chance.

In addition, with the overall downturn, more people are becoming more rational in their consumption, and the era of simply relying on concepts to manipulate young people is over. In front of the ingredient party, there is almost no information gap.

On the contrary, they are more willing to pay for new products with good appearance and high cost performance , so new category jackets with a price range of 400-600 yuan have become a substitute for down jackets.

In addition, after the epidemic, people are more pursuing a healthier lifestyle.

Drink sugar-free drinks, eat low-salt and low-sodium foods, and pursue outdoor sports and fitness.

I browsed Xiaohongshu and found that in the past two years, more and more people have been playing outdoor sports such as frisbee, citywalk, rock climbing, running, camping, etc., making outdoor sports a part of their lives.

I looked at the data from Xiaohongshu: 23% of the new first-tier cities have outdoor activities. There are 1.49 million #冲锋衣 notes on Xiaohongshu, and the #冲锋衣 topic on Douyin has been played 19.3 billion times.

Behind such huge data is a new trend. Equipping a mountain jacket has become a fashion trend among young people.

Therefore, the combination of multiple factors has pushed the jacket to such a trend. Here is a set of data:

The outdoor footwear and apparel market has seen a compound annual growth rate of more than 20% since 2021, with the growth rate for jackets exceeding 50%. In 2023, the proportion of jacket consumers aged 18-40 years old was 62.75%. CITIC Securities also reported that the scale of China's outdoor sports market will reach 100 billion by 2035.

I think there is a high probability that the wind for jackets will continue to blow for a while.

So, how do you determine whether a category is a trend?

Let’s look at a key data: if the growth rate of a category maintains a compound growth rate of more than 20% for three consecutive quarters, it is very likely to become a high-growth trend category .

Therefore, the key to the success of Camel’s new products is that they are based on trending categories.

2. Find out whose money you want to make

For Camel, finding trending categories is just the first step.

There is still a huge mountain in front of Camel. Outdoor brands have long been monopolized by foreign giants, and the competition landscape is a red ocean. Trying to enter the mid-to-high-end price range is like an egg hitting a stone.

For new brands in this field, firstly, there is no long-term technological accumulation, and high-end outdoor materials are basically controlled by foreign companies; secondly, there is no brand influence, and the products simply cannot support the high value behind the high-end.

When doing business, you can either go the luxury route and make money from high-net-worth individuals, or go the lower end and offer the best value for money and make money from the general public.

Therefore, Camel has only one choice left, which is to lower the price range, develop new product categories, and generalize a new market.

3. New markets emerging from old categories

Among the outdoor crowd, there is a sub-group that has been overlooked: they like mountain-style wear, but they don’t actually go off-road or mountain climbing.

The dividing line for jackets is 1,000 yuan. Above 1,000 yuan are mid-to-high-end, professional jackets represented by Arc'teryx, Descente, and The North Face. These are the products chosen by experienced outdoor enthusiasts who need warmth, windproof, and waterproof performance to save their lives at critical moments.

The target audience of windbreakers priced below 1,000 yuan is another group of people.

Professional functions are unnecessary for them, and daily wear is the core scenario. As long as the basic needs of waterproof, windproof and warm are met, it will be fine.

Now a new opportunity arises:

Whoever can produce a good-looking and cost-effective jacket, providing an affordable choice for young people who like outdoor style, will win this market.

Judging from the sales situation, Camel did it and got this result.

I have finished sharing this case, let me repeat the key points:

Consumer demands are constantly changing. It is a strategy that can be reused in many industries to promptly understand and seize new markets that emerge, fill the gaps with new product categories, and complete a differentiated strategic positioning.

The above is the full text.

Author: Han Xu

Source: WeChat public account "HanXu (ID: kenengyouxihanxu)"