In 2023, “substitution” becomes mainstream

In 2023, people's consumption concepts have changed a lot, and people are increasingly pursuing "parity substitutes". Let's take a look at the mainstream consumption concepts in 2023.

In 2023, as the economic environment changes, the situation of "spending every penny carefully" becomes more and more common. While satisfying their pursuit of quality of life, spending as little as possible has become the consumption attitude of many people.

On Xiaohongshu, there are more than 2 million notes related to "substitutes", many of which are about how to find "substitutes". Some people teach "online shopping substitute keywords", such as using "tea house booth" instead of "Chinese sofa", "wide-mouth bottle" instead of "vase", and "egg box" instead of "beauty egg storage".

Some people also shared the “1688 big-brand alternative factories”, which include OEM factories of brands such as Bosideng, MUJI, and Heilan Home.

This year, driven by consumers' motivation to save money, many industries and fields have seen some new developments in the trend of "parity".

1. Coffee newcomer: the rise of Cudi, the replacement of Luckin Coffee

In the past, Luckin Coffee was a substitute for Starbucks, and later, Cudi became a substitute for Luckin Coffee.

On October 22, 2022, the first store of Kudi Coffee opened in Fuzhou; on March 25, 2023, the 1,000th store opened in Jinan. As of December 21, 2023, data from Zhaimen Canyan showed that Kudi Coffee had 7,380 stores nationwide, of which 7,351 were in operation and 29 were suspended.

Since its inception, Kudi Coffee has been closely tied to Luckin Coffee. Kudi introduced the founding team as follows: Kudi Coffee was created by Luckin Coffee founder and former CEO Ms. Qian Zhiya and the original core team of Luckin Coffee. In terms of location, many of Kudi Coffee's stores are next to Luckin Coffee. Kudi even provides special subsidies to encourage partners to "face-to-face" with Luckin Coffee.

In terms of overall pricing, Kudi Coffee is lower than Luckin Coffee. In February this year, Kudi Coffee, which was established more than three months ago, launched the "100 Cities and 1,000 Stores Coffee Carnival". During the period, more than 70 products in 6 series all started at 9.9 yuan, and you could also buy 8.8 yuan redemption coupons when placing orders on Douyin.

In May, Kudi Coffee continued its price war and launched the "Summer Ice Drink Season, 9.9 Every Day" campaign. After that, when it officially announced that it had become the global sponsor of the Argentine national football team, Kudi Coffee launched the "1 yuan for all purchases" campaign to attract new customers. All these price offensives led Luckin Coffee to launch a 9.9 yuan promotion.

2. New tea drinks return to affordable prices, and Heytea and Nayuki become their own "low-priced alternatives"

New tea drinks have returned to the mainstream price range of 15-20 yuan. The price reduction of tea drinks is actually a thing of 2022.

At the beginning of last year, Heytea and Nayuki started a price war, bidding farewell to the 30 yuan price range and moving towards the 10-20 yuan price range. By this year, the tea market has basically entered the affordable market. Some people took the lead in becoming "affordable substitutes" for others, while others cleverly became "affordable substitutes" for themselves.

In fact, some new tea drink brands have emerged this year, continuing to stir up price competition in the tea drink market. Among them, Bawang Chaji, founded in 2017, can be called a "dark horse" in the tea drink market.

In January 2023, Bawang Cha Ji had 1,070 stores. With accelerated expansion, the number of stores exceeded 3,000 by December. This means that Bawang Cha Ji opened more than 2,000 stores in one year. In terms of promotion, Bawang Cha Ji frequently launched welfare subsidy activities such as buy one get one free, one yuan purchase, discounts, etc., which overall achieved low customer unit price to expand the radiation of consumer groups, attract consumers to buy their first order, and become Bawang Cha Ji users.

3. The snack industry bids farewell to "high-end" and moves towards high cost-effectiveness

In recent years, the new consumer format of mass-market snacks has achieved rapid development and has made further breakthroughs this year.

In August 2020, Snacks was only 300 stores, but the number of stores has grown rapidly since then. By October 2023, it has exceeded 4,000 stores, ranking first in the industry in terms of the number of stores. Next in line is Zhao Yiming Snacks, which had more than 2,000 stores nationwide as of August 2023.

As mass-market snacks are developing rapidly, they are also beginning to usher in "marriages".

In September 2023, Haoshanglai, an old player with more than 1,000 stores, was incorporated into Wanchen Group and merged with Laiyoupin, Lu Xiaochan, and Adi Adi to form "Haoshanglai Brand Snacks".

On November 10, Snacks Henmang and Zhao Yiming Snacks announced their merger. After the merger, the total number of stores reached 6,500, making it the leading company in the number of stores in the mass-market snack sector.

The popularity of mass-market snacks stems from the low price and diversified categories. With the expansion of mass-market snacks, the casual snack industry as a whole began to reduce prices, emphasizing the cost-effectiveness of snacks. On November 29, Yang Yinfen, chairman and general manager of Bestore, stated in an open letter to all employees that Bestore would return to its neighborly image and move towards a route of good quality and affordable prices. Bestore ushered in the largest-scale price reduction for the first time in its 17 years of establishment.

At that time, Zhang Liaoyuan, the founder of Three Squirrels, emphasized in his WeChat Moments that Three Squirrels launched "high-end cost-effective" products at the end of last year. Shi Yonglei, chairman of Laiyifen, also mentioned in his WeChat Moments that the Laiyifen team has always selected high-quality raw materials from around the world from the user's perspective, and has always achieved the best cost in each link of the industrial chain and the cheapest price for the same quality, so that consumers can benefit.

Since then, the snack industry has begun to bid farewell to "high-end snacks" and move towards high cost-effectiveness.

4. E-commerce platforms lower their profile and offer low prices for Double 11 coupons

This year’s Double 11, “low price” has become one of the main themes of major e-commerce platforms.

At the Tmall Double 11 launch conference, Taotian Group set "the lowest price on the entire network" as its core goal. All three industry development centers and horizontal departments such as users, platforms, and live streaming have clearly defined "the lowest price on the entire network" as the core KPI.

JD.com announced that it would "continue to strengthen the low-price mentality" and "provide 2 billion yuan in subsidies, and low-priced products will receive more exposure." The traffic support standard is "product prices and merchant services." Merchants who provide low-priced products and high-quality services will receive more exposure. The investment rules of Douyin and Kuaishou both mentioned the keywords related to "low prices across the network."

Long before Double 11, Alibaba's organizational change path had already foreshadowed this trend. According to reports, in late May this year, Alibaba founder Jack Ma convened an internal meeting of Taobao Group and proposed to "quickly change some of the successful methodologies of the past" and pointed out three directions for the future of Taobao Tmall: return to Taobao, return to users, and return to the Internet.

As the year draws to a close, Hema is rumored to cancel its membership system. According to a person in charge of Hema's public relations department, "At present, the company is indeed promoting the transformation to discounts, but there has been no official response regarding paid members." It can be seen that Hema previously launched a membership system targeting the middle class, and now it is constantly promoting discounts and canceling the membership system, aiming to cover all customer groups and provide universal low prices.

5. Domestic jackets become "Arc'teryx substitutes" and "down jacket substitutes"

Jackets are undoubtedly one of the hottest items this year. According to data from Magic Mirror Insight, the market share of jackets in September this year increased by 8.2% compared with the same period last year. The sales volume of jackets on platforms such as JD.com, Taobao, and Douyin has also increased significantly. The best-selling model is the three-in-one style, which accounts for 79.5% of the market share on Taobao and Tmall.

Compared with Arc'teryx, which mainly uses GORE-TEX fabrics and sells for four figures, the Camel and Pelliot jackets are more affordable. According to statistics, the best-selling jackets this year are Camel and Pelliot jackets, which sell for hundreds of yuan.

A set of data from Douyin also shows that the price ranges that contribute the most to the sales of jackets on the platform are 300-500 yuan and 100-300 yuan. Among them, the price range of 300 to 500 yuan is the mainstream price range, accounting for 33.72% of the market size.

Camels have lowered the price of jackets, and are therefore called "Arc'teryx alternatives."

In addition, because they are cold-proof, inexpensive, and have an eye-catching design, jackets can be used on both weekdays and windy and cold days, and therefore, they have taken a lot of market share from down jackets. According to data from Magic Mirror Insight, in September this year, while jackets grew, the share of down jackets fell by 3.1 percentage points.

6. The missing “ice cream assassin”

In 2018, Zhong Xue Gao was established, standing out from many ice cream brands with its unique tile-shaped ice cream and super high price. Known as the "Hermes of ice cream", Zhong Xue Gao has become an online celebrity ice cream that young people are eager to check in.

After Zhong Xue Gao, expensive ice creams began to emerge one after another, sweeping across major supermarkets and convenience stores. Ice cream is getting more and more expensive, and it may cost dozens of yuan to pick up an ice cream at a convenience store. In 2022, netizens who were deeply hurt by the high price of ice cream sent "Ice Cream Assassin" to the hot search, and even set a rule: Don't take ice cream you don't recognize in convenience stores.

This year, the "Ice Cream Assassin" has gradually faded out of the public eye, and ice cream consumption has gradually returned to rationality.

According to FoodTalks' TOP50 list of best-selling ice cream/ice cream products in East China, South China, Central China and North China in July 2023, among the top ten ice creams, only two 10 yuan ice creams from East China made the list, and the rest were 5 yuan or less.

Dingdong Maicai also revealed that Dingdong's overall ice cream sales this year increased compared to last year, especially in May, June and July when the weather was hotter. As for the price, more customers still pay attention to products with high cost performance, and products with big promotions are more likely to be popular with customers. Overall, the mainstream price range is 2-5 yuan per stick.

As early as March this year, in order to adapt to the market consumption situation, Zhong Xuegao also launched a new ice cream product "Sa'saa" priced at 3.5 yuan per stick.

The "Ice Cream Assassin" has not completely disappeared, but its presence in convenience stores is "not worth mentioning."

It is not difficult to see that in 2023, consumption is becoming more down-to-earth and returning to essential needs. Brands that change and adapt accordingly can always enjoy dividends and discover more business opportunities. This also shows that the business battlefield is always "changing", and companies must maintain a keen sense of the mainstream consumption trends and respond in time to avoid being left behind by the market and consumers.

Author: Lingling WeChat public account: Bohu Finance