Stingy but love to shop? This generation of young people has successfully made "substitutes" popular

The "substitution trend" is a hot topic in the current e-commerce field. This article explores the background and reasons for the "substitution trend" and provides corresponding solutions for brands and consumers. If you want to know how to stand out in the "substitution trend", then this article is not to be missed.

"Why do we have to spend exorbitant amounts of money on LV, iPhones and Mercurial ice cream? Wouldn't it be better to buy a cheaper alternative?"

Recently, on Weibo, a netizen's complaint attracted many likes. It is obvious that the "substitution trend" has become popular this year.

The so-called "parity substitute" is a low-priced substitute that focuses on cost-effectiveness. Generally speaking, it means that consumers spend less money to buy a substitute for a big brand with good effects and good experience.

So, how did the "substitution trend" become so popular? What does it reflect about the psychology of young people? What can brands learn from it?

1. How did the “substitution trend” become popular?

Nowadays, if you search for "平替" on the Xiaohongshu platform, more than 2 million notes will pop up. Phrases related to 平替 are endless, such as "平替穿衣", "平替坎车", "平替美妆笔", etc.

Interestingly, this generation of young people not only likes to look for "substitute" products of foreign big brands, but also likes to explore the substitute tourist spots of famous mountains and rivers. The main goal is to spend as little money as possible while satisfying their pursuit of quality of life.

So, why are “substitute” products so popular? I have summarized three reasons.

First, the market environment has changed.

Compared with the "goods-centric" business model of traditional e-commerce, the products of social e-commerce are disseminated based on the users' real personal experiences. Each social node can become a portal for dissemination and traffic, and generate transactions.

Therefore, some products with a higher cost-effectiveness are more likely to expand the consumer group among young people through recommendation and word-of-mouth.

In addition, on some social platforms, you can often see articles and videos about "product review comparisons". By analyzing the performance of different products, consumers have reduced their admiration for brands, and the brand's premium halo is gradually decreasing.

After three years of the epidemic and economic downturn, everyone's income and savings have decreased, and it is an indisputable fact that overall purchasing power has declined.

Second, consumer psychology has changed.

A consumer survey report in April this year showed that 62.56% of respondents "will think about whether they really have the need to buy when spending this year, compared with their past lavish spending habits."

In other words, today's consumers no longer blindly believe in advertising and brand halos, but return to the actual value of goods and tend to choose products that offer great value for money.

Among the buyers of substitute products, Generation Z, with a population of 260 million, is the main force of consumption. Compared with those born in the 70s and 80s, Generation Z does not respect authority, but pursues independence and self-reliance. When they consume, they also pay more attention to themselves, and the idea of ​​"pleasing oneself" has become the mainstream concept of consumption.

Rather than believing that “expensive is the best” and using Huabei to buy Apple products, young people today are no longer willing to pay for brand premiums easily. Instead, they focus on their inner and actual consumption needs and think about what kind of life they really want.

Third, it is the rise of domestic brands themselves.

After all, the core of cost-effectiveness is high quality at a reasonable price. And quality improvement is not a one-day effort of a certain enterprise, but a natural result of the development of the country's processing and manufacturing industry.

In the past few decades, many international brands in the clothing, electronics and other industries are actually manufactured in China. With such industrial development, the equipment, technology, production process and manufacturing level of related industries in my country have reached a relatively high standard.

An industrial environment that can independently produce high-quality products is fertile soil for the rise of a large number of "substitute" brands.

The rise of domestic brands can be seen in the "National Trend Brand Young Consumer Insight Report" jointly released by Xinhuanet. The report shows that compared with ten years ago, the popularity of national trends has increased more than 5 times. Now, as many as 78.5% of consumers prefer to buy domestic brands.

Source: Xinhuanet "National Trend Brand Young Consumer Insight Report"

Based on the above three points, choosing "substitution" may not mean that young people are "downgrading consumption", but is more of a realistic choice based on rationality.

Second, the replacement is not a panacea

In the eyes of many young people who choose "parity substitution", "parity substitution" is a consumption method that allows them to maintain a refined life despite consumption downgrade. It not only allows them to obtain cost-effective products, but also allows them to return to a rational consumption attitude instead of blindly pursuing luxury goods.

In May this year, the first quarter financial report released by Pinduoduo, the "king of low prices", showed that the brand achieved revenue of 37.64 billion yuan in the first quarter, a year-on-year increase of 58.2% . In comparison, the growth rates of Alibaba and JD.com in the same period were only in the single digits.

Pinduoduo's rapid growth reflects the rationality of mass consumption. Especially after experiencing the epidemic and layoffs, this generation of young people has become more pragmatic in consumption and pays more attention to cost performance.

Of course, substitutes are not a panacea and can sometimes be a consumer trap.

Because it must be a benchmark for a more expensive big brand. The big brand authentic products need to spend time to outline the overall picture of the product, while the "parity substitute" only needs to explain the object it "replaces". We will naturally think of the selling points of the big brand authentic products, and even do not need too much explanation. Subconsciously, we have begun to expect the effectiveness of the "parity substitute".

Therefore, in the marketing world, substitutes are often used by businesses as a means to deceive consumers.

For example, in the field of beauty and cosmetics, there are formulators who remind consumers not to blindly substitute products with similar ingredients. Even if the same ingredients are added to alternative products, differences in the production technology and purity of the raw materials will lead to significant differences in the effects of different products. If a product claims to be "100% alternative to a big brand", it must be a scam.

Another example is the Dyson hair dryer, which has been very popular in recent years. Its unique vertical handle and lightweight body design have even become the standard of the "hair dryer" category. After Dyson became popular, a large number of Dyson alternatives quickly appeared on the market, but the price was only 1/3 of it.

However, don’t be fooled by its price. These substitutes only look similar to Dyson in appearance, but they have not learned the essence of the big brand. There is still a technical barrier between the "substitutes" and Dyson.

For example, Dyson's core motor technology can help us dry our hair quickly without relying on "high temperature". However, most of the alternative hair dryers on the market do not have this technology of Dyson. They either have low wind speeds and cannot dry hair in half a day, or they rely too much on high temperatures, which can dry hair but also cause overheating damage to hair. This is where alternative products cannot replace Dyson.

The Dyson example illustrates many problems. Many times, "substitution" is a promotional strategy of merchants, but in fact it is replacing concepts or hiding real problems.

Therefore, this requires us consumers to keep our eyes open and avoid over-reliance on substitutes and thus avoid failures.

3. How should brands respond?

The popularity of the "substitute" phenomenon not only requires consumers to effectively identify, but also requires businesses to respond and respond in a timely manner.

If brands want to use "substitutes" to attract consumers' attention, they must prescribe the right medicine and have a deep insight into user needs in product research and development.

Only by deeply understanding the needs of target users can we create exciting "substitute" products.

For example, the domestic brand Dongpeng Special Drink has given us a good example.

"Drink Red Bull when you are sleepy or tired" is one of the classic slogans in the marketing industry, which makes people who have seen it unforgettable.

But did you know that Red Bull Group has changed its slogan since 2013? The new slogan is "Your energy is beyond your imagination."

However, this deeply rooted slogan did not disappear, but was inherited by another brand.

That's right, it is the "Chinese Red Bull" - Dongpeng Special Drink. In terms of price, a 250ml bottle of Dongpeng Special Drink costs only 2.5 yuan, which is about half the price of Red Bull. But in terms of efficacy, both can play a role in invigorating and refreshing.

Speaking of the Dongpeng Special Drink brand, its history can be traced back to the Shenzhen Soy Milk Beverage Factory in 1987, which is a state-owned enterprise. However, for many years, Dongpeng's beverages have not been able to get out of advertising, and people in the north at that time had not even heard of this brand.

It was not until 2013 that Dongpeng Special Drink directly copied the creativity of Red Bull, whether it was intentional or by accident.

The advertising language of "When you are tired and sleepy, drink Dongpeng Special Drink" is concise and to the point, and because Red Bull has many years of experience in strengthening the user mind, it achieved amazing results as soon as it was broadcast and quickly became known to people all over the country.

Another highlight of Dongpeng Special Drink is the design of the bottle cap. Dongpeng Special Drink surveyed many delivery boys and truck drivers during product development and found that they needed a bottle of energy drink that could be sealed because they were on the road all year round.

This subtle insight into the scene helped Dongpeng Special Drink replace Red Bull and become the first choice of their target group.

Data from Euromonitor International shows that as of 2019, Dongpeng Special Drink has become the second largest energy drink brand in China, second only to Red Bull in market share. Two years later, this domestic beverage brand, which has been tepid for many years, was listed, and its market value once exceeded 100 billion yuan.

I believe that Dongpeng Special Drink’s success story by leveraging its “parity” to replace Dongfeng can provide some inspiration and enlightenment to other brands.

4. Final Thoughts

The popularity of the “substitute style” is both an opportunity and a challenge for brands.

The so-called cost-effectiveness does not mean to engage in price wars blindly, but to continuously improve the value of products at moderate prices.

Compared with the traditional e-commerce model that focuses on "goods", the social era is an era where "word of mouth is king". Brands should pay attention to word of mouth, truly understand and solve users' needs and pain points, and encourage target groups to promote consumption on social media.

If brands can really do this well, then the spring of domestic brands will not be far away.

Author: Yan Tao, WeChat public account: Yan Tao Sanshou