The old domestic brand "Team Building" is very popular! How long can this carnival last?

This article discusses how, while the Huaxizi brand was caught in a storm, some old domestic brands quickly launched low-priced packages, attracting a large number of fans and increasing sales. However, whether they can continue to develop requires brands to face their own problems and make changes. This article interprets the current situation of domestic brands from the perspective of opportunities and challenges, and presents readers with a thought and outlook on domestic brands.

Recently, Li Jiaqi’s remarks in his live broadcast room caused controversy, and Hua Xizi, who he strongly supported, was also caught up in the storm.

Unexpectedly, a number of domestic brands, led by Fenghua, smelled the business opportunity and quickly and accurately launched the "79 yuan" package, allowing domestic brands to break out of the circle. Not only did the number of fans skyrocket, but the GMV of live streaming sales also saw an explosion.

This wave of product promotion has also been dubbed by netizens as a "plain business war". Although it is called a business war, in fact, brands are supporting each other and engaging in "team building" of domestic brands.

However, many people are disgusted with this kind of strategy of hard-to-grab traffic, and some netizens have discovered that many brands are taking advantage of the chaos to raise prices. They have no idea of ​​the plight of domestic products, but are still making money in the name of domestic products.

Why can a "failure" of Huaxizi cause such a big stir? With such a strong aftereffect, how long can this "team building" activity of domestic products be popular?

1. How do old domestic brands become popular through team building?

It can be said that Fenghua kicked off the prelude to this domestic product "commercial war" and "team building". After the "Huaxizi 79 yuan eyebrow pencil" incident, on the evening of September 11, Fenghua launched three 79 yuan wash and care packages on the live broadcast platform. At the same time, Fenghua also appeared in the comment section of Li Jiaqi's related videos and asked weakly: "Can I pick up fans?"

This move brought huge traffic to Fenghua. Public data showed that on September 11, during the nearly 95-hour long live broadcast of Fenghua, the number of viewers exceeded 39.94 million, sales exceeded 25 million yuan, and 2.76 million new fans were added.

Under the "Fenghua Effect", a number of old domestic brands with low prices have appeared on the market:

Yumeijing registered a Douyin account overnight, gained over 800,000 followers in one day, and achieved sales of over 1 million in 10 hours of live streaming;

The number of people online in the Vitality 28 brand live broadcast room exceeded 100,000, and most of the products were sold out;

…

Many old domestic brands have also joined in, including White Elephant, Shanghai Sulfur Soap, Lotus MSG, Huili, Golden Monkey, Liushen, etc.

Later, domestic brands began to work together and established the "domestic product alliance", and their respective live broadcast rooms were filled with domestic products. Faced with this situation, the audience was also happy to see domestic products become popular and were willing to pay for them.

Why are domestic brands so popular this time? I have summarized three main reasons.

First, the brand’s poor-looking marketing. Most consumers’ impression of old domestic products is that they are “poor”, “unable to market”, have no money for advertising, and their packaging is also tacky. Coupled with the wave of operations like Fenghua picking up vermicelli and boxes, it further arouses consumers’ sympathy for old domestic products.

Second, the brand’s high cost-performance ratio. With the current economic downturn, the trend of consumption downgrade has become very obvious. Therefore, domestic products that focus on high cost-performance ratio are naturally more likely to be favored by consumers. For example, the price of Fenghua has only increased by 2 yuan in ten years, which makes consumers call it a “conscience price”.

Third, the (national) sentimental value of the brand. While netizens were enjoying the melons in this business war, they also dug up many domestic brands with a long history. There was "Garden Biscuits", which produced 90,000 kilograms of biscuits in 1937 to support the anti-Japanese war, and White Elephant, which repeatedly rejected Japanese acquisitions.

The brand’s national justice has also been conveyed to consumers, and with the mutual recommendations between brands, the current live broadcast rooms have a scene of wild consumption in the past. “Consumer sentiment” is indeed an opportunity for domestic brands to rise.

But for traditional Chinese products, relying on consumers’ temporary enthusiasm is not sustainable. Moreover, excessive “crying poor” marketing and some brands’ attempts to fish in troubled waters have already aroused the disgust of many consumers.

This is also what these old domestic brands need to think about and reflect on, how to face up to the difficulties and problems they face and solve them effectively.

2. Even good wine needs to be hidden in a remote alley. The dilemma faced by traditional Chinese products

In fact, this is not the first time that a domestic brand has become popular in this way.

The explosion of old domestic brands such as Fenghua, Huoli 28, and Yumeijing is exactly the same as that of Hongxing Erke. However, how to continuously utilize the huge traffic gained in a short period of time is a test for the brand. Compared with the new domestic brands that have emerged in recent years, consumers have considerable confidence in "domestic products" in terms of both popularity and recognition.

Then why is it that the quality of old domestic products is not bad, but they can’t stand out from the crowd?

There are many reasons and pain points, which are also the problems that old domestic products need to face up to: lack of marketing, ugly packaging, single product structure, slow innovation, overly traditional channels, and rigid thinking within the company about new marketing and new ideas, etc.

Take marketing as an example. In the past, when traditional domestic brands were competing with each other, marketing channels were relatively single. Brands could quickly increase their visibility and drive actual sales by simply placing advertisements on TV and placing products in major supermarkets across the country.

However, with the increasing number of similar products on the market and the continuous changes in media channels, these old domestic brands are facing increasing pressure.

On the one hand, the budget for advertising is getting smaller and smaller, and most brands can only rely on existing channels for exposure and sales, with extremely low exposure rates.

On the other hand, with the ever-increasing demands of the new generation of consumers, new domestic brands have adopted the marketing strategy of "Little Red Book + Zhihu + big anchors", while old domestic brands are still "stagnant". For example, Yumeijing has just started to "connect to the Internet" and has urgently entered platforms such as Douyin and Little Red Book for marketing.

Another important problem of domestic products is "price increase anxiety". These old domestic brands often have some classic products and maintain relatively stable prices.

Fenghua has only raised its price by 2 yuan in 10 years, and its average gross profit margin is 15%, while the gross profit margin of foreign brands is generally around 40%. The low gross profit margin makes it difficult for many domestic brands to invest more money in product packaging and channel marketing.

If the price is raised rashly, it will be a difficult problem for domestic products that focus on cost-effectiveness. Only by truly balancing and improving all aspects can we achieve the transition from "Internet celebrity" to "long-term success".

3. How long can the “carnival” of domestic products last?

This time, the marketing leveraged the momentum and was closely linked together. It not only helped the product sell well and increase the number of fans, but also led to a large number of domestic brands "regaining attention", achieving a win-win situation.

But from the current perspective, this wave of traffic boom will not last long. When the popularity of the "79 yuan package" gradually fades, how to continue to catch this "overwhelming wealth" is a common problem faced by all old domestic brands.

As an old domestic brand, Pechoin started to explore digital transformation as early as 2014, becoming an explorer of the digitalization of beauty and cosmetics marketing.

With years of innovation and practical experience, Pechoin has created viral marketing cases such as "1931" and "Look at My Oriental Beauty". Today, it has applied digitalization to multiple business links from corporate brands, products, technology to services. It can be disassembled from the five forces model of consumer strategy for reference and learning.

1. Product Strength

A brand needs to have sufficient product innovation capabilities. Pechoin has continuously launched new products and series in recent years, which is inseparable from its systematic product creation capabilities.

For example, during the product planning stage, Pechoin will cooperate with Tmall, Douyin, Xiaohongshu, and professional consumer data research agencies to understand consumers' current pain points through digitalization.

At the same time, we also set up a special offline membership system to accurately analyze consumer portraits and discover that women over 30 have a huge demand for fighting early aging and other problems, so as to launch new products.

2. Brand power

Brand power is about establishing connections with consumers as much as possible and creating emotional resonance with them.

Today, from content, short videos to live broadcasts, Pechoin continues to strengthen its presence on platforms that are popular with young users. From public platforms such as Xiaohongshu and Douyin to private WeChat accounts, the layout and positioning of the consumer digitalization link is very clear.

For example, after purchasing a product online or offline, consumers can go to the official account to conduct "anti-counterfeiting verification". In the official account, Pechoin can continuously interact with users through activities and content to promote user conversion and repurchase.

In addition, Pechoin attaches great importance to the current young consumer group. It not only puts a lot of effort into packaging and copywriting, fully understanding the aesthetic taste of young people, but also invites top stars to be spokespersons to continuously deepen the brand's influence on contemporary young people.

3. Organizational skills

In the face of consumer demand, companies must have the speed of response, depth of service, height of brand, and industry professionalism.

For example, when developing a new product based on consumer demand, during the formula development process, Pechoin’s formula designers will use specially designed digital models to design the ingredient composition.

In terms of formula efficacy verification, the product will be sent to an internationally authoritative efficacy testing laboratory, recruiting a large number of population data samples, and after users have used it normally for a period of time, various professional efficacy testing instruments will be used in stages for comparative testing. From demand to development completion, all links are efficiently coordinated.

4. Service capability

The service provided to consumers should be considerate or exceed expectations, taking offline shopping guides as an example.

Pechoin promotes the use of digital technology in the form of "channel dynamic sales code" to encourage shopping guides to register as exclusive shopping guides for brands. Incentive mechanisms such as bonuses and commissions can motivate shopping guides and improve their enthusiasm.

In addition, the most important thing in Pechoin's consumer digital transformation is to build a consumer labeling system. The labeling system is divided into four dimensions (in the past, we would assist companies in formulating them during digital transformation consulting):

1. Basic data (gender, region, age);
2. Behavioral data (what activities were participated in);
3. Transaction data (purchase frequency, purchase amount);
4. Membership data, user level (low, medium, high)
5. …etc

It plays a very important role in the business chain, especially in front-end services and back-end product development.

5. Technical capabilities

From the perspective of consumers, technology empowers the entire chain from seeding to pulling out, from public domain to private domain. From the perspective of enterprises, it improves work efficiency.

For example, through the one-to-one-code technology, Pechoin can give each Pechoin product a unique QR code. Consumers can trace the source of the product by scanning the code through WeChat and learn about the entire manufacturing process behind the product in detail.

Through user analysis in the system background, consumers can be divided into multi-dimensional user portraits. According to different user attributes and user regions, different marketing activities and promotional information can be pushed to "specific times, specific users, and specific scenarios", realizing intelligent push notifications for thousands of people and waking up users regularly.

By studying the case of Pechoin's digital transformation, we can see that Pechoin's consumer digitalization strategy is to always take "people" as the starting point, put user needs in the first place , implement precise user management strategies, and continuously feed back to each link in the business chain through data.

Not only that, at a time when digital transformation is relatively mature, Pechoin is constantly thinking about how to innovate and break through in the next step, such as building a brand metaverse, creating metaverse IP spokespersons, metaverse shopping circles, etc., and developing new marketing and sales scenarios.

In this way, Pechoin, which was once regarded as an "outdated brand" by those born in the 1980s and 1990s, has become one of the most popular domestic products in the minds of those born in the 1995s and 2000s.

4. Final Thoughts

For old domestic brands, this wave of traffic is both an opportunity and a challenge. If these external factors can drive internal changes in the brand and complete brand upgrades and transformations, there may still be plenty of opportunities in the future.

On the contrary, if they only regard this wave of traffic as earned money, and nothing changes after this wave passes, then decline is the inevitable result.

We also hope that old domestic products can take this opportunity to complete brand rebirth, realize product upgrades, and corporate digital transformation, so as to turn overwhelming wealth into lasting wealth.

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