Internet giants are increasing their investment in new consumption. How attractive is this "side business"?

Have big companies also entered the new consumption market? From Alibaba's "A Little Naughty" brand to ByteDance's tea brand Taoyuan Yuye, big companies are accelerating their layout in areas that young people are interested in. In the hot land of new consumption, big companies are quietly accelerating. However, with players already entering the new consumption market, can big companies gain benefits in this field?

"I heard from a friend that Zhihu is selling its own drip coffee. I was quite surprised at the time. Zhihu has started selling coffee? Later I really found out that I can buy Zhihu-brand drip coffee in the Zhihu app. It is indeed a novel thing that a question-and-answer community platform has started selling coffee," said Li Hong, a coffee lover.

In fact, Internet platforms have not only started to cross over into the coffee industry, but have also made significant moves and layouts in many new consumer areas.

Tech Planet has learned exclusively that Byte posted an operation position for ByteMall on a recruitment website in October last year. The job requirements clearly stated that the company would be responsible for launching offline boutique stores around the world according to the company's operational needs. In response, the person in charge of ByteMall said that this was false information and that there were no plans to launch offline boutique stores around the world. Recruitment for the position of "ByteMall Operation Expert" was stopped last year.

Although ByteDance has no plans to launch global boutique offline stores, it has still launched a series of new consumer brands. In addition to the previously reported tea brand Taoyuan Yuye, it also has beverages such as Qingqing Coconut, with an original price of 7.5 yuan and an internal discount price of 4.5 yuan.

Among the major Internet companies, ByteDance is not the only one testing new consumer brands. Tech Planet has also exclusively learned that Alibaba has also launched a new consumer brand "A Little Naughty" on Taobao, which now appears on the shelves of the Taobao APP, including products in categories such as rice, daily necessities, and laundry detergent beads.

In addition, vertical players such as NIO and TAL Education have also launched new consumer brands such as NIO Life and Jiajia Youpin in addition to their main businesses, and have gradually expanded from online to offline.

For new consumption, large companies are accelerating their layout through investment and self-operation. In the past year, large companies including ByteDance, Alibaba, Tencent, JD.com, and Meituan have increased their investment and self-operation in new consumption, and these new consumption brands have gradually appeared in the lives of the public. The above signs show that Internet giants are stepping up their efforts to explore and layout the new consumption market.

1. Targeting young people, large companies increase investment in new consumption

Tech Planet found that large companies are accelerating their layout in the new consumer market, which is divided into two models: investment and self-operation, mainly focusing on tea drinks, peripherals, food, coffee, etc., which are also the most popular consumer areas for young people.

Investment has become an important move for large companies to lay out new consumption, and they prefer to invest in local brands in new first-tier cities. According to Tianyancha and Jingzhun data, Tencent invested in 18 new consumption companies in Chengdu alone between 2017 and 2021. This is also due to the fact that Chengdu has gradually become a popular consumption city for young people in recent years, giving rise to many new consumption companies. Like Tencent, ByteDance found a local new tea brand "Ningji" in Changsha, a city popular among young people, and invested in it.

A former ByteDance strategic investment department staff member told Tech Planet that investment is an important way for companies to explore new businesses. It is not only about expanding business and market, but more importantly, through investment, they can more quickly understand the development and operation of this consumer track, and can also integrate it with their own business to create a stronger business portfolio. For example, Manner Coffee, which ByteDance invested in, opened a store in the industrial zone of Beijing and launched a co-branded coffee between ByteDance and Manner for internal employees to purchase.

In addition to investment, large companies will also develop some new consumer brands internally and even sell them to the outside world. For example, in March 2020, Alibaba launched its own brand Bonbater on its Tmall supermarket. This is a snack food. Four months after it was launched, the average monthly sales volume was more than 2,000 orders. The highest sales volume was called "Bonbater Mixed Nuts 500g", with monthly sales of more than 3,000 units, and the unit price was 89.9 yuan/500g/can.

In addition to Bangbet, Tech Planet also exclusively learned that Alibaba recently launched a consumer brand "Youdian Taoqi" on Taobao. From the series of pictures of its products, it can be seen that the product categories involved in "Youdian Taoqi" include rice, cooking oil, laundry detergent, paper towels, thermos cups, etc., which are currently available in the self-operated Gou Shihui supermarket and some individual Taobao merchants' stores. Among them, the monthly sales of "Youdian Taoqi" brand laundry gel beads in Gou Shihui supermarkets with a specification of 50 pieces reached more than 8,000.

Caption: A bit naughty product page.

ByteDance is also not idle. Tech Planet once revealed that ByteDance is making a new tea drink "Taoyuan Yuye". Currently, ByteDance has opened a Taoyuan Yuye flagship store on Douyin, but no products have been launched yet. In addition, ByteDance has launched many new consumer brands on Douyin, such as emotif perfume and INDOO frisbee, keeping up with the consumption hotspots of young people.

Caption: Taoyuan Yuye flagship store.

In terms of beverages, ByteDance also launched the Light Coconut internally. According to the content posted by ByteDance employees on Xiaohongshu, the Light Coconut tastes delicious and enjoys a lower internal exclusive price.

In addition, JD.com and Meituan have also created their own consumer brands, selling food and corporate peripheral derivatives. For example, JD.com Jingzao covers all categories of products, including home appliances, kitchen utensils, home furnishings, personal care and beauty, food and fresh produce, and has opened offline stores. Meituan has opened a "Meituan Gift Shop" applet in WeChat, selling figures, office supplies, household goods, digital electronics, etc., and has also opened offline stores in Beijing and Shanghai.

It can be seen that major Internet companies have already targeted the new consumption track and are increasing their investment in the consumer market belonging to young people through various means.

2. Internet vertical enterprises enter the new consumption market

In addition to major companies such as Alibaba and ByteDance, some players in the Internet vertical track have also entered the consumer brand market in addition to their main business.

For example, NIO has created an original lifestyle brand NIO Life, which has now launched a mini-program mall that specializes in selling products that young people are keen on, including blind boxes, clothes, household items, food, etc. It has also launched special areas such as the Food Research Institute, the Tipsy Club (red wine), clothing accessories, and household daily necessities.

For some brands, NIO Life has also created sub-brands and product series. For example, in the field of red wine, it has developed sub-brands such as Bordeaux and Jingkong, and under the sub-brands, it has created series such as Son of Light.

Caption: The surprise mall in the NIO Life mini program.

A NIO owner told Tech Planet that there are many trendy products in NIO Life, and he will buy some of the products there. In addition to identifying with the NIO brand, he is also very satisfied with the quality of the products.

NIO has not only opened the NIO Life mall, Tech Planet has discovered that some individual merchants on Taobao are also selling NIO Life products. This shows that NIO Life's trendy products have been recognized by some merchants and have become one of the consignment products.

In addition to new consumer brands in the lifestyle sector, NIO has also entered the new coffee market. Currently, NIO has two aspects of its coffee layout. On the one hand, NIO provides users with special drinks, coffee and other beverages in NIO centers across the country. On the other hand, it sells coffee products in NIO Life, including drip coffee and portable coffee filter bags.

Like NIO, Zhihu, a question-and-answer community, has also entered the coffee market since 2021, launching an online WeChat mini-program to sell drip coffee, including drip coffee, cold brew, instant powder and other black coffee. Now it has launched the coffee purchasing channel on Zhihu, creating an atmosphere of "coffee + reading".

Online education companies that have been seeking transformation and business upgrades in the past two years have also identified new consumption as an important area of ​​layout. At present, Yuanfudao and TAL Education Group have entered the market, each launching a clothing brand SKYPEOPLE and a full-category live e-commerce platform "Jiajiayoupin". SKYPEOPLE has opened two stores in Beijing Sanlitun Taikoo Li and Shanghai Xingye Taikoo Hui, respectively, with more than 20 types of products.

It can be seen that not only large companies, but also companies in other vertical tracks of the Internet also favor new consumption. With the upgrading of the consumer market, young people have more diverse demands for new consumption. For companies in vertical tracks, by constantly exploring and expanding new consumer brands, they can not only increase revenue, but more importantly, grasp this group of young users with consumption power, and create possibilities for the further development of their other businesses.

3. Will new consumption be a good business for Internet companies?

The main force of new consumption is mainly young users, and the essence of large Internet companies' business is to obtain target traffic. Young users are high-quality traffic on the Internet, so the Internet's new consumption is also to reach young people.

According to iMedia Consulting data, there are nearly 320 million Chinese netizens born in the 1990s and 2000s, accounting for 23% of the country's total netizens. This new-age young group, who has a good economic foundation, is active on the Internet, and has trendy consumption concepts, has become a new force in the consumer market and is also driving changes in consumer demand.

IP co-branding, cross-border cooperation, circle alliances, social media promotion, private domain operations, etc. have become important means for brands to guide consumers. New retail, light catering, and trendy social networking are the sub-sectors that new Internet consumer brands focus on.

Tech Planet discovered that taking the leading large manufacturers as an example, in addition to new tea drinks and household products, large manufacturers have followed up to launch such products, such as the blind boxes that were popular last year in 2020 and the flying discs that were popular in 2022, such as Tencent's Penguin Blind Box, Kuaishou Blind Box, ByteDance's INDOO Frisbee, etc.

Moreover, as Internet companies continue to sink into third- and fourth-tier cities in recent years, and live short videos are popular, the "interest consumption" in the sinking market has been activated. The "2020 China Consumer Survey Report" released by McKinsey shows that "young shopping experts" in second-tier and lower-tier cities only account for 25% of the respondents in the survey sample, but they contributed nearly 60% to the growth of consumer spending that year. Young people have become the new main force in the consumer market. Therefore, some new consumer brands of large companies have opened brand live broadcast rooms on Douyin and Kuaishou.

In addition to new online consumption scenarios, large companies also have a prominent offline layout, such as Meituan's gift shop, Taobao's iFashion fast-moving consumer goods clothing collection store, Tencent's authorized QQfamily store, JD Jingdong Jingzao, etc. The emergence of these stores is not only to expand offline sales channels, but also conducive to the promotion of new brands.

Although large companies want to increase their investment in new consumer businesses, they are also facing competition from players who have already occupied a place in the new consumer track. Moreover, these players have also begun to accelerate product iteration and research and development, and continue to consolidate their respective business barriers. For example, Yuanqi Forest has begun to make diversified products such as beer and milk tea, Luckin Coffee has launched new products such as peripherals and tea drinks that are different from coffee, and Starbucks has launched pubs. Facing the competition from these new consumer brand players, how to break through will be a challenge that Internet companies need to overcome.

As Internet C-end traffic peaks and monetization becomes more difficult, accelerating the layout of new consumption is seen by most Internet giants as an important fulcrum for business and revenue growth. The new consumer market, where young users gather, will also become a new channel for Internet giants to attract young traffic. The new consumer market will usher in new changes with the entry of Internet companies.

Author: Chen Qiaohui

Source public account: Tech Planet (ID: tech618); focusing on cutting-edge Internet technology and new business.