Hello everyone, I'm Wei Ming, it's the end of the year, let's talk about consumption, only representing personal opinions.
At the end of 2023, I asked some entrepreneurs their impressions of the consumer industrySome entrepreneurs replied with two words:
Cold, fan. It's cold because consumption is not growing as high as it used to be.
Lost because many entrepreneurs don't know where to go.
Why do you feel cold?Why are feelings a mystery?
I think there are several reasons for this.
First, the high growth of consumption in the previous decades was initially due to the consumption upgrade demand of the top income group, which promoted the explosion of consumer leather brands and products, and the more mature foreign brands benefited from this. The medium-term cost-effective demand meets the needs of middle-income people for consumption upgrading, and some domestic high-quality brands have seized the opportunity.
However, at present, the upgrade of this wave of demographic dividend combined with information gap dividend has been basically completed.
Many emerging brands are trying to find a way to deal with this wave of people at the top level, and there is not much room for foreign brands and domestic head brands to basically occupy most of the market space.
The demand of the middle-income class itself is also with the economy and income, because the middle-income class itself is growing up by serving the consumption needs of the top-level people, and now the top-level demand is stable, and even many top-level assets are shrinking, so the middle-income itself is difficult to expand, and even difficult to maintain, and the demand will be quickly adjusted, from upgrading to downgrading.
The next thing should be the consumption upgrade demand of a large number of grassroots people. But the payment power of this group of people is not so strong, so the brand premium model will not work here, which is also the reason why many brands cannot sink. This is why it is now easier to gain favor for more cost-effective white label or flat products.
But, what can be done about it?This has led many companies to feel "lost".
Second, foreign brands and domestic top brands that have occupied the market before can of course continue to play, but in the face of the epidemic and changes in the international situation, they have also fallen into the challenge of low growth.
Many brands find that it is not possible to stand still, not only is there no growth, but the market may also be eaten away by white labels or replacement.
However, if you want to sink the market, not only will the original brand premium model not work, but also fight with the white label or the flat, that is, to open the "volume", which makes the team that has been accustomed to lying down to earn brand premium and poor information for a long time unable to adapt quickly. In addition, if you do it together, you will conflict with each other, and you will enter a state of refinement.
Due to the lack of new technologies, shrinking assets, the epidemic and other reasons, the effective demand of the top and middle-income groups is insufficient, resulting in the overcapacity prepared by the original head brands, and the factories are also motivated to find suitable replacement brands and white labels to fill the production capacity, which accelerates the supply of consumer goods in the whole society, and accelerates the gap between supply and demand.
This not only makes many brands feel cold, but also confused. It's not okay to stay where you are, but you don't want to go there and fight ** directly.
As a result, some brands simply rely on ** channels to go to volume, the reason is that the interference with the original ** system is relatively small, which is also one of the reasons why the current live broadcast and discount supermarkets are very popular.
However, there are also some big brands that choose to set up sub-brands or invest in sub-brands to maintain the positioning of the original brand.
It's just that for a large number of brands, it is inevitable to fall into the situation of volume **, volume parameters, and volume service. For example, mobile phones, including new energy vehicles, are currently rolling in the first volume parameters. The iPhone numbers are getting bigger, but the appeal is waning. Haidilao's service attitude is becoming more and more attentive, but too much will make users feel annoying.
But this is obviously not what mature brands want to see, and it also invisibly increases the difficulty of survival for emerging brands. But I still have no choice but to do this first, because I always feel that if I don't do this, I will be eliminated.
So, quickly copy the simple model, serve the grassroots people, and even the people of the world, has become a way out for many people at present, there are many people who say that this is not a consumption upgrade, I think to empathize, for a large number of grassroots people, a practical quality assurance product, for them is a consumption upgrade.
You know, there are still hundreds of millions of people in China who only have an income of about 1,000 yuan a month. There are also quite a few overseas.
So,"Cold" is the economic side, and some brands that try to raise the brand premium but have no support are definitely cold, such as Zhongxuegao and other brands. But on the other hand, there are still opportunities in the grassroots market, but they are also sure of volume, and they must accept small profits and make profits.
For manufacturers who want to build brands, to break through the current consumption dilemma, they still have to return to the core question, why do consumers come to buy your things.
In the era of material scarcity, consumers must pay for functions, and with the improvement of living standards, consumers can gradually accept the sense of belonging brought by the brand, but now consumers are becoming more and more calm, and the requirements for consumer goods are more and more dimensional, but one thing will not change.
That is, to help consumers complete a task. The original task may be to meet a physical or psychological need for an upgrade, as long as it is bigger and higher, it is only a one-dimensional improvement. Nowadays, it may also be an upgrade demand in some scenarios, but it seems to outsiders to be a consumption downgrade.
In the era when there is no technological leap in the short term, perhaps it is a way of thinking to find answers in history, and some answers may lie quietly in some literature, reports, and cases.
Share a recently heard case, McDonald's milkshakes in the United States are not selling well, how to solve it?There are many teams to analyze the reason, thinking that the materials are not rich enough, ** is not cheap enough, so they put forward a plan to add materials, the second cup is half price, etc. But one team chose to go to the front line to observe and study users, trying to understand beyond the data why consumers are buying a milkshake.
So do they buy a milkshake just because they like to drink it?Did you drink together because you were traveling together?
Through their observations, they found an unexpected situation, many of the people who bought the milkshake were actually alone, and it was in the morning.
Who would go alone early in the morning to buy a milkshake to drink?Is there something wrong?Can't afford burgers, consumption downgraded?
Later, they went and asked these users directly, what are they going to do after buying the milkshake?After some detailed conversations, it was learned that these consumers buy a milkshake for breakfast before driving to work in the morning.
Because of the long distance, and because the boring moving bricks is about to begin, drinking a sweet drink makes people happy.
So why not drink Coke, or eat donuts?
Because the Coke is finished in a few sips, the shake can be drunk slowly and for a long time with a sustained sense of pleasure. It's an hour's drive.
Donuts are more troublesome to eat, and they have sugar, which is easy to stick to your hands and inconvenient to drive.
Therefore, what users really need to solve is how to buy a food to fill their stomachs on the driving road of a 1-hour commute, and at the same time, it will make people a little happier, and they can slowly pass the boring time.
After gaining insight into the needs of users, McDonald's provides some choices in the product, such as providing a thinner straw to make the taste last longer, and in order to provide additional fun, you can add some ingredients, but randomly, for example, today it is pearls, tomorrow it is gummies, so that users have a small sense of expectation, and even some feeling of buying lottery tickets.
Later, some jokes were also provided on the cup, so that users who often come to buy have a lot of freshness and a lot of talking points.
Later, the investigators observed the consumption scene in the afternoon, which was completely different from the morning one, and if you are interested, I can fully talk about it in the ** number.
This case I mainly use to illustrate that there is no way out for the homogeneous competition of single-dimensional spelling parameters, and whether consumers have really been observed and what tasks they have to accomplish.
Consumption upgrades and downgrades are relative to scenarios. Using existing technologies and elements to meet the consumption upgrade in a certain scenario may be an opportunity, although it seems to be a consumption downgrade.
If you are just a simple volume **, volume parameters, either you can't fight, or you don't make much money, survive by taking small profits, and wait for the arrival of the next wave of dividends.
Differentiation is the "way" to solve the problem, and many other methods may only be at the level of "art". Differentiation is not necessarily successful, and it is difficult, but it is a road that seems far away, but in fact is the most recent way to break through.
2023 is coming to an end, if you also feel cold, welcome to leave a message, and we will huddle together to keep warm.
In 2024, we look forward to getting out of the fog together.