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on august 30, the "leading innovation and sharing the trend" new consumption and food and beverage industry investment summit, specially planned and launched by the sullivan new investment conference, was successfully held at the st. regis hotel jing'an, shanghai. the summit brought together the leaders of the new consumption industry to discuss how brands can break through the trend in the era of internal circulation.

the summit was full of new and exciting ideas. brands such as wanglaoji and yuanqi forest discussed their overseas strategies, while guoquan, juewei foods, and white elephant shared how to innovate in the era of internal circulation. many time-honored brands also exchanged ideas on how to renew domestic products. jiang nanchun, chairman of focus media, delivered a wonderful speech "seven rules to fight internal involution" from the perspective of advertising. in addition, li wenliang, the founder of zhixingheyi consulting group, the only consulting agency invited to give a keynote speech at the summit, deeply analyzed the latest changes in online consumption trends from "6.18" to "double 11", and proposed solutions from the perspective of operating 4p, which sparked heated discussions on the spot.

it is reported that zhixing consulting is china's leading strategic consulting service group focusing on e-commerce companies, driving online growth of enterprises with data. in the past five years, it has helped 8 companies to achieve online growth of over 1 billion. august and september are the key preparation periods for the end of the year for online businesses. judging from the just-concluded 2024 "6.18" gun smoke war, the overall economy is still not optimistic.

in recent years, the market share of online platform pinduoduo has gradually increased, and huang zheng has become china's newest richest man. offline discount formats have emerged, such as snack shops are popular among consumers, and it seems that "consumption downgrade" is no longer a new thing. in addition to the impact of involutionary retailer price competition on consumer behavior, these phenomena are further declaring a fact: china's consumer market is gradually entering the buyer era.

times make heroes, and there are always top three in every industry. in this consumption change, brands are bound to be divided, and those who lag behind in strategy will gradually lose market share. under the active screening and squeezing of channels, some brands that have fallen behind will gradually disappear. the strong will become stronger, clarify their own strategic advantages, re-explore the successful path they have gone through, form a total cost leadership, and gradually build a solid brand moat.

li wenliang, founder of zhixing consulting, shared many cases at the summit. among them, the century-old brand wufangzhai has bucked the trend in recent years and attracted attention. in september 2023, zhixing consulting reached an e-commerce strategic consulting cooperation with wufangzhai and renewed the contract again in august this year. recently, on august 22, wufangzhai released its 2024 semi-annual report. overall, the company's 2024q2 net profit increased by 3pct to 22.06% year-on-year. the company reduced costs and increased efficiency through refined operations, achieving improved profitability.

the rotating 4p product: the brand product matrix from stable traffic to retention, winning the long-term choice of users

"it is difficult for today's hot products to bring traffic growth. as long-term online operators, we have a deep understanding of this." li wenliang said, "many companies find it difficult to unify branding and traffic, and high-quality traffic is too scarce. how to solve it? we believe that we need to focus on the goal and win the long-term choice of customers. the biggest role of the product is to identify and retain long-term users."

image source: wufangzhai official website

wufangzhai, the gift sponsor of the sullivan summit, provided its second-curve product "glutinous mooncake" as a souvenir. according to wufangzhai's semi-annual report this year, wufangzhai is currently continuing to promote the zongzi + strategy. its main product zongzi has always maintained a high-end positioning, and non-zongzi products have developed into a second growth curve around chinese baking and quick-frozen rice and flour products. the distribution of mooncakes in the off-season in q2 2024 was smooth, with a year-on-year increase of 320,600 yuan, and the sales volume of mooncakes in the peak season in q3 is expected to set a new record. according to data from iresearch consulting and orient securities research institute, as early as 2022, wufangzhai ranked fifth in the top10 list of chinese mooncake gift box brands, and the top four were basically mainly engaged in mooncakes.

li wenliang put forward a unique point of view on the spot. in the product dimension, your brand has achieved 95 points, and others have achieved 92 points. in fact, there is not much difference in the 3 points here, unless you achieve 99 points. relying on china's complete supply chain system today, the product capabilities of each brand are not bad, and no one does not pay attention to the product! so the current situation is that everyone can achieve 90 points, so the differentiation cannot be pulled apart at all. the core point is that your products and those of your competitors are good, but the difference in the allocation of product promotion resources by each company leads to differences in the overall results. simply put, the difficulty today is not how to make a good product. the difficulty for companies is that there is only so much money for product promotion, and products are constantly expanding. how to allocate money and resources!

brand product matrix tool diagram | source: zhixing consulting

among them, flagship products have great opportunities and are strongly related, and their only mission is to win the category status. iimedia research ranks zongzi brands based on multiple dimensions such as comprehensive corporate strength, online e-commerce platform sales, network media communication trends, user word-of-mouth research, and professional analysis team evaluation. wufangzhai has been ranked first for four consecutive years.

opportunity products, big opportunities are weakly correlated, and the category has great growth potential, but it is not very relevant to the brand strategy population. at this time, it is necessary to ensure that the opportunity product wins profits, otherwise this product will have no chance for the company itself. in terms of split business, wufangzhai's gross profit margins for rice dumplings, moon cakes, meals, cakes and pastries in 2022 will be 41.3%, 24.1%, 49% and 24.2% respectively. the gross profit margins of meals and rice dumplings are relatively high. compared with sanquan, babi and taoli bread, wufangzhai has a clear advantage in gross profit margin.

image products, weak opportunities and strong correlation, opportunistic investment, such as fighting a battle at a certain marketing node every year, determining the budget, and never investing a penny more after the budget is invested. supplementary products, weak opportunities and weak correlation, use own resources to achieve higher profitability of related products, in plain words, no special investment. from the perspective of corporate strategy, wufangzhai has determined that "chinese festival food with glutinous rice food as the core" in 2022leading brand" is its strategic vision, and its product matrix development always revolves around vision and target groups, so as to win the long-term selection advantage of users.

"it is not difficult to make good products, and it is not that difficult to create hot products. good hot products require investment to drive them." li wenliang proposed, "building a product matrix solves two key problems. one is how to allocate effective resources among many products, and the other is how to achieve effective product expansion under limited resource conditions. the establishment of a branded product matrix is ​​the basis for stabilizing traffic and retention." major brands should avoid being involuted by "traffic" and "hot products". if a brand loses or blurs its focus on target users, it will be difficult to ensure sustained growth.

the price of the rotating 4ps: business that serves the people is good business

"'6.18' and 'double 11''we have entered the user operation era from the gmv era. we predict that from this year's 'double 11' to next year's '6.18', there will still be a trend of low-price defense. "li wenliang said that from now on, the online consumption trend is m-shaped. in summary, there are three super-

super cost-effectiveness, super value for money, super experience!

super cost-effectiveness, for example, luckin coffee is currently 9.9 yuan, and this price is difficult to increase. and 9.9 coffee has also become a huge traffic price segment for large platforms such as meituan. if you don’t do it, others will. many snack fast-moving consumer goods we serve are facing price segment squeeze in the bulk market, from the original regular 19.9 yuan to 12.9 yuan. more snack channels are starting to set prices first and then products. many people say that super cost-effectiveness means low prices, but in fact it is the comprehensive social cognition that reprices this category. the "price segmentation" of a large number of categories is an inevitable trend.

this has already happened in the home appliance industry. for example, in the tv industry, 32 inches is 599 yuan, 42 inches is 899 yuan, 55 inches is 1499 yuan, and 65 inches is 2199 yuan. every brand has products in these price ranges.featuredthe product is stuck in this price range.

image source: wufangzhai official website

in addition to super cost-effectiveness, there is also super value cost-effectiveness. this concept is talking about a type of product: the product is absolutely good and the price is relatively cheap. most of wufangzhai's gift box rice dumplings are priced between 60-200 yuan, and the bagged prices range from 10 yuan to more than 30 yuan. judging from the purchase data of the main consumer groups, if the price of rice dumplings is concentrated in 50-100 yuan per box, consumers are more concerned about the taste and price of rice dumplings. only for the purpose of gift giving will they give priority to packaging and brand, and tend to choose more than 100 yuan. as a century-old brand, the products are naturally absolutely good, and the price is relatively cheap, which has blocked this consumption trend and occupied market share.

li wenliang added that the last point of the m-shaped consumption trend is the super experience, which is divided into two ways: cheap and large bowls and emotional experience. the way douyin users now calculate prices has changed from the purchase price of a single item to the price of a single use of the item. it used to cost 39 yuan to buy a bottle of laundry detergent, but today consumers calculate that the cost of washing clothes has increased from 1.2 cents to 7 cents. crazy dabo broadcasters calculate in this way, driving consumers to start calculating in this way, so let me ask, how should brands calculate today? if there is no awareness of price positioning, it will be difficult for brands to take the lead in future competition, especially in price.

as a time-honored chinese brand, wufangzhai has always taken "protecting and innovating chinese cuisine" as its mission and has created seasonal food.leading brand"from the perspective of consumption trends, the market now prefers things that the working people like and enjoy. in a word, a business that serves the people is a good business. only by truly bringing benefits to consumers' lives, putting user needs first, and adapting to the changes of the times, price wars will not hinder the growth of excellent brands against the trend." li wenliang concluded.

rotating 4p promotion:oh shitwords become girlfriend's words

li wenliang believes that the biggest difference between online and offline is that every online user is bought with money. since every online consumer is not free, and is becoming more and more expensive, brands must learn to communicate with consumers in the words of a girlfriend, rather than "listen to your mother's words".oh shitif a product considers the communication dimension before development, the product will be content-based when it is born. it truly achieves "good products speak for themselves", and the words they say are words that consumers love to hear and can understand.

mr. li wenliang talked about a case in the electric vehicle field - yadea. within one year, dealers and store owners across the country were mobilized to set up 10,000 highly active local douyin accounts. and quickly replaced the original "hard advertising saturation delivery" approach with douyin localization's sea, land and air combination approach. (air: company official account for traffic potential, sea: brand city account for traffic stimulation, land: store matrix account for traffic acceptance). the annual flagship product t60 fully utilizes the six sensory attributes of knowing, feeling and acting, which are combined with the content of the knowledge and action product. communicate with consumers in the words of a girlfriend, and it will be a best-seller once it is launched.

image source: what's worth buying

back to the case of wufangzhai, this century-old brand has been actively embracing young groups in recent years. during the dragon boat festival in 2021, wufangzhai launched the feature film "looking for li xiaofang", and the human stories beyond taste swept the internet. in 2022, wufangzhai launched its first ai virtual artist, wu nuonuo, who shared the delicious, beautiful and fun wufangzhai seasonal food with consumers, especially generation z, as the manager of wufang food square. in 2023, in just one year, the brand collaborated with brands such as mixue bingcheng, three squirrels, wuling, luxi river, and disney to engage in creative advertising and marketing, and repeatedly became popular among young people.

the 4ps of rotation: channels (place): brands in the true sense have omni-channel operation capabilities

offline is difficult, is online naturally the second curve? this question came from many catering and food corporate guests at the event.

"a single channel is often highly cyclical, so it is difficult for consumers to establish a long-term relationship with a single channel. in essence, i think the modern business environment no longer has the concept of new retail. offline business is not completely traditional business, and online business is no longer a new business." li wenliang answered reporters' questions, "many catering channels have difficulty in offline expansion, so they want to engage in e-commerce or douyin local life, etc., which is understandable. the only prerequisite is that there must be a clear understanding and division of channels, and the purpose of entering each channel must be clear."

at present, many industries are exploring the omni-channel model. the online penetration rate of chinese brands is no longer a new thing. in the electric two-wheeled vehicle industry, the proportion of "online traffic to acquire customers and close deals, and offline stores to follow up services" has reached 30%. in the common home appliance field, the online penetration rate of large durable consumer goods such as refrigerators and washing machines is as high as 85%. "from the time the goods reach the hands of consumers, the sum of the push power of each link and each link is called the channel. the channel is traffic, and the channel's operational capacity is first of all the company's ability to mobilize and control the channel." li wenliang summarized the channel in this way.

image source: wufangzhai official microblog

according to the performance report, wufangzhai's 2023 revenue and net profit attributable to the parent company increased by 7.0% and 23.1% year-on-year respectively, with a significant increase in net profit. according to chanmama's data backend, during the dragon boat festival in 2024, the number of wufangzhai live streaming influencers who brought goods reached 223,600.

image source: cicada mom

image source: wufangzhai official microblog

"live streaming experts are actually online distributors. wufangzhai holds a meeting every year and invites experts to the scene. many of the experts are wufangzhai chinese festival food and chinese intangible cultural heritage food.chiefrecommendation officer. we call it the organizational life of the channel. the brand should mobilize all online and offline dealers, connect them into one, and make efforts and profits from one hole. "li wenliang added.

the current "consumption downgrade" has certainly led to "price involution" of products, which has a certain impact on the economic cycle, but it is more of a rise in the buyer's market voice. it is a downgrade for merchants, but it is an upgrade for consumers. it is a prerequisite for brands to find their own value to survive, and companies must recognize the underlying business logic of being service providers. reducing the external transaction costs of enterprises is actually reducing the decision-making costs of consumers, which is also the core value that enterprises provide to consumers.

take wufangzhai as an example. the company keeps up with the market and forms a more advanced e-commerce high-dimensional strategy. during this period, it is actually a process of re-exploring the successful path that wufangzhai has taken before. li wenliang's message at the end of his speech: in the era of involution, return to the essence of business and respect objective laws. don't think too much. let products, prices, channels, and promotions form a synergy, and use the "rotating 4p" to promote the sustainable and stable growth of the company. this is the way to break the deadlock.