Roundtable Dialogue: Searching for the "New Battlefield" of Brands | WISE2024 Future Consumption Conference

On November 29, the WISE2024 Future Consumption Conference was officially held in Beijing. This conference is hosted by 36Kr Future Consumption with the theme of "Always with You", focusing on hot topics in the consumption industry. It invites more than 20 investment institutions, platform sides, brand sides, and service provider executives to jointly explore new trends and opportunities in the consumption industry.

In the roundtable dialogue session of "Searching for the New Battlefield of Brands", Ren Cairu, an analyst from 36Kr, had a wonderful conversation with Gamma, the Head of Business Customer Empowerment and Strategic Communication of Xiaohongshu, He Yi, the founder of East Beast, and Nara, the co-founder of Chunshan Xiao.

"Searching for the New Battlefield of Brands"

Gamma mentioned that as a lifestyle community, Xiaohongshu has always adhered to "Always with Users" and is also insisting on finding a value route where the brand side, users, and the platform move in the same direction. In the past year, Xiaohongshu has observed three changes on the user side: First, the awakening of consumers. The more starting point of shopping is to please oneself. Second, the demand has changed from "big consensus" to "small consensus". Behind each subdivided "small consensus" is a new opportunity for enterprises. Third, ordinary people are being noticed. Users are more likely to believe the content of ordinary people in consumption decisions.

Gamma also said that Xiaohongshu is one of the few soils where growing brands can still grow healthily. And the brands that grow from Xiaohongshu, in addition to having both a highly aesthetic design and a high reputation within the community, also have a common feature of "understanding people", "because the essence of planting grass is the process of creating demand."

The core products of "East Beast" are concentrated in the field of skin care. In such a highly competitive and challenging track, what they have always insisted on is the "proposal thinking" - "It is inseparable from the attention to people and the insight into the real needs of consumers." In the past year, East Beast has become more determined that "do not ignore the power of'small consensus'", and therefore has focused more on enthusiastic people and deeply cultivated Xiaohongshu.

In He Yi's observation, fashion and beauty makeup constitute the core content ecology of Xiaohongshu. In the product development of East Beast, they also focus on meeting the needs of these highly fashion-sensitive users. For example, turning the traditional essence oil into a solid version, which not only meets the skin care needs but also can be used as a "bag charm", turning skin care products into fashion items. For He Yi, 2024 is a year of "dancing in the rain", "Enjoyment" is a sentence that I keep reminding myself. Only by finding love and fun in the process can the beauty be passed on to more people."

"Chunshan Xiao" is a young oriental plum wine brand that grows in a new market environment. But Nara said, "The origin of consumption is still the user, and we are still making products and content with a user-oriented approach." The team analyzed the background data and found that more than half of the users who bought Chunshan Xiao products had not bought low-alcohol fruit wine before - maybe because of the appearance, maybe because of the Chaoshan culture, maybe because of local ingredients such as tea and bergamot, attracting different users. "In essence, it is still a product made around the user."

Nara gave an example and said that the perfume bottle product of Chunshan Xiao is similar to the bag charm product of East Beast. It is small in size and can be carried in the bag to get slightly drunk at any time. "We integrate the product into the small moments of everyone's life, because even the smallest emotions have a story." For Chunshan Xiao, 2024 is the first year of the brand and also the "starting point". "The winter will pass, and the plum is the fruit of the Grain Rain season every year. 'Chun' comes and the mountain knows. We look forward to the spring of 2025 when more people know Chunshan Xiao."

The following is the live record of this roundtable dialogue:

Ren Cairu: Hello everyone, I'm very happy to talk with all the guests about the story of searching for the new battlefield of brands.

Gamma: Hello everyone, I'm Gamma from the Xiaohongshu Business Marketing Department.

He Yi: Hello everyone, I'm the founder of "East Beast". We are an oriental herbal sustainable skin care and lifestyle brand, bringing a healthy and beautiful oriental solution to consumers. Our main category is skin care, and we are also constantly exploring the lifestyle.

Nara: Hello everyone, we are an oriental plum wine brand, "Chunshan Xiao".

Ren Cairu: Thank you three. The theme of today's conference is "Always with You", which implies some persistence. For example, for us, it means being with all consumer brands, platforms, and readers. For a platform like Xiaohongshu, it means being with brands and users. Chunshan Xiao and East Beast also have their own persistence, standing with users and consumers.

So let's first talk about the unchanged things. For the three of you, in the past business process, is there anything that you have always insisted on doing and always been with you?

Gamma: As a lifestyle community, what Xiaohongshu has always insisted on doing is "Always with Users". From the community level, Xiaohongshu is still a decentralized traffic distribution mechanism. On the product side, it insists on the display form of double-page information flow. More than 90% of the community content is UGC, and the community convention advocates "sincere sharing and friendly interaction". All these are to protect the user experience on Xiaohongshu, so that they can see real and useful information when they come to Xiaohongshu.

The commercialization perspective of Xiaohongshu is in the same direction as the community values. The marketing concept we put forward to the brand side is called "planting grass". The essence of "planting grass" is to insight into user needs, and then through word-of-mouth, that is, the way of "people" influencing "people", to convey the product value. In the process of successful "planting grass", the brand side gains commercial benefits, users get good products and services, and the platform side also benefits. What we have always insisted on doing is to find a value route where the brand side, users, and the platform move in the same direction.

He Yi: For East Beast, currently, our core products are concentrated in the field of skin care. This is undoubtedly a highly competitive and particularly involuted track. Especially this year, with the trend of consumption downgrading, the market environment is more challenging. In this case, what we have always insisted on is to build the brand and products with the "proposal thinking". Nowadays, offline consumers do not lack products, but how to create a more complete lifestyle solution for consumers through the design of multi-function, multi-added value, multi-scene, and multi-application is the direction we have been exploring. What we are concerned about is the overall solution, not just limited to a single function, efficacy, or ingredient.

In my opinion, "proposal thinking" is the core that we have always adhered to. It is inseparable from the attention to people and the insight into the real needs of consumers. Even in the constantly changing environment, this point has never changed. We also insist on content creation, but our understanding of content is not limited to a marketing tool, but rather regards it as a product.

Take our brand reading materials as an example. Many people may first learn about East Beast through our reading materials. This year, we are about to launch the fourth issue. For us, the brand reading materials are not only a medium for brand communication, but also a "formula" that can be read. Therefore, we invest time and energy very seriously and solemnly to make it a readable product.

In general, our "proposal thinking" remains the same, but the forms and carriers that carry this thinking are constantly evolving. This combination of dynamics and stability is our persistence and solution in the face of a changing environment.

He Yi, the founder of East Beast

Nara: There are three things that we have always insisted on: products, cultural inheritance, and oriental aesthetics. What we do is plum wine, and the product itself is the foundation and the core. Telling the story of a plum: Because to make a delicious plum wine, the premise is to have a good plum. This plum wine brewed in spring, returning to the mountains and wilds, pure and natural, brewed for many years, without any additives, and more restoring the original taste of the plum.

Many users began to understand plum wine through Japanese plum wine brands. In fact, green plum is a very historical fruit, and the green plum in Japan also spread from China. We hope to let more people know that China has its own plum wine. Our green plum industrial park is in Puning, Chaoshan, Guangdong, which belongs to one of the four major green plum production areas in China. Many people in their homes will brew plum wine by themselves. Green plum is a solar term fruit, picked around the Grain Rain every year, and there is only one season a year. Therefore, we have also been talking about the twenty-four solar terms, the Chaoshan culture, and the local ingredients. We hope that through this product, more people can understand our cultural treasures.

Drinking plum wine is not a rigid demand, but more to provide emotional value. The culture and aesthetics of our ancestors are remarkable. We are also constantly learning, understanding, and constructing to express: the oriental aesthetic that pleases oneself and others. This is also what we have been insisting on.

Ren Cairu: We just talked about the things that remain unchanged. Next, we want to talk about the "change" in the new environment. Next, this question is given to Gamma first. Xiaohongshu is from the perspective of the platform side and can insight into many more front-line and comprehensive changes. Have you found any new brands, trends, and interesting changes on the user side on Xiaohongshu this year?

Gamma: I would like to start with the changes on the user side. New category opportunities come from user needs. This year, we have seen three changes on the user side.

First, the awakening of consumers. Every year, we cooperate with Nielsen to conduct a survey on users' consumption psychology. For three consecutive years, we have seen that the factor that affects consumption decisions, the first in the ranking is product quality, and the second is pleasing oneself. Now consumers are not shopping to meet a certain functional need of themselves, but more to please themselves.

The survey results and the in-station results of Xiaohongshu echo each other. Every month, 120 million users come to Xiaohongshu to seek purchase advice. We can see that a user has deeply browsed dozens of notes before entering the store to place an order. This shows that consumers have now changed from passively accepting consumption information to actively pursuing a better life and therefore searching and selecting information. They are becoming "love to do homework and be able to do homework".

Second, the demand has changed from "big consensus" to "small consensus". For a simple example, skin care is a "big consensus". What is a "small consensus"? "Small consensus" is dry skin, sensitive skin, dry and sensitive skin, using different skin care products and skin care methods. For another example, yoga has become popular in the whole of China since 2015. But in recent years, "small consensus" has gradually been subdivided from the yoga school culture. For example, Ashtanga yoga. The yoga mat in this scene is called the Legendary Black Mat, which can be sold for thousands of yuan. The yoga mat cannot be used just after purchase. Before use, it needs to be "opened": it needs to be manually smeared with salt and "pickled" for 24 hours to reach the best use state. Because of the refinement of users' lifestyles, many "small consensus" have emerged. Behind each "small consensus" is a new business opportunity for enterprises.

Third, ordinary people are being noticed. The new generation of consumers is more willing to share and express. In the survey conducted by Xiaohongshu and Nielsen, there is a section called whether consumers are annoyed by advertising and marketing. Now, more consumers indicate that they are more willing to pay attention to the use experience of ordinary people and are also more willing to share their own use experience. This gives enterprises the enlightenment that the quality of products and services is becoming transparent; when users make consumption decisions, they are also more likely to believe the content of ordinary people.

The above three, the awakening of consumers, the demand changing from big consensus to small consensus, and ordinary people being noticed, are the very interesting changes on the user side that we have found this year.

Just mentioned, whether there are any new category trends or new brands emerging. In fact, we internally find that many detailed opportunities can be born under some needs. For example, loving beauty, wanting to be healthy, being afraid of loneliness, wanting to be healed. Even in a very red sea track, a blue sea segment can still run out. The makeup track is very involuted, but pure makeup can still run out; the skin care track is also very involuted, but an oriental material skin care brand like East Beast can still run out; in the fragrance field, there are also many brands that do very well on Xiaohongshu. This year, from the observation of the Xiaohongshu platform level, as long as the user needs are seen finely enough and the scene needs are seen finely enough, there are still many opportunities for brands.

Gamma, the Head of Business Customer Empowerment and Strategic Communication of Xiaohongshu

Ren Cairu: There are many detailed opportunities in the changing environment. He Yi and Nara may have more specific feelings in terms of the brand. In the past few years when consumer venture capital was particularly hot, a large number of new consumer brands emerged in the market. But today, the primary market is still in a cooling channel, and many consumer brands are in a survival dilemma. As brand entrepreneurs, have the two of you experienced any changes in your mentality in the past two years? What corresponding changes and adjustments have occurred in the extension to the business strategy?

He Yi: When it comes to changes, I do feel some adjustments. We initially grew up on Xiaohongshu and also tried on the content platform last year. Many people have mentioned the problem of the "ceiling" and the challenge of how to further grow the crowd. But after this year's twists and turns and trial and error, we have become more determined - do not ignore the power of "small consensus".

My understanding is to first solidify the "small consensus", maximize the needs of the core crowd, the real added value of the product, and the unique advantages of the brand, and then gradually expand the crowd, and finally think about the "ceiling" problem.

As a young brand, this is our third year. We are more focused on serving the users on the "left bank of the gap" - those core crowds who have already recognized our values. The power of small consensus is not only reflected in the size of the crowd, but also relates to the consolidation of values and the stability of the brand foundation. With a solid small consensus, it will be more natural and effective to "break the circle".

In the past few years, we have become more and more firmly aware that serving the core crowd well and using word-of-mouth to promote the anti-funnel growth model is more important than simply pursuing expansion. This year, everyone is very anxious about growth, but the more anxious, the more we need to look inward, find our core positioning, and figure out where the brand's real crowd and small-scale consensus are. This is a tortuous process, but it also represents a positive change.

In terms of specific operations, under the limited budget, we are more clearly focused on the core crowd. The budget is not to sprinkle "pepper noodles", not to try to cover everything.