For many Fujian sports shoe foundries, there are two options. One is to continue to do OEM or fake business, and the other is to build your own brand. In the international division of labor system, the bulk of the profit goes to the brand side, while the foundry side gets a small part of the profit and most of the pollution.
It is difficult to say which aspect of the industrial chain, processing technology or brand is the most difficult to catch up. But for the Chinese manufacturing industry, what has been missing from the beginning is indeed the brand.
▲ Picture source: Global Trade Magazine
Modern factories don't just want to be foundry
Branding is a dangerous thing.
To be a factory OEM, you only need to be responsible for production. Although the profit is inferior to the brand, there is no need to face all-round challenges in sales, marketing, and channels. Although the profit is small, the risk is small and the loss is small. Because of this, many brands don't want to transform, and just want to continue to become foundries.
Zhang Chunyu, a researcher at the Chinese Academy of Social Sciences, once interviewed more than a dozen Putian factory owners. They mentioned that when making their own brands, these craftsmanships are recognized by the outside world, but factory owners who do not make brands will all mention an example-Water Basketball shoes. This is the best case for the leader of Putian's footwear industry to make a thrilling attempt to transform. It is a pity that this brand jumped into the cliff after a period of time, bringing a lot of psychological shadows to other foundry owners.
These companies say that we dare not jump, we are crawling underground, but we are still alive, which reflects the aspirations of many companies.
▲ Putian fake shoes flowed into the United States under investigation, picture from: Quartz
In the face of opportunities and dangers, some factories dare not "jump", but some factories say it is time to "jump".
Every company wants to "jump" on the vent, so that it is easier to survive. Even if there is no vent, they must choose a right time and place to try their brand transformation. Chen Qiu, vice president of Pinduoduo, thinks it is appropriate to "jump" at this time, because the Japanese and Korean cosmetics brands we are familiar with today have developed in response to the times, and domestic cosmetics brands now have good opportunities.
The cosmetics industry is closely linked to local production and sales. It can be said that after the domestic market productivity and consumption power reach a certain level, it will inevitably go through the process of such a local brand's rise.
Years of solid manufacturing has laid the foundation for "location" early. Take the Pearl River Delta as an example. There are concentrated cosmetics industry economic zones and complete upstream and downstream industrial chains. For the new cosmetics brand, it is the best choice to save worry, effort and cost.
Baiyun District is a good choice for the development of cosmetics brands. This is a national cosmetics gathering place integrating production, sales, research and development, exhibition and trade. There are more than 1,300 licensed cosmetics manufacturers, more than 4,000 commercial and trade companies, and more than 6,000 individual business owners. Baiyun District, which accounts for one-third of the number of companies in the cosmetics industry in the country, has a "location" for companies that want to develop their own brands.
▲ Guangzhou Baiyun District has a complete cosmetics industry chain
"Renhe" means that everyone collects firewood and pays. As more and more people join the cosmetics brand establishment team, the "fire" will become more and more prosperous, and the brand's success will be more likely. Even the boss of the Putian factory, who dare not "jump", said that with government support, external financial and e-commerce organizations, he dared to give it a try.
In the new brand plan of Guangzhou Cosmetics, cosmetics companies can not only receive support from e-commerce companies such as Pinduoduo, but also the Baiyun District Government.
At the time of the day, the people have the right place, and the foundries no longer just want to be foundry, they also want to make their own brands.
Domestically produced is "not brilliant"?
Branding is never easy, even if there is a good time and place, new brands have to be explored slowly.
Let me talk about the difference between brand products. Even if the new domestic brands and mature brands use the best hyaluronic acid, the various evaluation experiments conducted in the laboratory are all above the standard, but the same type of products of the two brands face different situations. completely different.
The former has been available for a long time, and consumers trust it, and some people buy it at a high price. The latter, even if the products are similar in efficacy, can only win the market at low prices.
From the perspective of research and development, new brands are also weaker than mature big brands. Big brands generally maintain close cooperation with laboratories, have strong R&D capabilities, have a matching product portfolio, and have the most manpower support for new concepts and new product lines. From the perspective of product R&D strength and R&D heritage, small brands can hardly beat them.
Du Zhiyun, the president of the Guangdong Cosmetics Society, once worked for the daily chemical giant Procter & Gamble. He said that when he worked at P&G, P&G had more than 3,000 R&D personnel. This number is basically more than the sum of all the staff of many newly developed small brands. This is also a concrete manifestation of the gap in R&D strength between the two parties.
Brand marketing also faces a lot of resistance. Big brands are rich and famous, with their own traffic and advertising costs, but it is becoming more and more difficult for new-born brands to get ahead.
On the one hand, the advertising costs are not as much as those of big brands, and the speed of burning money can't be achieved. On the other hand, the brand's popularity cannot be compared. For a new brand with a marketing budget that "makes a mistake and loses everything," it is also very difficult to open the door to marketing.
▲ Cai Jiangnan (first from left), head of the new brand Cuirun launched by Pinduoduo and Danzi, Du Zhiyun (second from left), president of Guangdong Cosmetics Association, Chen Qiu, vice president of Pinduoduo (third from left), and Zhang Chunyu, researcher of Chinese Academy of Social Sciences (right) 3) Zhang Qinglin, chairman of Zhenyan Cosmetics (second from right), Zhou Xin, founder of Skin Food (first from right)
In the end, most of the new domestic cosmetics brands can only rely on "the same effect, lower price" to open the situation and attract customers with low prices. It is too early to raise the goal of selling products at the same price as international brands.
A user who started buying domestic cosmetics in the past six months told us: "The reason for choosing them is that they are cheap. The functions of domestic cosmetics recommended by many people are not much different from those of big brands, but the prices of domestic cosmetics are really low. The price is not that low, I will definitely choose the big brand, not to mention the mystery of the sea blue, I will also choose the Keyan family, which feels more reliable."
Customized products, national brand opportunities
Gaps and dilemmas are real, but apart from low prices, don't new brands have any new opportunities?
Pinduoduo and the brand thought of a new approach-custom research and development. The platform discovers needs through user purchases, browsing and other data, and then informs new cosmetics brands of these findings, so that brands can develop more targeted product lines through consumer insights in addition to low-cost competition, occupying a less-competitive track .
Pinduoduo has tried a similar route before. In the new brand plan, the number of companies participating in customized research and development with Pinduoduo reached 1,500, launched more than 4,000 customized products, and reached 460 million customized product orders.
▲ Packaging line of cosmetic products
This is how the new brand Skin Foods was founded in 2011. As an ordinary player, they can't beat the strong "RMB player" and can only use the limited resources on hand to obtain data from the platform and grasp consumption trends.
This is how several popular products of Skin Foods came out. The brand's sea salt soap not only sells more expensive than ordinary soap, but also leads a small trend.
Consumers in the past believed that soaps could clean and sterilize. Consumers now believe that soap should also have skin care effects, and the fragrance should also be adjusted for better effects. Insight into consumers' needs for exquisite life, respecting consumers' individual needs, and launching corresponding products earlier, will be able to obtain better sales, and the corresponding brands will be more recognized.
Zhou Xin, the founder of the Skin Food brand, is very proud of the sea salt soap developed by his brand. When most of P&G's soaps can only sell for less than 10 yuan, the sea salt soap they made with more accurate market insights can already sell for 20 yuan. Although the customer unit price is still not high, it has made great progress compared with the era of purely relying on low prices to grab the market.
▲ Zhenyan cosmetics brand has multiple cosmetic testing rooms
Chen Qiu, vice president of Pinduoduo, believes that similar customized products are new opportunities for domestic cosmetics brands. "Driven by customized products, with high cost-effectiveness as the core, and new reach networks and media as carriers, local cosmetics companies have reached the turning point of their large-scale rise. It can be said that the new makeup of domestic products is justified.
For brands, it is advantageous to introduce more customized products through the new brand plan. Different products can find new tracks faster and avoid too fierce competition to seek opportunities. The popularity of a differentiated customized product also promotes the sales of other cosmetic line products of the brand. Explosive products are the fastest to build a brand, which is a good deal for new brands.
At the same time, the lack of platform commission also means that the operating cost of the brand has dropped. Even if it is not a "RMB player", the new brand in Pinduoduo can still get a certain amount of traffic and resource support. A large number of post-90s and post-00s consumers on the platform are interested in this Commodities also have a high degree of acceptance.
For Pinduoduo, platform technical support and traffic support can also achieve better results. The operating cost of the brand is low, so it can give a lower price on the platform. By consolidating Pinduoduo's price advantage, the platform can leave consumers with the impression of high cost performance and not afraid of price comparison. And the unique explosive products and in-depth cooperation brands that the platform ran out of the platform are more beneficial to long-term development, which is a win-win situation.
When the platform sits on a sedan chair, cosmetics brands that use the same materials as big-name cosmetics brands also want to try, to see if they can make a recognized domestic brand and see if they will be the next L'Oréal, Oushi Man or Pecho Antelope.
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