Based on our concern for big retail, big consumption and big community, we listed several key words of business trends in 2022:

Small but beautiful, vertical integration, category singleness, profitability, embeddedness, managers, lifestyle suggestions and branding of agricultural products are also the main entry points for us to continue to pay attention to these fields in the coming year.

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A completely different retail form in the past, such as retail and e-commerce, near-field and far-field, physical goods and services, interests and search, is evolving into a fully intertwined and highly coordinated "big retail pattern".

The essence of retail is information, transaction and logistics. The reason for the emergence of "big retail pattern" is that the potential of the Internet to aggregate information, match transactions and improve circulation efficiency has been fully exerted. Then, through the technical integration and coordination of different retail formats, it becomes a hard job to deepen the upstream and downstream changes of the supply chain and build a more solid circulation system.

Ali, Pinduoduo, JD.COM and Meituan all invested in industrial belts, production warehouses, logistics warehousing, agriculture and hardware technology.

For example, Meituan, which has been moving frequently recently, is attacking community group buying (Meituan's optimization), near-field e-commerce (Meituan's pop-up shop, Meituan's grocery shopping) and far-field e-commerce (Tuan's good goods) based on the traffic capacity and instant delivery capacity accumulated in the local life service field. "Big Retail" will become the second development curve of Meituan in the next decade.

From this point of view, Meituan's old rival is no longer just a food and beverage take-out platform like Hungry, but a new digital business sector in China (including Big Taobao, B2C Retail, Taobao Caicai, Taobao Special, etc. ) was established by Ali, and a life service section and city retail under Yu Yongfu. Online e-commerce and community group buying in Pinduoduo, and community group buying and retail in JD.COM (in cooperation with Dada) will all become the frontal battlefields for the giants to meet next.

The trend of integration with the business format is that the giants are more and more aware of their border capabilities and sense of cooperation, such as the integration of trading platforms and grass planting platforms in Lian Heng. Tik Tok's recommendation of e-commerce, search for e-commerce, local life service, cooperation with Tiantian Youxian, and strategic cooperation between Aauto faster and Meituan are typical manifestations of its ability to combine the existing supply chain to complete delivery and performance.

It should be emphasized that the so-called "closed loop of e-commerce" emphasized by the big community in recent two years is not a real closed loop, but a typical embodiment of "a set of whole network supply chains". For example, Tik Tok quickly cut into e-commerce physical transactions, selling movie tickets and other local life services, which is equivalent to opening a plug-in interface for suppliers who have already become Internet-based.

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Therefore, the long-term investment of Ali, JD.COM and Pinduoduo in the supply chain will also play an increasingly important role. In the organizational restructuring of Ali at the end of 20021,the opening of domestic commercial departments B and C was also to fully release its supply chain advantages.

Behind the accelerated integration of retail, a new consumption pattern is taking shape. The big consumption pattern that we are concerned about is a big industry that includes infrastructure such as crowd demand, supply chain, new brand, grass planting platform, trading channels, logistics warehousing and digital technology.

This industry shows several definite trends from online to offline, from traffic to commodities, from brands to industries, and from China to overseas.

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In the past few years, in the new consumption wave driven by the e-commerce platform, the new brand is the protagonist, VC provides ammunition, the community sells traffic, and the head anchor plays the accelerator. The pattern of vertical categories has been preliminarily determined.

Among the verified categories, one or two tried to pierce the category ceiling, and three or four sought a new way out. In the fake category, if one or two sales decline, three or four will also have poor financing.

After the category pattern is initially determined, vertical integration will become the core trend. Integration is driven by two factors. First, the head brand moves up and down through self-built production capacity and self-control channels. Second, the head enterprise accelerates the digital and intelligent transformation, and realizes the whole chain cooperation from supply chain to brand to delivery. The final effect is the deepening of vertical integration cooperation in the industry.

The core barrier of companies such as Rio Tinto and Mixue Ice City lies in their supply chain value, not pure C-end brand value. For example, the flavors and fragrances developed by Rio Tinto's parent company Bairun are not only for personal use, but also supplied to Pepsi Haojiu, Yuan Qi Forest, Nongfu Spring and a considerable number of low-alcohol wine brands, and the B-end revenue has accounted for 10% of its total revenue.

In this new wave of consumption, the head effect, platform effect, profit effect and sea effect of new brands will also become more clear development trends in the coming year.

Head companies such as POP MART, Perfect Diary and Yuan Qi Forest have begun to explore from brand to platform, which is reflected in frequent investment and acquisition, continuous investment in upstream supply chain and R&D.

Once the head company becomes a platform, its vertical industrial integration and horizontal boundary expansion will bring more development space. Its main role in the industrial chain will also become the ultimate capital destination of small and beautiful brands.

Relying on the spillover effect of domestic supply chain, channels, especially traffic operation, the head brand is doomed to be unable to become an international brand, especially the platform is greatly overweight, including cross-border e-commerce companies such as Fan Jiang, TIKTOK/Fanno, and Tencent invests in cider. The channel spillover effect that brands can enjoy when they go to sea is already coming to the fore.

But all this needs to be based on the premise that the category has been verified to have the possibility of branding.

Therefore, "category thinking" will once again become an important way for us to observe the development of the consumer industry. Whether it is a single brand or a channel, it is cognition, which categories have been falsified and which categories are still waiting for singularity.

What is certain is that pure traffic thinking is not completely effective. We need to review what Simon Peel, global media director of 20 19 Adidas, said in an interview with MarketingWeek:

In the past few years, Adidas has over-invested in digital effect advertisements that seem to have a higher return on investment, while ignoring brand advertisements. This has led to serious consequences: seemingly more efficient advertising has brought about a sharp decline in brand value. Between short-term benefits and long-term value, Adidas chose short-term benefits and eventually ate the long-term value.

An executive in the cotton era also said something similar: in the past decade, e-commerce platforms have basically consumed brand effects because they only do transactions and only do traffic.

After the inflection point comes, content, rather than pure traffic, will be more and more involved in the brand, and the path for large communities and platforms to intervene in the consumer industry is also changing.

One embodiment is the rapid integration of content and advertising: in the new round of adjustment of Ali e-commerce, shopping and Taobao live broadcast have been placed in the first-class position. ByteDance system with huge engine as the core not only swept through advertising, but also tried to redefine the whole content industry and realize advertising through platform role. Communities with high-value people, such as Xiaohongshu and Bili Bili, have also shifted their commercialization focus from e-commerce to advertising.

Another direct manifestation of the deep involvement of large communities in the consumer industry is that "lifestyle" will become the main axis for people, platforms and brands to participate and drive brand repurchase and user relations.

In the past year, Xiaohongshu has repeatedly emphasized that he is a "lifestyle platform" and has taken an increasingly active part in lifestyle sports, thus proving to the brand its key influence in the field of consumption, which is typically manifested in camping and skiing. Tik Tok is trying to list "planting grass" as the first-level entrance of the main station, and has also launched an independent e-commerce APP similar to "Little Red Book+Taking Things". The channel operation strategy of Amoy e-commerce is also changing from the idea of through train drilling to lifestyle proposal.

When it comes to specific brands and businesses, its requirements for content are getting higher and higher. This is exactly what Tiepi, the founder of Yongpu, emphasized. A consumer brand will go through three stages of "selling goods-lifestyle-cultural output", so a consumer brand should have "media attributes, design attributes and advertising attributes" at the same time.

The vigorous development of offline commerce is also an integral part of the future development trend of large consumption. When large shopping centers are saturated, small businesses and neighborhoods closer to the community will become new incremental business goals. Community businesses are more suitable for small and beautiful manager stores in terms of passenger flow and category preference than large chain high-efficiency commercial brands. This is also the reason why Yuan Ye Zhengzheng, TX Huaihai and other commercial bodies have been concerned in the past year.

In the words of Huang Wei, co-founder of Box X, the former consumption was eating and drinking, but now the consumption needs to be immersive, interactive and community-oriented, and the commercial space needs to be upgraded from space operation to content operation and user operation. Simply put, it is to inject content into assets and use culture to drive consumption.

Based on our concern about big retail, big consumption and big community, we have listed several key words about business trends in 2022, which is also the main entry point for our continuous attention to these areas in the coming year.

First, the category is single

In the past two years, many category dividends were generated by the superposition of traffic dividends and epidemic factors.

Product manager+traffic trader+foundry comes from fast-moving manufacturers such as Procter & Gamble, little red book notes+head blogger planting grass+endorsement in live broadcast room+unlimited information flow, a new brand is born, and the core business model is online DTC.

A number of new brands solve the same consumer demand, and a new category called tuyere is formed.

These valuable consumer demands are usually related to the epidemic situation. Because the epidemic needs to solve the food problem at home, new entrepreneurs are constantly pouring into the fields of convenient fast food, frozen food, compound seasoning, and prepared dishes; Because of the awakening and attention of health consciousness, plant-based, sugar-free drinks, functional foods, etc. Began to accelerate the penetration into mass consumption; Because of wearing masks for a long time, cosmetic contact lenses, eye shadows and functional skin care have seen rapid growth in cosmetics sales.

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Thanks to the most complete industrial chain structure in China, sufficient industrial chain capacity, and the reduction of stable orders from factories in the epidemic, many foundries, including high-quality heads, are willing to open OEM and ODM capabilities to new brands, and even a number of brands that have switched from B-end to C-end have become brands, competing with new brands in the field of traffic.

However, the problem is that the ammunition supply from VC has become more cautious after the two preconditions of flow+epidemic situation weakening or even reducing, which has brought a series of chain effects. The duration and stability of category bonuses have been increasingly related to whether the business model of this category is suitable for online DTC business model.

The origin of this association lies in the acceptance of the category in the C-end market. For those categories that are difficult to occupy the public's mind, their production capacity and target customers will return to toB, followed by the channel access efficiency of C-end consumers. Whether it's B2C or S2B2C, whether it's entering traditional offline distribution channels or opening new channels, efficiency determines the direction of circulation.

Finally, the flexible squeeze between different categories always exists. Even in the same channel, the cost performance and the convenience, efficiency and differentiation of the supply chain will play an important role.

At this time, after the ebb tide of consumer financing, the development direction of the once popular categories began to diverge, and the confirmed categories may continue to move forward, while the falsified categories will face the natural shrinkage of market space after being urged to heat up, and wait for the emergence of new variables and time conditions in this dynamic process and return to the rising sequence, which is the category singularity.

Second, small and beautiful.

In the past year, most brands have encountered growth difficulties. Behind this, it is not only caused by the low tide of VC, the long grass and the fading of traffic dividends, but also by the development trends of industries such as stratification, user innovation and DTC. The future decided by most brands is likely to be small and beautiful.

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Li Nan, the former senior vice president of Meizu, mentioned on many occasions that he had an understanding with Zhang Yong, then CEO of Ali, on 20 19. At present, most GMV of e-commerce platforms come from the top 500 in the world, but there may be top 5000 and 50000 in the future. The most valuable brands will increase tenfold and hundredfold.

Tang Binsen also mentioned that the future brand structure should be vertically subdivided and niche. Because the brand solves the segmentation needs, not the underlying needs. He used a vivid metaphor, China built the Beijing-Shanghai Expressway, and it is more valuable to build base stations along the street relying on the Beijing-Shanghai Expressway.

In addition to Yuan Qi Forest and burning tea, the brand matrix of Yuan Qi Forest also includes sub-brands such as yogurt brand Beihai Ranch, energy beverage brand Alien, fruit juice brand full marks, mineral water brand minerals, and Guanyun Liquor, pastoral light food and never coffee are included in the group brand matrix through investment.

Making friends is also relying on anchor resources and channel capabilities to build your own brand matrix. Huang He, co-founder, believes that the real success in the future may be more than N small brands with less inventory, good optimization points and strong quick response ability. More importantly, there is a clear profit model.

A noteworthy conclusion is that if most new consumer brands will become small and beautiful sub-brands, then most brands will not have the short-term and high-return rate expected by VC, unless they are head consumer brands such as Yuan Qi Forest, Yixian E-commerce and Xicha, which already have absolute head brands and have the ability to operate the brand matrix.

In this sense, the investment opportunities of new consumer brands have indeed closed the door of VC, but the old consumer giants who urgently need brand rejuvenation and market value management have found their own opportunities, and the phenomenon of new consumer brands investing in new consumer brands will continue.

Of course, every profitable brand will have more choices, and it is the way out to be committed to giants, small and beautiful.

Third, vertical integration.

In addition to small and beautiful brands, head brands will also control the upstream and downstream through "vertical integration" expansion, further improving their own competitive barriers.

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One aspect of vertical integration is to extend upstream. Brands control the upstream supply chain (raw materials and processing) through self-construction and investment, avoiding the limitation of raw materials and production capacity and improving product quality control.

For example, 202 1, Mixue Ice City and Modern China Tea Shop set up agricultural companies respectively, because the way to deal with the homogenization competition of new tea track products is product innovation, but this needs to be supported by sufficient raw material supply capacity to ensure the stability of procurement and price.

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On the other hand, it is to establish a controllable sales network downstream. The purpose of self-built offline channels is, on the one hand, to accelerate the penetration into lovers' shops and save some channel expenses, on the other hand, to establish their own product testing channels.

In this process, the brand will also improve the management efficiency of upstream and downstream through the digital system and deepen the degree of integration and coordination. Some production enterprises are also using their own raw materials and production advantages to expand downstream integration through incubation and investment, and obtain high added value of deep processing of products.

Fourth, profit, profit, profit.

The core problems faced by all brand categories in the coming year cannot escape "profit".

In the past few years, new brands have used capital to incite explosive growth, that is, short-term traffic has driven users to reach and GMV to grow rapidly. Brands with losses of 40% and 50% are promising.

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However, from the second half of 20021,with the new consumption investment boom fading, the number of VCS is decreasing, and the investment will become more and more cautious. The downward trend of valuation of new consumer representative companies such as Perfect Diary, Milk Snow Tea and POP MART after IPO has also affected the investment enthusiasm and valuation considerations in the primary market. Coupled with the gradual disappearance of the flow dividend, the growth model of "capital-flow" has failed, and new brands must have their own hematopoietic capacity.

After a wave of new brand injuries, VC is very harsh on new consumer brands. If the growth rate of GMV and return on investment is too high, they will worry that you have neglected brand building. If they pay too much attention to brand building in the early stage, they will question the growth rate of the brand. In addition, it is best for brands to have offline channel capability or distribution network system.

For a brand that has just started, it is impossible for the brand, sales volume and channel to be trinity, but it may also give a glimpse of the capital's desire for the certainty of new brand profits and long-term development stability.

Some former stars subdivided the track, because the growth rate of the head company could not meet the requirements of the capital market, it was difficult for non-top three companies to get financing, and even the whole track was left unattended. Consumer goods naturally have no zero-sum game. As long as it meets the real needs of users and serves the target users well, it will have its own business, which will be valued by capital in three to five years, but only if the new brand has the ability to be self-financing

In short, whether actively or passively, capital and new brands themselves will pay more and more attention to profitability, repurchase rate, ROI, conversion rate, customer acquisition cost and other data reflecting operational efficiency and quality. At the end of 20021,some brands we came into contact with emphasized the role of repurchase rate in GMV growth, and emphasized the control of cash flow, making a profit by selling one order.

Fifth, the sense of embedding

Represented by Beijing, Shanghai and Chengdu, the urban construction of first-tier and new first-tier cities in China has ended the stage of overall planning and large-scale construction, and entered a more flexible and organic renewal.

Compared with the giant commercial enterprises that pursued one-stop service in the previous generation, in the limited urban space, these new projects, which mainly focus on the renovation of existing properties, are small in area, scattered and widely nested in different communities of the city.

"Embedding feeling" is the natural result of the transformation of existing properties in the old city. Kangli, a cross-boundary mountain in Shanghai, is located at the intersection of Shaanxi North Road and Kangding Road. Its core building is a western-style red brick building, which used to be a police station, Sikh church, repair shop and building materials market. Adjacent to Li Xinhua community, Shangsheng New Institute was rebuilt on the basis of Columbia Club and Sun Ke's former residence.

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These commercial spaces nested in the community usually complement the large shopping centers nearby. For example, Wuyi |MIX320 is close to Zhongshan Park business circle; The formal Yuan Ye in Chengdu is just across the road from Ito Yokado.

Different from the traditional community business, these new spaces not only provide a kind of peripheral convenience, but also have the ability to attract a wider range of passengers, which requires them to find new ideas to solve problems outside the traditional commercial real estate ideas. Beijing Nanyang enjoys the theme of drama and fills the space with rich drama performances; Shangsheng Xinsuo completes drainage through the house bookstore; The formal source field has become a popular landmark in Chengdu by introducing the manager format.

"Embeddedness" will continue to attract more attention from more dimensions. To some extent, it is the concrete embodiment of the overall urban planning idea of China in the new stage. As Shanghai 2040 Master Plan mentioned in the chapter "Building a Multi-integrated Urban and Rural Area"-a life circle of about 15 minutes is an important way to realize a livable city.

Sixth, the principle of humanization.

As an exotic product, the concept of "manager" was first used in fashion brands to distinguish it from the manager of mass clothing brands. In the past few years, with the upgrading of the consumer market, the concept of "manager" has been introduced and applied to more fields in China, and has been widely recognized and concerned.

The core of manager brand is "own taste", which points to a more stylized and personalized aesthetic and experience. Managers often bring their own traffic and have loyal followers in the circle. The pursuit of manager brand by a new generation of consumers shows the changes of their consumption demand and consumption habits.

This change has been captured by commercial real estate, and it has become a new solution for urban renewal and space operation, among which Yuan Ye is the representative.

In non-first-tier cities, managing people has become a new career choice for young people in small towns and a sinking path for new lifestyles. Under the trend of stricter management and control in the secondary market and the ever-changing distribution mechanism, managers also have the opportunity to become the direction of social capital flow in the future.

At the same time, represented by Jiang Sida, for the content industry, the emergence of a group of star executives has also provided a new definition and solution for IP.

In the broader field of consumer retail, whether it is to meet consumers' personalized consumption needs or to establish a more sticky user relationship, brand operation with more "management color" will also become a trend.

The "humanization" here can be a clearer product style and brand values, and it can also be a change in consumer communication methods represented by marketing. In fact, it does not need a specific person to stand at the front desk, but points to a road of brand building with stronger personality and more unified style.

Seven. Lifestyle proposal

"Lifestyle" is a higher-dimensional vocabulary, which can make brands surpass products, categories and even brands themselves and have specific physical attributes. It first represents a division of "taste" and "class". Combined with consumer culture, it refers to a marketing concept with aesthetics and values, which can naturally bring high user stickiness and good interaction.

1975 American scholar Will put forward the concept of lifestyle marketing, which is a marketing method for enterprises to create goods that really impress consumers by understanding consumers' psychology, values, consumption behavior and audio-visual contact, so that a group of homogeneous consumers with the same consumption time and money pattern can have empathy and mutual understanding and gain consumers' spontaneous recognition.

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The representative enterprise that first applied this marketing concept was Ford, which introduced Thunderbird, Mustang, Maverick and other cars with different lifestyles around 1960s, and then quickly returned to the leading automobile enterprises in the United States.

In China, with more and more grass, content and community play an increasingly important role in the overall consumption chain, and "lifestyle" will become the main axis for people, platforms and brands to participate in and drive brand repurchase and user relations.

More and more brands begin to declare themselves as "lifestyle brands", such as underwear, clothing and fashion brands, home and children's wear series. Modern Sky will be upgraded from a music company to a lifestyle company, which will be more closely related to new consumption. Laughter directly defined comedy consumption as a way of life from the beginning.

Some brands can even successfully break the circle through the popularity of lifestyle. For example, after the rise of camping as a way of life, brands such as Xuefeng became popular. Behind skiing are the opportunities for professional brands such as Burton and Disante to go to the public.

Of course, this is also related to the overall oversupply of consumption and the growing awareness of consumer sovereignty. Brand lifestyle can also adapt to the objective requirements of more and more content-based advertisements; This is a cost-effective way to expand the supply of different categories around the core population, especially in the case of extremely mature domestic supply chain.

Eight, agricultural products brand

Brand building of agricultural products has long been restricted by domestic scattered and lack of large-scale production system and consumer market with discrete demand. This situation of scattered at both ends determines that agricultural products lack the foundation of brand building.

The opportunity to shake this powerful structure comes from the changes that are taking place in the downstream retail channels and intermediate circulation links of the industrial chain.

This is also a bottom-up industrial change, which has accelerated in the past two years.

In the self-iteration process of retail industry, the discrete consumption demand of agricultural products is gathered by e-commerce and new retailers. Based on these needs, the traditional multi-level and decentralized circulation resources have also begun to be decentralized and reorganized.

The concentration of demand and the reduction of circulation links provide a favorable premise for the top-down branding of agricultural products. In this process, some categories of agricultural products gradually show the trend of branding. For example, mountain products, beef and mutton, aquatic products and other processed foods, fruits and other fresh agricultural products with high commercial value. The reason why they can give priority to branding in the environment of circulation reform is because their own production supply chain foundation is relatively concentrated.

Take nuts for example. At present, Jieyang, Guangdong, Hangzhou, Zhejiang and other places have formed a considerable scale of nut industry belt. They are not only gathering places for raw materials, but also gathering places for selling related packaging materials, logistics, manpower and other resources. Under the premise of concentrated demand, nut suppliers in the industrial belt also have the opportunity to respond to market demand quickly. They no longer exist only as suppliers in the industrial chain, but also begin to have the ability to directly face the consumer market.

Of course, this top-down brand trend of agricultural products has just begun, and there is still a long way to go. The more upstream the industrial chain, the more complicated the game relationship between stakeholders, and the greater the resistance to brand building.

However, self-iteration from within the retail system provides a new solution to deal with these complex interests upstream. The continuous concentration and more subdivided consumer demand they bring will become an opportunity for the brand building of upstream agricultural products in the coming year.