Original title: why do brands rush to sink the market? Source: Tencent News

Author | Linchuan Source | Brand front page

The sinking market is becoming a must for soldiers in the second half of the Internet.

In 2019, the successful listing of Pinduo made more brand giants realize that they had ignored this huge blue ocean-"sinking market". Many brands such as Haidilao International Holding, Nai Xue, Xi Tea and Meituan were also eyeing the sinking market covetously.

Accelerating the layout of offline stores is not only first-tier brands, but also new head players XPeng Inc., ideal, Weima and NIO Inc. are also stepping up the layout of their own offline channels recently, and are also expanding from the original first-and second-tier cities to third-and fourth-tier cities.

Why do brands have to "break the scalp", in the sinking market horse enclosure? How should the brand correctly cut into the sinking market?

01

What is a sinking market?

In 2018, with Pinduoduo ringing the bell on NASDAQ in the United States, the word "sinking market" jumped into public view and quickly became popular.

Shi Yuzhu once said: "the population distribution of China is in the shape of a pyramid. The three cities of Beijing, Shanghai and Guangzhou are the real spires, and in these three cities, most brands do not make money, or even lose money. The main reason is that the cost is too high. However, the city at the bottom of the pyramid makes more money, because the lower the city, the lower the cost. "

The city under the pyramid here is the so-called "sinking market" that people often see.

The so-called "sinking market" refers to the market in third-tier cities, counties, towns and rural areas.

According to the data of the National Bureau of Statistics, cities with the third and fourth lines and below account for 77.55% of the population, and the huge population base naturally corresponds to the same huge market potential. Therefore, for the huge growth of traffic, some brands have sank from first-and second-tier users to third-and fourth-tier cities, and even rural users.

Gu Ming Milk Tea, founded in 2010 from Daxi Town, Wenling City, Taizhou City, Zhejiang Province, is only a small town market. Now it has more than 1600 stores and a turnover of more than one billion yuan.

Whether it is Pinduoduo or Gu Ming Milk Tea, the success of these brands has always focused on first-and second-tier cities, and the businesses who have killed their heads and blood have lost their jaws. In the past, we have always believed that first-and second-tier cities have a large population, strong consumption power, well-developed logistics system and complete supporting facilities. First-and second-tier cities should be the core and only position of each brand.

However, as everyone knows, China's rural population has always accounted for the majority. With the development of economy and the construction of a new countryside, today's countryside is no longer the scene of mud-walled earth houses and livestock running all over the ground.

Today's rural areas are neatly planned new houses, small parks and small supermarkets. The town no longer used to have only a wholesale store and a restaurant, but a decent supermarket, even a small Shopping Mall, cinema, cafe and so on.

It is an indisputable fact that the sinking market is a gold mine.

02

Why choose to sink the market?

Today, with the rising cost of getting customers and the basic disappearance of traffic dividends in first-and second-tier cities, the "sinking market", which has been neglected for a long time, has become a new commercial engine.

In the past many years, the sinking market used to be a paradise for shoddy products. By virtue of price advantages, it built a deep moat to keep famous brand products out, but the end result was often disorderly price competition among inferior products. So that these shoddy brands do not make more money. At the same time, the best opportunity for transformation has been lost.

Nowadays, with the improvement of consumer awareness of brands in the overall sinking market, and at the same time, in order to increase, more and more first-tier brands are beginning to occupy the sinking market.

The reasons for the sinking of brand choice are mainly divided into the following two aspects:

On the one hand, for big brands, the market in first-tier cities has been carved up and new markets must be found.

As Internet users in first-and second-tier cities become saturated, traffic dividends have peaked. In order to find new growth points, more and more brands are sinking to low-tier cities.

Take Nai Xue and Xi Cha as examples.

Now the competition of new tea has already entered the second half, for the head players such as Xi Cha and Nai Xue, how to stabilize their position in the fierce market competition and continue to look for new increments has become the top priority in 2020.

In the past half a year, the news of financing, listing and launching sub-brands came out frequently from the Xicha and Nai Xue of the new tea race track.

When the regional "great powers" such as tea face are planning to break through, Xi Cha and Nai Xue collectively choose to accelerate their sinking, look for new incremental battlefields, open stores directly to third-and fourth-tier cities, look for new incremental spaces, and battle on the front of regional brands.

It is reported that the number of stores opened by Xi Cha, Nai Xue and Starbucks Corp in third-tier cities and below has exceeded that of second-tier cities and is approaching first-tier cities.

Therefore, when the first and second tier stock market reaches its peak, Xi Cha and Nai Xue must look for new incremental markets and continue to "tell stories" to capital with beautiful market data.

On the other hand, with the development of economy, the level of consumption at the grass-roots level has gradually improved, and the concept of consumption is also changing. the sinking market also has a huge market space.

With the return of the population, the mature consumption concept cultivated by life in first-and second-tier cities has spread in the sinking market, and other users' awareness of consumption upgrading has begun to awaken. In addition, with the continuous growth of people's income, the sinking market has accelerated and become a new blue ocean for traffic growth.

According to the public data of Analysys Qianfan, there are only 0.49 mobile devices per capita in third-tier cities and below, and the consumption potential of the sinking market should not be underestimated.

The rapid rise of Pinduoduo and Kuaishou Technology is undoubtedly the best proof, and the sinking strategy of Tmall and JD.com has also proved the fact that the market sinking can harvest huge traffic.

03

How do brands cut into the sinking market?

With regard to the "sinking market", the consumer goods market is the most mentioned and discussed most, and everyone is cheering. It is a blue sea market, an undeveloped virgin land, and a huge "gold mine".

However, there are many people talking about cheers, and there is no head brand that specializes in sinking the market.

So, in the face of the sinking market, how can brand marketing be effective?

1. Keen insight into the market and full understanding of consumer psychology

Consumer insight is the premise of all marketing activities.If a brand wants to layout and sink the market, it is necessary to understand and understand the needs and preferences of consumers.

Due to the difference of living environment, there are great differences in consumer preferences between consumers in third-tier and lower-tier cities and those in first-and second-tier cities. If we simply use the demand understanding of the head market to create marketing materials for sinking markets, how can we impress them? Therefore, consumer insight into the sinking market is crucial.

In fact, there is still a gap in the consumption level between third-and fourth-tier cities and first-tier cities, and compared with first-tier cities, consumers in third-and fourth-tier cities are more sensitive to prices and pursue more cost-effective, soOnly "good quality and low price" can be favored by the sinking market.

Take Pinduoduo as an example, its success is due to grasping the market demand of this group in pursuit of low price and high performance-to-price ratio, and starting from the most attractive "price", it can make a large number of consumers flock to it and closely attract the attention of consumers.

two。 Shape content IP to create more competitive products

"content is king" will never be out of date, for brands, good content is the cornerstone.

For example, Qutoutiao's content positioning is very clear, focusing on pan-entertainment and light reading content, judging from its rapidly growing number of users, its positioning is obviously successful.

According to statistics, in recent years, the actual year-on-year growth rate of per capita disposable income of rural residents has been significantly higher than that of urban residents. Accordingly, the per capita consumption expenditure growth rate of rural residents is also higher than that of urban residents.

That means that the opportunity to sink the market is that people will shift from household consumption trends to personal consumption trends, so that branded, high-end products will be more valuable and competitive.

3. Pay close attention to the influence of the first batch of users and formulate reasonable marketing strategies

A typical feature of the sunken market is the recommendation of acquaintances.

Different from the first-and second-tier cities, the population base of the third-and fourth-tier cities is not high, and the consumption circle is small and fixed, so most brands compete for the stock market here, or even the "human market", so the repurchase rate is a very important indicator.

Therefore, before there is a scale effect, the influence of the first group of users is crucial.

4. Do a good job of "localization" and find the meeting point between the brand and the market

If there is no universal value to meet the needs of all markets, it will be difficult to adjust, because what the sinking market thinks is good does not necessarily mean that first-and second-tier cities think it is good.

Consumers are diversified, so the sinking market is not "one" market, but "multiple" markets. Perhaps, A market recognized services, B market recognized products, brands can not perfectly adapt to every user.

Therefore, in the expansion of the sinking market, the brand must find the point where the market coincides with the brand, and then do this point thoroughly.

04

Conclusion

There is no invincible market, only giants who do not want to turn around.

Today, the sinking market is still a tuyere for dividends and a new blue ocean market for brands. As long as the brand is used properly, the brand is bound to achieve something, and the mobile Internet will grow a new dimension in the sinking market in the future.

However, in the sinking market, brands should also have the ability to adapt to circumstances, do a good job of "localization", find the most suitable entry point, and at the same time, do a good job in brand positioning, content positioning, and formulate reasonable marketing strategies. in order to maximize the success rate of the brand in the new market.

I knew you."watching."