Emerging Chinese Consumer Brands

What is happening to China’s domestic consumer brands?
The rapid development of Chinese domestic new consumer brands has become a conspicuous phenomenon for China’s consumer market in recent two years. 2020 can be seen as the “breaking out” year for Chinese domestic brands when they started expanding rapidly by differentiation, segmentation, and regionalization. Emerging domestic consumer brands show great competitiveness when facing traditional players. Some of them even successfully beat traditional brands to become the sales champion on e-commerce platforms in their segment. For example, during the “618 shopping festival” in 2021, more than half of the emerging domestic brands on JD.com doubled their sales and >450 emerging Chinese consumer brands on Tmall were listed as No.1 in their segments.

Some Chinese brands have emerged as especially eye-catching success stories:

Genki Forest: sparkling beverage with “Zero Sugar”
✓ Founded in 2016, and achieved 40 billion CNY (6 billion USD) valuation within 5 years by 2021, with aim to provide “sparkling water with no sugar that young people like most”

Florasis: cosmetics with Chinese aesthetics
✓ Provides healthy and nourishing make-up products with Chinese traditional craftsmanship and emphasizes on “Orient Cosmetics”
✓ Founded in 2018 and achieved over 3 billion CNY revenues in 2020

Chicecream: the “Hermes” in ice cream
✓ Dedicated to becoming the premium ice cream brand with strong Chinese characters: its name comes from traditional Chinese family names and shape of its products comes from China’s classical architecture
✓ Surpassed Haagen-Dazs and became No.1 frozen food brand on Tmall
✓ Achieved 300% YoY growth in first 4 months in 2021

Saturn Bird: “Hand grinding coffee” drinkable within 3 seconds
✓ Develops the concept of “Boutique Instant Coffee”- pre-dissolved cold brew instant coffee with the same taste as hand grinding one
✓ Overtook Nestlé to become the best-selling player in the coffee category on Tmall
✓ Achieved 400 milliion CNY revenue H1 2021 and a 4.5 billion CNY valuation

Why do they succeed?

The core consumer group in China is changing. The main consumer forces in China are gradually shifting towards the post-90 and even post-00 generations. These show distinct differences on consuming habits and requirements with the previous generations -being more individualized, more diverse, and more fascinated by new and high-quality products. Thus, company’s marketing and products offerings also need to be changed for these new consumer habits and requirements. Almost all successful emerging brands successfully manage to occupy the minds of young customers in their own segments.

• Product: Design products to better cater for needs of young customers: focusing more on health, social connection, culture recognition, high-quality lifestyles, etc.
• Design: Elaborated packaging design to stimulate young customer’s curiosity, catch the latest trend among young customers, and promote self-spread on social media
• Channel: Highly rely on online channels and ecommerce (including live-streaming ecommerce) to avoid direct competition with traditional players
• Marketing: Intensive marketing campaigns on emerging channels: Red, Douyin, live streaming, etc.; as well as actively collaborating with TV shows, KOLs, and cross-over branding with other brands