If there's a chance that things will go bad, no matter how small that likelihood, it will always happen.
Source | Poly beauty
Author | Shu Xiuhui in the previous issues of "If you want to be Proya, Huaxizi, you have to bear it first", "Xinrui is really embarrassed: from the PRE-IPO valuation of 10 billion back to the angel round", "Proya eats the person who fell from L'Oreal, Han Shu eats the person who eats Nature/Pechoin", just around this 618, and visited and exchanged with many brand founders, MCN agency operators and friends of the platform.
Including the two activities organized by the Jumei Brand Society in June, they were the discussion of the popular ingredient recombinant collagen and the capture of new traffic opportunities after 618 (through the door: "Divergent Opinions: Recombinant Collagen in the Eyes of Industry Professionals", "In the Stock Era, What Are the Traffic "Depressions" in the Beauty Market?). Many founders and traders also talked about the difficulties of the moment.
The more I communicate, the more I can't help but think of what Li Bai said - Shu is difficult, and it is difficult to go to the sky. Today's brand road, and the Shu road back then, which is difficult?
01. Now the brand business is mainly random, and most brands are actually swaying with the trend. is like what Panzi said to Gazi: The depth of the water here is something you can't grasp. There is a skin care brand with a volume of more than 100 million, which grew by 200% before last year, and after the first half of this year, I found that it was too far from the goal set at the beginning of the year. The trading team found that this year it has recruited a lot of talents and is ready to continue to rush rapidly, but the embarrassment is that there are too many people and the output has not gone up, including the changes in the market, which make them helpless. Last year's 618, they only used 3 celebrities to broadcast 8 million, and this year's broadcast has 103 people and more than 500 games, which is not enough to do last year's 8 million. Isn't it said that the live broadcast has declined this year, including the overhead, it is not immune. How far has that slipped is now a reference here. How to put it, suddenly there is a sense of frustration that "the harder you try, the more you fail".
02. Do you think the brand is such a hard-working loser? The processing plant is no better! A processing plant owner in East China told me a "helpless joke": last year, I made sales of 100 million yuan and made a profit of 20 million; This year, it has reached 150 million, and the profit is still 20 million. As we talked about before, now the cost is high and the profit is thin near the C-end, and then the cost is reduced upstream. And after the baptism of the past few years, brands are basically clear about the cost of products. A factory boss in Guangdong said that now customers come more and more like buying vegetables in the market and cutting prices, every time they buy, they cut once, because (the market) is too transparent, everyone has asked around (similar factories), and they are very clear about the cost.
03, let's take a look at the third contestant - the MCN agencies that used to lie down and earn, because of the shrinking budgets of international brands, they had to start to attack domestic brands that pursue instant sales effects, from last year to test the water short video trailers, customized micro-short dramas, to this year, various institutions have entered the live broadcast track. Among them, those who have a keen sense of smell and enter the game early have eaten dividends, and the list of institutions in Changsha is lined up half a year later, but the entry is a little later (that is, 3-4 months later) is another world, a friend of an institution told me that it has lost more than 5 million yuan in more than 5 months after entering the micro-short drama at the end of last year (and there are also institutions that have lost 10 million), because of the loss of the short drama test water, coupled with the shrinkage of other businesses, the live broadcast business is still in the test climbing period, and it earned 100,000 yuan from January to April in the first half of the year. You read that right, it's a company of 100,000 yuan and more than 50 people.
04, it's all like this, can you still live? Actually, you can. Some institutions found that although the entire platform of Douyin is still growing this year, the merchant side is the fierce white card (press Dr. Wen, up BUV), and the celebrity side is KOC. On the other hand, it is the brand and the KOL that are difficult. However, this year, they found that many international customers on the Xiaohongshu side have stepped up their advertising, not to convert but to be exposed. An institutional friend in Guangzhou also said that international brands are still investing, but they will assess the degree of service and cooperation, so they will choose the kind of institutions with a degree of 200% cooperation, rather than some institutions with good results but low cooperation. Is this certain, people are standing to earn money, they must be tough, and kneeling service always depends on people's faces.
05. Why is it so difficult? Earlier, we talked about a chain reaction, starting from the reduction of consumer desire and continuing upwards to the pressure on the most upstream raw materials, all of which are based on gross and unit cost games. Two days ago, a leading co-founder in Hangzhou gave me another idea. He said that in the traditional era, although the retail price of the brand was a little more expensive, there would be several passes in the middle - the brand → provincial → distribution → stores→ BA (with decal rewards for terminal interception) → consumers, but each of it promoted employment, each of which could make money, and they would come to consume when they had money. It's cheaper to say now, the middleman has been removed under the DTC model, but the last one (consumer) has no money, and even many have no jobs, how do you let him spend? Even if it's cheap, he can't afford it, and a vicious circle is formed.
06. Therefore, today there will be some slightly powerful enterprises that do individual "loss of identity" things. There is no way, in the stock market environment, if you take one more bite, others will eat less, and this bite may determine the next life and death. There is a listed supply chain company in Guangdong, this year to grab orders is very fierce, the main one is not profit, but to ask customers to move the list in other factories to give a huge temptation of 10% price reduction. A brand friend said that we know that we need to diversify risks in the supply chain, but people give too much, which can allow us to reduce a lot of costs.
07. The above are all played by "big households", what should small and medium-sized enterprises do? If you can't afford it, lay off employees and change to an office with a lower rent. There is a brand founder who has done hundreds of millions of business and financing, and this year he has cut the staff to more than 40 people, and the sales return is two or three million a month, but the cost expenditure is still 1 million, and it is still a slight loss in the first half of the year. He is counting on business to pick up in the second half of the year, such as Double 11. But 618 already looks like a fake carnival, how much can you really count on this year's Double 11?
08. In the past five or six years of cutting-edge frenzy, many star professional managers have gone to the sea to create brands, and many of them have shouted out this year that "it is the most difficult half a year since 2020". A senior brand boss who has been in the industry for more than 20 years talked to me about this group some time ago, and said that if you really can't do it today, don't do it, give up. You've tried tricks such as planting, sowing, self-sowing, streaming, offline, and going to sea, but you haven't tried it, don't you feel hopeless? After so many years of entrepreneurship, I earned 30,000 yuan a month, and turned it off as soon as possible. If you go to work by yourself, you may still have an annual salary of one million. I think this statement is a bit flawed (such as whether you can still get an annual salary of one million in this situation), but it is also close to reality.
09, there will be no more peace and prosperity in the future, there may be more and more noise, whether it is like the inconclusive battle between Bloomage and Zhifanfan, or like the rumored layoff of Miguang, etc., the things that were originally pressed under the water will become more and more unbearable. At the same time as the incident of Miguang happened, some friends in the supply chain also revealed that another head sub-category brand was also suspected of breaking the capital chain. But when I went to ask the brand directly, they said that we still have 200 million in our account. Last year, a cutting-edge founder also told me