Many new consumer brands in China are at the inflection point now. While they are often good at initial traffic generation and use of KOLs, brand advertising seems still an effective and a necessary step to go mainstream. It’s also the ultimate battle that can build brand equity into a long-term competitive advantage.
Three takeaways:
1/ buying traffic is cost-effective and useful in early stage to test and improve the product. But it seems to have a decreasing marginal return after certain level – this is also where brand advertising should kick in.
2/ brand advertising may take time to be “effective” when non-linear growth can be observed. Three key factors to determine whether it will work / how long it’s gonna take: 产品完成度，种草基础，渠道渗透
3/ for new segments, first mover or the current market share leader doesn’t effectively mean it’s the winner – as long as there is no clear leadership in consumers’ mind. The first to establish a strong association or become the cognitive referent is the key.