Analysis: "Sell Pig Story" Of Local Daily Chemical Brand

Wu Zhigang: well known local marketing expert.

Reporter: how do we view the recent international cosmetic brand acquisition? What impact will it have on local brands? 2. What do you think is the biggest obstacle to the rise of local brands?

Wu Zhigang: I once wrote an article called local.

Mr. Zhu Xinli, who once tried to sell Huiyuan to Coca-Cola, said a very philosophical saying * "to raise a brand as a child, but to sell it as a pig".

When TJOY's takeover of Coty is reported recently, people can't help but add another * pig to the local brand list.

In fact, it is not only TJOY, but many names of local brands have been listed on this list.

In December 2003, Paris L'OREAL, the world's largest cosmetics group, announced the signing of a small Chinese skin care brand.

It includes all the management teams, all sales outlets, and a production base in Yichang, Hubei Province, including the "small nurse" brand and the founder Li Zhida.

In January 2004, L'OREAL group announced that it had signed an agreement with TJOY to acquire its leading brand Yuesai.

In 2007, Bayer Dorf bought 85% of silk Bao's daily chemical products under the silk Bao International Group, and the brand of Shu Lei, Feng Ying, Shun Shuang, Maestro and so on, involving a total value of 317 million euros (equivalent to HK $3 billion 500 million).

In 2008, Johnson (China) Investment Co., Ltd. announced the completion of the acquisition of Beijing Dabao Cosmetics Co., Ltd., Dabao became a wholly owned subsidiary of Johnson.

It is said that the total value of the paction may exceed $300 million.

In the face of the above list, some people sigh, but sigh continues.

What's more, some friends are indignant that these brands are not forced to sell because they can not operate. They are the ones who choose to sell under the circumstances of good management and good profits.

In the face of this phenomenon, some people in addition to the big hair "profit is a businessman's nature", or curse "a boss has no national integrity", but still did not stop the sale of Dabao, the sale of Shu Lei, and perhaps TJOY brand and more "fat pig" for sale.

Therefore, in the face of these "pigs", we should not stay in the so-called simple "enemy and I" analysis, but should go deep into the core of enterprise management to explore its internal roots.

Through in-depth analysis of these enterprises' "sell pig story", we will find that "brand when pigs sell" is economic rationality, but more is the regret and helplessness of local daily chemical enterprises.

The reason for selling pigs is: since the pork market is not optimistic, it is better to get rid of it quickly.

The reason is: the external market environment of local enterprises is changing, and the future development of the brand is not optimistic.

Take Dabao as an example, for many years, the product lacks update. SOD honey accounts for more than 80% of the company's sales, and sales have not exceeded 1 billion. In the face of the overall rise in the consumption of the Chinese market, the attractiveness of Dabao brand to customers is decreasing, and the future market space is squeezed by many international brands. Under such circumstances, it seems very necessary to choose to sell.

Take Yuesai as an example, the high-end cosmetics industry's group camp is becoming more and more obvious. The department store brand is basically monopolized by four big companies such as Estee Lauder, L'OREAL, LVMH, Shiseido and so on. Independent high-end brands are hard to maintain, and the choice of sale can make Yuesai brand survive and develop under the sanctuary of large groups.

Take silk Bao as an example, with the market of Procter & Gamble shampoo and hair care products continuously sinking, the competition pressure is increasing, and the marketing cost is higher and higher.

Therefore, in the face of the new market environment, facing the fierce offensive of international brands, the rapid growth period of many local brands is going to be over, and the stagnation period of brand development is coming or coming. There may be an inflection point in the brand. In order to avoid the greater loss of brand value after the sharp decline of the brand, it is very normal to choose the brand to sell.

Philosophy two: since the pig itself is not big, it is better to sell a good price now.

Reasons: there is an inherent bottleneck in the development of local enterprises, which is doubtful for the sustainable development of enterprises.

Take Dabao as an example, there are many uncertain factors in the future development of the nature of the collective enterprise and the strong state-owned color. These institutional defects make the management team of the business owners naturally choose the brand to sell and get immediate interest.

Take small nurses as an example, brand lacks core competitiveness, and localization business team restricts the next development of enterprises and worries about future development.

Take TJOY as an example, brand growth has grown bottlenecks for many years. Sales began to decline in the 09 years, mainly due to the lack of understanding of market changes, lack of sustained competitiveness of brands, lack of freshness of products, and the decline of natural sales.

All these kinds of nature are easy for entrepreneurs to be suspicious. Since they are not big enough, they are better off selling them.

Philosophy three: since pigs do not make money, then they have to choose to sell pigs.

Reasons: local enterprises financing or capital withdrawal path is limited, restricting the further development of enterprises.

In fact, any enterprise will have higher requirements for financing when it develops to a certain stage, so as to support the next development of enterprises.

In particular, local daily chemical enterprises find that in the face of international brand market pressure, facing the cost pressure of modern channels, facing the increasingly picky consumers, there is no sufficient resources to ensure the orderly operation of the brand.

But the problem is that local enterprises are unable to obtain relevant funds to expand their scale or accelerate their development due to many problems.

Many of the local daily chemical companies are opaque, and companies lack fixed assets, and bank financing is often difficult to obtain.

Both Dabao, silk Bao and TJOY have chosen the pre listed companies before the sale. However, because of their own and external reasons, it is difficult for all companies to achieve capital market financing.

These problems have greatly troubled the local daily chemical enterprises. They are thinking, we want to expand the operation but there is no way to effectively finance, the brand is only selected to be sold.

What Mr. Zhu Xinli said is not wrong. If it is a pig, we have to choose to be sold or eaten, but we actually have the chance to choose not to be a pig.

Because in accordance with the principle of "natural selection", as long as the "pig" will be eaten sooner or later, as long as "wolf" will eat "pig" sooner or later, the truth is whether "native pig" or "international pig", whether it is "local wolf" or "International Wolf".

The cruelty of "natural selection" is staged every day, and the weak brand life is eliminated every day. The key to the survival of local brands lies in avoiding the "pig" as far as possible in the ecological chain of the survival of enterprises, because "pigs" are not lucky to escape every time.

Therefore, from the rumor that TJOY has been bought, local brands need to wake themselves up. In a cruel market environment, in order to win the future, local brands must learn to "adaptable variation", learn to change genes, and start a new round of evolution.

- learn to operate socialized and standardized.

In the operation of enterprises, we should gradually standardize and pparent, step out of the grey zone in taxation, gradually realize socialization and diversification in the corporate governance structure, and gradually realize professionalization on the management team. This is the way for all the enterprises in the past century, and the local cosmetics enterprises must also go through it.

Early walking is better than late walking, and the cost of opportunity cost will be smaller.

It is also easier to get support and help in financing in the future.

Learn to study and respect consumers.

With the overall upgrading of China's consumption, consumers are more mature, more fashionable and more professional.

Without in-depth understanding of their local brands, they will have nothing.

The conclusion of all successful brands is that consumers must be respected.

We believe that deceiving customers and playing with customers will be deceived and played by the market.

Respect for consumers from the heart will become the basic belief and law of all enterprises.

- learn to improve the success of decision-making through scientific means.

In mature markets, the key to success is not to grasp opportunities, but also to make fewer mistakes.

P & G's success tells us that quantitative marketing can greatly improve the accuracy of decision-making and ensure that enterprises can make more efficient use of resources in a dangerous environment.

Learn to build competitive brands.

Brand is not brand name, we must learn to occupy the minds of consumers.

The local brand has just been established compared with the international brand that has been developing for hundreds of years.

As a local brand, we should clearly understand the difference between competitors and consumers, and the emotional link with consumers is the only valuable resource for cosmetics companies.

Learn to rely on teamwork instead of relying on heroes.

The hero's boss can bring the company to heaven, but more often it leads to hell.

In the coming age, the hero has already called the curtain.

If local brands want to continue to exist and grow, they must get rid of family management and heroic leadership, recruit and cultivate a core team that belongs to enterprises and can achieve brand sustainable management.

- learn to operate in mainstream markets and channels.

Facing the one or two tier city market, facing the strategic mainstream channels of department stores and modern businessmen, local enterprises must enter, which has become a key indicator to measure the business capabilities of enterprises.

Gradually entering the mainstream market and channels will help to get rid of the non mainstream position of local brands and truly achieve the leap of brand value.

As early as 200 years ago, there were wise men who told us that the survival struggle is the survival of the fittest, and that the individuals with adaptive variation are preserved. This is the choice.

Individuals who do not have adaptive variation are eliminated. This is the elimination.

Faced with the new competitive environment, local brands must start new evolution.

Because if we only have the "pig" gene, even if we seem to be more powerful in the past, we will still be sold as "pig" tomorrow.

In my opinion, the selling story of local cosmetics brands is nothing more than the truth.